Ahmedabad CESTAT: Tax Refund Claims Invalid Without Citing Relevant Provision and Notification

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has mentioned that the department cannot assume a refund claim unless it is established under which notification and provision the same has been desired.

The Bench of Somesh Arora (Judicial) has noted that “The lapse of non-filing of refund under proper notification separately for June 2013 cannot be termed as mere procedural lapse. The department cannot be expected to consider refund claim if it is not indicated to them as to under which notification and provisions same has been sought.”

The taxpayer in the case was not provided with the claim of refund of which they were qualified under the Notification No. 40/2012-ST for June 2013. The taxpayer obtained the refund for the period July to September 2013 under Notification No. 12/2013-ST on 1st July 2013 but a refund for the 4th month filed by them for June 2013 was not allowed to them.

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The taxpayer has asserted that they are qualified to claim the refund for the supply as they were qualified under the mentioned notification. Therefore it is merely a procedural lapse and must not have been directed to refusal of the advantage of refund to them.

The department claimed that Notification No. 12/2013-ST came into force merely from 1st July 2013 and cannot be applied for June 2013 as it was of a prior date from coming into force of the notification.

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It was noted by the tribunal that the lapse of not filing the refund under effective notification separately for June 2013 could not be directed as a procedural lapse. Hence the lapse is not only procedural but consequential originating from legal provisions.

The bench mentioned that “Even if, the stand of the party that it was otherwise entitled to benefit even for June 2013 under a separate Notification No. 40/2012-ST is considered correct then ideally, they should have filed a separate claim to be considered as per terms and conditions of that notification. The same is a lapse that cannot be termed as a mere procedural lapse since the requirement to file a refund claim as per the statutory provision, under the Finance Act, 1994 (as per borrowed provision from central Excise Act, 1944 of Section 11B) is a requirement having its ramifications of limitation and fulfilment of conditions of Notification No. 40/2012-ST.”

The tribunal in the above said view has rejected the plea.