In a recent ruling, the Supreme Court clarified that the Revenue department cannot recover the refunded cess amount solely because the judgment under which the refund was issued has been overruled. The bench of Justices B.V. Nagarathna and Prashant Kumar Mishra examined Order XLVII Rule 1 and emphasized that once there is a subsequent judgment overruling an earlier judgment on a point of law, the earlier judgment cannot be reopened or reviewed based on the subsequent judgment.
Brief Facts:
The case at hand involved a dispute between the appellant as the landlord and the respondent as the tenant of a shop. The appellant purchased the property from its previous owner in 1985, while the respondent was already a tenant in the premises at the time of the purchase.
Contentions by the Petitioner:
The counsel for the petitioner, Mr. N. Venkataraman, pointed out that the Supreme Court's judgment in SRD Nutrients (P) Limited vs. CCE contradicted the previous judgment rendered by a three-judge bench in the case of Modi Rubber Ltd. And Anr. vs. Union of India and Others. However, in a subsequent decision, M/s Unicorn Industries vs. Union of India, the judgment in SRD Nutrients (P) Limited vs. CCE was overruled, and it was declared that the exemption from payment of excise duty under a notification would not exempt the payment of education cess and secondary education cess.
Observations by the Court:
The Supreme Court examined the conflicting judgments and noted that in SRD Nutrients (P) Limited vs. CCE, it was held that when the payment of excise duty is exempt, the education cess and secondary and higher education cess would also be exempt. However, in M/s Unicorn Industries vs. Union of India, the top court overruled the earlier judgment and concluded that the exemption from payment of excise duty does not extend to the education cess. Consequently, the refund that was granted based on the judgment in SRD Nutrients (P) Limited vs. CCE was no longer valid.
The bench clarified that the matter concerning the reference order made by the revenue department seeking to undo the judgment in SRD Nutrients (P) Limited vs. CCE was unnecessary. The court highlighted that such an application should not have been filed after a review petition in SRD Nutrients (P) Limited vs. CCE had been dismissed, as filing a miscellaneous application seeking a second review of the judgment is impermissible under the law. The court further emphasized that reopening or reviewing an earlier judgment based on a subsequent judgment is not permissible and goes against the principle of finality in litigation.
The Supreme Court affirmed that the decision in SRD Nutrients (P) Limited vs. CCE had attained finality and was binding on the parties involved. Therefore, the subsequent judgment in M/s Unicorn Industries vs. Union of India, which overruled SRD Nutrients (P) Limited vs. CCE, cannot have any impact on past decisions that had already achieved finality. The court expressed concerns that allowing such actions would lead to endless litigation, which is against public policy.
The Order:
Consequently, the bench dismissed the petition and upheld the decision of the Jammu and Kashmir and Ladakh (J&K&L) High Court, which had ruled that the assessee was not obligated to return the education cess and secondary & higher education cess based on the subsequent law laid down by the Supreme Court in M/s Unicorn Industries vs. Union of India. The revenue department was deemed ineligible to recover the previously refunded amount of cess based on the subsequent judgment.
Case Name: Commissioner of CGST and Central Excise (J and K) vs M/s Saraswati Agro Chemicals Pvt. Ltd.
Coram: Hon’ble Mrs. Justice B.V. Nagarathna and Hon’ble Mr. Justice Prashant Kumar Mishra
Case No.: SLP (Civil) No. 18051 of 2023
Advocates of the Petitioners: Mr. N. Venkataraman, A.S.G. Mr. Arijit Prasad, Sr. Adv. Mr. Mukesh Kumar Maroria, AOR Mr. V.C. Bharathi, Adv. Mr. Ashok Panigrahi, Adv. Mr. Navanjay Mahapatra, Adv.
Advocates of the Respondent: None
Read Order @LatestLaws.com
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