TPI Advisory Services India Private Limited Vs Commissioner of Central Tax (Karnataka High Court)
Held that undisputedly the appellant has made payment of both service tax and also GST. Further, service tax invoices were subsequently cancelled by issuing credit note. Hence, refund of service tax available to the assessee.
Facts-
The appellant had raised four Invoices dated 17.04.2017, 16.06.2017 and 30.06.2017 for the period from April to June, 2017 for payment of Service Tax of Rs.17,84,952/- against WNS Global Services Private Limited, Tech Mahindra, USA & Morgan Stanley Advantage Services Pvt. Ltd. After raising the Invoices, the said amount was paid by the appellant to the Government. GST Act came into effect from July 1, 2017. The clients in whose names the Invoices were raised had expressed reservation to make the payment in view of the transition from service tax to GST. The appellant accordingly issued credit notes to those customers and raised fresh Invoices under the provisions of GST, on 30.09.2017, 08.11.2017 and 31.12.2017 for a sum of Rs.21,41,944/- and paid the said amount.
Thereafter, appellant filed an application seeking refund of the service tax of Rs.17,84,952/-. A show cause notice was issued calling upon the appellant as to why the refund claim should not be rejected. Appellant submitted its explanation leading to Order-in-Original dated 10.01.2019 rejecting the said claim. The appeal filed thereon before the Commissioner of Central Tax (Appeals-II) also stood rejected vide order dated 16.07.2019. A further appeal filed before the CESTAT, was also dismissed on 27.01.2020. Hence, this appeal.
Conclusion-
It is not in dispute that the appellant has paid Rs.17,84,952/- as service tax and subsequently GST of Rs.21,41,944/-. In view of the undisputed facts that the appellant has paid the service tax and also the GST; and the Commissioner of Central Excise has held that appellant was not liable to pay GST, rejection of applications for refund is untenable. Having paid the service tax in the year 2017 and having submitted its application, the appellant is awaiting the refund from March 2018 till date.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
This appeal is admitted to consider the following substantial questions of law:
a) “Whether in the facts and circumstances of the case, the Tribunal was justified in dismissing the appeal of the Appellant thereby upholding rejection of refund claim of the service tax paid by the Appellant despite the fact that they had also paid Goods and Service Tax (GST) on the very same transaction which had resulted in payment of tax twice-over in respect of the very same transaction?
b) Whether in the facts and circumstances of the case, the Tribunal was right in law in rejecting the claim for refund of service tax when it was an undisputed fact that the service tax invoices were subsequently cancelled by issuing credit notes to the customers which had the effect that payment of service tax on such cancelled invoices were not required as per law and hence there was no liability to pay service tax on cancelled tax invoices?
c) Whether the Order of the Hon’ble Tribunal is in accordance with the provisions of Rule 6(3) of the Service Tax Rules, 1994 when the parties renegotiated the invoices issued under the Finance Act, 1994 and the Appellant had issued a credit note which annulled/cancelled the invoices issued and the denial of refund of the stated amount would be in violation of the Statutory Provisions?
d) Whether by operation of Section 142(3) of the CGST Act, 2017 the amount of tax paid under Finance Act, 1994 due to renegotiation of invoice with the service receiver and having given a credit note of the payment made, the tax so paid should have to be refunded to the appellant?”
2. Heard Shri. K.S. Ravi Shankar, learned Senior Advocate for the appellant and Shri. Jeevan J. Neeralagi, learned Standing Counsel for the Revenue.
3. Brief facts of the case are, appellant runs a Business Management and Consultancy Service. During the course of its business, it had raised four Invoices dated 17.04.2017, 16.06.2017 and 30.06.2017 for the period from April to June, 2017 for payment of Service Tax of Rs.17,84,952/- against WNS Global Services Private Limited, Tech Mahindra, USA & Morgan Stanley Advantage Services Pvt. Ltd. After raising the Invoices, the said amount was paid by the appellant to the Government. The GST Act came into effect from July 1, 2017. The clients in whose names the Invoices were raised had expressed reservation to make the payment in view of the transition from service tax to GST. The appellant accordingly issued credit notes to those customers and raised fresh Invoices under the provisions of GST, on 30.09.2017, 08.11.2017 and 31.12.2017 for a sum of Rs.21,41,944/- and paid the said amount. Thereafter, appellant filed an application seeking refund of the service tax of Rs.17,84,952/-. A show cause notice was issued calling upon the appellant as to why the refund claim should not be rejected. Appellant submitted its explanation leading to Order-in-Original dated 10.01.2019 rejecting the said claim. The appeal filed thereon before the Commissioner of Central Tax (Appeals-II) also stood rejected vide order dated 16.07.2019. A further appeal filed before the CESTAT1, was also dismissed on 27.01.2020. Hence, this appeal.
4. Shri. K.S. Ravi Shankar, learned Senior Advocate submitted that:
