TaxTMI 
TaxTMI 
2020 (8) TMI 222
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, this Hon'ble Court may be pleased to direct the learned Respondents to forthwith grant refund of tax amount of Rs. 33,85,782 collected from the Petitioner and deposited by the seller along with appropriate interest on such refund amount; (C)) Ex parte ad interim relief in terms of prayer B may kindly be granted; (D) Such further relief (s) as deemed fit in the facts and circumstances of the case may kindly be granted in the interest of justice for which act of kindness your petitioner shall forever pray." 2. The case put up by the writ applicant, in its own words, as pleaded in the memorandum of the writ application, reads thus; "The Petitioner is a Public Limited Company having place of business at Shripatinagar, P.O. CFA 313 021, Near Dabok, District Udaipur, Rajasthan. The 1st Respondent is the State of Gujarat. The 2nd and 3rd Respondents are officers of the State of Gujarat entrusted with the task of collecting tax under the CST Act and thereby being a State within the meaning of Article 12 of the Constitution are amenable to the writ jurisdiction of this Hon. Court. The Petitioner is engaged in the manufacture and sale of cement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....absence of C forms being issued by the learned authorities of the State of Rajasthan. In cognate matters of other dealers Hon. Rajasthan High Court held by order dated 18.5.2018 that the learned authorities under the CST Act had erred in refusing to issue C form declarations to dealers for purchase of high speed diesel. The authorities of the State of Rajasthan were directed to issue C form declarations to the concerned purchasing dealers. It was further directed that if in case the Petitioners in those cases had to pay any amount on account of wrongful refusal to issue C form declarations then such Petitioners were entitled to refund from the concerned authorities who collected the excess tax. The concerned authorities were directed to process the refund claims within 12 weeks from the date of refund claim. Copy of judgement of Hon. Rajasthan High Court dated 18.5.2018 in cognate matters to that of the Petitioner is annexed herewith and marked as Annexure C. Such judgement was followed in the case of the Petitioner and the writ petition filed by the Petitioner was allowed by learned Single Judge of Hon. Rajasthan High Court by order dated 31.5.2018. Direction was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hority for refund in accordance with the direction of Hon. Rajasthan High Court. Copy of the correspondence between the seller and the Petitioner is annexed herewith and marked as Annexure G. The Petitioner therefore addressed a letter on 28.3.2019 to the jurisdictional authority of the seller under the CST Act in the State of Gujarat requesting for refund of excess tax totaling to Rs. 33,85,782 collected from the Petitioner in accordance with the direction given by Hon. Rajasthan High Court. Copy of letter dated 28.3.2019 addressed by the Petitioner to the learned 2nd Respondent authority is annexed herewith and marked as Annexure H. The Petitioner thereafter approached the higher authority being the 3rd Respondent authority with identical request. Copies of order of Hon. Rajasthan High Court as well as the C form declarations were produced before the 3rd Respondent authority. Copy of letter dated 11.4.2019 addressed to the 3rd Respondent authority is annexed herewith and marked as Annexure I. The Petitioner gave written reminder to the 3rd Respondent authority on 21.8.2019. Copy of written reminder dated 21.8.2019 is annexed herewith and marked as Annex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payable on sales made by the seller to the Petitioner is admittedly 2% as per Section 8(1) of the CST Act. Retention of tax deposited at the rate of 20% despite the fact that the applicable rate of tax on the transactions is 2% under the CST Act is without any authority of law." 3. Thus, it appears from the aforesaid that the writ applicant is seeking direction to the respondents to forthwith grant the refund of tax amount of Rs. 33,85,782/- collected from the writ applicant by the seller of diesel and deposited with the respondent-authorities under the Central State Tax Act, 1956 ( hereinafter referred to as the "CST Act"). 4. It appears that despite the fact that diesel continued to come within the ambit of the CST Act, after 1.7.2017, the authorities in the State of Rajasthan refused to issue "C" Form declarations of purchase of diesel at concessional rate on the ground that after introduction of the GST regime, the registration certificates of the dealers such as the writ applicant, automatically stood cancelled and they were not eligible for making purchases of diesel against C form declarations. In view of such stand taken by the authorities of the State of Rajasthan, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny, shall instead of being credited to the fund be paid to the applicant if such amount is relatable to the duty of excise and interest, if any, paid on such duty borne by the buyer, if he has not passed on the incidence of such duty and interest, if any, paid on such duty to any other person. 11.1 Reference was made to the decision of the Supreme Court in State of M.P. v. Vyankatlal & Another, (1985)2 SCC 544, wherein it has been held thus: "14. The principles laid down in the aforesaid cases were based on the specific provisions in those Acts but the same principles can safely be applied to the facts of the present case inasmuch as in the present case also the respondents had not to pay the amount from their coffers. The burden of paying the amount in question was transferred by the respondents to the purchasers and, therefore, they were not entitled to get a refund. Only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. The amount deposited towards the Fund was to be utilised for the development of sugarcane. If it is not possible to identify the persons on whom had the burden been placed for payment to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....says "person" and does not use the expression "dealer". It was submitted that this is not a refund arising in an ordinary case and that the petitioners were forced to pay the tax on account of the action of the authorities at Rajasthan which was held to be illegal. 11.4 Reliance was placed upon the case of the Supreme Court in the case of Indian Aluminium Company Limited v. Thane Municipal Corporation, 1991 (55) ELT 454 (SC), wherein the court has held thus:- "8. In any event the petitioner Company cannot claim concession at this distance as a matter of right. In Orissa Cement Ltd. v. State of Orissa & Ors, A I R 1991 SC 1676, it was observed thus: "We are inclined to accept the view urged on behalf of the State that a finding regarding the invalidity of a levy need not automatically result in a direction for a refund of all collections thereof made earlier. The declaration regarding the invalidity of a provision and the determination of the relief that should be granted in consequence thereof are two different things and, in the latter sphere, the Court has, and must be held to have, a certain amount of discretion. It is well-settled proposition that it ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n for the petitioner not being able to retrieve such amount from the service tax department, the CPWD must get it back; even if it is from the petitioner personally. In the process, if we allow this situation to prevail, the petitioner would end up losing the service tax component from his profit which in the first place was not the liability of the petitioner. Instead of a case of unjust enrichment, it would be a case of unjust impoverishment. 16. The respondent no. 4 was also not correct in his approach while dealing with the petitioner's refund application. In the communication dated 7th November 2016, the petitioner had made it abundantly clear that the service tax refund is being claimed for and on behalf of the CPWD and the petitioner would have no objection, if the amount is directly paid to the said organization. Ignoring such representation of the petitioner, the Assistant Commissioner of Service Tax, Ajmer held that this was a case of unjust enrichment. If he was of the opinion that the petitioner was not the correct person who can ask for refund, he could have stated so in the order. This would have enabled the petitioner to point out to the CPWD the correct....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n question being interstate transactions, the Commercial Tax Department of Rajasthan was required to issue C forms to the petitioners, which were then required to be forwarded to Reliance Industries Limited, but as the Rajasthan Commercial Tax Department refused to grant C forms to the petitioners, they were liable to pay tax @ 20 % which was deposited with the Gujarat Commercial Tax Department. It was submitted that since the assessment proceedings qua Reliance Industries Limited are still pending for the assessment years in question, the respondent authorities are still to process the application for grant of refund. It was further submitted that the refund shall be paid to Reliance Industries Limited which in turn shall forward the amount to the petitioners. However, the respondent authorities would not be in a position to directly grant refund to the petitioners as it is Reliance Industries Limited who has deposited the tax qua the said transactions. It was submitted that the respondent authorities will process the refund in accordance with law on completion of the assessment proceedings of Reliance Industries Limited for the assessment years in question and grant refund therea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies is that such refund can be made to the seller - Reliance Industries Limited after its assessment for the period in question is concluded and not to the petitioners who are not registered as dealers in Gujarat. 15. In the opinion of this court, while adopting the above stand, the respondents have failed to take into consideration the fact that insofar as Reliance Industries Limited is concerned, it has already collected the tax from the petitioners, and hence, if Reliance Industries Limited seeks refund of the amount against the C form declarations, it would not be entitled to such refund as such claim would be hit by the principles of unjust enrichment. As held by the Supreme Court in State of Madhya Pradesh v. Vyankatlal (supra), only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same. The petitioners having borne the ultimate burden in this case, it is only they who would be entitled to refund of the same. 16.Besides the Rajasthan High Court in the petitioners' own case has held that the authorities at Rajasthan were liable to issue 'C' forms in respect of high speed diesel procured for mining purpose ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... open for them to call upon the petitioners to furnish the same. However, the respondent authorities have taken a stand that since it is Reliance Industries Limited which has deposited the tax, such refund application has to be made by it and upon refund being made to Reliance Industries Limited, it can pay the same to the petitioner. However, as noted earlier, Reliance Industries Limited cannot make an application for refund inasmuch as such claim would be barred by the principle of unjust enrichment. Moreover, as stated by the respondents, in the case of Reliance Industries Limited, the refund claim would be processed during the course of its assessment for the period in question, which may take years together and in the meanwhile the petitioners would be deprived of such amount. Moreover, it may be that while processing the refund claim during the course of Reliance Industries Limited's assessment, the respondents may even adjust the refund amount against its dues. Thus, the stand of the respondents that Reliance Industries Limited should file the refund claim and then pay the amount so refunded to the petitioners is neither legally tenable nor is it practically workable. ....