Unjust enrichment bars service tax refund where the tax burden was passed on under the payment arrangement.

A refund claim for service tax was rejected on the ground of unjust enrichment because the written agreements contemplated deduction of service tax from the amounts payable, yet the appellant received the full commission without any deduction of the tax element by the recipient. On that footing, the tax was treated as having been passed on, and the payment made to the Government was regarded as tax collected from others rather than a loss borne by the appellant. The doctrine of unjust enrichment therefore barred refund.

---

---

Issues: Whether the claim for refund of service tax was barred by the doctrine of unjust enrichment.

Analysis: The service tax was payable in connection with services rendered under written agreements which contemplated deduction of service tax from the amount payable. It was found that the appellant received the full commission and that no deduction of the service tax element was made from the amounts payable by the recipient. The tax element was therefore treated as having been passed on, and the amount paid to the Government was only the tax collected by the appellant.

Conclusion: The refund claim was hit by unjust enrichment and was rejected.

---