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TMI Blog2025 (2) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... having unjust enrichment over the amount of refund and the petitioner is to refund the same to the consumers who have borne the loss of such amount of tax which was passed on by the petitioner by including the same in the tarrif charged by it. The consumers of the petitioner have suffered the real loss who can claim the refund of the amount of the IGST and the Service Tax paid by the petitioner, however, such persons are now being represented by the petitioner as a custodian of its consumer and the methodology by which the petitioner has come forward by keeping the amount of refund in a seperate bank account to be considered as a revenue in the tarrif determination by the Gujarat Electricity Board as per the provisions of the Electricity Act, 2003, it cannot be said that it is not possible to refund the amount to such consumers for one or other reason. Therefore, it would not be just and appropriate that the respondent- Authorities can retain the amount of refund by transferring the same to the Consumer Welfare Fund. Conclusion - The refund is only permissible if the petitioner has not passed on the tax burden to others or if the refund can be effectively returned to those who b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al; B. This Hon'ble Court may be pleased to issue a writ of 13 mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith grant refund of the amount of service tax of Rs.4,72,03,838 permitting the Petitioner to offer the same as revenue for the purpose of determination of tariff by GERC under the Electricity Act, 2003." 5. Having regard to the controversy in narrow compass, with the consent of the learned advocates for the respective parties, both the petitions are taken up for hearing as they are containing the same facts under different Acts pertaining to the refund of the amount paid towards ocean freight which is held to be unconstitutional by the Hon'ble Supreme Court in case of Union of India Versus Mohit Minerals Private Limited reported in (2022) 10 SCC 700. 6.1. The factual matrix of the case of Special Civil Application No. 1659 of 2024 is that the petitioner who is engaged in the generation and distribution of power was duly granted electricity distribution license under the Electricity Act, 2003 in the Cities of Ahmedabad, Surat, Gandhinagar, Dahej SEZ and Dholera having electricity distribution fra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Authority under Section 54 of the GST Act in case of a statutory provision being declared unconstitutional by this Court. By order dated 13.10.2021, the refund application was rejected by the respondent No.3 on the ground that respondent No.3 having no jurisdiction to grant such sanction being outside the purview of Section 54 of the GST Act. 6.10. The petitioner therefore, preferred Special Civil Application No.2603 of 2022 before this Court seeking refund of IGST paid on ocean freight on 21.01.2022. In the meantime, the Judgment of this Court in case of Mohit Minerals Private Limited (Supra) was affirmed by the Hon'ble Supreme Court in case of Union of India and Another versus Mohit Minerals Private Limited reported in (2022) 10 Supreme Court Cases 700 on 19.05.2022. 6.11. This Court allowed the Special Civil Application No.2603 of 2022 filed by the petitioner by order dated 04.08.2022 directing the respondents to consider the application for refund filed by the petitioner favourably after verifying the same and grant the refund to the petitioner. 6.12. Pursuant to the order of this Court, petitioner filed on-line refund application before the respondent-Authority on 28th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecial Civil Application 2748 of 2022 before this Court which was allowed by Judgment and order dated 25.04.2024 directing the respondent to grant refund to the petitioner. 7.4. Pursuant to the order passed by this Court, the petitioner preferred an application dated 27.05.2024 for refund of the service tax paid on imports, however, the same was rejected by the impugned Order-in-Original dated 18.07.2024 though the same was ordered to be transferred to Consumer Welfare Fund. 7.5. The petitioner has therefore preferred the Special Civil Application No.13655 of 2024 without preferring an Appeal in view of the pendency of the Special Civil Application No.1659 of 2024 before this Court in the similar issue. 8. This Court passed the following order on 04.09.2024 in Special Civil Application No.1659 of 2024 : "Learned advocate Mr. Siddharth Dave for the respondent No.3 prays for time to take instructions with regard to additional affidavit filed by the petitioner for depositing the amount of refund in separate account and not utilizing the same till such refundamount is recognized by the Gujarat Energy Regulatory Commission (GERC) as part of the revenue to determine the tariff so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich can be paid to the petitioner so as to pass on the same to the consumers from whom the same is recovered by adjusting the electricity tarrif to be determined by the Gujarat Electricity Regulatory Commission under the provisions of the Electricity Act, 2003. It was further submitted that the petitioner has also undertaken to return the amount to the respondents if for any reason the amount of refund is not accepted as revenue to be considered as a part of the tariff computation by the Gujarat Electricity Regulatory Committee. 10.3. Learned Senior Advocate Mr. Saurabh Soparkar submitted that transferring the amount of refund to the Consumer Welfare Fund would be contrary to the decision of the Hon'ble Apex Court in case of Mafatlal Industries Limited versus Union of India reported in (1997) 5 SCC 536 wherein, the Constitution Bench of the Hon'ble Supreme Court of India has held that in case where the refund is claimed on the ground that the provisions of the Act under which it was levied has been held to be unconstitutional then such a claim is only maintainable by virtue of declaration containing Article 265 of the Constitution of India and accordingly, the petitioner had pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by the persons could be claimed only by them and not by the dealer and such restriction on the right of the dealer to obtain refund could lawfully be imposed in the interests of general public. 45. From the above discussion, it is clear that the doctrine of `unjust enrichment' is based on equity and has been accepted and applied in several cases. In our opinion, therefore, irrespective of applicability of Section 11B of the Act, the doctrine can be invoked to deny the benefit to which a person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine. That, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming a relief of refund, it is necessary for the petitioner/appellant to show that he has paid the amount for which relief is sought he has not passed on the burden on consumers and if such relief is not granted, he would suffer loss. 46. In the present case, not only no such case has been made out by the appellant-Mandal, the position is just contrary. All the authorities below have expressly recorded a finding that the appellant-Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icle 226 and of this Court under Article 32 cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will be considered and disposed of in the light of and in accordance with the provisions of Section 11-B. This is for the reason that the power under Article 226 has to be exercised to effectuate the rule of law and not for abrogating it. The said enactments including Section 11-B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retained or not refunded in accordance with the said provisions must be held to be collected, retained or not refunded, as the case may be, under the authority of law. Both the enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties imposed thereunder. Section 11-B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... templated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any real loss or prejudice. The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fare Fund to which the petitioner is not otherwise entitiled to in view of the principle of unjust enrichment, so as to utilise the same for the benefit of the consumers at large as per the available guidelines and statute. 11.9. Learned advocate Mr. Siddharth Dave therefore submitted that no interference is required to be made at this stage by evolving a new methodology of granting refund to the petitioner by permitting the petitioner to retain the amount of refund till the same is adjusted in the tarrif by the Gujarat Electricity Regulatory Commission as it would amount to payment of refund to the petitioner resulting into unjust enrichment at this stage till the amount is adjusted in the Electricity Tarrif. 12. Considering the rival submissions made by the learned advocates of both the sides and in view of the facts of the case, it is undisputed fact that the petitioner is entitled to the refund of both IGST and Service Tax paid by the petitioner on the ocean freight in view of the decision of this Court in case of Mohit Minerals Private Limited (Supra) which is affirmed by the Hon'ble Supreme Court and in view of the orders passed by this Court in the Writ Petitions filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the petitioner by including the same in the tarrif charged by it. 15. It would be therefore appropriate to reiterate what is directed by the Hon'ble Supreme Court in the aforesaid decision of the Mafatlal Industries Limited (Supra) as under : "The real loss or prejudice is suffered in such a case by the person who has ultimately borne the burden and it is only that person who can legitimately claim its refund. But where such person does not come forward or where it is not possible to refund the amount to him for one or the other reason, it is just and appropriate that that amount is retained by the State, i.e., by the people. There is no immorality or impropriety involved in such a proposition." 16. Applying the above test to the facts of the case, the consumers of the petitioner have suffered the real loss who can claim the refund of the amount of the IGST and the Service Tax paid by the petitioner, however, such persons are now being represented by the petitioner as a custodian of its consumer and the methodology by which the petitioner has come forward by keeping the amount of refund in a seperate bank account to be considered as a revenue in the tarrif determination ..... X X X X Extracts X X X X X X X X Extracts X X X X
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