Payment of Refund - Board Decides to accept High Court Order
THE High Court observed that this was an unusual case.
A Commissioner (Appeals) after a long drawn litigation allowed on 28.12.2011, refund of Service Tax paid for the period 10.9.2004 to 31.12.2004. Commissioner filed an appeal in the Tribunal along with an application for staying the implementation of the order passed by the Commissioner (Appeals). The Tribunal on 10.9.2012 rejected the application for stay.
Despite the rejection of the stay application of the Department by the Tribunal, the service tax deposited by the assessee was not refunded. And the assessee approached the High Court.
The High Court by its order dated 11.03.2015, which was reported by us as , directed that the order dated 28.12.2011 passed by the Commissioner (Appeals) be implemented and the assessee be refunded the amount of service tax so deposited along with interest to which he may be entitled to. The Court also directed that the refund may be given as expeditiously as possible, but, not later than six weeks from the date of filing of the certified copy of this order before the respondent.
Within six weeks, the Commissioner promptly sent a proposal to the Board to file a Special Leave Petition (SLP) in the Supreme Court against the High Court order.
Good sense prevailed in the Board. CBEC decided that this case does not deserve filing of SLP. The good Board not only decided not to continue with this illegal litigation, but also brought to the notice of the Commissioner its Circular No. 572/9/2001-CX dt, 22.02.2001, wherein it was stated:
The cases where refund arises due to order of Commissioner (Appeals) or Commissioner of Central Excise/ Customs and decision is taken to contest them before CEGAT.
In such cases appeal/stay application should be filed expeditiously well before the expiry of stipulated period of three months (and not waiting for the last date of filing of appeal). However, no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained. It would be the responsibility of the concerned Commissioner to obtain stay order expeditiously where the orders passed by Commissioner (Appeals) suffer from serious infirmities and it involves grant of heavy refunds.
It was in utter disobedience to the Board direction that the refund was rejected, in spite of Stay application being rejected.
Because of the overanxious urge of an officer to protect revenue, the Government is made to pay interest for three years and the assessee was denied funds which was its legal entitlement. The assessee also had to go through the torture of unnecessary litigation.
The assessee loses his money, time and efforts; the Government loses interest and reputation, but the babus who are responsible for all this do not lose anything. They will probably get a promotion.
Board deserves all praise for deciding not to drag the issue to the Supreme Court and advising the Commissioner to follow its unambiguous Instructions meticulously.
Board should reiterate these instructions to all Commissioners and tell them once again that disobedience will be viewed seriously.