2023 (11) TMI 902 - HC - Service Tax

Seeking interest on reimbursement of service tax from the service recipient (Port Authority) - HELD THAT - The defendant has reimbursed the service tax paid by the plaintiff on 10th March, 2017, as per the direction passed by the Hon ble High Court in the writ proceeding dated 24th February, 2017, after submission of discharge certificate by the plaintiff. The plaintiff has submitted discharge certificate as per the direction passed by the Hon ble Court - The plaintiff admittedly not paid the service tax during the subsisting of contracts. The plaintiff has paid service tax firstly on 31st December, 2013 and secondly on 31st December, 2014 with interest. Admittedly, at the time of claim of reimbursement of service tax, the plaintiff has not submitted discharge certificate in Form VCES-3. In the present case, the plaintiff has paid part of the service tax on 31st December 2013 and subsequently the balance amount was paid on 31st December 2014 with interest. After payment of service tax in both occasions, the plaintiff has applied for reimbursement of the said amounts enclosing debits notes as documentary evidence but admittedly, the plaintiff has not submitted discharge certificate in both the occasions. The plaintiff has disclosed the discharge certificate in the writ proceedings. This Court finds that the plaintiff has paid service tax in two instalments and in both occasions, the plaintiff has applied for reimbursement of service tax by enclosing debit notes and has not submitted the original discharge certificate issued by the service tax department in Form VCES-3. Petition dismissed.

Summary

Issues Involved:
1. Entitlement of the plaintiff to a decree for Rs. 2,81,59,025.
2. Entitlement of the plaintiff to interest and its rate.
3. Whether the claim is barred by the law of limitation.
4. Other reliefs entitled to the plaintiff.

Summary:

Issue 1: Entitlement to Decree for Rs. 2,81,59,025
The plaintiff sought reimbursement of service tax paid under eight agreements with the defendant, totaling Rs. 3,94,34,035. The plaintiff paid Rs. 2,40,00,000 on 31st December 2013 and the balance of Rs. 1,54,34,035 on 31st December 2014, along with interest of Rs. 13,97,767. Despite submitting debit notes as documentary evidence, the defendant demanded a bank guarantee and indemnity bond for reimbursement, leading to a writ petition. The court ordered the defendant to reimburse Rs. 3,94,34,035 upon submission of the discharge certificate in Form VCES-3, which the plaintiff complied with.

Issue 2: Entitlement to Interest
The plaintiff claimed interest on the delayed reimbursement of service tax. However, the court found that the plaintiff did not submit the discharge certificate in Form VCES-3 at the time of the reimbursement request, which was a requirement under the contract and the Circular No. 176/2/2014-ST dated 20th January 2014. The discharge certificate was only submitted after the court's order. Therefore, the plaintiff was not entitled to any interest.

Issue 3: Barred by Law of Limitation
The judgment does not explicitly address the limitation issue, but the dismissal of the suit implies that the court did not find the claim barred by limitation.

Issue 4: Other Reliefs
No additional reliefs were granted to the plaintiff.

Conclusion:
The court dismissed the suit, finding that the plaintiff was not entitled to any interest due to the failure to submit the discharge certificate in Form VCES-3 at the appropriate time. The reimbursement was made by the defendant as per the court's order after the discharge certificate was provided.