9911796707
Advanced Search 
TMI Blog2024 (1) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... (herienafter referred to as "the Appellate Authority") upholding the rejection of the refund claim by the respondent no.2. 4. Brief facts of the case are as under:- 4.1 The petitioner is an undertaking of Government of Gujarat incorporated on 01.11.1988 under the provisions of the Companies Act, 1956 having the main objective to undertake construction of residential, non-residential all types of buildings for Gujarat Police, Jails, Home Guards etc. and to formulate various housing scheme for serving and retired employees in the Police Department of the Government of Gujarat. For carrying out the above objectives, the petitioner is engaging the Contractors, Engineers, Architects etc. for providing activity of construction. The petitioner floats tenders and invites the application/bid from various activities like appointment of Project Management Consultant, Engineers etc. and the payments are made from grant received by the petitioner from the State Government from annual budget allocations. The petitioner did not raise any invoice up on the Government of Gujarat for the construction activity carried out by it as per its objective and the amount received by the petitioner is for s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be filed and are governed by the provisions under Section 54 of the GST Act and refund was filed in Form- RFD-01. The refund application was filed only to the extent of outward liability of tax discharged by the petitioner through electronic cash ledger. 4.5 Respondent no.2-Assistant Commissioner, CGST rejected the refund claim filed by the petitioner by Order in Original dated 18.12.2020 in Form GST RFD-06 only on the ground that the refund claims were filed by the petitioner are time barred beyond the statutory time period of two years as per Section 54(1) CGST Act. 4.7 Feeling aggrieved by the order dated 18.12.2020 passed by respondent no.2 preferred five appeals before the Appellate Authority contending that the tax was paid under mistake of law and therefore, time limit of two years would not apply. 4.8 By the impugned order in appeal dated 20.07.2021 (issued on 30.07.2021), the Appellate Authority dismissed the appeal filed by the petitioner on the ground that the refund claim of the petitioner would be governed by Section 54 of the GST Act and therefore, time limit of two years shall be applicable and therefore, refunds are time barred. The Appellate Authority rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of M/s. Joshi Technologies International (supra) that respondent authorities are liable to refund the GST paid by the petitioner. 8. Learned advocate Mr.Nainawati further submitted that the Government cannot retain the money, which is not due and in support of his submission, reliance was place on the following decisions:- 1. Salonah Tea Company Ltd. vs. Superintendent of Taxes, Nowgong, 1987 (12) TMI 3-SC. 2. Superintendent of Taxes vs. Onkarmal Nathmal Trust, 1975 Supp SCR 365. 3. Union of India vs. ITC Ltd., 1993 Supp (4) SCC 326. 4. Vallabh Glass Works Ltd. vs. UPI, [1985] 155 ITR 560 (SC). 5. Teleecare Network (India) Pvt. Ltd. vs. Union of India, 2018 (8) TMI 1901-Delhi High Court. 6. 3E Infotech vs. Customs, Excise, & Service Tax Appellate Tribunal, CCE, Appeals, 2018 (7) TMI 276-Madras High Court. 7. Commissioner of Central Excise vs. KVR Construction, 2012 (26) STR 195 (Kar.) 8. Gokul Agro Resources Ltd. vs. Union of India, 2020 (2) TMI 1242(Guj.) 9. Bharat Oman Refineries Ltd. vs. Union of India, 2020 (8) TMI 568(Guj.) 9. It was, therefore, submitted that as petitioner has paid the tax under mistake of law, as tax was not payable by virtue of No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 11221 of 2022 ZY24122 00205891 dtd 18.12. 2020 March 2018 1,83,24,398 1,83,24,398 20.04.2020 11.11.2020 YES 4. SCA No. 15755 of 2022 ZY24122 00205813 dtd 18.12. 2020 May 2018 5,27,00,160 5,27,00,160 20.06.2020 11.11.2020 YES 5. SCA No. 15752 of 2022 ZY24122 00205591 dtd 18.12. 2020 Sept. 2018 3,37,50,751 3,37,50,751 20.10.2020 11.11.2020 YES 21. Referring to the above details, it was submitted that the orders refund claims at serial nos.3, 4 and 5 are concerned, the same would be within the period of limitation in view of the Notification No. 13/2022 and to that extent, the refund claim may be considered by the respondent authority. It was submitted that for the remaining two refund claims at serial nos. 1 and 2 are concerned, the same may be considered by applying Article 265 of the Constitution of India. It was further submitted that the petitioner has made refund claims for the amount paid in cash through electronic cash ledger only and not for the amount discharged using ITC availed by the petitioner as the GST paid through ITC utilization is equivalent to reversal of ITC, which was availed under mistake of law. 22. Having heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Under Secy." 23. The entry no.9(c) of Chapter 99 of GST Tariff-Services, reads as under:- "Supply of service by a Government Entity to Central Government, State Government, Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority against consideration received from Central Government, State Government, Union territory or local authority, in the form of grants." 24. Section 5A(1A) of Central Excise Act, 1944 stipulates as under:- "Section 5A[(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer of such excisable goods shall not pay the duty of excise on such goods" 25. Section 54(1) of the CGST Act reads as under:- "Section 54(1) Refund of tax paid on zero rated supplies of goods or services or both or on "input or input service" (not the capital goods) used in making such zero rated supplies." 27. Explanation 2(h) of Section 54 of the CGST Act defining the relevant date reads as under:- "(2) "relevant date" means- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 32/2017, the petitioner was not granted exemption providing "Nil rate of Tax". Therefore, as per clause(h) explanation 2, refund date would be the date of payment of tax, which petitioner has failed ignoring the Notification No. 32/2017. Therefore, the petitioner is ought to have filed refund claim as per the Section 54(1) of the CGST Act. 29. This Court in the case of Joshi Technologies International (supra) has held that the amount paid by mistake or through ignorance as self assessment of tax cannot be retained by the revenue and revenue is duty bound to refund as its retention is hit by Article 265 of the Constitution of India, which mandates that no tax shall be levied or collected except by authority of law. It was held as under:- "13. The next question that needs to be addressed is the aspect of limitation. The refund application has been made in July 2014 seeking refund of the amount paid for the period July, 2004 to April 2014. On behalf of the revenue it has been contended that in view of the provisions of section 11B of the CE Act, the limitation for filing the refund claim would be before the expiry of one year from the relevant date. The expression "rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was beyond the scope of the suit. Thereafter, the present writ petition was filed explaining all the circumstances. The High Court considered the delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case. 13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy claimed are and how delay arose. The principle on which the relief to the party on the grounds of laches or delay is denied is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the writ court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not as to physical running of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time in October, 2003 whereupon immediately on 1-11-2003, such refund claim was filed. 17. In a recent judgment in case of C.C. Patel & Associates Pvt. Ltd. (supra), this court had occasion to deal with somewhat similar situation where the petitioner had deposited service tax twice which was not being refunded by the Department. In that context, it was observed as under:- (12) We fail to see how the department can withhold such refund. We say so for several reasons. Firstly, we notice that under sub-section(3) of section 68, the time available to a service provider such as the petitioner for depositing with the Government service tax though not collected from the service recipient was 75 days from the end of the month when such service was provided. This is in contrast to the duty to be deposited by a service provider upon actual collection by the 15th of the month following the end of the month when such duty is collected. Sub-section (3) of section 68 thus provided for an outer limit of 75 days, but never provided that the same cannot be paid by the 15th of the month following the end of the month when such service was provided. Thus, if the petitioner deposited such duty w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the instant case after analysing the various decisions came to the conclusion that where a petitioner approached the High Court with the sole prayer of claiming refund of money by writ of mandamus, the same was normally not granted but where the refund was prayed as a consequential relief the same was normally entertained if there was no obstruction or if there was no triable issue like that of limitation. We agree that normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under Article 226 of the Constitution the court has power to direct the refund unless there have been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to respondent or any third party. It is true that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexible rule. It depends upon the facts of each case. In this case, however, the High Court refused to grant the relief on the ground that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of mandamus directing this to be done since there was unreasonable delay in filing the petition. The High Court rejected all the contentions of the appellant and a writ of mandamus was issued as prayed for. It was held that tax was violative under Article 301 of the Constitution. But it was held that even though the tax contravened Article 301 of the Constitution, it was valid if it came within the saving provisions of Article 304 of the Constitution. Tobacco manufactured or produced in the appellant State, similar to the tobacco imported from outside had not been subjected to the tax and therefore the tax was not within the saving provisions of Article 304(a) of the Constitution. It was reiterated that the tax which had already been paid was so paid under a mistake of law under Section 72 of the Indian Contract Act. The High Courts had power for the purpose of enforcement of fundamental rights and statutory rights to grant consequential reliefs by ordering repayment of money realised by the government without the authority of law. It was reiterated that as a general rule if there has been unreasonable delay the court ought not ordinarily to lend its aid to a party by the extraordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not clear and hence, pursuant to representations made by the trade and field formations, the CBEC was required to issue the circular dated 07.01.2014 clarifying the issue. As noticed earlier, the petitioner had all along, right from July 2004 been paying Education Cess and subsequently, from the year 2007 was paying Secondary and Higher Secondary Education Cess, till April 2014. It was only when the Circular dated 07.01.2014 came to be issued by the CBEC, clarifying the issue, that the petitioner came to know about its mistake. Considering the nature of the mistake and the fact that the issue was not free from doubt till the above circular came to be issued by the CBEC, it also cannot be said that the petitioner could with reasonable diligence have discovered the mistake. It appears that it is only sometime after the Education Cess and Secondary and Higher Secondary Education Cess came to be paid for the month of April 2014 that the petitioner came to know about its mistake and in July 2014, it filed the application for refund before the second respondent. Since the period of limitation begins to run only from the time when the applicant comes to know of the mistake, the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner could have challenged it as unconstitutional and without authority of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularise such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17-9-2004, the payment made by the respondent company would not partake the character of "service tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor the nature of transaction. In other words, mere payment of amount would not make it a "service tax" payable by them. When once there is lack of authority to demand "service tax" from the respondent company, the department lacks authority to levy and collect such amount. Therefore, it would go beyond their purview to collect such amount. When once there is lack of authority to collect such service tax by the appellant, it would not give them the authority to retain the amount paid by the petitioner, which was initially not payable by them. Therefore, mere nomenclature will not be an embargo on the right of the petitioner to demand refund of payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , notwithstanding any judgment, order or decree of the court. This Court is at a loss to observe the relevance of that reasoning, given that SRF Limited (supra) had ruled in principle that import implied a deemed manufacture, without any corresponding obligation on the part of the importer to have availed CENVAT credit. As such, the amount claimed was not duty and could not have been recovered by the Customs authorities in the first instance, given the declaration of law in SRF Limited (supra). Therefore, they cannot now seek shelter under Section 27 (3) to resist a legitimate refund claim." 33. The Hon'ble Madras High Court in the case of M/s. 3E Infotech (supra) Court has held thus:- "8. The present appeal lies from the order of the Appellate Tribunal. We have heard the learned counsel for the Assessee and the State. The issue, which arises for consideration in this case, whether the provisions of Section 11B of the Central Excise Act would be applicable to claim of refund made by an Assessee when the tax has been paid under mistake of law. In this case, indisputably, there was no liability on the petitioner to pay service tax. The Supreme Court of India, in the case of Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law is no longer res integra. The two decisions of the Division Bench of this Court in Hindustan Cocoa (supra) and Commissioner of Central Excise, Nagpur v. M/s. SGR Infratech Ltd. (supra) are squarely applicable to the facts of the present case. 5. Both decisions have held the limitation prescribed under Section 11B of the said Act to be not applicable to refund claims for service tax paid under a mistake of law. The decision of the Supreme Court in the case of Collector of C.E., Chandigarh v. Doaba Co-Operative Sugar Mills (supra) relied upon by the Appellate Tribunal has in applying Section 11B, limitation made an exception in case of refund claims where the payment of duty was under a mistake of law. We are of the view that the impugned order is erroneous in that it applies the limitation prescribed under Section 11B of the Act to the present case were admittedly appellant had paid a Service Tax on Commercial or Industrial Construction Service even though such service is not leviable to service tax. We are of the view that the decisions relied upon by the Appellate Tribunal do not support the case of the respondent in rejecting the refund claim on the ground that it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o commence observed that relief in respect of payments made beyond the period of three years may not be granted from the date of filing of the petition, taking into consideration the date when the mistake came to be known to the party concerned. Just as an assessee cannot be permitted to evade payment of rightful tax, the authority which recovers tax without any authority of law cannot be permitted to retain the amount, merely because the tax payer was not aware at that time that the recovery being made was without any authority of law. In such cases, there is an obligation on the part of the authority to refund the excess tax recovered to the party, subject of course to the statutory provisions dealing with the refund. 9. We are, therefore, of the opinion that the High Court, while disposing of the writ petition under Article 226 of the Constitution of India, was perfectly justified in holding that the bar of limitation which had been put against the respondent by the Collector Central Excise (Appeals) to deny them the refund for the period 1.9.1970 to 28.5.71 and 1.6.1971 to 19.2.1972 was not proper as admittedly the respondent had approached the Assistant Collector Excise soo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
