2015 (9) TMI 519 - HC - Central Excise

Court directs Revenue to process refund application despite pending appeal

TCS e-Serve Ltd. Versus Union of India & Ors.

The High Court held that the Revenue was not justified in rejecting a refund application solely based on a pending appeal against a Tribunal's order when ... Denial of refund claim - Department has not accepted the Tribunal's order and has filed an appeal against the same in this Court - Held that:- There is no legal provision which is brought to our notice enabling the Revenue to keep refund applications pending merely because an order passed by the Tribunal has been challenged by the Revenue in further appeals. In the teeth of the clear language of law and there being no interim stay in favour of the Revenue, we find no justification for keeping the refund application either pending or rejecting it with the aforesaid endorsement. - we dispose of this writ petition with a direction to the respondents to consider the refund application in Form-R filed on 2nd September, 2013 and dispose of the same in accordance with law as expeditiously as possible - Petition disposed of. Issues:Refund application rejection based on pending appeal challenging Tribunal's order.Analysis:The High Court considered a writ petition where the petitioner-assessee sought a refund of service tax amounting to Rs. 2,50,06,269 based on a Customs, Excise and Service Tax Appellate Tribunal order. The Tribunal had ruled that the services received by the petitioner were not chargeable to service tax. However, the refund claim was rejected by the Revenue, citing a pending appeal filed by them against the Tribunal's order. The Court noted that there was no legal provision allowing the Revenue to keep refund applications pending solely due to a challenge against the Tribunal's order. Since there was no interim stay favoring the Revenue, the Court found no justification for withholding or rejecting the refund application.The Court further highlighted that they had admitted the Revenue's appeal but had not stayed the Tribunal's order. Consequently, the Court opined that the Revenue was not justified in failing to process the refund application in line with the law. Emphasizing the clear language of the law and the absence of any stay order, the Court directed the respondents to consider the refund application filed by the petitioner on 2nd September, 2013, and to dispose of it promptly in accordance with the law. The Court granted three months to the Revenue for this purpose and ultimately disposed of the writ petition without any costs.