TaxTMI 
TaxTMI 
2025 (7) TMI 1710
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....5 to 31.12.2016 40,85,608/- 20/2018 (R) dated 27.04.2018 CMB-CEX- 000-APP251 -18 dated 02.11.2018 ST/40183/2019 2. Brief facts are that the appellant is a Contractor registered with the Department, holding registration certificate No.AAOPR3712JST001 and rendering construction services to various parties including the Government Department viz., Kerala State Industrial Development Corporation Ltd., (in short 'KSIDC'). On 15.03.2017, the appellant filed the aforementioned claims for refund of the service tax paid towards the services rendered to KSIDC, claimed to be exempted under Notification No.25/2012-ST dated 20.06.2012 vide Sl.No.12(a). 3. On scrutiny of the impugned refund claims, the Department being of the view that (a) the appellant has not established its entitlement of the exemption under the notification No.25/2012-ST dated 26.06.2012 as amended; (b) that the claim appears to be hit by limitation of time bar as per Section 11B and also for the period from 01-04-2015 to 29-022016, the refund had to be applied within 6 months of the date of passing of Section 102 of the Finance Act, ( that is from 14.05.2016); (c) as the work or....
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....00% equity owned company of Government of Kerala and that they are a Government Company. Both letters also stated that they were being issued pursuant to the appellant's request that they be so issued in order for the appellant to avail service tax exemption. The appellant also reiterated the aforesaid contentions through its consultant vide two separate letters in respect of the refund claims, both dated 09.02.2018. However, in the letter pertaining to the claim for the period from October 2015 to Jan 2017, it was stated that the refund claim is filed by claiming the benefit vide Section 102 of Finance Act 2016 which granted retrospective exemption for the period 01-04-2015 to 31-03-2016, in respect of the exemption under Sl.No.12(a) which was initially withdrawn with effect from 01-042015 vide notification No.6/2015-ST dated 01.03.2015, but was restored vide entry Sl.No.12A inserted vide Notification No.9/2016-ST with effect from 01.04.2016 subject to fulfilment of the conditions that the contract should have been entered prior to 01.03.2015 and appropriate stamp duty wherever applicable should have been paid prior to that date. The letters dated 09.02.2018 also reiterated that t....
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....e Section 83 of the Finance Act, 1994, the refund claim is hit by limitation. Reliance was placed on various citations including Apex court decision in Mafatlal Industries v Union of India, (1997) 5 SCC 536. 5. Aggrieved by the said orders in Original rejecting their refund claim, the appellants filed appeals before the first Appellate Authority. However, the Appellate Authority vide the impugned Orders in Appeal held that the impugned orders rejecting the claim of the appellant, on the twin grounds of merits as well as on limitation, is as per law and does not warrant any interference and thus while rejecting the appeals filed by the appellant, upheld the orders in original of the adjudicating authority. 6. It is pursuant to the litigious journey through the adjudicatory and appellate hierarchy that the appellant is presently before this Tribunal having preferred the instant appeals against the impugned Orders in Appeal on the following common grounds: A) Governmental Authority is explained in para 2(s) of the notification No.25/2012-ST which is as furnished below: Sl.No. With effect from Explanation 1 01.07.2012 "governmental authority....
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....lant has also raised the ground that appellant is eligible for refund of Rs.27,83,379/-, which is within one year period under Section 11B of CEA, 1944. 7. Shri. N. Viswanathan, Advocate, appearing for the appellant submitted that the common findings recorded in both the orders of the original authority and verbatim approved by the appellate authority to hold that KSIDC is not a governmental authority is grossly incorrect. The Ld. Counsel submits that the findings rendered that a municipality or any local body is a local government carrying on public administration and governance using public fund without any profit motive whereas KSIDC is a profit making PSU by relying on a CAG report, not made available to the appellant, to hold that KSIDC is not entrusted with any of the functions under Schedule XII of the constitution and therefore they are not a governmental authority, was followed by the first appellate authority without due application of mind. 8. The Ld. Counsel would contend that the lower authorities ought to have considered the list of work that could be entrusted on a municipality or a local body as enshrined in Schedule XII of the constitution and demonstrated th....
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...., Madurai, 2022 (61) GSTL 364 (Tri-Chennai) vii) Gail India Ltd v Commr of GST & Central Excise, Puducherry, 2023 (79) GSTL 403 (Tri-Chennai) viii) Hexacom (I) Ltd v CCE, Jaipur, 2003 (156) ELT 357 (Tri-Del) ix) CCE, Raipur v Indian Ispat Works (P) Ltd, 2006 (3) STR 161 (Tri-Del). 11. Learned Authorised Representative, Ms. Anandalakshmi Ganeshram appeared for the Department and while reiterating the findings in the impugned order in appeal, she argued that the findings of the lower authority that the appellant is not a Governmental Authority is correct in as much as KSIDC does not satisfy the requirement of Governmental Authority as stipulated in the definitions provided in para 2 under clause (s) of the mega exemption notification 25/2012-ST ibid. Ld. A.R argued that it has not been shown by the appellant that KSIDC was established by the Government of Kerala to carry out any function entrusted to a municipality under article 243W of the Constitution. Ld.A.R submitted that since it is the claim of the appellant that the exemption was available it was for the appellant to have let in evidence to prove that KSIDC satisfies the definition of Governmental....
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....bility of benefit of exemption under Sl.No.12(a)/12A of the Exemption Notification 25/2012-ST ibid is tenable? ii) Whether the claim though tenable on merits, is however barred by limitation under Section 11B of the Central Excise Act, 1944 as made applicable to Finance Act by virtue of Section 83 of the Finance Act, 1994/Section 102 of the Finance Act, 1994. 14. At the outset, the notifications and its amendments and other statutory provisions and articles of constitution that are necessary for determination of the issues at hand are reproduced infra. 15. Exemption Notification No.25/2012-ST dated 20-06-2012 which came into force from 01-07-2012, stipulated that the Central Government, being satisfied that it is necessary in the public interest so to do, thereby exempts the taxable services stipulated therein from the whole of the service tax leviable thereon under section 66B of the said Act and Sl.No.12 of the said notification ibid stipulated as under: - "12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renova....
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....ry 12, items (a), (c) and (f) shall be omitted;" (emphasis supplied) The notification further provided that save as provided in the notification, it shall come into force on the 1st of April, 2015. 15.4 The Central Government again, vide Notification No.9/2016-ST dated 01-03-2016, further amended notification No.25/2012-ST vide para 1(a)(iv) which stipulated as under: "after entry 12, with effect from the 1st March, 2016, the following entry shall be inserted, namely - ""12A. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of - (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any other business or profession; (b) a structure meant predominantly for use as (i) an educational, (ii) a clinical, or (iii) an art or cultural establishment; or (c) a residential complex predominantly meant for self-use or the use of their employees or other persons specified in the Explanation 1 to clause (44....
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....ticle 243W of the Constitution reads as under : "243W. Powers, authority and responsibilities of Municipalities, etc. - Subject to the provisions of this Constitution, the Legislature of a State may, by law, endow - (a) the Municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government and such law may contain provisions for the devolution of powers and responsibilities upon Municipalities, subject to such conditions as may be specified therein, with respect to - (i) the preparation of plans for economic development and social justice; (ii) the performance of functions and the implementation of schemes as may be entrusted to them including those in relation to the matters listed in the Twelfth Schedule; (b) the Committees with such powers and authority as may be necessary to enable them to carry out the responsibilities conferred upon them including those in relation to the matters listed in the Twelfth Schedule." (emphasis supplied) 18. Furthermore, the twelfth Schedule of the Constitution is as under: "TWELFTH SCHEDULE (Article 24....
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....tood withdrawn with effect from 01.04.2015 vide Notification No.6/2015-ST dated 01-03-2015 vi) The exemption that was provided at Sl.No.12(a) was restored retrospectively with effect from 01-03-2016 till 31.03.2020, albeit with conditions, vide insertion of another entry Sl.No.12A by Notification No.9/2016-ST dated 01-03-2016, into the Notification No.25/2012-ST ibid, the two conditions stipulated being that the services provided ought to be under a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date. vii) The Finance Act, 2016, which received the assent of the President on 14th May, 2016, vide Section 159 thereof, inter-alia, provided for insertion of a new section 102 in the Finance Act, 1994 which stipulated that no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending with the 29th day of February, 2016 (both days inclusive), in respect of taxable services provided to the Government, a local authority or a Governmental authority, essentially as had been provided for in the entry 12A inserted by Notific....
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....s per law apart from obtaining and providing the necessary certification from KSIDC for the non-reimbursement of the tax to them and also that they are a governmental authority." We are constrained to say that such bald averments, especially regarding the service receiver KSIDC informing them that they being a governmental authority no service tax is payable, have not been reflected in the replies to the SCN brought on record. Neither is any such contention seen raised in the appeals filed before the first appellate authority, nor has it been raised in the grounds of appeal preferred before this Tribunal. No evidence has been let in to support such averments nor have such averments been brought on record by filing a proper application seeking leave of this Tribunal to take additional grounds. Suffice to say, we do not appreciate such bald averments sans any evidence. Such averments cannot be countenanced and are hence rejected. We say no more. 23. Be that as it may, we note that the refund claims of the appellant hinge on the crucial contention that KSIDC is a governmental authority. This is so, for the reason that it is the benefit of exemption under Sl.No.12(a) of the notifica....
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....hority." 25.2 Furthermore, the said definition of "governmental authority" in clause (s) of paragraph 2, was substituted vide Notification No.2/2012-ST dated 30-01-2014, which provided as under: '(s) "governmental authority" means an authority or a board or any other body; (i) set up by an Act of Parliament or a State Legislature; or (ii) established by Government, with 90% or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution;'." 25.3 At this juncture, it would also be necessary to note the effect of substitution of the definition of "governmental authority" in clause (s) of para 2 of the Notification. 25.4 The effect of substitution of a provision has been stated in Chandra Sekhar Jha v Union of India, 2022 (380) ELT 130 (SC), as "Substitution of a provision results in repeal of the earlier provision and its replacement by the new provision [See in this regard, a discussion in Justice G.P. Singh, Principles on Statutory Interpretation (12th Edition) page No. 676.]." 25.5 The principles of law with regard to the interpretations of the word "subs....
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....pellant to derive the benefit of the exemption at Sl.No.12(a) of the Notification 25/2012-ST ibid as amended. 25.7 By the said substitution, the Central Government divested an authority or a board or any other body set up by an Act of Parliament or a State Legislature from the requirement that it should be so set up with 90% or more participation by way of equity or control and further that it should have been so set up to carry out any function entrusted to a municipality under article 243W of the Constitution in order to be considered a "governmental authority". In other words, the mere setting up of an authority or a board or any other body by an Act of Parliament or a State Legislature was sufficient for the said authority or a board or any other body to qualify as a "governmental authority". 25.8 However, in the case of an authority or a board or any other body; other than that set up by an Act of Parliament or a State Legislature; the definition of "governmental authority" as provided in the substituted clause (s), would be satisfied only when: i) an authority or a board or any other body is established by Government, ii) such an authority or a board o....
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.... Xxxx 48. The next authority, which needs to be referred is the case in Mangalore Chemicals (supra). As we have already made reference to the same earlier, repetition of the same is not necessary. From the above decisions, the following position of law would, therefore, clear. Exemptions from taxation have tendency to increase the burden on the other unexempted class of taxpayers. A person claiming exemption, therefore, has to establish that his case squarely falls within the exemption notification, and while doing so, a notification should be construed against the subject in case of ambiguity. Xxxxx 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export ....
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....e letter has cited the appellant's request and that the certification has been requested by the appellant to avail the service tax exemption applicable to services provided to governmental authority as per exemption notification No.25 of 2012-Service Tax. Therefore, it must be taken that appellant has informed, and KSIDC is aware, as to the definition of "governmental authority" in the said notification. Yet, while issuing the letter the concerned official has refrained from certifying that the company is so established to carry out any function entrusted to a municipality under article 243W of the Constitution. Thus, the letter which does not certify this crucial aspect and is not properly authenticated, fails to substantiate the appellant's contention that KSIDC is a "governmental authority." 32 The appellant has in its reply, drawn the attention of the adjudicating authority to the website of KSIDC and the purported extracts therefrom reproduced therein to contend that KSIDC is carrying out functions entrusted to a municipality under Sl.No.3 "planning for economic and social development" as stipulated in the Twelfth Schedule to the Constitution. 33 It is seen from the Orde....
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...., is absent in the grounds of appeal preferred before this Tribunal and was also never raised before the first appellate authority, is rejected as unsustainable. It is also pertinent that it is not the contention of the appellant that the CAG report was not available on the KSIDC website at the time when the adjudicating authority had accessed it and premised his observations on what was found on the KSIDC website. In any event, that alone is not the sole criteria for the findings of the lower authorities. 35 That apart, we are of the view that reproduction of purported content as available on the website of KSIDC is insufficient evidence to conclude that the appellant has discharged its burden of proving that KSIDC is a Governmental Authority. In fact, the appellant is seeking to obtain the benefit of the exemption notification by requiring an inference or assumption to be made premised on the contents on the website of KSIDC that the company is so established to carry out any function entrusted to a municipality under article 243W of the Constitution. We are of the view that, absent any averment or evidence as to the veracity of the contents on the website displayed, and given....
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....s amended, it lends itself only to the explanation that legislature in its wisdom had decided that while the mere setting up of an authority or a board or any other body by an Act of Parliament or a State Legislature was sufficient for the said authority or a board or any other body to qualify as a "governmental authority", however, when an authority or a board or any other body is otherwise established by the Government, then such an authority or board or any other body established with 90% or more participation by way of equity or control by Government, should also have been so established to carry out any function entrusted to a municipality under article 243W of the Constitution. We have elucidated the functions entrusted to a municipality under article 243W of the constitution supra. Concededly, KSIDC is not established under an Act of the Parliament or the State Legislature so as to fall under sub-clause (i) of clause (s) of paragraph 2 of the Notification 25/2012-ST ibid as amended and thus satisfy the definition of 'governmental authority'. 38 Hence, when it was only by the Constitution (74th Amendment) Act, 1992 that the Parliament had inserted Part IXA of the Constitut....
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.... its entitlement to exemption under Sl.No.12(a)/12A of the notification No.12/2012-ST ibid as amended. Consequently, the appellant's claim for refund on merits is liable to be rejected on these aspects alone. For the aforesaid reasons since the appellant has failed to establish that its claim for refund has merits, the decisions relied upon by the appellant, which are different from the facts and circumstances of the appellant's case herein, are distinguishable and thus inapplicable. 40 Furthermore, given that the appellant is also claiming the benefit of Sl.No.12A of the notification 25/2012-ST as amended, we notice from the appeal records, that despite the benefit of the said Sl.No. being premised on the condition that the services rendered ought to be on a contract which had been entered into prior to the 1st March, 2015 and on which appropriate stamp duty, where applicable, had been paid prior to such date, no evidence substantiating the fulfilment of the said conditions is seen placed in the appeal records. 41 In as much as we have found that the appellant does not succeed on merits, the second question formulated for our determination, i.e, whether the claim though tena....
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....van Reddy, J on behalf of the other four Honourable Judges and himself. Presumably inadvertently, there have been decisions rendered premised on the concurring judgements without noticing the majority Judgment. However, being the view taken by only three Judges, they are normally accorded less significance and it is the opinion of Jeevan Reddy, J. which is the unanimous verdict of five Judges, out of the nine Judges, that becomes the effective and binding judgment in this case. The relevant portions of the said majority judgement are reproduced as under: "17. We must, however, pause here and explain the various situations in which claims for refund may arise. They may arise in more than one situation. One is where a provision of the Act under which tax is levied is struck down as unconstitutional for transgressing the constitutional limitations. This class of cases, we may call, for the sake of convenience, as cases of "unconstitutional levy". In this class of cases, the claim for refund arises outside the provisions of the Act, for this is not a situation contemplated by the Act. 18. Second situation is where the tax is collected by the authorities under the Act ....
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....urthermore, B.P. Jeevan Reddy, J., per majority, after stating that the discussions in the Judgement yields the following propositions, have laid them down in para 99, as under: (i) Where a refund of tax/duty is claimed on the ground that it has been collected from the petitioner/plaintiff - whether before the commencement of the Central Excises and Customs Laws (Amendment) Act, 1991 or thereafter - by mis-interpreting or misapplying the provisions of the Central Excises and Salt Act, 1944 read with Central Excise Tariff Act, 1985 or Customs Act, 1962 read with Customs Tariff Act or by mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the said enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein. No suit is maintainable in that behalf. While the jurisdiction of the High Courts under Article 226 - and of this Court under Article 32 - cannot be circumscribed by the provisions of the said enactments, they will certainly have due regard to the legislative intent ....
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....me final and cannot be re-opened on the basis of a decision on another person's case; this is the ratio of the opinion of Hidayatullah, CJ. in Tilokchand Motichand and we respectfully agree with it. Such a claim is maintainable both by virtue of the declaration contained in Article 265 of the Constitution of India and also by virtue of Section 72 of the Contract Act. In such cases, period of limitation would naturally be calculated taking into account the principle underlying Clause (c) of subsection (1) of Section 17 of the Limitation Act, 1963. A refund claim in such a situation cannot be governed by the provisions of the Central Excises and Salt Act or the Customs Act, as the case may be, since the enactments do not contemplate any of their provisions being struck down and a refund claim arising on that account. In other words, a claim of this nature is not contemplated by the said enactments and is outside their purview. (iii) A claim for refund, whether made under the provisions of the Act as contemplated in Proposition (i) above or in a suit or writ petition in the situations contemplated by Proposition (ii) above, can succeed only if the petitioner/plaintif....
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....opening such assessment/order on the ground of a decision in another person's case. Any proposition to the contrary not only results in substantial prejudice to public interest but is offensive to several well established principles of law. It also leads to grave public mischief. Section 72 of the Contract Act, or for that matter Section 17(1)(c) of the Limitation Act, 1963, has no application to such a claim for refund. (v) Article 265 of the Constitution has to be construed in the light of the goal and the ideals set out in the Preamble to the Constitution and in Articles 38 and 39 thereof. The concept of economic justice demands that in the case of indirect taxes Central Excises duties and Customs duties, the tax collected without the authority of law shall not be refunded to the petitioner-plaintiff unless he alleges and establishes that he has not passed on the burden of duty to a third party and that he has himself borne the burden of the said duty. (vi) Section 72 of the Contract Act is based upon and incorporates a rule of equity. In such a situation, equitable considerations cannot be ruled out while applying the said provision. (vii) While exami....
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....under Article 32 - is concerned, it remains unaffected by the provisions of the Act. Even so, the Court would, while exercising the jurisdiction under the said articles, have due regard to the legislative intent manifested by the provisions of the Act. The writ petition would naturally be considered and disposed of in the light of and in accordance with the provisions of Section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it. Even while acting in exercise of the said constitutional power, the High Court cannot ignore the law nor can it over-ride it. The power under Article 226 is conceived to serve the ends of law and not to transgress them. (xi) Section 11B applies to all pending proceedings notwithstanding the fact that the duty may have been refunded to the petitioner/plaintiff pending the proceedings or under the orders of the Court/Tribunal/Authority or otherwise. It must be held that Union of India v. Jain Spinners [1992 (61) E.L.T. 321 (SC) = 1992 (4) S.C.C. 389] and Union of India v. I.T.C. [1993 (67) E.L.T. 3 (SC) = 1993 Suppl. (4) S.C.C. 326] have been correctly deci....
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....nother assessee, regardless of the time-lapse involved and regardless of the fact that the relevant enactment does not provide for such refund or reopening; (3) whether equitable considerations have no place in situations where Section 72 of the Contract Act is applicable; and (4) whether the spending away of the taxes collected by the State is not a good defence to a claim for refund of taxes collected contrary to law. 68. Re. : (I) : Hereinbefore, we have referred to the provisions relating to refund obtaining from time to time under the Central Excises and Salt Act. Whether it is Rule 11 (as it stood from time to time) or Section 11B (as it obtained before 1991 or subsequent thereto), they invariably purported to be exhaustive on the question of refund. Rule 11, as in force prior to August 6, 1977, stated that "no duties and charges which have been paid or have been adjusted....shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officers within three months from the date of such payment or adjustment, as the case may be". Rule 11, as in force between August 6, 1977 and November 17, 1980 contained sub....
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....t must be held that Section 11B [both before and after amendment] is valid and constitutional. In Kamala Mills, this Court upheld the constitutional validity of Section 20 of the Bombay Sales Tax Act (set out hereinbefore) on the ground that the Bombay Act contained adequate provisions for refund, for appeal, revision, rectification of mistake and for condonation of delay in filing appeal/revision. The Court pointed out that had the Bombay Act not provided these remedies and yet barred the resort to civil court, the constitutionality of Section 20 may have been in serious doubt, but since it does provide such remedies, its validity was beyond challenge. To repeat - and it is necessary to do so - so long as Section 11B is constitutionally valid, it has to be followed and given effect to. We can see no reason on which the constitutionality of the said provision - or a similar provision - can be doubted. It must also be remembered that Central Excises and Salt Act is a special enactment creating new and special obligations and rights, which at the same time prescribes the procedure for levy, assessment, collection, refund and all other incidental and ancillary provisions. As pointed o....
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....of the Constitution. lt follows that any action taken under and in accordance with the said provisions would be an action taken under the "authority of law", within the meaning of Article 265. In the face of the express provision which expressly declares that no claim for refund of any duty shall be entertained except in accordance with the said provision, it is not permissible to resort to Section 72 of the Contract Act to do precisely that which is expressly prohibited by the said provisions. In other words, it is not permissible to claim refund by invoking Section 72 as a separate and independent remedy when such a course is expressly barred by the provisions in the Act, viz., Rule 11 and Section 11B. For this reason, a suit for refund would also not lie. Taking any other view would amount to nullifying the provisions in Rule 11/Section 11B, which, it needs no emphasis, cannot be done. It, therefore, follows that any and every claim for refund of excise duty can be made only under and in accordance with Rule 11 or Section 11B, as the case may be, in the forums provided by the Act. No suit can be filed for refund of duty invoking Section 72 of the Contract Act. So far as....
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....ly borne its burden - that would be economic justice. Conferring an unwarranted and unmerited monetary benefit upon an individual is the very anti-thesis of the concept of economic justice and the principles underlying Articles 38 and 39. Now, the right to refund arising as a result of declaration of unconstitutionality of a provision of the enactment can also be looked at as a statutory right of restitution. It can be said in such a case that the tax paid has been paid under a mistake of law which mistake of law was discovered by the manufacturer/assessee on the declaration of invalidity of the provision by the court. Section 72 of the Contract Act may be attracted to such a case and a claim for refund of tax on this score can be maintained with reference to Section 72. This too, however, does not mean that the taxes paid under an unconstitutional provision of law are automatically refundable under Section 72. Section 72 contains a rule of equity and once it is a rule of equity, it necessarily follows that equitable considerations are relevant in applying the said rule - an aspect which we shall deal with a little later. Thus, whether the right to refund of taxes paid under an unc....
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.... the learned Judges who said so, we find ourselves unable to agree with the said proposition. Acceptance of the said proposition would do violence to several well-accepted concepts of law. One of the important principles of law, based upon public policy, is the sanctity attaching to the finality of any proceeding, be it a suit or any other proceeding. Where a duty has been collected under a particular order which has become final, the refund of that duty cannot be claimed unless the order (whether it is an order of assessment, adjudication or any other order under which the duty is paid) is set aside according to law. So long as that order stands, the duty cannot be recovered back nor can any claim for its refund be entertained. But what is happening now is that the duty which has been paid under a proceeding which has become final long ago - may be an year back, ten years back or even twenty or more years back - is sought to be recovered on the ground of alleged discovery of mistake of law on the basis of a decision of a High Court or the Supreme Court. It is necessary to point out in this behalf that for filing an appeal or for adopting a remedy provided by the Act, the ....
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....at the provisions of the Bombay Sales Tax Act clearly indicate that all questions pertaining to the liability of the dealer to pay assessment in respect of their transactions are expressly left to be decided by the appropriate authorities under the Act as matters falling within their jurisdiction. Whether or not a return is correct and whether a transaction is exigible to tax or not are all matters to be determined by the authorities under the Act. The argument that the finding of the authority that a particular transaction is taxable under the Act is a finding on a collateral fact and, therefore, resort to civil court is open, was expressly rejected and it was affirmed that the whole activity of assessment beginning with the filing of the return and ending with the order of assessment falls within the jurisdiction of the authorities under the Act and no part of it can be said to constitute a collateral activity not specifically or expressly included in the jurisdiction of the authorities under the Act. It was clarified that even if the authority under the Act holds erroneously, while exercising its jurisdiction and powers under the Act that a transaction is taxable, it cannot be s....
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....st succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favour just because in another assessee's case, a similar point is decided in favour of the manufacturer/assessee. (See the pertinent observations of Hidayatullah, CJ. in Tilokchand Motichand extracted in Para 37). The decisions of this Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith. (emphasis supplied) 71. Re. : (III) : For the purpose of this discussion, we take the situation arising from the declaration of invalidity of a provision of the Act under which duty has been paid or collected, as the basis, inasmuch as that is the only situation surviving in view of our holding on (I) and (II). In such cases, the claim for refund is maintainable by virtue of the declaration contained in Article 265 as also under Section 72 of the Contract Act as explained hereinbefore, subject to one exception: where a person approaches the High Court or Supreme Court challenging the constitutional validity of a provision but fails, he cannot take advantage of the declaration of unconsti....
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....fact that the person claiming the refund has passed on the burden of duty to another. In other words, the person claiming the refund has not really suffered any prejudice or loss. If so, there is no question of reimbursing him. He cannot be recompensated for what he has not lost. The loser, if any, is the person who has really borne the burden of duty; the manufacturer who is the claimant has certainly net borne the duty notwithstanding the fact that it is he who has paid the duty. Where such a claim is made, it would be wholly permissible for the court to call upon the petitioner/plaintiff to establish that he has not passed on the burden of duty to a third party and to deny the relief of refund if he is not able to establish the same, as has been done by this Court in I.T C. In this connection, it is necessary to remember that whether the burden of the duty has been passed on to a third party is a matter within the exclusive knowledge of the manufacturer. He has the relevant evidence - best evidence - in his possession. Nobody else can be reasonably called upon to prove that fact. Since the manufacturer is claiming the refund and also because the fact of passing on the b....
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....of tax where tax was not chargeable at the time of the making of the contract, or for the sale or purchase of such goods tax paid where tax was chargeable at that time, - (a) if such imposition or increase so takes effect that the decreased tax or increased tax, as the case may be, or any part of such tax is paid or is payable, the seller may add so much to the contract price as will be equivalent to the amount paid or payable in respect of such tax or increase of tax, and he shall be entitled to be paid and sue for and recover such addition, and (b) if such decrease or remission so takes effect that the decreased tax only, or no tax, as the case may be, is paid or is payable, the buyer may deduct so much from the contract price as will be equivalent to the decrease of tax or remitted tax, and he shall not be liable to pay, or be sued for, or in respect of, such deduction. (2) The provisions of sub-section (1) apply to the following taxes, namely : (a) any duty of customs or excise on goods; (b) any tax on the sale or purchase of goods." 73. Sub-section (2), it may be noted, expressly makes the said provision applicable to duty ....
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....ers, his claim for refund will be rejected whether such a claim is made in a suit or a writ petition. It is a case of balancing public interest vis-avis private interest. Where the petitioner-plaintiff has not himself suffered any loss or prejudice (having passed on the burden of the duty to others), there is no justice or equity in refunding the tax (collected without the authority of law) to him merely because he paid it to the State. It would be a windfall to him. As against it, by refusing refund, the monies would continue to be with the State and available for public purposes. The money really belongs to a third party - neither to the petitioner/plaintiff nor to the State - and to such third party it must go. But where it cannot be so done, it is better that it is retained by the State. By any standard of reasonableness, it is difficult to prefer the petitioner-plaintiff over the State. Taxes are necessary for running the State and for various public purposes and this is the view taken in all jurisdictions. It has also been emphasised by this Court In D. Cawasji wherein Mathew, J. not only pointed out the irrational and unjust consequences flowing from the holding in Bhailal B....
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.... distinction between the constitutional values obtaining in countries like United States of America, Canada and Australia - or for that matter, United Kingdom - and the values obtaining under our Constitution. Unlike the economically neutral - if not pro-capitalist - Constitutions governing those countries, the Indian Constitution has set before itself the goal of "Justice, Social, Economic and Political" - a total re-structuring of our society - the goal being what is set out in Part IV of the Constitution and, in particular, in Articles 38 and 39. Indeed, the aforesaid words in the preamble constitute the motto of our Constitution, if we can call it one. Article 38 enjoins upon the State to "strive to promote the welfare of the people by securing and protecting as effectively as it may a social order in which justice, social, economic and political shall inform all the institutions of the national life". Article 39 lays down the principles of policy to be followed by the State. It says that the State shall, in particular, direct its policy towards securing "(b) that the ownership and control of the material resources of the community are so distributed as best to subserve the com....
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....ng off old legal thought is part of the process of the new equity-loaded legality.... It is right that the rule of law enshrined in our Constitution must and does reckon with the roaring current of change which shifts our social values and shrivels of feudal roots, invades our lives and fashions our destiny." The learned Judge quoted Granville Austin, saying : "The Judiciary was to be the arm of the social revolution upholding the quality that Indians had longed for in colonial days.... the courts were also idealised because, as guardians of the Constitution, they would be the expression of a new law created by Indians for Indians," 77. That "the material resources of the community" are not confined to public resources but include all resources, natural and man-made, public and private owned" is repeatedly affirmed by this Court. [See Ranganatha Reddy, Sanjeev Coke Manufacturing Co. v. Bharat Coking Coal [1983 (1) S.C.R. 1000] and State of Tamil Nadu etc. etc. v. L. Abu Kavur Bai & Ors. etc. [1984 (1) S.C.R. 725]. We are of the considered opinion that Sri Parasaran is right in saying that the philosophy and the core values of our Constitution must be kept....
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....itutional, the person who paid the tax is entitled to claim refund and such a claim cannot be governed by the provisions in Rule 11/Section 11B. It is in this context of the duty levied being found to be unconstitutional that it is stated that the very collection and/or retention of tax without the authority of law entitles the person, from whom it is collected, to claim its refund. The Apex Court then goes on to hold that the right to refund arising as a result of declaration of unconstitutionality of a provision of the enactment can also be looked at as a statutory right of restitution. It can be said in such a case that the tax paid has been paid under a mistake of law which mistake of law was discovered by the manufacturer/assessee on the declaration of invalidity of the provision by the court. Section 72 of the Contract Act may be attracted to such a case and a claim for refund of tax on this score can be maintained with reference to Section 72. This too, however, does not mean that the taxes paid under an unconstitutional provision of law are automatically refundable under Section 72. The Apex Court further cautions that the very concept of economic justice means and demands ....
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....y collection or retention of tax in accordance or pursuant to the said provisions is collection or retention under "the authority of law" within the meaning of the said article. The Apex Court then holds that in short, no claim for refund is permissible except under and in accordance with Rule 11 and Section 11B and that an order or decree of a court does not become ineffective or unenforceable simply because at a later point of time, a different view of law is taken. The Apex Court further goes on to hold that the Court therefore, is of the clear and considered opinion that the theory of mistake of law and the consequent period of limitation of three years from the date of discovery of such mistake of law cannot be invoked by an assessee taking advantage of the decision in another assessee's case. All claims for refund ought to be, and ought to have been, filed only under and in accordance with Rule 11/Section 11B and under no other provision and in no other forum. An assessee must succeed or fail in his own proceedings and the finality of the proceedings in his own case cannot be ignored and refund ordered in his favour just because in another assessee's case, a similar point is ....
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....pecial and exclusive knowledge, it is for him to allege and establish that he has not passed on the duty to a third party. The Apex Court goes on to hold that this is the requirement which flows from the fact that Section 72 is an equitable provision and that it incorporates a rule of equity. It is also held that this requirement flows not only because Section 72 incorporates a rule of equity but also because both the Central Excise duties and the Customs duties are indirect taxes which are supposed to be and are permitted to be passed on to the buyer. The Apex Court then goes on to hold that it would be legitimate for the court to presume, until the contrary is established, that a duty of excise or a customs duty has been passed on. It is a presumption of fact which a court is entitled to draw under Section 114 of the Indian Evidence Act. It is undoubtedly a rebuttable presumption but the burden of rebutting it lies upon the person who claims the refund (plaintiff/petitioner) and it is for him to allege and establish that as a fact he has not passed on the duty and, therefore, equity demands that his claim for refund be allowed. This is the position de hors 1991 (Amendment) Act - ....
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....he Apex Court went on to hold that it is a case of balancing public interest vis-a-vis private interest and where the petitioner-plaintiff has not himself suffered any loss or prejudice (having passed on the burden of the duty to others), there is no justice or equity in refunding the tax (collected without the authority of law) to him merely because he paid it to the State, as it would be a windfall to him. The Apex Court observed that as against it, by refusing refund, the monies would continue to be with the State and available for public purposes; the money really belongs to a third party - neither to the petitioner/plaintiff nor to the State - and to such third party it must go. The Apex Court held that but where it cannot be so done, it is better that it is retained by the State. The Supreme Court held that by any standard of reasonableness, it is difficult to prefer the petitioner-plaintiff over the State; Taxes are necessary for running the State and for various public purposes and this is the view taken in all jurisdictions. The Apex Court therefore went on to hold that even looked at from the constitutional angle, the right to refund of tax paid under an unconstitutional ....
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....tion of nine, has categorically held that in the case of mis-interpreting or mis-applying any of the rules, regulations or notifications issued under the Central Excise or Customs Enactments, such a claim has necessarily to be preferred under and in accordance with the provisions of the respective enactment before the authorities specified thereunder and within the period of limitation prescribed therein, we are of the view that even a case of payment of service tax, made without knowledge of an exemption notification, or failing to apply an exemption notification to which the appellant purportedly is entitled, it would still have to be dealt with under the refund provisions as provided for in the Finance Act 1994, namely Section 11B as made applicable vide Section 83 of the Finance Act, 1994. When the Apex Court has categorically held that the Central Excise and Customs Enactments are self-contained enactments providing for levy, assessment, recovery and refund of duties, imposed thereunder and that Section 11B of the Central Excises and Salt Act and Section 27 of the Customs Act, both before and after the 1991 (Amendment) Act are constitutionally valid and have to be followed and....
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....r the payment of service tax retrospectively for a specified time frame, that is from 01-04-2015 to 29-03-2016. Moreover, the section itself prescribed the time limit of six months from the date the Finance Bill 2016 received the assent of the President. The Finance Act, 2016, received the assent of the President on 14th May, 2016. So, in any event, the refund claim preferred for the aforesaid period was preferred by the appellant beyond the six months specified in Section 102. When the Section 102 inserted for a specified purpose has itself stipulated the time limit for preferring a refund application, we are of the view that the legislature has consciously circumscribed the period that is available to prefer a refund claim to the stated window of six months from the date the Finance Bill received the assent of the President and hence the time limit stipulated therein cannot be ignored in preference to the time limit of one year specified under Section 11B. In other words, for the refund claim, if any, for the service tax paid between 01-04-2015 and 29-03-2016 with respect to the benefit extended under Section 102, the same would necessarily have to be filed within the time period....
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....the Honourable Courts and Tribunals resulting in them being rendered without having the benefit of the Judgement itself in its entirety, and especially paragraphs 67 and 68 as well as the aforesaid principles as crystallised in the said paragraph 99 of the Binding Judgement of an ennead Judge constellation of the Supreme Court, in particular. In as much as the Apex Court decision is binding on this Tribunal, the decisions relied upon by the appellant, which are different from the facts and circumstances of the appellant's case herein, are distinguishable and thus inapplicable on this count too. 54 We hold that, given our finding on merits already elucidated above, and in light of our discussions supra addressing the contentions raised by the appellant on inapplicability of time limit under Section 11B of the Central Excise Act, 1944 as made applicable to Finance Act by virtue of Section 83 of the Finance Act, 1994 as well as the contentions raised on inapplicability of time limit under Section 102 of the Finance Act, the outcome of our analysis is that the appellant's refund claims are not only found to be unsustainable on merits, but also, even otherwise, are found to be barred....