Case Law Details
Casa Grande Co-Operative Housing Vs Commissioner of CGST (CESTAT Mumbai)
When any provision in the statute has been held to be unconstitutional, refund of tax under such statute will be outside the scope and purview of such enactment and under such circumstances, refund can be claimed by way of a suit or by way of a writ petition. The Hon’ble Apex Court have ruled that where the tax levy is struck down as unconstitutional for transgressing the constitutional limitations, a refund claim in such a situation, cannot be governed under such taxing statute; and such 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. It was further held that in such cases, period of limitation would be calculated as per the provisions contained in clause (c) of sub-section (1) of Section 17 of the Limitation Act, 1963. In the case in hand, since the refund applications were filed by the appellant under Section 11B ibid and entertained by the authorities under the said provisions, as per the ratio laid down by the Hon’ble Supreme Court, the refund claim in such cases (unconstitutional levy) will fall outside the scope and purview of the Central Excise Act, 1944. Hence, rejection of refund benefit cannot be faulted with. Therefore, the judgment relied upon by the appellant squarely covers the case in favour of Revenue for rejection of the refund application.
FULL TEXT OF THE CESTAT JUDGMENT
This appeal is directed against the impugned order dated 28.12.2017 passed by the Commissioner of Central Tax (Appeals), Mumbai, upholding the adjudication order dated 11.11.2006, by which the Asst. Commissioner (Refund), Service Tax-II, Mumbai had rejected the claim for refund of service tax amounting to Rs.20,38,255/- filed by the appellant.
2. Brief facts of the case are that the appellant is engaged in providing taxable service under the category of “Club or Association Service” defined under Section 65(25a) of the Finance Act, 1994. The appellant is registered with the service tax department for providing of such taxable service. During the disputed period 2005-06 to 2014-15, the appellant had deposited the service tax amount in respect of such taxable service on different dates (1st and last of days of such deposits being 22.10.2009 and 30.04.2014 respectively). The appellant had filed the refund application before the Jurisdictional Service Tax authorities on 19.09.2016 on the ground that the service provided by the club to its members cannot be considered as taxable service by one legal entity to another and hence, not liable to service tax, on the principles of mutuality. The refund application filed by the appellant was rejected by the original authority on the ground that the same was filed beyond the prescribed time limit provided under Section 11B of the Central Excise Act, 1944 made applicable to service tax matters under Section 83 of the Finance Act, 1994. On appeal, the learned Commissioner (Appeals) vide the impugned order dated 28.12.2017 has upheld rejection of the refund application by the original authority.
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