2021 (9) TMI 293 - AT - Service Tax

Tribunal overturns rejected tax refund claim for mistaken deposit, emphasizes importance of supporting evidence

Virajit Pvt Limited Versus Commissioner of Central Tax, Visakhapatnam - GST

Virajit Pvt Limited Versus Commissioner of Central Tax, Visakhapatnam - GST - TMI Issues:Claim for refund of mistakenly deposited tax amount in inactive account, rejection of refund claim, production of additional evidence, verification reports by range officers, liability for double payment, unjust enrichment, bar of limitation for refund claim.Detailed Analysis:1. Refund Claim for Mistakenly Deposited Tax Amount:The appellant mistakenly deposited an amount in an inactive account instead of the registered account. The appellant subsequently rectified the error by depositing the amount in the correct account. The appellant filed a refund claim for the amount deposited in the inactive account, which was initially rejected. The appellant contended that the payment was made twice against the same liability and deserved a refund.2. Rejection of Refund Claim:The jurisdictional range officer's verification report supported the appellant's claim, stating that the payment was made twice, and the refund claim was not hit by unjust enrichment. The departmental representative objected to the production of additional evidence, citing delay and legal precedents. However, the reports confirmed no recoverable arrears and supported the appellant's case.3. Production of Additional Evidence:The appellant produced a certificate from their Chartered Accountant certifying no double collection of service tax. The department objected to the belated production of this certificate. Despite this objection, the reports from range officers corroborated the appellant's position, indicating no liability for double payment.4. Verification Reports by Range Officers:Reports from range officers confirmed that the inactive account was never used for services, and the appellant had already received a refund in a similar situation previously. These reports were issued before the show cause notice, questioning the need for the notice itself. The reports supported the appellant's claim of inadvertently paying twice for the same liability.5. Liability for Double Payment and Unjust Enrichment:The department argued that the appellant was not entitled to a refund due to the delay in filing the claim and the alleged double payment. However, the verification reports and lack of evidence of separate liabilities contradicted this argument. The reports indicated no recoverable arrears and supported the appellant's refund claim.6. Bar of Limitation for Refund Claim:Despite the delay in filing the refund claim, it was within one year of the payment in the inactive account. The appellant's actions were deemed justified considering the circumstances and the verification reports supporting the refund claim.7. Judgment and Conclusion:The Tribunal set aside the order rejecting the refund claim, emphasizing the verification reports and lack of evidence of separate liabilities. The appellant's refund claim was deemed valid, and the appeal was allowed, highlighting the importance of supporting evidence and the onus on the department to prove allegations in a show cause notice.