The Madras High Court has recently held that the refund claim of the assessee cannot be rejected merely for the reason that the claim was made before the Lessor and not before the service tax authorities.
The petitioner, M/s Grand Technologies manufactures parts for mosquito machines and was registered under the erstwhile service tax as well as Central Excise Laws. The unit had been established on land that had been allotted by the Pondicherry Industrial Promotion Development and Investment Corporation (PIPDIC), which is a Government of Puducherry Undertaking. The land had been leased out to the petitioner for a period of 76 years. The petitioner had remitted premium of a sum of Rs.31,10,400/-, which included service tax of an amount of Rs.3,17,288/- at 12.36% as applicable. Later, the amount paid as premium for the grant of long term lease of industrial plots for a period in excess of 30 years, was exempted from payment of service tax. Following which, the petitioners approached the department for refund. However, the same was rejected on the ground that the claim was time-barred and the petitioner approached the lessor initially seeking a refund.
Justice Anita Sumant, while deciding whether the petitioner’s claim before PIPDIC could be considered as compliance of the condition under Section 104, held that PIPDIC falls squarely within the factual and legal matrices envisaged under Section 104 and on this score.
“Also admittedly, the request of the petitioner for refund before PIPDIC was made 06.03.2017 even before the Presidential assent has been received, which is on 31.03.2017. Thus, the petitioner cannot be faulted for lethargy, negligence or even ignorance of the law,” the Court said.
Holding in favour of the assessee, the Court held that “In this case, the petitioner has filed the claim before PIPDIC which is altogether a different entity. However, the mere fact that the entity approached was PIPDIC and not an officer of the Department does not, in the light of the reasoning adduced above, persuade me to take a view adverse to the petitioner as I believe that such a conclusion would be hyper-technical.”
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