9911796707
TMI Blog2025 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... extile machinery and equipment. Petitioner is registered under the provisions of the Central/State Goods and Services Tax Act, 2017 (for short the 'GST Act') , after coming into force of the said Act. 5. The petitioner for manufacturing the goods, various types of textile machinery and equipment was procuring various inputs, raw materials, capital goods including the supplies by way of import during the period from May 2019 to March 2020. The petitioner imported various inputs and material by filing 33 Bills of Entry which were cleared from the ports of imports to the factory premises of the petitioners on payment of import duties leviable including the integrated tax of Rs. 2,48,28,300/- which is admissible as Input Tax Credit (ITC). Accordingly, the petitioner availed the ITC of the said amount on the basis of the Bills of Entry and challans. However, it appears that due to some wrong impression created on the petitioner' s part that an excess credit of Rs. 40,00,000/- was availed regarding the tax paid on imported goods, which the petitioner paid on account of the mismatch between the figures of ITC relatable to integrated tax paid on imports, which was auto populated in Form o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 024 rejected the refund application of the petitioner being time barred. 11. Being aggrieved the petitioner has preferred this petition. 12. Learned advocate Mr. Paresh Dave for the petitioners submitted that there are no disputes with regard to the facts of the case as it is admitted by the respondents in the affidavit-in-reply filed that the payment made by the petitioner was not recovered as tax by the authorities but was a voluntary payment. It was further submitted that the petitioner has not paid the amount of Rs. 40,00,000/- towards any tax and interest as contemplated under Section 54 (1) of the Act and therefore, the limitation of two years prescribed in Section 54 (1) shall not be applicable to the refund of the amount voluntarily deposited by the petitioner in Form DRC-03. It was further submitted that the issue of refund of such voluntary payment is no more res-integra in view of decision of this Court in case of M/s. Joshi Technologies International Versus Union of India reported in (2016) 339 ELT 21, which was subsequently followed in decision of M/s Gujarat State Police Housing Corporation Ltd. Versus Union of Indian and Another rendered in Special Civil Applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner failed to submit their reply to the SCN issued to them in the form of RFD-08 and also failed to appear for personal hearing. Hence, after considering the facts, the impugned order dated 14. 06. 2024 came to be passed. 10. It is submitted that, a contention is raised by the petitioner that, the cause of action for claiming refund has arisen in April, 2024 based on ASMT-12 order. Such contentions are completely misplaced, in as much as the order of ASMT-12 has been issued by the jurisdiction Range Superintendent on 24.04.2024 whereas the refund claim was filed by petitioner, prior to that, i.e. on 30.03.2024. Furthermore, even assuming, without admitting, that upon intimation of GST ASMT-10 dated 23.02.2024, it came to the knowledge of petitioner regarding such mistake, it would not be of any relevance, since as per the Act, the period of limitation of 2 years does not start with such knowledge of mistake but starts with payment of tax. Hence, the petitioner' s computation of delay is against the provisions of the Act and they shift the onus upon the authorities for justifying their delay. 11. It is submitted that a contention is raised by the petitioner regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have any relevance for the petitioner. 14. It was therefore submitted that the petitioner is not entitled to any refund in view of the belated claim of refund made by the petitioner after the period of two years from the date of deposit. 15. Having considered the rival submissions made by both the learned advocates, it is not in dispute that the petitioner deposited amount of Rs. 40,00,000/- by mistake on 20.11.2020 voluntarily which was neither towards any tax, interest or penalty. The similar issue came up for consideration before this Court in case of M/s. Joshi Technologies International (Supra) as well as in case of Gujarat State Police Housing Corporation Ltd. (Supra), wherein it is held by this Court as under : - "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-Centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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- (a) in the case of goods exported out 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake 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 "relevant date" is defined under clause (B) of the Explanation to section 11B of CE Act and insofar 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 time. Where the circumstances justifying the conduct exist, the illegality which is manifest cannot be sustained 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 with the Government during a particular quarter on the basis of billing without actual collection, he had discharged his liability 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 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 when the section was declared ultra vires originally that was the time when refund should have been claimed. But it appears to us, it is only when 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufactured 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 extraordinary remedy of mandamus. Even if there is no such delay, in cases where the opposite party raises a prima facie issue as regards the availability of such 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 application made by the petitioner was well within the prescribed period of limitation. Moreover, as discussed hereinabove, the retention of the Education Cess and 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, 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 made by them under mistaken notion. 23. Now we are faced with a similar situation where the claim of the respondent/assessee is on the ground that they have paid the amount 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. 1,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration 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 of India Vs. ITC Ltd. reported in (1993) Supp. IV SCC 326, while dealing with the question of refund of excess excise paid held: - 8. In Shri Vallabh Glass Works Ltd. V. Union of India, this Court, while examining 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, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 barred by limitation. We are, therefore, of the view that the impugned order is unsustainable. We accordingly allow the present appeals and quash and set aside the impugned order, insofar as it is against the appellant in both appeals. 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 cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime 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 soon after coming to know of the judgment in Voltas case ( supra) and the assessee was not guilty of any laches to claim refund. 10. This now takes us to the basic question, viz. the right of the respondent to receive refund otherwise than in accordance with the provisions 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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