Delhi And District Vs Assistant Commissioner Central Tax (Delhi High Court)
Conclusion: Once the statute provided for payment of interest and the stipulated conditions were fulfilled, the respondent/revenue would be obliged, in law, to pay the interest alongwith the refund. The fact that assessee submitted a communication that it will not claim interest, would not bar assessee from claiming the interest, as the law otherwise allowed for the same.
Held: In the instant case, the department passed an order stating that the assessee association had short paid towards tax. Assessee approached the High Court stating that the demand was more than Rs.50,00,000/- and no consultation prior to issuance of show-cause notice took place in the instant matter, contrary to the provisions of the master circular dated 10.03.2017, issued by the Central Board of Excise and Customs. It was also not disputed that before passing the impugned assessment order no personal hearing was granted to the authorized representative of the assessee. It was held that considering the fact that assessment had already been carried out by the adjudicating authority via order dated 03.01.2019 and that the remand order of the appellate authority was confined two only two aspects, there was no occasion for the adjudicating authority to pass a fresh assessment order reopening the entire assessment. Ordinarily, the impugned Order-in-Original was set-aside with a direction to the adjudicating authority to pass a fresh order. However, the adjudicating authority had not furnished an acceptable reason as to why the amount paid towards tax and cess i.e., Rs.36,27,615/- [Rs.36,94,642/- less Rs.67,027/] was not refunded, the writ petition insofar as the refund of the actual excess amount paid by assessee on account of the service tax and cess was concerned. The fact that assessee submitted a communication that it will not claim interest, would not bar the assessee from claiming the interest, as the law otherwise allowed for the same. It was not in dispute that statutory interest gets triggered under Section 11BB of the 1944 Act, once the stipulated period for refund of the amount gets over (in this case, the stipulated period was three months commencing from the date of receipt of application under sub-section (1) of Section 11BB of the 1944 Act). Once the statute provided for payment of interest and the stipulated conditions were fulfilled, the respondent/revenue would be obliged, in law, to pay the interest.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The matter was listed, in the first instance, on 13.09.2021, when we had recorded the following after Mr Puneet Agarwal, learned counsel for the petitioner, was heard in support of the instant action:
“W.P.(C) 9628/2021 & CM No.29755/2021 [Application filed on behalf of the petitioner seeking stay on the operation of the impugned order]
2. The instant writ petition is directed against the Order-in-Original no.01/2020-21 dated 30.06.2020, passed by the Assistant Commissioner, Goods and Service Tax (GST), and the show cause notice, dated 20.02.2020.
3. Mr. Puneet Agarwal, who appears on behalf of the petitioner, says that, the impugned order and show cause notice are flawed, broadly, for the following reasons:
(i) The impugned order, dated 30.06.2020, was passed by an officer who had no jurisdiction to pass the said order. According to Mr. Agarwal, demand for service tax in excess of Rs.50,00,000/- could have been adjudicated upon only by Additional/Joint Commissioner or a Commissioner [if the demand exceeds Rs.2,00,00,000/-].
(ii) In this behalf, Mr. Agarwal has relied upon paragraph 11.1 of the Central Board of Excise and Customs (CBEC) circular bearing no. 1053/02/2017-CX, dated 10.03.2017.
(iii) No pre-show cause notice consultation was carried out, although, the demand was over Rs.50,00,000/-, which was a requirement of paragraph 5 of the aforementioned circular dated 10.03.2017
(iv) No hearing was given to the petitioner prior to passing of the impugned order.
(v) The impugned order has gone beyond the order of remand, passed by the Commissioner, Appeals-I, GST, Delhi [hereafter referred as „Commissioner (Appeals-I)‘], dated 30.05.2019.
(vi) According to Mr. Agarwal, the remand order was restricted to the issue, concerning the purported failure, in not granting to the petitioner, the claim for refund of cess quantified at Rs.36,94,642/-. For this purpose, our attention has been drawn to the Order-in-Original, passed in the first round, dated 03.01.2019 and the remand order passed by the Commissioner (Appeals-I), dated 30.05.2019. [See Annexure „P-14‘ and „P-17‘.]
(vii) lastly, it is stated that, the impugned show cause notice is based on inaccurate facts. For this purpose, our attention has been drawn to paragraph 8 at page 75 of the case file, wherein it is stated that, on account of „Business Auxiliary Services‘, the petitioner had failed to pay service tax amounting to Rs.2,40,03,002/-. Mr. Aggarwal has pointed out that this amount has been paid. In this behalf, our attention has been drawn to page 178 and 232 of the case file.
4. We may note that, the record, at present, shows that the case set up by the petitioner was that, it had deposited excess amount towards service tax and cess, and since certain amounts remained unutilized, it wanted refund of the excess amount.
4.1. In the first round, the Order-in-Original dated 03.01.2019 had pegged the refund amount, at Rs.2,32,09,285/-. In doing so, it denied refund attributable to cess amounting to Rs.36,94,642/-.
4.2. It is because of this grievance that the petitioner had carried the matter in appeal to the Commissioner (Appeals-I), who, via order dated 30.05.2019, had remanded the matter to the adjudicating authority.
4.3. The grievance of the petitioner is that, the adjudicating authority, instead of confining itself to this aspect of the matter, broadened the scope of the adjudication by issuance of the impugned show cause notice dated 20.02.2020, and thereafter, went on to adjudicate the matter, vide order dated 30.06.2020, contrary to the scope of the order of remand.
4.4. The petitioner claims that the injury inflicted was further compounded by not according personal hearing to the petitioner. It is in this context that, various flaws [as noted above by us], in the impugned order, have been pointed out by the petitioner.
5. Issue notice to the respondent/revenue, via all permissible modes including e-mail.
5.1. Counter-affidavit will be filed by the respondent/revenue, within four weeks from the date of receipt of notice.
5.2. The respondent/revenue, in their counter-affidavit, apart from anything else, will also indicate the amount that has already been paid by the petitioner towards service tax and cess, during the relevant period(s) i.e., October 2016 to March 2017 and April 2017 to June 2017.
5.3. The counter-affidavit will also indicate the liability towards service tax and cess, which the petitioner, according to the respondent/revenue, is mulcted with, as per the ST-3 return.
6. In the meanwhile, there shall be a stay on the operation of the impugned order, dated 30.06.2020.
7. List the matter on 03.12.2021.”
2. The respondent/revenue entered appearance in the matter on 03.12.2021, when opportunity was granted to the petitioner to file a rejoinder to the counter-affidavit filed by the respondent/revenue.
2.1. Thereafter, the matter was taken up on 08.04.2022. On that date, after hearing the learned counsel for the parties, a brief order was passed, wherein, inter alia, it was recorded that the period in issue, in respect of which refund is sought, along with interest, by the petitioner, concerns October 2016 to March 2017 and April 2017 to June 2017.
2.2. Furthermore, a reference was also made to the counter-affidavit filed on behalf of the respondent/revenue. In particular, the table which is set-forth in Annexure „R/1‟ appended to the counter-affidavit, was adverted to in the said order. For the sake of convenience, the said table is set forth hereafter :
