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1 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 8TH DAY OF SEPTEMBER, 2022
BEFORE
THE HON'BLE MR.JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION No.1979 OF 2022(T-RES)
BETWEEN:
M/S ASCENDAS SERVICE (INDIA) PVT LTD 1ST FLOOR INNOVATOR BUILDING ITPL WHITEFIELD ROAD BENGALURU -560066
REPRESENTED BY ITS AUTHORIZED SIGNATORY ANIRBAN CHOUDHARY , AGED 47 YEARS, R/AT NO.6 CLIFTON BUILDING 2ND FLOOR RICHMOND ROAD BANGALORE-560 025. …PETITIONER
(BY SRI. P.B.HARISH., ADVOCATE)
AND:
1 . COMMISSIONER OF CENTRAL TAX BANGALORE, EAST COMMISSIONERATE BMTC/TTMC OLD AIRPORT ROAD BENGALURU -560071
2 . DEPUTY COMMISSIONER - EAST DIVISION-7 BANGALORE EAST COMMISSIONER ATE BMTC BUS STAND HAL AIRPORT ROAD DOMMALURU BENGALURU-560071
3 . ASSISTANT COMMISSIONER ARREARS RECOVERY CELL GST COMMISSIONERATE BENGALURU EAST TTMC/BMTC BUS STAND HAL AIRPORT ROAD, DOMMALURU
BENGALURU-560071
…RESPONDENTS
(BY SRI. AMIT ANAND DESHPANDE., ADVOCATE)
THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE DIRECTING RESPONDENT NO.2 TO ACCEPT THE REFUND CLAIM FILED BY THE PETITIONER IN FORM-R ON 01.03.2021 AND GRANT THE REFUND OF RS.38,94,844 BY SETTING ASIDE THE RETURN OF THE SAID REFUND CLAIM ISSUED DATED 22.09.2021(ANNEXURE-A) ISSUED BY THE RESPONDENT NO.2.
THIS W.P. COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
In this petition, petitioner seeks quashing of the impugned order at Annexure-A dated 22.09.2021 rejecting the refund application of the petitioner and for a consequential direction to the respondents to grant the refund claim of the petitioner in a sum of Rs.38,94,844/- and for other reliefs.
Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits that aggrieved by
3 the Order-in-Original No.63/2018 dated 18.12.2018 passed by the respondents, which was received by him through email on 04.06.2020, petitioner preferred an appeal before the Tribunal (CESTAT) on 10.06.2020 along with the pre- deposit of 7.5% of the demand amount and an application for condonation of delay in preferring the appeal. Though the petitioner applied for urgent hearing / listing of the condonation of delay application, the same was rejected by CESTAT on 02.09.2020, pursuant to which, a recovery letter dated 21.10.2020 was issued by the respondent seeking to recover the amounts from the petitioner on the ground that no appeal had been filed. On 06.11.2020, petitioner sent a reply stating that an appeal had already been filed before the CESTAT. However, on 14.12.2020, since the delay in preferring the appeal by the petitioner had not been condoned, the respondents issued a letter calling upon the Citi Bank, to pay the aforesaid dues demanded from the petitioner.
3.1 On 30.12.2020, the CESTAT confirmed the filing of the appeal by the petitioner and allotted Diary No.201952020, pursuant to which, the petitioner sent a
4 reply to the aforesaid recovery letter reiterating that the appeal had been filed and requested the recovery proceedings by the respondents to Citi Bank to be kept on hold till the condonation of delay application filed by the petitioner was considered and disposed of by CESTAT. However, the respondents insisted upon the Citi Bank to make payment, as a result of which, the Bank issued a Demand Draft dated 11.01.2021 in favour of the respondents by debiting the Bank account of the petitioner.
3.2 Subsequently, on 18.01.2021, CESTAT allowed the condonation of delay application filed by the petitioner and admitted the appeal on payment of costs of Rs.50,000/- which was paid by the petitioner on 19.01.2021, pursuant to which, the appeal was numbered by CESTAT as ST/20055/2021. Immediately thereafter, petitioner submitted a letter to the respondents seeking refund of the aforesaid sum debited from its account and also submitted refund application in Form-R for a sum of Rs.38,94,844/- along with written submissions together with judicial precedents in this regard. It is the grievance of the petitioner that the said application for refund submitted by
5 the petitioner was rejected by the respondents by passing impugned communication / order dated 22.09.2021, petitioner is before this Court by way of the present petition. In support of his contentions, learned counsel for the petitioner places reliance upon the following judgments:- (i) Mina fusade v. Shibaji Dash & others - 2005 SCC Online Bom 1279; (ii) Raja Kulkarni v. State of Bombay - 1954 SCR 384; (iii) Shyam Sunder Sethi v. Pr. Commissioner of Income Tax - W.P. (C) No. 2291/2021 dated 3.3.2021; (iv) M/S FCI Oen Connectors Limited v. Union of India - W.P. No. 5901 of 2021 (T-RES) dated 23.12.2021; (v) P Ram Bhoopal & Ors vs. Pragnya River bridge Developers Ltd & Ors - Civil Appeal NO: 19486 of 2017; (vi) Chandra Prakash Sharma vs. State Election Commission and Ors WP 8123/2014 – Madhya Pradesh High Court. (vii) Boddu Ramesh vs. Designated Authority and Ors - WP NO: 12038/2021 High Court of Telangana; (viii) Rakesh Garg vs. Principal Commissioner of Income Tax, Ajmer & Ors Civil Writ Petition NO: 4178, 4201 and 4199/2021 Rajasthan High Court (Jaipur Bench) AND
6 (ix) Maheshbai Shantilal Patel vs. Principal Commissioner of Income Tax and Ors Special Civil Application No: 7441/2021 High Court of Gujarat.
Per contra, learned counsel for the respondents, in addition to reiterating the various contentions urged in the statement of objections submit that there is no merit in the petition and that the same is liable to be dismissed.
The material on record discloses that it is an undisputed fact that though the appeal was preferred by the petitioner beyond the prescribed period, the CESTAT allowed the condonation of delay application and condoned the delay in preferring the appeal. It is well settled that though there is delay in preferring an appeal by a party, upon allowing an application for condonation of delay, the same would relate back to the date of preferring the appeal and the appeal would be deemed to be pending from the date when it was preferred by a party and cannot be reckoned from the date, on which the delay was condoned. In other words, in the instant case, upon the CESTAT allowing the condonation of delay application on
7 18.01.2021, the said order would relate back to 10.06.2020, on which date, the appeal was filed by the petitioner and consequently, the recovery made by the respondents on 11.01.2021 i.e., subsequent to 10.06.2020, would necessarily have to be reversed by applying the principles of restitution and restoring status-quo ante as it existed on the date of preferring the appeal on 10.06.2020. Further, upon the delay being condoned, the appeal is deemed to have been pending from 10.06.2020 onwards and any recovery made subsequently including the recovery made by the respondents on 11.01.2021 is clearly contrary to law and the petitioner is entitled to refund of the amount recovered by restoring him to the position that was existing as on 10.06.2020.
Under these circumstances, in view of the principles laid down in the aforesaid judgments referred to supra and having regard to the mandatory pre-deposit of 7.5% made by the petitioner on 10.06.2020 along with the appeal, in the light of the order dated 18.01.2021 condoning the delay and relating back the same to
8 10.06.2020, the subsequent recovery made by the respondents on 11.01.2021 is clearly contrary to the provisions of Section 87 of the Finance Act, 1994 and Section 35-F of the Central Excise Act, 1944, and as such, the impugned order passed by the respondents declining to refund the amount recovered during the pendency of the appeal is clearly illegal, arbitrary and the same deserves to be quashed and necessary directions are to be issued to the respondents to refund the amount back to the petitioner.
In the result, I pass the following:- ORDER
(i) Petition is hereby allowed. (ii) The impugned order / communication at Annexure – A dated 22.09.2021 passed by the 2nd respondent is hereby quashed. (iii) Respondents are directed to refund a sum of Rs.38,94,844/- (together with applicable interest) in favour of the petitioner as expeditiously as possible and within a period of four weeks from the date of receipt of a copy of this order.
9 (iv) It is made clear that the petitioner - appellant shall co-operate with the respondents for expeditious disposal of the appeal pending before the CESTAT.
Sd/- JUDGE
SV/SRL