2024 (6) TMI 712 - HC - Service Tax

Refund of Service Tax amounts collected from various chitty transactions of the petitioners in different branches of the Kerala State Financial Enterprises Limited - HELD THAT - When the petitioners have made the applications individually in pursuance to the judgment dated 14.03.2018 passed by this Court, within one year from the date of the judgment, their applications ought not to have been rejected on some technical issue. These applications are in time and the authority, on examination, finds that they are eligible for a refund of the service tax amount paid by them as per the judgment dated 14.03.2018 passed by this Court, their applications ought to have been considered and the refund could have been credited to their accounts, if such refund is to be made under the judgment of this Court. The matter is remitted back to the Original Authorities to process the petitioners applications for refund of the service tax amount in pursuance of the judgment dated 14.03.2018 passed by this Court and pass fresh orders expeditiously, preferably within a period of two months - petition allowed by way of remand.

Summary

Issues involved: Refund of service tax on chitty transactions, rejection of refund applications by petitioners, simultaneous filing of refund applications by service provider, authorization for refund application.

Summary:
In the case involving refund of service tax on chitty transactions, the petitioners had subscribed to chitties from Kerala State Financial Enterprises Limited and paid service tax on the subscriptions between 2012 and 2015. Following a judgment by the Supreme Court and a subsequent decision by the Kerala High Court, it was held that no service tax was leviable on chitties during a specific period, and refunds were directed to be processed upon application within a year. The petitioners duly applied for refunds within the stipulated time frame. However, their applications were rejected on the basis that the service provider, Kerala State Financial Enterprises Limited, had also applied for refunds covering the same amounts. The rejection was justified on the grounds of simultaneous filing of refund applications by the service provider and the service recipients, which was deemed unacceptable.

The petitioners contended that they had not authorized the service provider to apply for refunds on their behalf, and therefore, their individual applications should not have been rejected. The Department's Standing Counsel argued that the service provider had claimed to have applied on behalf of all subscribers, and there was an alleged undertaking by the petitioners not to make individual applications. Despite these contentions, the Court emphasized that the petitioners had filed their applications individually in compliance with the Court's judgment, and thus, their applications should not have been rejected on technical grounds. The Court ruled in favor of the petitioners, allowing the writ petitions and remanding the matter to the Original Authorities for processing the refund applications promptly, preferably within two months. It was clarified that if the service provider had claimed refunds on behalf of the petitioners, such claims should be disregarded by the Original Authority in favor of the petitioners' individual applications.