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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 ..... e A) as well as order passed by the adjudicating authority (annexed at Annexure Q) to the extent it directs transfer of refund amount to the consumer welfare fund; B. This Hon'ble Court may be pleased to issue a writ of 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 IGST of Rs. 19,28,86,868 permitting the Petitioner to offer the same as revenue for the purpose of determination of tariff by GERC under the Electricity Act, 2003." 4. Special Civil Application No.13655 of 2024 is containing the following prayers : "A. This Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside order dated 18.7.2024 (annexed at Annexure A) to the extent it directs transfer of refund amount to the consumer welfare fund as being wholly without jurisdiction, arbitrary and illegal; 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 amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Mohit Minerals Private Limited versus Union of India reported in (2020) 74 GSTR 134 strucked down Entry No.10 of the Notification No.10 of 2017 dated 28th June, 2017 as being ultra-vires the provisions of the IGST Act as well as being unconstitutional. 6.7. After pronouncement of the Judgment of this Court, the petitioner stopped paying IGST on ocean freight in respect of the CIF contracts and also claimed the refund of the IGST already paid on the ocean freight on the basis of the said Judgment. 6.8. A Chartered Accountant Certificate was also attached with the application of refund wherein, the IGST amount recovered from the Customers through inclusion in tarrif and the IGST amount borne by the petitioner was tabulated and segregated. 6.9. The respondent No.3-Assistant Commissioner of Central Goods and Services Tax issued a show-cause notice dated 17th September, 2021 to the petitioner proposing to reject such refund on ground that refund cannot be granted by 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 is preferred by the petitioner on the similar facts, however, there the ocean freight was liable to pay subjected to the service tax and the petitioner was paid the service tax on such ocean freight service under provisions of the Finance Act, 1994 and the refund application of the petitioner was rejected on the ground that the respondent- Authorities have no jurisdiction to consider such refund under Section 11B of the Central Excise Act, 1944 as applicable to the Finance Act, 1994. 7.2. The respondent-Authorities rejected the levy of contention of the petitioner that petitioner is entitled to the refund of the service tax paid by it on reverse charge mechanism as such tax has been held to be unconstitutional and without authority in view of the aforesaid decision of this Court and being without authority of law and in violation of Article 225 of the Constitution of India. 7.3. The petitioner challenged the order of rejection of the refund claimed by preferring Special 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 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Gujarat Energy Regulatory Commission under the Electricity Act, 2003. 5. The Resolution of the Committee of Directors of the Petitioner has passed resolution to the aforestated effect. Copy of Committee of Director's resolution is annexed herewith and marked as Annexure A1." 10.1. Learned Senior Advocate Mr. Saurabh Soparkar submitted that by inadvertent error in the Board Resolution as well as in the affidavit affirmed on 2nd September, 2024, instead of Gujarat Electricity Regulatory Commission, the name of Gujarat Energy Regulatory Commission is stated which does not exist. It was further submitted that the corrected affidavit and the Board resolution shall be placed on record within a period of three days from today. 10.2. Learned Senior Advocate Mr. Saurabh Soparkar for the petitioner, in view of the affidavit filed by the petitioner on 2nd September, 2023 submitted that the petitioner is not interested in keeping the amount of refund of IGST and Service Tax which 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 Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... burden on the consumers and if such relief is not granted, the petitioner would suffer the loss. In support of his submissions, reliance was placed on the decision of the Hon'ble Supreme Court in case of Sahakari Khand Udyog Mandal Limited versus Commissioner of Central Excise & Customs reported in (2005) 3 SCC 738. 11.2. It was submitted that the Hon'ble Supreme Court in the case of Sahakari Khand Udyog Mandal Limited (Supra) has held as under: "31. Stated simply, 'Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. `Unjust enrichment' occurs when a person retains money or benefits which in justice, equity and good conscience, belong to someone else. 36. In Orient Paper Mills Ltd. v. State of Orissa, [1962] 1 SCR 549, this Court did not grant refund to a dealer since he had already passed on the burden to the purchaser. It was observed that it was open to the Legislature to make a provision that an amount of illegal tax paid 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. In case of any doubt or ambiguity in these propositions, reference must be had to the discussion and propositions in the body of the judgment. (i) Where a refund of tax duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis-interpreting or mis- applying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Actor by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a decision on another person's case; this is the ratio of the opinion of Hidayatullah, CJ. in Tilokchand Motichand and we respectfully agree with it. Such a claim is maintainable both by virtue of the declaration contained in Article 265 of the Constitution of India and also by virtue of Section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying Clause (c) of Sub- section (1) of Section 17 of the limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. It other words, a claim of this nature is not contemplated by the said enactments and is outside their purview. (iii) A claim for refund, whether made under the provisions of the Act as contemplated 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted which pertains to the Consumer Welfare Fund as referred to in Section 57 of the GST Act. 11.7. It was submitted that the substituted Rule 97 of the GST Rules provides a mechanism for application of the amount to be deposited in the Consumer Welfare Fund. Reference was also made to the order No.3/2018-Central Tax dated 16th August, 2018 for constitution of the Standing Committee under Sub-rule (4) of Rule 97 of the GST Rules. Learned advocate Mr. Siddharth Dave also referred to and relied upon the Consumer Welfare Funds Guidelines, 2023 issued by the Department of Consumer Affairs Ministry of Consumer Affairs, Food and Public Distribution, Government of India, whereby, the over all objective of the Consumer Fund is to provide Financial Assistance to promote and protect the Consumers and strengthen the Consumer Movement in the Country. 11.8. It was therefore submitted that the respondent-Authorities have rightly transferred the refund amount to the Consumer Welfare 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 statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph till such amount is offered as well as accepted as revenue for the purpose of determination of tariff by Gujarat Electricity Regulatory Commission under the Electricity Act, 2003. 5. The Petitioner undertakes to return such amount to the Respondents if, for any reason, it is not accepted as revenue for the purpose of determination of tariff by Gujarat Electricity Regulatory Commission under the Electricity Act, 2003. 6. The Committee of Directors of the Petitioner has passed resolution to the aforestated effect. Copy of Committee of Director's resolution is annexed herewith and marked as Annexure A2." 14. Considering the averments made in the affidavit together with the Board Resolution of the petitioner-Company, it is amply clear that the petitioner is not at all interested in 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. 15. It would be therefore appropriate to reiterate what is directed by the Hon'ble Supreme Court in the aforesaid decision of the Mafatlal Industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of the loss borne by it regarding the tax which is collected by the petitioner to be paid to the respondents under the Notification No.10 of 2017 which is held to be unconstitutional later on. 19. We therefore, propose to pass the following order during pendency of this petition. (i) the impugned orders passed by the respondent-Authorities, so far as it relates to transfer of the amount of refund of Rs.19 Crores and 4 Crores to the Consumer Welfare Fund, are hereby quashed and set aside. (ii) The respondent-Authorities are directed to refund the aforesaid amount to the petitioner within a period of two weeks from the date of receipt of the copy of this order. (iii) On receipt of the aforesaid amount, the petitioner shall deposit the same in the Separate Bank Account as per the affidavit of undertaking filed by the petitioner. (iv) On deposit of such amount in the separate Bank account, the petitioner shall convert the same into a fixed deposit, initially for a period of six months which can be renewed from time to time till the Gujarat Electricity Regulatory Commission determines the tarrif for the next year for the petitioner-Company. (v) The Gujarat Electricity ..... 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