Prescribed Time Limit For Filing Refund Application Cannot Be Disregarded Merely Because Tax Was Collected Without Legal Authority: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the prescribed time limit for filing a refund application cannot be disregarded merely because the tax was collected without legal authority. The Bench of Justices Dilip Gupta (President) and P. V. Subba Rao (Technical) has observed that “the appellant cannot be permitted to claim a refund of service tax under sub-section (1) of section 102 and at the same time contend that the condition stipulated in sub-section (3) of section 102 of the Finance Act should be ignored.” In this case, the assessee filed an application seeking reimbursement of the service tax paid on government work during the period between April 2015 and December 2015, as per Section 102 of the Finance Act, 1994. The application was rejected as it was filed beyond six months prescribed under Section 102 of the Finance Act. The Assistant Commissioner rejected the reimbursement claim as it was time-barred. Aggrieved by the decision of the Assistant Commissioner, the assessee filed an Appeal before the Commissioner (Appeals), who rejected the appeal and upheld the order of the Assistant Commissioner. The assessee has challenged the order passed by the Commissioner (Appeals) before the Tribunal. The assessee contended that while Section 102 of the Finance Act allows the assessee to claim a refund, but such refund can be claimed by the assessee within a reasonable time. Whereas it was contended by the department that the assessee cannot call upon Section 102(1) for a refund while neglecting the six-month time limit given in Section 102(3). The Tribunal stated that the assessee cannot be permitted to claim a refund of service tax under sub-section (1) of section 102 and at the same time contend that the condition stipulated in sub-section (3) of section 102 of the Finance Act should be ignored. When sub-section (3) specifically provides that notwithstanding anything contained in Chapter 5, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Act, 2016 receives the assent of the President, it clearly implies that the application has to be moved within six months and not after the expiry of period of six months, added the bench. The Tribunal opined that “once the time limit of six months has been provided, it cannot be contended that merely because the character of the tax deposit would continue to be in the nature of the tax collected without authority of law and, therefore, no limitation can be prescribed for filing the refund application. The learned Member failed to take into consideration the terms of sub-section (3) of the section 102 while arriving at such a conclusion.” In view of the above, the Tribunal dismissed the appeal. Counsel for Appellant/ Assessee: Nikita Jaju Counsel for Respondent/ Department: Jaya Kumari Case Title: Deepak Pandey v. Commissioner of Service Tax Case Number: Service Appeal No. 52346 of 2018Click Here To Read/Download The order

Prescribed Time Limit For Filing Refund Application Cannot Be Disregarded Merely Because Tax Was Collected Without Legal Authority: CESTAT

Mehak Dhiman

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