M/s M/s. Aadhar Stumbh Township Pvt. Ltd. Versus Commissioner of Central Excise & Central Goods & Service Tax Commissionerate

PJ/case law/3577

Issue:-
No Limitation applicable for Refund amount lying with Dept. having the Nature of Revenue Deposit: CESTAT
Brief Facts:-
The appellant is registered with Service-Tax Department and providing services under the category of “Construction Services”, including commercial/industrial building or civil structure, works contract service, etc. The appellant is engaged in executing work for the state government and therefore is eligible for exemption as per Notification No. 25/2012-ST.However, the exemption lapsed w.e.f. April 01, 2015 and consequently, appropriate amount of tax was being deposited by the appellant. Subsequently, the government extended the exemption benefit by making retrospective amendment in the aforesaid Notification. Therefore, refund of tax already deposited was demanded from the revenue authorities in this regard vide refund application sent through speed post. However, they were received back by the appellant with remarks “refused to accept”. Thereafter, refund application was again filed by the appellant as on 05.12.2016. However, after scrutinizing the application, deficiency memo was issued and it was asked to furnish various documents by the appellant. Further, another communication letter was served to the appellant alleging that the refund is time barred.

Appellant’s Contention:-
The appellant thus submitted following grounds:

The appellant submitted vide letter dated 13.11.2017 that they had claimed refund well within time prescribed u/s 102(3) of Finance Act vide speed post which was however, returned with remarks “refused”. The Counsel of petitioner further submitted that the present controversy revolves around the address mentioned on the envelope. The issue is not related to dispatch of the refund application and receipt with remark of “refused to accept”. Therefore, it is well known that there was presume service on the department. Therefore, it was argued that the revenue authorities are trying to take advantage of the present situation, thereby denying the refund of the assessee on the grounds of being time barred. Further, it was contended that on account of retrospective amendment in exemption notification, there was no liability on the taxpayer to deposit service tax. Therefore, the amount of tax deposited has taken a character of “revenue deposit”        by operation of law and hence, should be refunded back. Refence was further made to Article 265 of the Constitution of India which provides that “no tax can be levied or collected except by the Authority or Law”. Reliance was placed on following Judicial Rulings:-
1.     Kujjal Builders Pvt. Ltd. – 2018 (10) GSTL 374 (T-Delhi)
2.     Siemens Engineering & Mfg. Co. of India Ltd. - 1976 AIR 1785, 1976 SCR 489
3.     M/s. Agni Steels Pvt. Ltd. -2021 TIOL 251 CESTAT-Mad.

Moreover, it was submitted that as per Madras High Court in the case of M/s 3E Infotech Vs. Commissioner of Customs, Excise and Service Tax – 2018 (7) TMI 276, service tax was paid under misconception and therefore, it was held that claim for refund cannot be held barred by limitation, merely because period of limitation expired.

Respondent’s Contention: -
The respondent argued that refund claim is time barred because it is difficult to establish as to at which office the refund application was submitted by the appellant since the service tax division is not clearly visible whether it is 11 or II. Therefore, the refund applications were rejected being time barred.

Reasoning Of Judgment:-
It was stated that as per the facts of the case, it can be sufficiently prove that the appellant had dispatched the refund application by speed post which were returned to the department with remarks “refused”. After observing the facts of the present case, it was held that the refund application is filed within the limitation as prescribed under Section 102(3) of the Finance Act. Further, the service tax deposited has taken the character of revenue deposit, by operation of law. Further, there is violation of Article 265 of the Constitution of India. Therefore, the impugned order was quashed and set aside and it was directed to revenue authorities to grant refund within 45 days from date of receipt of this order.

Decision: -
The appeal was allowed and refund was granted to the assessee.
Comments:-
The above judgement has proved to be a silver lining for the business community. It is well known fact that in case amount of tax is paid due to mistake of law, then the period of limitation cannot be attracted. Thus, the taxpayers can apply the same analogy under GST regime and take shelter from various unnecessary litigations and proceedings in this respect.

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PJ/case law/3577

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