A two-judge bench of the Gujarat High Court has held that only the persons on whom lay the ultimate burden to pay the tax would be entitled to get a refund of the same.
The petitioner filed a writ application seeking refund from State under the Central Sales Tax Act 1956. The refund sought was to the tune of INR 2,30,11,188. Background The Applicant herein was a dealer in natural gas and continued to fall within the ambit of CST Act after 2017 when the authorities in Rajasthan refused to issue Form ‘C’ declarations of purchase of natural gas at concessional rate basis the GST regime.
The State Government had averred that the registration certificates of the Applicants automatically stood cancelled and was not eligible for making purchases of natural gas against Form C declaration. Due to this stand of the State Government, the seller (Indian Oil Corporation) raised invoice charging full tax @20% on sales of natural gas to the Applicant. Thereafter, the Applicant approached the High Court wherein the CST Authorities were directed to issue Form ‘C’ declaration for the transactions.
The petitioner contended that the Respondents did not dispute the fact that the tax collected from the Applicant and deposited by Indian Oil was to be refunded. It sought refund of the amount of Rs.2,30,11,188/- collected by the seller of natural gas and deposited with the respondent authorities under the Central Sales Tax Act, 1956.
Upholding the decision of a coordinate bench, Justice JB Pardiwala and Justice Nisha Thakore observed that the issue of consideration herein was covered squarely by the J.KI. Cement Ltd. vs. State of Gujarat, Special Civil Application No.15333 of 2019 judgement which had held: “The burden of paying the amount in question was transferred by the respondents to the purchasers and, therefore, they were not entitled to get a refund. Only the persons on whom lay the ultimate burden to pay the amount would be entitled to get a refund of the same.”
The Court further observed that if the amount is refunded to the seller, and not the dealer who ultimately paid the tax, such claim would be hit by the principles of “unjustenrichment”.
SAINT-GOBAIN INDIA PRIVATE LIMITED vs UNION OF INDIA
CITATION: 2022 TAXSCAN (HC) 136
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