Refund of investigation deposits cannot be denied for wrong assessee code when the levy itself is unsustainable.

Refund of a deposit made during investigation cannot be refused on the ground that it was reflected under a different assessee code or registration when the Department had already treated the matter as a single consolidated liability. The Tribunal treated the mismatch as a clerical or accounting issue and held the balance refund admissible, setting aside rejection of the claim. It also held that unjust enrichment did not apply because the amount retained after the underlying levy was found unsustainable did not continue to bear the character of tax, and there was no passing on of incidence. The appeals succeeded, and refund of the deposited amount with applicable interest was directed.

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Issues: (i) whether the balance refund claim of Rs. 35,44,329/- was admissible despite deposit being reflected under a different assessee code and registration; (ii) whether the refund was barred by unjust enrichment.

Issue (i): whether the balance refund claim of Rs. 35,44,329/- was admissible despite deposit being reflected under a different assessee code and registration.

Analysis: The amount in dispute was found to have been deposited into the Government exchequer during investigation, and the difference in registration or assessee code was treated as an internal accounting or clerical matter. The Tribunal held that the Department had itself proceeded against the unit as a consolidated entity in the demand proceedings, and it could not, at the refund stage, split the same factual unit into two separate entities to deny refund on technical grounds. Reliance was placed on the principle that substantive refund cannot be defeated by wrong accounting particulars when the revenue has already received the money.

Conclusion: The balance refund claim was held admissible and the rejection of Rs. 35,44,329/- was set aside.

Issue (ii): whether the refund was barred by unjust enrichment.

Analysis: The Tribunal held that an amount deposited during investigation and retained after the underlying demand had been set aside does not retain the character of tax for the purpose of unjust enrichment. Since the levy itself was found unsustainable on the principle of mutuality, there was no passing on of tax incidence to members. The Tribunal further held that Article 265 forbids retention of money without authority of law, and the bar of unjust enrichment was inapplicable to the facts.

Conclusion: The refund was held not to be hit by unjust enrichment.

Final Conclusion: The appeals succeeded, the impugned orders were set aside, and refund of the entire deposited amount, together with applicable interest, was directed.

Ratio Decidendi: Money deposited with the Government during investigation cannot be denied refund on technical objections such as a wrong assessee code or registration when the Department has already treated the matter as a single liability and the levy itself is unsustainable; in such circumstances, the bar of unjust enrichment does not apply.

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