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TMI Blog2015 (2) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf as to the identity, it is open to the second respondent to seek necessary information or clarification from the petitioner, and if the second respondent paid any service tax on the amount collected by it towards service tax, it need not refund the same. - Decided in favour of assessee. - WRIT PETITION No.11171 of 2012 - - - Dated:- 15-9-2014 - SRI L. NARASIMHA REDDY AND SRI CHALLA KODANDA RAM, JJ. For the Appellant : Sri S.R. Ashok, Sr. Counsel For the Respondent : Sri A.V. Krishna Koundinya, Sr. Counsel JUDGEMENT L. Narasimha Reddy J.- This writ petition is filed with a prayer to declare the action of the Visakhapatnam Port Trust, the second respondent herein, in not refunding the amount that has been co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages for the workers are paid by the stevedores, it was resolved to collect the fringe benefit tax for the concerned employees, from the respective stevedores. The tax is on the fringe benefits paid to each employee. However, a formula was evolved to collect Re. 1 for each metric tonne of the material handled by the stevedore for onward payment of fringe benefit tax, to the Income-tax Department. Between the years 2005 and 2009, a sum of ₹ 7 crores was collected towards fringe benefit tax from the stevedores, i.e., the members of the petitioner-association. The petitioner contends that the board and the second respondent herein were registered under section 12 of the Act and, accordingly, they stood exempted from the obligation t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r counsel for the respondents. It is not uncommon that the employees in the establishments, particularly those, which are large in size, provide for payment of fringe benefits to their employees. Taking into account the fact that the benefits so paid are many a time phenomenal in quantum, Parliament introduced the provision for levy of fringe benefit tax in the form of addition to section 115W to section 115WL in Chapter XII-H of the Act through the Finance Act, 2005. It is the obligation of the employer to pay the fringe benefit tax. In the introductory part itself, it has been mentioned that the board, which has since merged with the second respondent, would have several employees on its rolls, and they, in turn, are allotted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a formula, in this behalf, through its resolution dated July 28, 2005. It reads : The board resolved to adopt the minutes of meeting No. 2 held on June 4, 2005, and circular resolution No. 42 of 2005 dated June 23/ 30, 2005. Shri K. V. Krishna Kumar stated that with regard to the board resolution No. 40 of 2005, for the purpose of clarity, it was decided to collect fringe benefit tax from an easily measurable point without double accounting. Hence, the board resolved to collect a special levy towards fringe benefit tax liability of VDLB from the employers of the registered scheme on the stevedoring tonnage at Re. 1 per metric tonne with effect from August 1, 2005. Accordingly, the amounts were being collected from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the employers and credited under liability with a condition that as a consequence of the Income-tax appeal, if it is not liable to fringe benefit tax, the amount so collected will be refunded to the firms. The tax appeal is only in relation to service tax and not about the Income-tax. Once there is no demand, much less the payment of the fringe benefit tax by the second respondent to the Income-tax Department, there does not exist any justification to withhold the amount. Across the Bar, it is argued that the refund of the amount may result in undue enrichment of the members of the petitioner-association, and sometimes, it may even be difficult to identify the persons, from whom it is collected. As regards the first contention, it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er with the agency, or with the petitioner. It is only on full satisfaction of the second respondent, about the identity of the agency, that the relevant amount can be refunded. 16. The writ petition is, therefore, allowed directing that : (a) The second respondent shall be under obligation to refund the amount collected towards the fringe benefit tax along with accrued interest to the respective stevedores from whom it was collected duly identifying them, within two months from the date of receipt of a copy of this order. (b) We also make it clear that the second respondent shall not be under any obligation towards fringe benefit tax for the benefits paid to the employees supplied by it to the stevedores. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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