2024 (12) TMI 949 - HC - Service Tax

Seeking a direction to the sole opposite party to refund the sum of Service Tax to petitioners alongwith interest - HELD THAT - Liberty is granted to petitioners to file a fresh individual application/representation either physically or through e-mail for refund of such Service Tax, which shall be considered and decided by the opposite party expeditiously, preferably within a period of two months from the date of presentation of such representation alongwith copy of this order, particularly adverting to the facts whether such a tax was realized from petitioners as a part of their fee and in terms of the judgment rendered by Delhi High Court. The petition stands disposed of.

Summary

Issues:
1. Refund of Service Tax to petitioners along with interest.

Analysis:
The petitioners filed a petition seeking a direction for the refund of Service Tax along with interest. The petitioners had enrolled in a specific institute after 2010 where Service Tax was levied. The Delhi High Court, in a judgment dated 21.05.2013, held that imposing Service Tax on such institutes was contrary to the Finance Act, 1994. Subsequently, the Custom Excise and Service Tax Appellate Tribunal passed an order on 02.07.2013 in line with the Delhi High Court judgment. The opposite party's appeal against the Service Tax imposition was also allowed by the Delhi High Court. The Commissioner Central Excise, Lucknow's appeal against the Delhi High Court judgment was dismissed by the Supreme Court on 06.02.2018.

The petitioners argued that since it was established that the institute was not required to pay Service Tax, students who had paid the tax as part of their fee were entitled to a refund. The opposite party had applied for a refund of Service Tax, claiming it was erroneously paid. However, the institute had deferred refund applications from students, indicating that the tax was indeed collected from them. The opposite party had also filed Central Excise Appeals, which were pending consideration.

The learned counsel for the opposite party stated that any representations made by the petitioners regarding the refund would be reviewed by the appropriate authority. The court granted liberty to the petitioners to file individual applications for refund, which should be decided by the opposite party within two months. The decision should consider whether the tax was collected from the petitioners as part of their fee and in accordance with the Delhi High Court judgment. The petition was disposed of with these directions.