9911796707
TMI Blog2025 (1) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts of the case, the amount paid by the petitioner from electronic cash ledger is required to be refunded by the respondent authority and could not have been rejected on the ground of limitation under Section 54 (1) of the CGST Act.' In view of above analysis made in the aforesaid judgment which is squarely applicable to the facts of the case, more particularly when the petitioner has deposited voluntarily the amount of Rs. 40,00,000/-, the same would not be covered by the provisions of Section 54 of the GST Act and the same is required to be refunded by the respondent authorities as the same could not have been rejected on the ground of limitation under Section 54 (1) of the GST Act. However, the petitioner will not be entitled to any interest on such amount as the same was deposited voluntarily by mistake and therefore, the respondents to refund the amount of Rs. 40,00,000/- deposited by the petitioner. The impugned order dated 14. 6. 2024 passed by the respondent No. 2 rejecting the refund application of the petitioner is hereby quashed and set aside - petition allowed. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D. N. RAY Appearance : For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in excess of what was legally admissible. 6. It is the case of the petitioner that no communication or letter was issued by the respondent authorities acknowledging the deposit of Rs. 40,00,000/- as voluntary payment and such payment is still shown on GST portal as pending for action by Tax Officer . 7. It appears that in the month of January February, 2024, the Range Superintendent of the respondent authorities conducted verification and formal auditing of the records of the petitioner. During the scrutiny, it was found that there is discrepancy about Rs. 40,00,000/- which was deposited vide Form DRC-03 but there was apparently no such tax liability which was required to be discharged within the financial year 2019-2020. Therefore, a notice in form of GST ASMT-10 dated 23.2.2024 was uploaded on the portal calling upon the petitioner to clarify about the payment of Rs. 40,00,000/- through DRC-03 along with other issues. The petitioner provided a clarification on 20.3.2024 stating that there was a excess payment of Rs. 40,00,000/- by DRC-03 by mistake and filed an application for refund in Form GST RFD-01 on 30.3.2024 stating that the petitioner has paid excess GST by mistake. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum of Rs. 40,00,000/- in the year 2020 and has made the application for refund in the year 2024 after calling upon the petitioner to give the clarification for deposit of such amount by the respondent authorities. It was further submitted that the amount of Rs. 40,00,000/- deposited by the petitioner cannot be refunded after the expiry of period of two years as per provisions of Section 54 (1) of the GST Act. In support of her submissions, reliance was placed on the following averments made in the affidavit-in-reply filed on behalf of respondents : - 7. It is submitted that, the petitioner had voluntarily made payment of Rs. 40,00,000/-through DRC-03 on 20.11.2020 (annexed at pg. 21) for excessive availment of ITC under the reason as IGST CREDIT EXCESSIVELY CLAIMED BY RS. 4000000 DUE TO PUNCHING ERROR IN F. Y. 2019-20, WHICH IS HEREBY PAID THROUGH DRC-03. It is pertinent to note that, the said payment was not recovered as ' tax' by the authorities, but was a voluntary payment as it is evident from the section ' cause of payment' in the form. 8. That, thereafter, the petitioner had made refund application on 30. 03. 2024 by Form GST RFD-01 for refund of the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducted. On the basis of assessed bills of entry and Customs challans evidencing payment of duties, the Petitioner has availed ITC of integrated tax of Rs. 2,48,28,300/-. During the period 2019-20, on verification and reconciliation of the records they have found mismatch between amount of credit shown in GSTR 2A and GSTR 3B as a result they noticed that they have availed excess ITC of Rs. 40,00,000/- and therefore, the same has been paid in cash through DRC-03 dated 20-11-2020. The discrepancies so noticed were communicated to the Petitioner in form of ASMT-10 and a copy of this intimation uploaded on portal 23.02.2024 (annexed at pg 25 26 of petition). At that time, the Petitioner was requested to clarify such voluntarily payment of Rs. 40,00,000/- through DRC-03. A reply was filed on 20.3.2024 (annexed at pg. 29 pf petition), wherein for the first time it was intimated by them that, they have made the payment by mistake and a separate application for refund is preferred. Hence, proceedings under S. 61 are initiated with respect to many discrepancies and not just regarding the amount in issue. The said proceedings are completely different than proceedings under S. 54 of the Act, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment 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 in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) , vide number G.S.R. 310 (E) , dated the 1st May, 2021, the Government, on the recommendations of the Council, hereby, - (i) extends the time limit specified under sub-section (10) of section 73 for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized, in respect of a tax period for the financial year 2017-18, up to the 30th day of September, 2023; (ii) excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation under sub-section (10) of section 73 of the said Act for issuance of order under sub-section (9) of section 73 of the said Act, for recovery of erroneous refund; (iii) excludes the period from the 1st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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 received in advance prior to the date of issue of the invoice; (d) in case where the tax becomes refundable as a consequence of judgment, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgment, decree, order or direction; 2[(e) in the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-section (3), the due date for furnishing of return under section 39 for the period in which such claim for refund arises: ] (f) in the case where tax is paid provisionally under this Act or the rules made thereunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 relief on account of the laches and delay. It is true that the appellant could have even when instituting the suit agitated the question of legality of the demands and claimed relief in respect of the earlier years while challenging the demand for the subsequent years in the writ petition. But the failure to do so by itself in the circumstances of the case, in our opinion, does not disentitle the appellant from the remedies open under the law. The demand is per se not based on the net profits of the immovable property, but on the income of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein 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 Section 11B of the Act. It is true that insofar as the Act is concerned, for refund of duty, the provision is contained in Section 11B. However, merely because there is no specific statutory provision pertaining to return of amount deposited under a mistake, per se, in our opinion, should not deter us from directing the respondents to return such amount. Admittedly, there is no prohibition under the Act from returning such an amount. Allowing the respondents to retain such amount would be, in our opinion, highly inequitable. We may not be seen to suggest that such a claim can be raised at any point of time without any explanation. In a given case, if the petitioner is found to be sleeping over his right, or raises such a claim after unduly long period of time, it may be open for the Government to refuse to return the same and this court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 arise since we hold that retention of such service tax would be without any authority of law. 14.3 Strong reliance was placed upon the decision of the Supreme Court in Salonah Tea Co. Ltd. v. Supdt. of Taxes (supra) , wherein it has been held thus: 13. Under Article 113 of the Limitation Act, 1963 the limitation was the period of three years from the date the right to sue accrues. It may be noted that in the instant case under Section 23 of the Act, it was provided that the Commissioner shall, in the prescribed manner refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under this Act either by cash or, at the option of the producer or dealer, be set off against the sum due from him in respect of any other period. Section 23 applies only in a case where money is paid under the Act. If there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 unreasonable delay in moving the court when tax was paid under a mistake. There the respondents were dealers in tobacco in the State of Madhya Bharat. The State had imposed sales tax on the sale of imported tobacco by the respondents. But no such tax was imposed on the sale of indigenous tobacco. The respondents filed writ petitions under Article 226 of the Constitution for the issue of writ of mandamus directing the refund of sales tax collected from them. They contended that the impugned tax was violative of Article 301 (a) of the Constitution and they paid the tax under a mistake of law and the tax so paid was refundable under Section 72 of the Indian Contract Act, 1872. The appellant contended that there was no violation of Article 301 of the Constitution, and even if there was such violation the tax came within the special prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the instant case was in error in presuming that there was a triable issue on this ground and refusing to grant refund. (Emphasis supplied) 14.4 Thus, in view of the principles enunciated by the Supreme Court in Salonah Tea Co. Ltd. v. Superintendent of Taxes, Nowgong (supra), in case where money is paid by mistake, the period of limitation prescribed is three years from the date when the mistake was known. Besides, section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it. Therefore, in case where money is paid under a mistake, the limitation would begin to run only when the applicant com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. No doubt in the present case, Form-R was used by the applicant to claim refund. It is the very case of the petitioner that they were exempted from payment of such service tax by virtue of circular dated 17-9-2004 and this is not denied by the Department and it is not even denying the nature of construction/services rendered by the petitioner was exempted from to payment of Service Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petitioner. Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay, as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 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, reported in 2018 (8) TMI 1901 has held as under: - 12. There is no dispute about the applicability of SRF Ltd (supra); indeed the Revenue' s refrain during the hearing was that the amounts could not be refunded because the claims were time-barred and that the petitioner has an alternative remedy. This Court is of opinion that the plea of alternative remedy-an unoriginal and frequently used stereotypical defence by public bodies - in such cases at least dodges the crux of any dispute, i. e the liability of the concerned public body or agency on merits. Sans any dispute with respect to facts, this Court finds it entirely unpersuasive, since Article 144 of the Constitution, compels all authorities to give effect to the law declared by the Supreme Court (as in this case, the SRF Limited judgment). The other p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efund. 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, 1971 to February 19, 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 and the assessee was not guilty of any laches to claim refund. 9. In the above cited case, the Supreme Court stated that the Assessee' s claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by laches. 11. A similar view has been taken by the Bombay High Court in the case of Parijat Construction Vs. Commissioner Excise, Nashik, reported in 2018 (359) ELT 113 (Bom), where the Bombay High Court has held as under: - 4. We are of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 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 authority of law in such cases, the Court opined: (SCC p. 411, para 14) [N]ormally 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 has 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 the 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. 8. In Shri Vallabh Glass Works Ltd., and Anr. v. Union of India and Ors. 1984 (16) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 order dated 8.10.1982, the respondent be directed to pay back the amount which was received by them under orders of this Court with interest @ 12% p.a. 35. Considering the above dictum of law, 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 required to be refunded by the respondent authority and could not have been rejected on the ground of limitation under Section 54 (1) of the CGST Act. 36. In view of the foregoing reasons, the impugned order dated 20. 07. 2021 passed by the Appellate Authority and Orders in Original dated 18. 12. 2020 passed by the adjudicating authority rej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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