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TMI Blog2024 (1) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... s Court in the case of Joshi Technologies International [ 2016 (6) TMI 773 - GUJARAT HIGH COURT] 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 that ' 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 application made by the petitioner was well within the prescribed period of limitation.' The amount of GST paid by the petitioner is admittedly paid as a self assessment, which the petitioner was not required to pay as per the Notification No. 32/2017. Accordingly, in the facts of the case, the amount paid by the petitioner from electronic cash ledger is r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 specific purpose of either construction of new civil structure or for repairs of the existing civil structure. 4.2 In the year 2017, the petitioner was given works contract by the Government of Gujarat for construction of various residential, nonresidential buildings and different locations across the Gujarat. The petitioner is not exempted from the registration under the provisions of the Goods and Service Tax Act, 2017 (for short the GST Act ) and therefore, the petitioner is registered under the GST Act having Registration No. 24AAACG5532C1Z7 and the petitioner duly complied with the provisions of the GST Act. The petitioner was availing the input tax credit on the goods and services and utilized such ITC for discharge of its output liability. The petitioner discharged the GST liability on the construction activity carried out during the period in the year 2017-2018 of utilization available ITC balance for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 rejected of five refund claims filed by the petitioner for the period from November 2017 to September 2018 as under:- Sr. No. Appeal No. Order No. and date Period of Dispute Central Tax State Tax 1. GAPPL/ADC/GSTP/811 ZY2412200 205546 dated 18.12.2020 Nov. 2017 1,91,44,909 1,91,44,090 2. GAPPL/ADC/GSTP/820/2021 ZQ2412200 205679 dated 18.12.2020 Jan. 2018 2,54,53,321 5,19,76,246 3. GAPPL/ADC/GSTP/821/2021 ZO2412200 205891 dated 18.12.2020 March 2018 1,83,24,398 1,83,24,398 4. GAPPL/ADC/GSTP/819/2021 ZU2412200 205813 dated 18.12.2020 May 2018 5,27,00,160 5,27,00,160 5. GAPPL/ADC/GSTP/823/2021 ZS24122002 05591 dated 18.12.2020 Sept. 2018 3,37,50,751 3,37,50,751 4.9 The petitioner has therefore filed these five Special Civil Applications challenging the common order in Appeal dated 20.07.2021 as the Tribunal under Section 112 of the GST Act is not yet available. 5. Learned advocate Mr.Anand Nainawati for the petitioners submitted that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Notification No. 32/2017, the petitioner is eligible to file refund claim, which would not be governed by Section 54 of the CGST Act and accordingly, the time limit of two years shall not be applied and the respondent authority is required to refund the amount paid by the petitioner as the same was collected without any authority of law in violation of Article 265 of the Constitution of India, which cast an obligation on the respondents to refund such amount. 10. On the other hand, learned advocate Mr. Divyeshvar for the respondent submitted that the Appellate Authority has rightly rejected the refund claims relying upon the provisions of Section 54 of the CGST Act. It was submitted that the adjudicating authority has recorded finding, which indicate that the total tax paid by the appellant for which the benefit of Notification No. 32/2017 dated 13.10.2017 is admittedly beyond stipulated time of two years from the relevant date i.e. the order of payment of tax in terms of the provisions of explanation 2(h) of Section 54 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under mistake of law. 22. Having heard learned advocates for the respective parties and having considered the facts of the case, it is not in dispute that the petitioner is entitled to the exemption under Notification No. 32/2017 read with Notification No. 12 of 2017 dated 13.10.2017, which reads as under:- GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE) CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS New Delhi: 05.07.2022 Notification No. 13/2022-Central Tax G.S.R. 516(E). In exercise of the powers conferred by section 168A of the Central Goods and Services Tax Act, 2017 (12 of 2017) (hereinafter referred to as the said Act) read with section 20 of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) and section 21 of the Union Territory Goods and Services Tax Act, 2017 (14 of 2017) and in partial modification of the notifications of the Government of India in the Ministry of Finance (Department of Revenue), No. 35/2020-Central Tax, dated the 3rd April, 2020, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 235(E), dated the 3rd April, 2020 and No. 14/2021-Central Tax, dated the 1st May, 2021, published ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India where a refund of tax paid is available in respect of goods themselves or, as the case may be, the inputs or input services used in such goods, (i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which such goods are loaded, leaves India; or (ii) if the goods are exported by land, the date on which such goods pass the frontier, or (ii) if the goods are exported by post, the date of despatch of goods by the Post Office concerned to a place outside India: (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is available in respect of the goods, the date on which the return relating to such deemed exports is furnished; (c) in the case of services exported out of India where a refund of tax paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of - (i) receipt of payment in convertible foreign exchange [or in Indian rupees wherever permitted by the Reserve Bank of India, where the supply of services had been completed prior to the receipt of such payment; or (ii) issue of invoice, where payment for the services had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the present case is concerned would be the date of payment of duty. However, as discussed hereinabove, the provisions of section 11B of the Act would not apply to the claim of refund made by the petitioner. Consequently, the limitation prescribed under the said provision would also not be applicable. 14. It has been further contended on behalf of the revenue, that in case the limitation prescribed under section 11B of the CE Act is not applicable, the general principles of limitation would apply and the limitation of three years for filing a suit would apply, whereas on behalf of the petitioner reliance has been placed upon section 17 of the Limitation Act, 1963 to contend that this case would be governed by the said provision and hence the limitation would not begin to run till the petitioner discovered the mistake. In support of the above submission, on behalf of the petitioner, reliance has been placed on the following decisions:- 14.1 The decision of the Supreme Court in Dehri Rohtas Light Rly. Co. Ltd. v. District Board, Bhojpur (supra), was cited, wherein it has been held thus: 12. The question thus for consideration is whether the appellant should be deprived of the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined on the sole ground of laches. The decision in Tilokchand case1 relied on is distinguishable on the facts of the present case. The levy if based on the net profits of the railway undertaking was beyond the authority and the illegal nature of the same has been questioned though belatedly in the pending proceedings after the pronouncement of the High Court in the matter relating to the subsequent years. That being the case, the claim of the appellant cannot be turned down on the sole ground of delay. We are of the opinion that the High Court was wrong in dismissing the writ petition in limine and refusing to grant the relief sought for. We however agree that the suit has been rightly dismissed. (Emphasis supplied) 14.2 Reliance was also placed upon the decision of this court in Swastik Sanitarywares Ltd. v. Union of India (supra), wherein it has been held as follows: 15. In the present case, however, we find that the second deposit of the same amount on clearance of the same goods did not amount to deposit of excise duty and was a pure mistaken deposit of an amount with the Government which the revenue cannot retain or withhold. Such claim, therefore, would not fall within Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity under sub-section (3) of section 68. Thereafter, on an artificial basis, the Assessing Officer could not have held that he ought to have deposited same amount once all over again in the following quarter. This is fundamentally flawed logic on the part of the Assessing Officer. (13) Further, to accept such formula adopted by the Assessing Officer would amount to collecting the tax from the petitioner twice. The petitioner having already paid up the service tax even before collection in a particular quarter, cannot be asked to pay such tax all over again in the following quarter on the same service on the ground that such tax had to be deposited in the later quarter but was deposited earlier. Any such action would be without authority of law. Further, before raising demand of Rs. 1,19,465/- under the head of duty short paid, the Assessing Officer should have granted adjustment of the duty already paid by the petitioner towards the same liability. (14) Under the circumstances, we are of the opinion that the department cannot withhold such amount which the petitioner rightfully claimed. Under the circumstances, question of applying limitation under section 11B of the Act would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Loong Soong case was decided by the High Court in 1973 that the appellant became aware of his crystal right of having the assessment declared ultra vires and in that view of the matter in October 1973 when the judgment was delivered in July 1973 the appellant came to know that there is mistake in paying the tax and the appellant was entitled to refund of the amount paid. That was the time when the appellant came to know of it. Within a month in November 1973 the present petition was filed. There was no unexplained delay. There was no fact indicated to the High Court from which it could be inferred that the appellant had either abandoned his claims or the respondent had changed his position in such a way that granting relief of refund would cause either injury to the respondent or anybody else. On the other hand, refunding the amount as a consequence of declaring the assessment to be bad and recovery to be illegal will be in consonance with justice, equity and good conscience. We are, therefore of the view that the view of the High Court in this matter cannot be sustained. 20. In State of M.P. v. Bhailal Bhai, AIR 1964 SC 1006, this Court had occasion to consider what was unreas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief on the merits on grounds like limitation the court should ordinarily refuse to issue the writ of mandamus. Though the provisions of the Limitation Act did not as such, it was further held, apply to the granting of relief under Article 226, the maximum period fixed by the legislature as the time within which relief by a suit in a civil court must be claimed may ordinarily be taken to be a reasonable standard by which delay in seeking remedy under Article 226 could be measured. The court might consider the delay unreasonable even if it is less than the period of limitation prescribed for a civil action for the remedy. Where the delay is more than that period it will almost always be proper for the court to hold that it is unreasonable. The period of limitation prescribed for recovery of money paid by mistake under the Limitation Act was three years from the date when the mistake was known. In this case knowledge is attributable from the date of the judgment in Loong Soong case on 10-7-1973 and there being a statement that the appellant came to know of that fact in October 1973 and there being no denial by the averment made on this ground, the High Court, in our opinion, in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Secondary and Higher Secondary Education Cess by the respondents is without authority of law and hence, in the light of the decision of this court in Swastik Sanitarywares Ltd. v. Union of India (supra), the question of applying the limitation prescribed under section 11B of the CE Act would not arise. 30. The Hon ble High Court of Karnataka in the case of Commr. of C.EX (Appeals), Bangalore vs. KVR, reported in 2012 (26) S.T.R. 195 (Kar.) Construction has held as under:- 18. From the reading of the above Section, it refers to claim for refund of duty of excise only, it does not refer to any other amounts collected without authority of law. In the case on hand, admittedly, the amount sought for as refund was the amount paid under mistaken notion which even according to the department was not liable to be paid. 19. According to the appellant, the very fact that said amounts are paid as service tax under Finance Act, 1994 and also filing of an application in Form-R of the Central Excise Act would indicate that the applicant was intending to claim refund of the duty with reference to Section 11B, therefore, now it is not open to him to go back and say that it was not refund of duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by mistake and therefore they are entitled for the refund of the said amount. If we consider this payment as service tax and duty payable, automatically, Section 11B would be applicable. When once there was no compulsion or duty cast to pay this service tax, the amount of Rs. 1,23,96,948/- paid by petitioner under mistaken notion, would not be a duty or service tax payable in law. Therefore, once it is not payable in law there was no authority for the department to retain such amount. By any stretch of imagination, it will not amount to duty of excise to attract Section 11B. Therefore, it is outside the purview of Section 11B of the Act. 31. The Hon ble Supreme Court in the case of Commissioner vs. KVR Construction, reported in 2018 (14) G.S.T.L. J70 (S.C.) has held thus:- Delay Condoned The Special Lave petitions are dismissed. The Hon ble Supreme Court by order dated 11.07.2011 dismissed the Special Leave Petition in Appeal (civil) No. CC 10732 and 10733 of 2011 filed by the Commissioner of wages against the judgment and order of Karnataka High Court in the case of KKR (supra) 32. The Hon ble Delhi High Court in the case of Teleecare Network (India) Pvt. Ltd. vs. Union of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the question as to what is the point of time from which the limitation should be deemed to 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 Collect of Central Excise (Appeals) to deny them the refund for the period September 1, 1970 to May 28,1971, and June 1, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals. We fully allow refund of Rs. 8,99,962/- preferred by the appellant. We direct that the respondent shall refund the amount of Rs. 8,99,962/- to the appellant within a period of three months. There shall be no order as to costs. 12. Further, the claim of the respondent in refusing to return the amount would go against the mandate of Article 265 of the Constitution of India, which provides that no tax shall be levied or collected except by authority of law. 34. The Hon ble Supreme Court in the case of ITC Ltd. (supra), has held as under:- 7. In Salonah Tea Company Ltd. Etc. v. Superintendent of Taxes Now-gong and Ors. etc. this Court said : Normally speaking in a society governed by rule of law taxes should be paid by citizens as soon as they are due in accordance with law. Equally as a corollary of the said statement of law it follows that taxes collected without the authority of law, as in this case, from a citizen should be refunded because no State has the right to receive or to retain taxes or levies realised from citizens without the authority of law. Dealing with the question of bar of limitation for making a claim for refund of tax or duty paid or collected without the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of Section 11B of the Act as amended by Act 40 of 1991, which amendments are aimed at preventing unjust enrichment . Learned Counsel for the appellants urged that the excise duty, being an indirect tax, is passed on to the consumers and therefore the respondent was not in law justified to claim refund since, it was not even stated by the respondent in its affidavit that they were going to return the amount to various consumers or that any consumer had in fact sought such a refund. Reference in this connection was made by the learned Counsel specially to the provisions of Section 11B(3) of the Act as introduced by Act 40 of 1991 with effect from 20.9.1991 and it was submitted that with effect from 20th of September 1991, no person is entitled to claim and obtain refund of the excess duty paid except in accordance with the provision of Section 11B(2) of the Act, as amended, and that since the respondent had failed to produce any documentary evidence to show that it had not passed on the burden of excess excise duty to the consumers, it was not open to it to claim and obtain the refund. Learned Counsel therefore urged that in accordance with the directions of this Court in its or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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