Service Tax Refund: Supreme Court Permits Full Reimbursement and Revises Original Judgment's Paragraph 21

SC allowed appeals by both Union of India and Assessee regarding service tax disputes. Review petitions filed by Assessees were permitted, resulting in substitution of original judgment's paragraph 21. The court recalled prospective operation of earlier judgment, enabling full refund of service tax paid under protest with effect from 01-07-2010. Civil appeal was disposed of after considering review petition outcomes.

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Issues:
1. Appeal filed by Union of India against the judgment of the High Court of Sikkim in favor of the Assessee.
2. Appeal filed by the Assessee due to prospective operation of the judgment.
3. Review petitions filed by Assessees before the Sikkim High Court.
4. Substitution of paragraph 21 of the judgment dated 29.11.2012.
5. Recalling of prospective operation of the judgment.
6. Disposal of the civil appeal in light of the review petition outcome.

Analysis:

1. The Union of India and the Assessee both filed appeals against the judgment of the High Court of Sikkim dated 29.11.2012. The Union of India's appeal was due to the judgment being in favor of the Assessee, while the Assessee filed an appeal because the judgment had a prospective operation post-2010.

2. The Assessee had paid service tax under protest as the provisions were under challenge before the High Court. Subsequently, the Assessees filed Review Petition Nos. 1 and 2 of 2013 before the Sikkim High Court. The review petitions were allowed, and paragraph 21 of the original judgment was substituted due to an error apparent on the face of the record.

3. The substituted paragraph allowed for the refund of the service tax paid by the Assessees under the impugned provision with effect from 01-07-2010. The prospective operation of the judgment dated 29.11.2012 was recalled, providing complete relief to the Assessees.

4. The learned senior counsel for the Assessee submitted that in light of the order passed by the High Court in the review petitions, the Assessee's appeal would no longer survive for further consideration and should be disposed of. The civil appeal was disposed of accordingly, as it would not survive for further consideration due to the developments in the review petitions.

5. The submission of the learned senior counsel was recorded, and pending applications were disposed of in light of the judgment and the outcomes of the review petitions. The judgment provided clarity on the payment of service tax under protest and the entitlement of the Assessees to a refund, ultimately resolving the issues raised in the appeals and review petitions.

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