TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 3
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....hat they had paid the above Service Tax to the service providers who rendered consultancy service to them. The appellant was of the view that vide Entry No. 25 of Notification No.25/2012-ST dated 20.06.2012, the service provided in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement is exempt and hence the services that were received by the Appellant from the service providers, for which they have paid service tax to these service providers, which in fact ought not to have been collected, were refundable to them. 3. The department being of the view that the appellant was not entitled to the said refund claim, issued Show Cause Notice No.31/2014(R) dated 17-09-2014. Pursuant to the reply filed by the appellant, after due process of law, the Adjudicating Authority rejected the refund claim on the grounds that the appellant is not the service provider who had paid service tax to the Government and the eligible person to claim the refund would be the service providers. The adjudicating authority further held that the appellant has not filed any declaration to the effect that the consultancy firms/service providers wil....
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.... the Apex Court in Mafatlal Industries vs Union of India 1997 (87) ELT 247. It was further held that on the aspect of unjust enrichment since the rejection of the refund claim on time bar aspect and on merit is not interfered with, the unjust enrichment aspect need not be gone into, since the same requires examination only when the refund claim succeeds on merits/time bar. Finding thus, the Appellate Authority upheld the impugned Order-in-Original in toto and rejected the appellant's appeal. Aggrieved by the same the appellant has preferred the appeal and is before this Tribunal. 5. Shri V. Swaminathan, Ld. Consultant appearing on behalf of the appellant submitted as under: i) That the appellant is covered under Serial No. 25 of Notification No. 25/2012 as it stood before amendment by notification 6/2014 ST dated 11.07.2014. That prior to the amendment, the notification provided exemption to service provided to government, a local authority or a governmental authority by way of carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum ....
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....l not apply. 6. Shri M. Selvakumar, Ld. AR appearing for the Respondent reiterated the findings in the impugned Order-in-Appeal. Ld. A.R argued that the appellate authority has rightly upheld the lower adjudicating authority's order rejecting the refund claim of the appellant on both the grounds of merits as well as limitation. Ld. A.R. cited the Judgement of the Apex Court in Dilip Kumar case for his contention as regards strict interpretation of exemption notification. 7. Heard both sides and perused the appeal records and the citation submitted as relied upon. 8. The principal issues that arise for determination are : i) Whether the Appellant's claim for refund premised on the availability of benefit of exemption under Sl.No.25(a) of the Exemption Notification 25/2012-ST ibid to its service provider 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? 9. At the outset, the notifications and its amendments, as are necessary for determination of the issues at hand are reproduced infra. 10. Exemption No....
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....ilitation measures. [Para 4] 2. Measures to widen the tax base : Broadening the tax base is a fiscal objective justified in itself. Primary objective of the negative list approach which came into effect from 1st July, 2012 was also to broaden the tax base. Keeping this in view, the negative list and exemptions have been reviewed. 2.1 Review of the Negative List of services : Xxxxxx 2.2 Review of General Exemptions : The following changes are being made as a result of the review of exemptions. 2.2.1: Exemptions being withdrawn (Notification 25/2012-S.T.] : (i) Presently service of passenger transportation by a contract carriage other than for the purposes of tourism, conducted tour, charter or hire, is exempt from service tax [Sl. No. 23(b)]. The scope of exemption is being reduced by withdrawing the exemption in respect of air-conditioned contract carriages. As a result, any service provided for transport of passenger by air-conditioned contract carriage including which are used for point to point travel, will attract service tax, with immediate effect. Service tax will be charged at an abated value of 40% of the amount charged from service receiver; ther....
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....uing a statute or notification will give much weight to the interpretation put up on it at the time of enactment or issue, by those who have to construe, execute and apply the said enactments. They are in the nature of contemporanea expositio, furnishing legitimate aid the construction to the relevant provisions. It can thus be seen that there is no express or clear intent emanating from the Notification No.6/2014-ST dated 11.07.2014, amended the Notification No.25/2012-ST dated 20.06.2012 so as to substitute the item (a) of entry Sl.No.25, that it is retrospective in its operation. Moreover, since it has been stated by CBEC to be with an intent to expand the tax base, it fortifies our view that the said substitution of item (a) in Sl.No.25 is only prospective in nature. Further, we note that the refund claim was in respect of Service Tax paid during the period from July 2012 to September 2013 and has been filed on 13.06.2014, even prior to the issue of the Notification No.6/2014-ST dated 11.07.2014, which amended the Notification No.25/2012-ST dated 20.06.2012. Therefore, we are of the considered view that it is the unamended entry at Sl.No.25(a) of the notification No.25/20....
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....is not correct and all the decisions which took similar view as in Sun Export case (supra) stands overruled." (emphasis supplied) 15. We possibly cannot, and in fact do not, have any quarrel with the aforesaid proposition. However, in the facts of the appellant's case, we find that the Show Cause Notice No.31/2014(R) dated 17-09-2014 itself acknowledges that the appellant is an implementing agency for Hogenakkal Water Supply and Flourosis Mitigation Project for Dharmapuri and Krishnagiri Districts of Tamilnadu appointed by the Government of Tamilnadu. The notice concedes that the appellant has appointed consultancy firms for receiving consultancy services and have paid for such Project Management Consultancy services for the services received for the period from October 2011 to June 2013, the payment towards which were made over a period of time upto September 2013. It is a well settled proposition in law that admitted facts need not be proved. The decisions of the Apex Court in CCE v. Gas Authority of India Ltd, 2008(232)ELT 7 (SC), and CCE Madras v. Systems & Components Pvt Ltd, 2004 (165) ELT 136 (SC) are authorities for the aforesaid proposition. Thus, when the Departmen....
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....low: "General Principles concerning retrospectivity 30. A legislation, be it a statutory Act or a statutory Rule or a statutory Notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work of fiction/non fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of 'Interpretation of Statutes'. Vis-àvis ordinary prose, a legislation differs in its provenance, lay-out and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 31. Of the various rules guiding how a legislation has to be interpreted, one established rule is that unless a contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current l....
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....This exactly is the justification to treat procedural provisions as retrospective. In Government of India & Ors. v. Indian Tobacco Association (2005) 7 SCC 396, the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra & Ors. (2006) 6 SCC 286 It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here. 34. In such cases, retrospectively is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectivity. In the instant case, the proviso added to Section 113 of the Act is not beneficial to the assessee. On the contrary, it is a provision which is onerous to the assessee. Therefore, in a case like this, we have to proceed with the normal rule of presumption against retrospective operation.....
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....ant' is declaratory, and is in plain terms retrospective. In the absence of clear words indicating that the amending Act is declaratory, it would not be so construed when the pre-amended provision was clear and unambiguous. An amending Act may be purely clarificatory to clear a meaning of a provision of the principal Act which was already implicit. A clarificatory amendment of this nature will have retrospective effect and, therefore, if the principal Act was existing law which the Constitution came into force, the amending Act also will be part of the existing law." The above summing up is factually based on the judgments of this Court as well as English decisions. A Constitution Bench of this Court in Keshavlal Jethalal Shah v. Mohanlal Bhagwandas & Anr. (1968) 3 SCR 623, while considering the nature of amendment to Section 29(2) of the Bombay Rents, Hotel and Lodging House Rates Control Act as amended by Gujarat Act 18 of 1965, observed as follows: "The amending clause does not seek to explain any pre-existing legislation which was ambiguous or defective. The power of the High Court to entertain a petition for exercising revisional juris-diction was before the amendmen....
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.... by the said notification, a retrospective effect. By the said substitution of clause 25(a), it does not confer any benefit and in contradistinction it widens the tax base by taking away the benefit of exemption from services that were hitherto excluded. The restriction of the exemption to the specified services post the substitution, thus imposes fresh burden on services that had till then remained excluded, thereby attracting the presumption of prospectivity. Given that the clause 25(a) as it existed was clear and unambiguous, we cannot consider the substitution to be clarificatory or declaratory either and therefore, its operation can only be construed to be prospective in nature. Hence, being fortified in our view by the aforesaid Apex Court decision, we hold that the findings regarding ineligibility of the impugned services to exemption provided under the Notification No.25/2012-ST ibid, as was held by the appellate authority, is unsustainable and is liable to be set aside. Resultantly, we hold that the appellant's claim for refund is tenably premised on the availability of the benefit of the exemption as provided in the unamended clause 25(a) of the Notification 2....
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....plain 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 by mis-construction or wrong interpretation of the provisions of the Act, Rules and Notifications or by an erroneous determination of the relevant facts, i.e., an erroneous finding of fact. This class of cases may be called, for the sake of convenience, as illegal levy. In this class of cases, the claim for refund arises under the provisions of the Act. In other words, these are situations contemplated by, and provided for by, the Act and the Rules. Xxxxxx 22. There is as yet a third and an equally important category. It is this : a manufacturer (let us call him "X") pays duty either without prote....
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....preting 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 evidenced by the provisions of the said Acts and would exercise their jurisdiction consistent with the provisions of the Act. The writ petition will 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 rule of law and not for abrogating it. The said enactments including Section 11B of Central Excises and Salt Act and Section 27 of the Customs Act do constitute "law" within the meaning of Article 265 of the Constitution of India and hence, any tax collected, retai....
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....sions 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/plaintiff alleges and establishes that he has not passed on the burden of duty to another person/other persons. His refund claim shall be allowed/decreed only when he establishes that he has not passed on the burden of the duty or to the extent he has not so passed on, as the case may be. Whether the claim for restitution is treated as a constitutional imperative or as a statutory requirement, it is neither an absolute right nor an unconditional obligation but is subject to the above requirement, as explained in the body of the judgment. Where the burden of the duty has been passed on, the claimant cannot say that he has suffered any ....
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....t 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 examining the claims for refund, the financial chaos which would result in the administration of the State by allowing such claims is not an irrelevant consideration. Where the petitioner-plaintiff has suffered no real loss or prejudice, having passed on the burden of tax or duty to another person, it would be unjust to allow or decree his claim since it is bound to prejudicially affect the public exchequer. In case of large claims, it may well result in financial chaos in the administration of the affairs of the State. (viii) The decision of this Court in Sales Tax Officer, Benaras v. Kanhaiyalal Mukundlal Saraf [1959 S.C.R. 1350] must be held to have been ....
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....ceived 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 decided. It is, of course, obvious that where the refund proceedings have finally terminated - in the sense that the appeal period has also expired - before the commencement of the 1991 (Amendment) Act [September 19, 1991], they cannot be re-opened and/or governed by Section 11B(3) [as amended by the 1991 (Amendment) Act]. This, however, does not mean that the power of the Appellate Authorities to condone delay in appropriate cases is affected in any manner by this clarification made by us. (xii) Section 11B does provide for the purchaser making the claim for refund provided he is able to establish that he has not passed on the burden to another person. It, therefore, cannot be said tha....
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.... 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-rule (4) which expressly declared: "(4) Save as otherwise provided by or under this rule, no claim of refund of any duty shall be entertained". Section 11B, as in force prior to April, 1991 contained sub-section (4) in identical words. It said : "(4) Save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained". Sub-section (5) was more specific and emphatic. It said : "Notwithstanding anything contained in any other law, the provisions of this section shall also apply to a claim for refund of any amount collected as duty of excise made on the ground that the goods in respect of which such amount was collected were not e....
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....cessary 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 out in the Statement of Objects and Reasons appended to the Bill which became the Act, the Act along with the Rules was intended to "form a complete central excise code". The idea was "to consolidate in a single enactment all the laws relating to central duties of excise". The Act is a selfcontained enactment. It contains provisions for collecting the taxes which are due according to law but have not been collected and also for refunding the taxes which have been collected contrary to law, viz., Sections 11A and 11B and its allied provisions. Both provisions contain a uniform rule of limitation, viz., six months, with an exception in each case. Sections 11 and 11B are compliment....
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....ule 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 the jurisdiction of the High Court under Article 226 - or for that matter, the jurisdiction of this court under Article 32 - is concerned, it is obvious that the provisions of the Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising the power under Article 226/Article 32, the Court would certainly take note of the legislative intent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment. (emphasis supplied) 69. There is, however, one exception to the above proposition, i.e., where a provision of the Act whereunder the duty has been levied is found to be unconstitutional for....
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.... 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 unconstitutional provision of law is treated as a constitutional right flowing from Article 265 or as a statutory right/equitable right affirmed by Section 72 of the Contract Act, the result is the same - there is no automatic or unconditional right to refund. 70. Re : (II) : We may now consider a situation where a manufacturer pays a duty unquestioningly - or he questions the levy but fails before the original authority and keeps quiet. It may also be a case where he files an appeal, the appeal goes against him and he keeps quiet. It may also be a case where he files a second appeal/revision, fails and then keeps quiet. The orders in any of the situations have become final against him. Then what....
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....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 limitation generally prescribed is about three months (little more or less does not matter). But according to the present practice, writs and suits are being filed after lapse of a long number of years and the rule of limitation applicable in that behalf is said to be three years from the date of discovery of mistake of law : The incongruity of the situation needs no emphasis. And all this because another manufacturer or assessee has obtained a decision favourable to him. What has indeed been happening all these years is that just because one or a few of the assessees succeed in having their interpretation or contention accepted by a High Court or the Supreme Court, all the manufacturers/Assessees all over t....
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....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 said that the decision of the authority is without jurisdiction. We respectfully agree with the above propositions and hold that the said principles apply with equal force in the case of both the Central Excises and Salt Act and the Customs Act. Once this is so, it is un-understandable how an assessment/adjudication made under the Act levying or affirming the duty can be ignored because some years later another view of law is taken by another court in another person's case. Nor is there any provision in the Act for reopening the concluded proceedings on the aforesaid basis. We must reiterate that the provisions of the Central Excise Act also constitute "law" within the meaning of Article 265 and any collectio....
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.... 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 unconstitutionality obtained by another person on another ground; this is for the reason that so far as he is concerned, the decision has become 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. In such cases, the plaintiff may also invoke Section 17(1)(c) of the Limitation Act for the purpose of determining the period of limitation for filing a suit. It may also be permissible to adopt a similar rule of limitation in the case of writ petitions seeking refund in such cases. But whether the right to refund or restitution, as it is called, is treated as a constitutional right flowing from Article....
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.... 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 burden of duty is within his special and exclusive knowledge, it is for him to allege and establish that he has not passed on the duty to a third party. This is the requirement which flows from the fact that Section 72 is an equitable provision and that it incorporates a rule of equity. 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. That these duties are indirect taxes, meant to be passed on, is statutorily recognised by Section 64A of the Sale of Goods Act, 1930 [which was introduced by Indian Sale of Goods (Amendment) Act, 1940 and substitut....
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....ecrease 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 of customs and duties of excise on goods. This fact was also recognised by the Federal Court in The Province of Madras v. M/s. Boddu Paidanna & Sons [1942 F.C.R. 90] and by this Court in R.C. Jall v. Union of India [1962 Suppl. S.C.R. 436]. In such a situation, 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. T....
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.... 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 Bhai and Aluminium Industries but also pointed out the adverse impact on public interest resulting from the holding that expending the taxes collected by the State is not a valid defence. (see Paras 39 and 40). This would not be a case of unjust enrichment of the State, as suggested by the petitioners-appellants. The very idea of "unjust enrichment" is inappropriate in the case of the State, which is in position of parens patrea, as held in Charan Lal Sahu v. Union of India [1990 (1) S.C.C. 613 at 649]. And even if such a concept is tenable, even then, it should be noticed that the State is not being enriched at the expense of the petitioner-plaintiff but at someone else's expense who is not the petitioner-plaintiff. As rightly explained by Saikia, J. in Mahabir Kishore & Ors. v. State of Madhya Pradesh [1989 (....
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....ice, 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 common good; and (c) that the operation of the economic system does not result in the concentration of wealth and means of production to the common detriment". Refunding the duty paid by a manufacturer/assessee in situations where he himself has not suffered any loss or prejudice (i.e., where he has passed on the burden to others) is no economic justice; it is the very negation of economic justice. By doing so, the State would be conferring an unearned and unjustifiable windfall upon the manufacturing community thereby contributing to concentration of wealth in a small class of persons which may not be consistent with the common good. The preamble and the aforesaid articles do demand that where a duty cannot be refunded to the real persons who have bore the burden, for one or the other reason, it is but appropriate tha....
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....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 in mind while understanding and applying the provisions of Article 265 of the Constitution of India and Section 72 of the Contract Act (containing as it does an equitable principle) - for that matter, in construing any other provision of the Constitution and the laws. Accordingly, we hold that even looked at from the constitutional angle, the right to refund of tax paid under an unconstitutional provision of law is not an absolute or an unconditional right. Similar is the position even if Article 265 can be invoked - we have held, it cannot be - for claiming refund of taxes collected by misinterpretation or misapplication of a provision of law, rules, notifications or regulation." (emphasis supplied) 22 To our mind, with the deliberations in the aforesaid paragraphs being the guiding factors, the answers to the four questions posed by the ....
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.... 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 that unless the claimant (for refund) establishes that he has not passed on the burden of the duty/tax to others, he has no just claim for refund. It would be a parody of economic justice to refund the duty to a claimant who has already collected the said amount from his buyers. The refund should really be made to the persons who have actually borne its burden - that would be economic justice. Conferring an unwarranted and unmerited monetary benefit upon an individual is the very antithesis of the concept of economic justice and the principles underlying Articles 38 and 39. 2) To the second query, whether it is open to an assessee to claim refund of tax paid by him under orders which have become final - or to reopen the orders which have become final in his own case - on the basis of discovery of a mistake of law based upon the decision of a court in ....
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.... 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 decided in favour of the manufacturer/assessee. (See the pertinent observations of Hidayatullah, CJ. in Tilokchand Motichand extracted in Para 37). The Apex Court then states that the decisions of the Apex Court saying to the contrary must be held to have been decided wrongly and are accordingly overruled herewith. 3) To the third question formulated by the Apex Court whether equitable considerations have no place in situations where Section 72 of the Contract Act is applicable; the Apex Court itself emphatically states that in view of what has been held by the Apex Court with respect to the questions posed at (1) and (2) ( which is at paragraph 67 of its decision), the only situation surviving is the situation arising from the declaration of invalidity of a provision of the Act under which duty has been paid or collected, and is taken as the basis....
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.... 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 - and as the Apex Court point out later, the said Amendment Act has done no more than to give statutory recognition to the above concepts. The Apex Court emphasizes that this is the position whether the refund is claimed by way of a suit or by way of a writ petition and further observes "It needs to be stated and stated in clear terms that the claim for refund by a person who has passed on the burden of tax to another has nothing to commend itself; not law, not equity and certainly not a shred of justice or morality. In the case of a writ petition under Article 226, it may be noted, there is an additional factor : the power under Article 226 is a discretionary one and will be exercised only in furtherance of interests of justice. This factor too obliges the High Court to enquire and find out whether the petitioner has in fact suffered any loss or prejudice or....
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....er 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 provision of law is not an absolute or an unconditional right. The Apex Court also held that similar is the position even if Article 265 can be invoked for claiming refund of taxes collected by misinterpretation or misapplication of a provision of law, rules, notifications or regulation and hastened to add that they have held that Article 265 cannot be invoked for claiming refund of taxes collected by misinterpretation or misapplication of a provision of law, rules, notifications or regulation. 23 In the instant case, the appellant's service provider has self-assessed the duty and paid the service tax during the relevant period. Later on, being of the view that the service provider is entitled to the benefit of Sl.No.25(a) of the exemption notification 25/2012-ST ibid, the appellant has preferred the claim for refund contending that the service tax has been collec....
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....y other lower judicial forum, can tenably contend to the contrary. It is also pertinent that the Apex Court has in no uncertain terms held that Section 72 of the Contract Act has no application to such a claim of refund as elucidated supra. In light of the categorical finding of the Honourable Supreme Court in the aforesaid judgement in Mafatlal Industries case that all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision whereunder the levy was created) have to be preferred and adjudicated only under the provisions of the respective enactment, this Tribunal, as a creature of statute is well aware of its jurisdiction. Thus, we have no hesitation to hold that the appellant's contentions to the contrary as to the inapplicability of the time limit prescribed under Section 11B, are wholly untenable and cannot be countenanced. We also notice that the larger bench of this Tribunal in two decisions, Veer Overseas Ltd v. CCE, Panchkula, 2018 (15) GSTL 59 (Tri-LB) and M/s. Oil and Natural Gas Corporation Limited v The Commissioner of GST & Central Excise, Tiruchirappalli, 2024(6) TMI 1417-CESTAT CHENNAI (LB) have held that claims fo....