TaxTMI 
TaxTMI 
2024 (1) TMI 1409
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....al Commissioner (Appeals), CGST Appeal Commissionerate Ahmedabad (herienafter referred to as "the Appellate Authority") upholding the rejection of the refund claim by the respondent no.2. 4. Brief facts of the case are as under:- 4.1 The petitioner is an undertaking of Government of Gujarat incorporated on 01.11.1988 under the provisions of the Companies Act, 1956 having the main objective to undertake construction of residential, non-residential all types of buildings for Gujarat Police, Jails, Home Guards etc. and to formulate various housing scheme for serving and retired employees in the Police Department of the Government of Gujarat. For carrying out the above objectives, the petitioner is engaging the Contractors, Engineers, Architects etc. for providing activity of construction. The petitioner floats tenders and invites the application/bid from various activities like appointment of Project Management Consultant, Engineers etc. and the payments are made from grant received by the petitioner from the State Government from annual budget allocations. The petitioner did not raise any invoice up on the Government of Gujarat for the construction activity carried out by it as....
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....etitioner under the bona fide belief at the relevant point of time, that all refund under GST would be filed and are governed by the provisions under Section 54 of the GST Act and refund was filed in Form- RFD-01. The refund application was filed only to the extent of outward liability of tax discharged by the petitioner through electronic cash ledger. 4.5 Respondent no.2-Assistant Commissioner, CGST rejected the refund claim filed by the petitioner by Order in Original dated 18.12.2020 in Form GST RFD-06 only on the ground that the refund claims were filed by the petitioner are time barred beyond the statutory time period of two years as per Section 54(1) CGST Act. 4.7 Feeling aggrieved by the order dated 18.12.2020 passed by respondent no.2 preferred five appeals before the Appellate Authority contending that the tax was paid under mistake of law and therefore, time limit of two years would not apply. 4.8 By the impugned order in appeal dated 20.07.2021 (issued on 30.07.2021), the Appellate Authority dismissed the appeal filed by the petitioner on the ground that the refund claim of the petitioner would be governed by Section 54 of the GST Act and therefore, time limit o....
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....ax is not to be imposed saved by the authority of law. No tax shall be levied or collected except by authority of law". It was, therefore, submitted that as held by this Court in the case of M/s. Joshi Technologies International (supra) that respondent authorities are liable to refund the GST paid by the petitioner. 8. Learned advocate Mr.Nainawati further submitted that the Government cannot retain the money, which is not due and in support of his submission, reliance was place on the following decisions:- 1. Salonah Tea Company Ltd. vs. Superintendent of Taxes, Nowgong, 1987 (12) TMI 3-SC. 2. Superintendent of Taxes vs. Onkarmal Nathmal Trust, 1975 Supp SCR 365. 3. Union of India vs. ITC Ltd., 1993 Supp (4) SCC 326. 4. Vallabh Glass Works Ltd. vs. UPI, [1985] 155 ITR 560 (SC). 5. Teleecare Network (India) Pvt. Ltd. vs. Union of India, 2018 (8) TMI 1901-Delhi High Court. 6. 3E Infotech vs. Customs, Excise, & Service Tax Appellate Tribunal, CCE, Appeals, 2018 (7) TMI 276-Madras High Court. 7. Commissioner of Central Excise vs. KVR Construction, 2012 (26) STR 195 (Kar.) 8. Gokul Agro Resources Ltd. vs. Union ....
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.... 1. SCA No. 15758 of 2022 ZY24122 00205546 dtd 18.12. 2020 Nov. 2017 1,91,44,090 1,91,44,090 20.12.2019 10.11.2020 NO 2. SCA No. 15756 of 2022 ZY24122 00205679 dtd 18.12. 2020 Jan. 2018 2,54,53,321 5,19,76,246 20.02.2020 11.11.2020 NO 3. SCA No. 11221 of 2022 ZY24122 00205891 dtd 18.12. 2020 March 2018 1,83,24,398 1,83,24,398 20.04.2020 11.11.2020 YES 4. SCA No. 15755 of 2022 ZY24122 00205813 dtd 18.12. 2020 May 2018 5,27,00,160 5,27,00,160 20.06.2020 11.11.2020 YES 5. SCA No. 15752 of 2022 ZY24122 00205591 dtd 18.12. 2020 Sept. 2018 3,37,50,751 3,37,50,751 20.10.2020 11.11.2020 YES 21. Referring to the above details, it was submitted that the orders refund claims at serial nos.3, 4 and 5 are concerned, the same would be within the period of limitation in view of the Notification No. 13/2022 and to that extent, the refund claim may be considered by the respondent authority. It was submitted that for the remaining two refund claims at serial nos. 1 and 2 are concerned, the same may be considered by applying Article 26....
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....ery of erroneous refund; (iii) excludes the period from the 1st day of March, 2020 to the 28th day of February, 2022 for computation of period of limitation for filing refund application under section 54 or section 55 of the said Act. 2. This notification shall be deemed to have come into force with effect from the 1st day of March, 2020. [F. No. CBIC-20001/2/2022-GST] RAJEEV RANJAN, Under Secy." 23. The entry no.9(c) of Chapter 99 of GST Tariff-Services, reads as under:- "Supply of service by a Government Entity to Central Government, State Government, Union territory, local authority or any person specified by Central Government, State Government, Union territory or local authority against consideration received from Central Government, State Government, Union territory or local authority, in the form of grants." 24. Section 5A(1A) of Central Excise Act, 1944 stipulates as under:- "Section 5A[(1A) For the removal of doubts, it is hereby declared that where an exemption under sub-section (1) in respect of any excisable goods from the whole of the duty of excise leviable thereon has been granted absolutely, the manufacturer....
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....reunder, the date of adjustment of tax after the final assessment thereof; (g) in the case of a person, other than the supplier, the date of receipt of goods or services or both by such person; and (h) in any other case, the date of payment of tax." 28. Therefore, the contention of the petitioner that the Section 54(1) of the CGST Act is not applicable in the facts of the case is not tenable in view of the fact that the petitioner is liable to pay the GST under the Act. However, in view of the Notification No. 32/2017, the petitioner was not granted exemption providing "Nil rate of Tax". Therefore, as per clause(h) explanation 2, refund date would be the date of payment of tax, which petitioner has failed ignoring the Notification No. 32/2017. Therefore, the petitioner is ought to have filed refund claim as per the Section 54(1) of the CGST Act. 29. This Court in the case of Joshi Technologies International (supra) has held that the amount paid by mistake or through ignorance as self assessment of tax cannot be retained by the revenue and revenue is duty bound to refund as its retention is hit by Article 265 of the Constitution of India, which mand....
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....come of the business and is, therefore, without authority. The appellant has offered explanation for not raising the question of legality in the earlier proceedings. It appears that the authorities proceeded under a mistake of law as to the nature of the claim. The appellant did not include the earlier demand in the writ petition because the suit to enforce the agreement limiting the liability was pending in appeal, but the appellant did attempt to raise the question in the appeal itself. However, the Court declined to entertain the additional ground as it was beyond the scope of the suit. Thereafter, the present writ petition was filed explaining all the circumstances. The High Court considered the delay as inordinate. In our view, the High Court failed to appreciate all material facts particularly the fact that the demand is illegal as already declared by it in the earlier case. 13. The rule which says that the Court may not enquire into belated and stale claim is not a rule of law but a rule of practice based on sound and proper exercise of discretion. Each case must depend upon its own facts. It will all depend on what the breach of the fundamental right and the remedy....
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....ighly inequitable. We may not be seen to suggest that such a claim can be raised at any point of time without any explanation. In a given case, if the petitioner is found to be sleeping over his right, or raises such a claim after unduly long period of time, it may be open for the Government to refuse to return the same and this court in exercise of discretionary writ jurisdiction, may also not compel the Government to do so. 16. In the present case, however, no such inordinate delay is pointed out. The petitioners have contended that the error was noticed by them some time in October, 2003 whereupon immediately on 1-11-2003, such refund claim was filed. 17. In a recent judgment in case of C.C. Patel & Associates Pvt. Ltd. (supra), this court had occasion to deal with somewhat similar situation where the petitioner had deposited service tax twice which was not being refunded by the Department. In that context, it was observed as under:- (12) We fail to see how the department can withhold such refund. We say so for several reasons. Firstly, we notice that under sub-section(3) of section 68, the time available to a service provider such as the petitioner fo....
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....ion 23 of the Act, it was provided that the Commissioner shall, in the prescribed manner refund to a producer or a dealer any sum paid or realised in excess of the sum due from him under this Act either by cash or, at the option of the producer or dealer, be set off against the sum due from him in respect of any other period. Section 23 applies only in a case where money is paid under the Act. If there is no provision for realisation of the money under the Act, the act of payment was ultra vires, the money had not been paid under the Act. In that view of the matter Section 23 would not apply. 14. The High Court in the instant case after analysing the various decisions came to the conclusion that where a petitioner approached the High Court with the sole prayer of claiming refund of money by writ of mandamus, the same was normally not granted but where the refund was prayed as a consequential relief the same was normally entertained if there was no obstruction or if there was no triable issue like that of limitation. We agree that normally in a case where tax or money has been realised without the authority of law, the same should be refunded and in an application under Art....
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.... refund of sales tax collected from them. They contended that the impugned tax was violative of Article 301(a) of the Constitution and they paid the tax under a mistake of law and the tax so paid was refundable under Section 72 of the Indian Contract Act, 1872. The appellant contended that there was no violation of Article 301 of the Constitution, and even if there was such violation the tax came within the special provision under Article 304(a) of the Constitution and the High Court had no power to direct refund of tax already paid and in any event the High Court should not exercise its discretionary power of issuing a writ of mandamus directing this to be done since there was unreasonable delay in filing the petition. The High Court rejected all the contentions of the appellant and a writ of mandamus was issued as prayed for. It was held that tax was violative under Article 301 of the Constitution. But it was held that even though the tax contravened Article 301 of the Constitution, it was valid if it came within the saving provisions of Article 304 of the Constitution. Tobacco manufactured or produced in the appellant State, similar to the tobacco imported from outside had not b....
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....wn. Besides, section 17 of the Limitation Act inter alia provides that when a suit or application is for relief from the consequences of a mistake, the period of limitation would not begin to run until the plaintiff or applicant has discovered the mistake, or could, with reasonable diligence, have discovered it. Therefore, in case where money is paid under a mistake, the limitation would begin to run only when the applicant comes to know of such mistake or with reasonable diligence could have discovered such mistake. Adverting to the case at hand, the mistake is in the nature of a mistake of law. It appears that the legal position was not clear and hence, pursuant to representations made by the trade and field formations, the CBEC was required to issue the circular dated 07.01.2014 clarifying the issue. As noticed earlier, the petitioner had all along, right from July 2004 been paying Education Cess and subsequently, from the year 2007 was paying Secondary and Higher Secondary Education Cess, till April 2014. It was only when the Circular dated 07.01.2014 came to be issued by the CBEC, clarifying the issue, that the petitioner came to know about its mistake. Considering the nature ....
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....ce Tax. What one has to see is whether the amount paid by petitioner under mistaken notion was payable by the petitioner. Though under Finance Act, 1994 such service tax was payable by virtue of notification, they were not liable to pay, as there was exemption to pay such tax because of the nature of the institution for which they have made construction and rendered services. In other words, if the respondent had not paid those amounts, the authority could not have demanded the petitioner to make such payment. In other words, authority lacked authority to levy and collect such service tax. Incase, the department were to demand such payments, petitioner could have challenged it as unconstitutional and without authority of law. If we look at the converse, we find mere payment of amount, would not authorize the department to regularise such payment. When once the department had no authority to demand service tax from the respondent because of its circular dated 17-9-2004, the payment made by the respondent company would not partake the character of "service tax" liable to be paid by them. Therefore, mere payment made by the respondent will neither validate the nature of payment nor th....
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....s of opinion that the plea of alternative remedy- an unoriginal and frequently used stereotypical defence by public bodies - in such cases at least dodges the crux of any dispute, i.e the liability of the concerned public body or agency on merits. Sans any dispute with respect to facts, this Court finds it entirely unpersuasive, since Article 144 of the Constitution, compels all authorities to give effect to the law declared by the Supreme Court (as in this case, the SRF Limited judgment). The other plea which the Customs had relied on, to defeat the petitioner's refund application was Section 27 (3) which confines refunds to the situations contemplated in Section 27 (2), notwithstanding any judgment, order or decree of the court. This Court is at a loss to observe the relevance of that reasoning, given that SRF Limited (supra) had ruled in principle that import implied a deemed manufacture, without any corresponding obligation on the part of the importer to have availed CENVAT credit. As such, the amount claimed was not duty and could not have been recovered by the Customs authorities in the first instance, given the declaration of law in SRF Limited (supra). Therefore, they c....
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....e Court stated that the Assessee's claim to refund would not be disallowed solely because it seemed barred by limitation. Since the Assessee in that case made the claim for refund shortly after learning about their entitlement for the same, it would not be just to hold that such claim is hit by laches. 11. A similar view has been taken by the Bombay High Court in the case of Parijat Construction Vs. Commissioner Excise, Nashik, reported in 2018(359) ELT 113 (Bom), where the Bombay High Court has held as under:- "4. We are of the view that the issue as to whether limitation prescribed under Section 11B of the said Act applies to a refund claimed in respect of service tax paid under a mistake of law is no longer res integra. The two decisions of the Division Bench of this Court in Hindustan Cocoa (supra) and Commissioner of Central Excise, Nagpur v. M/s. SGR Infratech Ltd. (supra) are squarely applicable to the facts of the present case. 5. Both decisions have held the limitation prescribed under Section 11B of the said Act to be not applicable to refund claims for service tax paid under a mistake of law. The decision of the Supreme Court in the case of....
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....funded and in an application under Article 226 of the Constitution the court has power to direct the refund unless there has been avoidable laches on the part of the petitioner which indicate either the abandonment of his claims or which is of such nature for which there is no probable explanation or which will cause any injury either to the respondent or any third party. It is true that in some cases the period of three years is normally taken as a period beyond which the court should not grant relief but that is not an inflexible rule." 8. In Shri Vallabh Glass Works Ltd., and Anr. v. Union of India and Ors. 1984 (16) ELT 171 SC, this Court, while examining the question as to what is the point of time from which the limitation should be deemed to commence observed that relief in respect of payments made beyond the period of three years may not be granted from the date of filing of the petition, taking into consideration the date when the mistake came to be known to the party concerned. Just as an assessee cannot be permitted to evade payment of rightful tax, the authority which recovers tax without any authority of law cannot be permitted to retain the amount, merely bec....