Bombay HC: Order Council to Return Tax Amount Deposit via HSBC Under Protest

The Bombay High Court has directed the council to refund the tax deposited via HSBC during the protest.

The bench of Justice G. S. Kulkarni and Justice Jitendra Jain noted that once the amounts were deposited via the applicant and retained via the council without the authority of law, the applicant’s claim for the refund can not be refused. The same was relevant for the applicant to invoke the jurisdiction under Article 226 of the Constitution, asking for the writ for the refund of the money which has been kept or withheld illegally.

The applicant/taxpayer has contested the action of the GST council or respondents while retaining the amount of Rs 56,19,84,075 which the applicant argued to be without any authority in law and no tax is to get imposed or liable to get paid by the applicant.

The applicant argued that the amount was deposited via the applicant with the respondents to buy peace in the event of any prospective demand for the service tax and the interest on the interchange income. The same is not true in the dispute that the deposited amount was under the protest. No show-cause notice for the interchange income was furnished to the applicant for the duration from October 2007 to June 2012.

The applicant contends that the retention of the amounts which is in question via the respondent or revenue is without the authority beneath the law. The amount was filed under the protest. No warrant was there for the council to retain the amounts once the amounts were deposited beneath the protest since it would amount to a breach of the provisions of Article 265 of the Constitution of India.

From the date of deposit of the amounts which was approximately 11 years ago, respondents enjoyed the amounts and no show cause notice was provided or any process was chosen to appropriate the amounts in the way called as per the law, hence to acknowledge the amount to be the legal and lawful obligation of the applicant to pay service tax on interchange income.

The court concluded that it was clear that the respondents retained the questioned amounts without authority under the law. These amounts are needed to get refunded to the applicant including the interest.