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TMI Blog2013 (2) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... to that assessee, has been paid to the assessee’s agent but by virtue of the judgement of the Supreme Court in Laghu Udyog Bharati & Others [1999 (7) TMI 1 - SUPREME COURT OF INDIA] and the effect of the Supreme Court’s judgement was nullified by statutory enactment, validity of which has been upheld by the Supreme Court. In that situation, one of the legal proposition applicable is that, one who gets the benefit because of the order of the Court and that order is set aside, he is bound to restore the benefit from whom he got. Therefore, the Tribunal was fully justified in ordering the recovery of the said amount from the person to whom it was paid in view of the judgement of Supreme Court effect of which has been nullified by Finance Act, 2000. The plain and logical consequence of making such law is to restore status quo ante and imposing a duty and obligation on the noticee who got the refund under the overruled judgement to pay back that amount - against the applicant and held that the Tribunal was justified in demanding refund of the amount of the tax paid to the applicant from applicant with the liability of payment of interest @ 24%. - Tax Case No. 6 of 2003 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble Supreme Court in the case of Laghu Udyog Bharati Others Vs. Union of India reported in 1999(112) ELT-365-SC quashed the provisions of Rule 2(i)(d)(xii) and XVII of the Service Tax Rules, 1997. Before this judgement came, the TISCO-service availer, who availed the services of the Transport Operator (applicant) of providing the transport vehicles, paid the service tax amount to the Revenue pertaining to period 16.11.1997 to 01.06.1998. In view of the judgement of the Hon'ble Supreme Court delivered in the case of Laghu Udyog Bharati Others (supra), quashing the tax liability with the consent of TISCO, an application was submitted by the applicant (Transport Operator) for refund of the tax deposited by TISCO in view of the order of the Hon'ble Supreme Court which is as under :- ................ any tax which has been paid by customers or clients of the clearing and forwarding agents or of the goods transport operators shall be refunded within twelve weeks on their making a demand for refund. The Revenue, finding above direction of the Supreme Court, refunded the tax amount deposited by TISCO to the applicant. 4. However, applicant's own case i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xvii) of Clause (d) of sub-rule (1) of Rule 2 of Service Tax Rules, 1994 (obviously, by judgment of Laghu Udyog Bharati's case) before the date on which Finance Act, 2000 received the assent of the President and by Clause (ii) of Section 117 of the Finance Act, 2000, the said amount was made recoverable within a period of 30 days from the date on which the Finance Act, 2000 received the assent of the President and the President accorded assent on 12thth May, 2000. Therefore, a duty was cast to refund the amount which may have been paid by virtue of the judgement or decree of any court including the judgement of the Hon'ble Supreme Court rendered in the case of Laghu Udyog Bharati Others (supra). 6. The contention of the applicant before us is that any notice under the Finance Act, 1997 or the Finance Act, 2000 could have been issued to only the assessee or the person who is covered and governed by the Act of 1997 and 2000. Admittedly, applicant was not liable to pay the tax amount and admittedly the said position continued from the beginning to till date and, therefore, the Department has no authority and jurisdiction to ask the applicant to pay or refund or redep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the applicant was rightly given the refund of the money and that too, with the consent of the TISCO against discharge of applicant's claim against the TISCO. 7. In view of the above submission, learned counsel for the applicant vehemently submitted that question No.1 referred to this court is based on undisputed facts. It is not in dispute that applicant is not liable to pay any service tax. It is also not in dispute that TISCO was liable to pay the service tax but in arguments, specifically in the opinion of the applicant, TISCO was and is also not liable to pay the service tax. Then in that situation, in either case, the applicant not being assessee was not being liable to pay service tax and could not have been served with the notice and notice of demand could have been raised against the TISCO, therefore, the notice was wholly without jurisdiction. 8. Learned counsel for the Revenue supported the reasons given by the Tribunal and submitted that the TISCO was liable to pay the tax amount and said tax amount was duly paid by the TISCO. In view of the judgement of the Supreme Court delivered in the case of Laghu Udyog Bharati Others (supra), the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being service availer, was liable to pay the tax till said liability was quashed by the Supreme Court's judgement given in the case of Laghu Udyog Bharati's Case and thus, liability revived retrospectively by Validation Act of 2000 leaving no area without liability of TISCO for the Service Tax and in this case the tax was paid by the TISCO. 11. In view of the judgement of the Supreme Court validating the provisions of the Act of 2000, the liability of TISCO continued without any break. During the period of the absence of the validation Act i.e., Finance Act, 2000, the amount was refunded. The applicant s counsel though argued vehemently that TISCO was not liable but the applicant s stand throughout before all authorities including this reference application itself was very categorical and it has been specifically pleaded that applicant was not liable to pay the tax but TISCO was liable to pay the tax. The afterthought of the applicant taking the plea that TISCO was not liable to pay service tax also is not legally sustainable, therefore, so far as answer to 1stst part of question No.1 is concerned, it can be given that the applicant was not liable to pay the tax and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provider. 14. It appears that the arguments have been advanced as though the applicant is sought to be taxed and that is not the correct position. In view of the finding recorded by us also and upholding the contention of even applicant, the applicant was not liable to pay the tax and the TISCO was liable to pay the tax and paid the tax and the amount was refunded to the TISCO, may it be through its agent or may its nominee or may it be any person. Admittedly, the agent/agency continues for specific period and in this case, if the case of the applicant is accepted as has been pleaded even before the authorities, then the applicant acted as an agent of the TISCO and received money which admittedly it had not paid to the TISCO and at the time when the applicant was asked to refund the amount, who was holding the amount certainly and absolutely on behalf of the TISCO. Contrary to it, the applicant s own pleading is that TISCO wrongly and illegally deducted applicant's bill amount and paid to the revenue. If it is the case of the applicant, then applicant could have claimed the amount from the TISCO by availing lawful remedy and the Revenue was not in picture at any point of ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the such judgement, he is not bound to restore the position and to return the benefit which it obtained under that overruled legal position. 17. In view of the above reasons, the 2ndnd part of question No.1 is answered against the applicant and it is held that the Tribunal was justified in demanding refund of the amount of the tax paid to the applicant from applicant. 18. In view of the above finding, it is held that the Tribunal was justified in holding that the tax amount refunded to the applicant is recoverable from the applicant and question No.2 is answered against the assessee. 19. So far as the language of Section 117 for the purpose of liability of payment of interest @ 24% is concerned, that is abundantly clear and it is not dependent on any further fact and this liability is statutory liability and therefore, that amount which was refunded, carries an interest according to Section 117 and at the rate as provided in the said Section. The question No.3 is also answered against the applicant. 20. In view of the valid statutory provision under Section 117 creating liability, which is not dependent upon setting aside of the order of refund, the liability to pay in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for filing the return, serve on the assessee a notice and proceed to assess or reassess the value of the taxable service. Clause (ii) of Section 117 of the Finance Act, 2000 is as under:- 117. Validation of certain action taken under Service Tax Rules (ii) any service tax refunded in pursuance of any judgement, decree or order of any court striking down sub-clauses (xii) and (xvii) of clause (d) of sub-rule (1) of rule 2 of the Service Tax Rules, 1994 before the date on which the Finance Act, 2000 receives the assent of the President shall be recoverable within a period of thirty days from the date on which the Finance Act, 2000 receives the assent of the President, and in the event of non-payment of such service tax refunded within this period, in addition to the amount of service tax recoverable, interest at the rate of twenty-four per cent. Per annum shall be payable, from the date immediately after the expiry of the said period of thirty days, till the date of payment. 22. A bare reading of these two provisions will reveal that both Sections deal with two different subjects. Section 73 of the Act of 1994 is specific provision which normally finds place ..... 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