2021 (9) TMI 1103 - HC - Service Tax

Refund of service tax paid under the mistaken understanding of law - Time limitation - Lack of evidences placed on record - HELD THAT - The Adjudicating Authority while passing the order in original has categorically observed that no evidence was placed before the authority correlating that the service tax amount collected from the claimant has been remitted to the government account and there is no evidence to show that the service tax amount received from the claimant is actually remitted to the government account by M/s.Ranka International Pvt. Ltd., Bangalore. The same having been observed by the Appellate Authority without further examining on this factual aspect. In the absence of factual findings before the Court, in the writ petition proceedings, this Court cannot exercise the functions of the assessing authority or the fact finding authority to ascertain the genuineness of the claim, in the absence of material documents like original invoices raised by the service providers and the details of the service tax paid by the petitioners. Matter remanded to the Tribunal to reconsider the matter keeping in mind the decision of this Court in Commissioner of Central Excise (Appeals), Bangalore vs. KVR Construction, 2012 (7) TMI 22 - KARNATAKA HIGH COURT vis-a-vis the factual aspects in as much as the claim made by the petitioners, who are not assessees - petition allowed by way of remand.

Summary

Issues:
Claim for refund of service tax paid under mistaken understanding of law, rejection of refund application, appeal to various authorities, time limitation for filing refund claims, lack of evidence of service tax remittance, necessity of factual findings before the court.

Analysis:
The petitioners, claiming to be flat owners of a residential apartment, sought a refund of service tax paid to the builder under a mistaken understanding of the law. The authorities rejected the refund claim citing the lack of evidence correlating the remittance of service tax to the government account by the builder. The Appellate Authority upheld the rejection based on time limitation under Section 11B of the Central Excise Act, 1944. The Tribunal, referring to relevant judgments, also held the claims as time-barred without examining the genuineness of the petitioners' claim for refund.

The High Court noted the absence of factual findings on the genuineness of the refund claims before it. It emphasized that without such findings, it cannot act as the assessing authority to verify the claim's validity. The Court highlighted the necessity of material documents like original invoices and details of service tax payments for a proper assessment.

Consequently, the High Court set aside the Tribunal's order and remanded the matter for reconsideration. The Court directed the Tribunal to reevaluate the case, considering the decision in a relevant case and the factual aspects of the petitioners' claim. Both parties were permitted to present evidence, if any, and were instructed to appear before the Tribunal without further notice. The Tribunal was tasked to expedite the reconsideration and pass appropriate orders in accordance with the law.

In conclusion, the writ petition was disposed of with the direction for a fresh review by the Tribunal, emphasizing the importance of factual findings and evidentiary support in assessing the refund claims.