Jharkhand HC Directs Refund Determination as CESTAT Order Required Implementation

Kalsi Buildcon Private Limited Vs Principal Commissioner (Jharkhand High Court)

The petitioner sought refunds based on the Customs, Excise and Service Tax Appellate Tribunal’s Final Order dated 24.10.2024. The Tribunal had held that the extended period of limitation was not invokable and set aside the demand relating to that period, while directing that demands falling within the normal limitation period were payable along with interest.

The petitioner contended that, based on the Tribunal’s order, a refund along with interest had become payable, whereas the respondents disputed this calculation. The High Court observed that it was not for the Court to determine whether any refund was due or whether any amount remained payable by the petitioner. It held that this exercise must be undertaken by the concerned authority.a

The Court directed the third respondent to act on the Tribunal’s order, determine whether any refund with interest was payable to the petitioner or whether the petitioner was liable to pay any amount with interest, and complete the exercise within three months after hearing the petitioner, if necessary. The decision was also required to be communicated within the same period.

The Court further directed that if a refund with interest was found payable, it should be released within one month of the decision. The petitioner stated that if any amount with interest was found payable, it would be paid within one month, subject to any further legal proceedings and interim relief. The Court clarified that it had not examined the merits of the rival claims and left all contentions open for determination by the third respondent. The writ petition was disposed of without costs.

FULL TEXT OF THE JUDGMENT/ORDER OF JHARKHAND HIGH COURT

Heard learned counsel for the parties. With their consent and at their request, we finally dispose of this writ petition.

The petitioner seeks certain refunds based upon Final Order No. 77206 of 2024 dated 24.10.2024 in Service Tax Appeal No. 75934 of 2022 instituted by the petitioner before the Customs, Excise and Service Tax Appellate Tribunal, Eastern Zonal Bench, Kolkata.

The operative portion of the order dated 24.10.2024 is contained in paragraph nos. 7 and 7.1, which we transcribe below for the convenience of reference:

We further take note of the fact that in this case, there were confusions with regard to the service rendered to the Government and all the documents pertaining to the appellant’s activity were also in the public domain. In these circumstances, we hold that the extended period of limitation is not invokable. We note that in this case, for the period from 2014-15 up to June, 2017, the Show Cause Notice has been issued on 20^th September, 2019. Consequently, the demand pertaining to the extended period of limitation is not sustainable and therefore, set aside.

7.1. We hold that any demand which is within the normal period of time, is liable to be paid by the appellant, along with interest.”

4. In terms of the above order, any demand made upon the petitioner pertaining to the extended period of limitation has been set aside. However, the Customs, Excise and Service Tax Appellate Tribunal has held that any demand within the normal period is liable to be paid by the petitioner to the respondents, together with interest.

5. The grievance now raised in the petition is that the respondents are not acting in accordance with the order dated 24.10.2024 passed by the Customs, Excise and Service Tax Appellate Tribunal. The petitioner has contended that, according to its calculations, a refund, along with interest, becomes payable. The learned counsel for the respondents does not agree with this position.

6. At this stage, it is not for us to determine whether any refund is due to the petitioner or whether the petitioner is liable to pay any amounts to the respondents. That exercise will have to be undertaken by the respondents themselves. However, the respondents will have to undertake this exercise within a reasonable period.

7. Accordingly, we direct the concerned respondent i.e., the 3rd respondent, to act on the order dated 24.10.2024 passed by the Customs, Excise and Service Tax Appellate Tribunal, and determine whether any refund with interest is required to be made to the petitioner or whether the petitioner is required to pay any amounts to the revenue together with interest. This exercise must be completed within three months from today, if necessary, after hearing the petitioner. In fact, we think that it would be better if the petitioner were heard so that the matter can be sorted out at the earliest. The 3^rd respondent must communicate its decision to the petitioner within three months.

8. If, in terms of the decision so taken, any refund with interest is found to be due to the petitioner, then the same must be paid to the petitioner within a month of such decision. Similarly, the learned counsel for the petitioner, on instructions, states that if any amount, together with interest, is found to be payable by the petitioner to the respondents, the same will be paid within a month from the date of such communication. The learned counsel, however, clarifies that this shall be subject to any further legal proceedings that the petitioner may wish to initiate in this matter, and to any interim relief that may be granted restraining the enforcement of such demand in the meantime.

9. We clarify that we have not examined the rival contentions on merits and, therefore, all contentions of all parties are left open to be decided by the 3^rd respondent in the first instance.

10. This writ petition is disposed of in the above terms without any order for costs.