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ST – If burden of service tax has been shifted on customers, petitioner cannot be a beneficiary as any refund would amount to unjust enrichment: HC

2019-TIOL-1774-HC-PATNA-ST

IN THE HIGH COURT OF PATNA

Civil Writ Jurisdiction Case No.2259 of 2018

BIHAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY

Vs

1) COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX
BIHAR, PATNA

2) ASSISTANT COMMISSIONER, CGST, PATNA

Jyoti Saran & Partha Sarthy, JJ

Dated: July 02, 2019

Appellant Rep by: Mr D V Pathy, Adv.
Respondent Rep by: Mr Satya Prakashtripathy, Adv.

ST – The petitioner is aggrieved by impugned order whereby their claim for refund of service tax under provisions of FA, 1994 has been rejected on merits as well as on grounds that the burden has been shifted by petitioner on the customers – The claim relates to the service tax deposited by petitioner for the period 2007-16 and the reason for such belated raising of grievance is that in view of provisions of Section 104 of ‘the Act’, the services provided or agreed to be provided for a long term lease of 30 years or more was not taxable but the observations of statutory authority in order impugned mentions that the petitioner did not submit documentary evidence to espouse his cause – The fact remains that the service tax for the period in question was deposited by petitioner but after realizing it from its customers – It is also not in dispute that no refund application was filed by these customers – As such, no infirmity found in the opinion recorded by statutory authority to hold that if the burden of the service tax has been shifted on customers in view of legal position settled by Supreme Court in case of Mafatlal 2002-TIOL-54-SC-CX-CB the petitioner can not be a beneficiary thereof as any refund to them would amount to unjust enrichment – No infirmity found in the impugned order of statutory authority: HC

Writ petition dispose of

Case law cited:

Mafatlal Industries versus Union of India – 2002-TIOL-54-SC-CX-CB…Para 2

JUDGEMENT

Per: Jyoti Saran:

1. Heard Mr. D.V. Pathy, learned counsel for the petitioner and Mr. Rajesh Kumar Verma, learned counsel for the Central Excise and Service Tax Department, the respondents herein.

2. The petitioner is aggrieved by the order dated 06.10.2017 passed by the Assistant Commissioner, G.S.T., Patna Central, Patna whereby the claim for refund of service tax made by the petitioner under the provisions of Finance Act, 1994 (hereinafter referred to as ‘the Act’) has been rejected on merits as well as on grounds that the burden has been shifted by the petitioner on the customers i.e the service recipient. The Assistant Commissioner has relied upon the Constitution Bench judgment of the Supreme Court rendered in the case of Mafatlal Industries versus Union of India since reported in (1997) 5 SCC 536 = 2002-TIOL-54-SC-CX-CB to hold that the claim raised by the petitioner the burden of which has been shifted to the service recipient if allowed, would amount to unjust enrichment.

3. The claim relates to the service tax deposited by the petitioner for the period 2007-16 and the reason for such belated raising of grievance as advocated by Mr. Pathy is, that in view of the provisions of Section 104 of ‘the Act’, the services provided or agreed to be provided for a long term lease of 30 years or more was not taxable but the observations of the statutory authority in the order impugned mentions that the petitioner did not submit documentary evidence to espouse his cause.

4. Be that as it may, the fact remains that the service tax for the period in question was deposited by the petitioner but after realizing it from its customers. This fact is not disputed. It is also not in dispute that no refund application was filed by these customers.

5. In such circumstances noted, we find no infirmity in the opinion recorded by the statutory authority to hold that if the burden of the service tax has been shifted on the customers in view of the legal position settled by the Supreme Court in the case of Mafatlal (supra) the petitioner can not be a beneficiary thereof as any refund to the petitioner would amount to unjust enrichment.

6. For the discussions above and finding no infirmity in the order impugned of the statutory authority put to challenge we dispose of this writ petition.

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