By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether service tax refund claim can be rejected on the sole technical ground that refund claim was not shown as ‘receivable’ in the Balance Sheet? Held, No.
Facts:
After paying service tax on advances received, the agreement for provision of services was terminated and consequently, no services were provided by the appellants. The appellants filed refund claim which was rejected by the Revenue.
The appellants contested that they had refunded the value of taxable service along with service tax to the customer and sufficient documents were already shown for the amounts received and refunded back to the customer. Furthermore, chartered accountant’s certificate was provided for refund of service tax amount to the customer. Further legality of claim has substantiated through guidance note, circular and judicial pronouncements and since the amount was already refunded to customer, there was no question of unjust enrichment.
Held:
The Tribunal observed that there was no dispute regarding eligibility of refund claim but, prima facie the claim was rejected since the amounts were not shown in the Balance Sheet as ‘receivable’. The rejection made on such a short ground cannot be held to be just and fair. Therefore, the Tribunal held that irrespective of the non-reflection of refund amount in the Balance Sheet, the same needs to be refunded inasmuch as the same was not required to be paid by the assesse.
