Double taxation on the same advance receipt across service tax and GST regimes justified refund in cash

Where the same advance receipt was taxed once under the pre-GST service tax regime and again after GST commenced, the transaction was treated as part of a continuous tax transition and the double incidence was found unsustainable. The note states that transitional and saving provisions preserved tax adjustment across the two regimes, so refund could not be denied merely because the first payment arose under the earlier regime. On those facts, the refund claim was held maintainable and cash refund was directed in accordance with law.

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Issues: Whether refund was admissible where tax had been paid twice on the same advance receipt under the service tax regime and again under the GST regime.

Analysis: The liability on advance receipts arose under the pre-GST service tax framework, while the same transaction was again subjected to tax after the GST regime commenced. The transition between the two regimes was treated as a continuous fiscal process, with transitional credit and saving provisions preserving continuity of tax adjustment. On the facts, the same tax incidence had been suffered twice for the same transaction, and such double taxation could not be sustained. In those circumstances, the proper course was to grant refund in cash in accordance with law.

Conclusion: The refund claim was held to be maintainable and the assessee succeeded.

Final Conclusion: The appeal was allowed with a direction to consider and grant the refund in accordance with law.

Ratio Decidendi: Where the same transaction is subjected to tax under two successive regimes, and the tax incidence is shown to have been discharged twice, refund cannot be denied merely because the first payment was otherwise made under the earlier regime.

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