TMI Blog2020 (6) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... m from 1st November, 2006 to 31st May, 2018 and with interest @ 7.5% per annum from 1st June, 2018 till the date of refund on or before 31st July, 2020. However, if the said amount is not refunded by 15th July, 2020, the rate of interest with effect from 1st August, 2020 shall stand enhanced to 12% per annum. No purpose will be served in proceeding with the contempt proceedings and the contempt notice issued vide order dated 3rd March, 2020 is discharged - respondents having however indulged in frivolous litigation, are burdened with costs of ₹ 25,000/- payable to the petitioner along with the amounts with respect whereto mandamus has been issued. Petition disposed off. - W.P.(C) 13114/2019 & CM No.7430/2020 (for directions) - - - Dated:- 10-6-2020 - HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW AND HON'BLE MS. JUSTICE ASHA MENON Petitioner Through: Mr. J.K. Mittal, Ms. Vandana Mittal and Ms. Aarti Sharma, Advs. Respondents Through: Mr. P.S. Singh, Adv. for R-1. Mr. Kuldeep Singh, Mr. Gurmeet, Advs. for R-2 with Ms. Niharika Gupta, Assistant Commissioner, Division-Nehru Place, Central GST, Delhi East Commissionerate. [VIA VIDEO CONFERENCING] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with an application for interim stay; the Tribunal by order dated 24th September, 2012 allowed the stay application, by waiving of pre-deposit of the balance amount owing to deposit by the petitioner, though under protest, of the said sum of ₹ 2,38,00,000/- and vide subsequent order dated 15th October, 2013, it was clarified that the stay would continue to operate till the pendency of the appeal; (vi) that vide Circular No.984/08/2014-CX dated 16th September, 2014 issued by the Central Board of Excise and Customs, Department of Revenue, Ministry of Finance, it was clarified that when an appeal is decided in favour of the assessee, the assessee is entitled to refund of amount with interest under Section 35FF of the Central Excise Act, 1944 and such refund should be made within fifteen days of receipt of letter seeking refund, irrespective of whether the Department was proposing to challenge the said order; (vii) that vide Master Circular No.1053/02/2017CX dated 10th March, 2017 issued by the Board, it has further been clarified that when an appeal is decided in favour of assessee, the assessee is entitled for refund of the amount deposited along with interest, from the date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was taken up on 13th May, 2020. It was the stand of the counsel for the respondents on that date that the reasons for not complying with the orders were set out in a counter affidavit which remained to be filed. Vide order dated 13th May, 2020, the counter affidavit was permitted to be filed and the application for early hearing allowed and the writ petition posted for hearing for today. 5. The respondents, in their counter affidavit have pleaded (a) that show cause notice dated 28th July, 2008 proposing a demand of ₹ 4,66,39,021/- along with interest and penalty was issued to the petitioner and out of which a sum of ₹ 2,38,00,000/- had been deposited by the petitioner under protest; (b) that on the said show cause notice being adjudicated in favour of the petitioner, on 12th March, 2019, a refund application was filed by the petitioner; (c) that refund sanction order was drafted by the then Assistant Commissioner but negative observations were raised by the pre-audit branch, Central GST Commissionerate, Delhi East and hence the refund application was rejected; (d) that the petitioner was informed of the said rejection of refund and was given an opportunity of pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even the High Court in its order dated 24th August, 2018 had not gone into the merits of the case; (VIII) that thus the deposit of ₹ 2,38,00,000/- by the petitioner, though under protest, was made against service tax liability and which liability had not been decided in any of the Court s orders; (IX) that therefore the claim of refund of the amount of ₹ 2,38,00,000/- was not admissible; (X) that none of the judgments cited by the counsel for the petitioner dealt with treating the amount deposited by way of tax, though under protest, to be a pre-deposit for refund purpose; and, (XI) that thus the amount of ₹ 2,38,00,000/- deposited by the petitioner against service tax liability and which liability had not been set aside by CESTAT, was not refundable. 7. The purport of the aforesaid order of the respondents declining refund to the petitioner and which forms the defence of the respondents to this petition, is that since the petitioner had deposited the said amount of ₹ 2,38,00,000/-, even though under protest, before preferring the appeal to CESTAT and not by way of pre-deposit under Section 35F of the Central Excise Act, notwith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already been received and to which they have not been held to be entitled. 11. Though there is no clarity of the circumstances under which the petitioner deposited the said sum of ₹ 2,38,00,000/- during audit/investigation but the undisputed position remains that the deposit was under protest and against anticipated liability and which liability though fructified by the respondents was set aside by the CESTAT and which order has attained finality. It is not the case of the respondents that the said deposit was voluntary or by way of self-assessment and which has been accepted by the respondents and in which case the respondents could perhaps have argued that the said deposit was voluntary and not refundable, as was the case in Commissioner of Income Tax, Bhopal Vs. Shelly Products (2003) 5 SCC 461. On the contrary, the assessment done by the respondents and the demand raised in pursuance thereto, of ₹ 4,66,39,061/- and whereagainst ₹ 2,38,00,000/- was adjusted, has been set aside in entirety and as of today there is no assessment which had attained finality assessing the liability of the petitioner to tax of ₹ 2,38,00,000/-. The respondents as State can r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a reasonable and practical manner and when warranted, liberally in favour of the assessee. 14. To be fair to the counsel for the respondents, he has only placed before us what is recorded in the final rejection refund order but reasoning wherein is illogical and contrary to the expected conduct from the State and unjustifiable. The said order does not disclose any ground or statutory provision whereunder the respondents State are entitled to retain the said amount of ₹ 2,38,00,000/-. 15. No statutory mechanism whereunder the petitioner is entitled to seek refund in such circumstances also has been disclosed. It is thus not as if, we ought not to exercise our implicit discretion in exercising writ jurisdiction for the reason of any statutory remedy being available to the petitioner. When it is so and when the reasons disclosed in the order refusing refund are found to be illogical and de hors the statutory provision and further when it is found that the respondents State are illegally withholding money, a case for issuing a mandamus as sought is made out. 16. It is perhaps for this reason only that even while issuing notice of the petition, directions for refund w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the Office of Division-Nehru Place, Central GST, Delhi East Commissionerate is present in the Court. 22. The respondents are expected to at least now, on or before 15th July, 2020 refund the amount of ₹ 2,38,00,000/- with interest @ 6% per annum from 1st November, 2006 to 31st May, 2018 and with interest @ 7.5% per annum from 1st June, 2018 till the date of refund on or before 31st July, 2020. However, if the said amount is not refunded by 15th July, 2020, the rate of interest with effect from 1st August, 2020 shall stand enhanced to 12% per annum. A mandamus to the said effect is issued to the respondents GST Department. 23. We would be failing in our duty, if do not also record another contention of the counsel for the respondents. It was also the contention of the counsel for the respondents that the petitioner had concealed the facts in the petition, as disclosed in the counter affidavit accompanied with documents. However, once the respondents are not found entitled to the monies of the petitioner and/or are found to be unjustifiably retaining the same, the said argument would not entitle the respondents to appropriate what is not due to them. 24. Having he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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