Gujarat High Court
Torrent Power Ltd vs Union Of India on 25 April, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/2748/2022 ORDER DATED: 25/04/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 2748 of 2022
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TORRENT POWER LTD.
Versus
UNION OF INDIA & ANR.
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Appearance:
UCHIT N SHETH(7336) for the Petitioner(s) No. 1
MS HETVI H SANCHETI(5618) for the Respondent(s) No. 2
NOTICE SERVED for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE NIRAL R. MEHTA
Date : 25/04/2024
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs;
"27.A. This Hon'ble Court may be pleased to strike down and declare Notification No.15/2017 - Service Tax dated 13.4.2017 and Notification No.16/2017 - Service Tax dated 13.4.2017 as being ultra-vires the provisions of the Finance Act and unconstitutional.
B. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith grant refund of the amount of service tax of Rs.10.64,537 and interest amounting to Rs.24,11,265 paid and borne by the Petitioner pursuant impugned notifications along with appropriate interest on such refund.Page 1 of 4 Downloaded on : Fri May 10 20:59:09 IST 2024
NEUTRAL CITATION C/SCA/2748/2022 ORDER DATED: 25/04/2024 undefined C. This Hon'ble Court may be pleased to issue a writ of mandamus or writ in the nature of mandamus or any other appropriate writ or order directing the Respondents to forthwith grant refund of the amount of service tax of Rs.4,72,03,838 paid and passed on by the Petitioner pursuant to the impugned notifications along with appropriate interest on such refund subject to undertaking by the Petitioner to pass on such amount of refund to its customers as soon as the same is received from the Respondents.
D. This Hon'ble Court may be pleased to issue a writ of certiorari or writ in the nature of certiorari or any other appropriate writ or order quashing and setting aside order dated 3.1.2022 (annexed at Annexure L) rejecting refund of service tax paid on the basis of the impugned notifications.
E. Pending notice, admission and final hearing of this petition, this Hon'ble Court may be pleased to direct the Respondents to grant refund of the amount of service tax and interest paid and borne by the Petitioner pursuant to the impugned notifications along with appropriate interest on such refund."
2. The facts in brief are that the petitioner was subjected to pay tax for the services availed by the petitioner for generation of power as per the Notification 15/2007. This Court by judgment and order dated 23.01.2020 in case of Mohit Minierals Pvt. Ltd. Vs. Union of India and Others (Special Civil Application No.726 of 2018 decided on 23.01.2020) declared the Notification No.8/2017 Integrated Tax (Rate) dated 28.06.2017 and the Entry No.10 of the Notification No.10/2017
- Integrated Tax dated 28.06.2017 as ultra vires the integrated Goods and Services Tax Act, 2017 on the ground that the same lacks legislative competency. The judgment delivered by this Page 2 of 4 Downloaded on : Fri May 10 20:59:09 IST 2024 NEUTRAL CITATION C/SCA/2748/2022 ORDER DATED: 25/04/2024 undefined Court is also upheld by the Honourable Supreme Court.
3. This Court, in case of Sai Steel Ltd. & Ors. Vs. Union of India reported in 2019 SCC Online Guj 3706 passed following order;
"58.In view of the aforesaid discussion, the writ application succeeds and is hereby allowed. The Notification Nos.15/2017-ST and 16/2017-ST making Rule 2(1)(d)(EEC) charge Notification No.30/2012-ST is struck down as ultra vires Sections 64, 66B, 67 and 94 of the Finance Act, 1994; and consequently the proceedings initiated against the writ applicants by way of show cause notice and inquiries for collecting service tax from them as importers on sea transportation service in CIF contracts are hereby quashed and set aside with all consequential reliefs and benefits."
4. The petitioner, therefore, applied for refund on the basis of the order passed by this Court before the respondent - authority. However, the respondent - authority by order dated 03.01.2022 rejected the claim of the petitioner by observing as under "29. As the service tax have been declared unconstitutional and the refund have been claimed under section 83 of Finance Act, 1994, the issue is whether the Central Excise Office has power to sanction the refund of the taxed which have been declared as unconstitutional. In this connection I find that Supreme court in case of Mafatlal Industries Ltd. vs. Union of India - 1997(89)ELT247(SC) has pronounced that such refunds are out of the preview of Section 11B of the Central Excise Act, 1944 and only way to get the refund of such amount is to file Writ Petition or Civil Suit and the said Judgment have been relied upon by the CESTAT in many cases. In Page 3 of 4 Downloaded on : Fri May 10 20:59:09 IST 2024 NEUTRAL CITATION C/SCA/2748/2022 ORDER DATED: 25/04/2024 undefined one such case, CESTAT Mumbai in the case of Casa Grande Co-Operative Housing Vs. Commissioner of CGST (CESTAT Mumbai) in Appeal No.ST/86347/2018 has held that 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 writ petition."
5. The judgment delivered by this Court is binding upon the sub-ordinate authority, more particularly, when the same is not stayed by the higher authority inspite of the fact that the judgment of this Court is pending before the Apex Court for adjudication.
6. In view of the above reasons, this petition is allowed. The respondents are directed to pay service tax already paid by the pursuant to the Notification 15/2017, which is declared ultra vires as observed in case of Sai Steel Ltd. (supra). The respondent to refund the service tax at the earliest and not later 12 weeks from the date of receipt of this order along with interest as per the law. Rule is made absolute. No order as to costs.
(BHARGAV D. KARIA, J) (NIRAL R. MEHTA,J) DRASHTI K. SHUKLA Page 4 of 4 Downloaded on : Fri May 10 20:59:09 IST 2024