Service Tax Pre-Deposit Paid Through GST DRC‑03 Refundable Beyond Section 54 Limit: GSTAT Kolkata

The Kolkata Bench of the GST Appellate Tribunal dismissed a Revenue appeal, holding that an appeal deposit routed through the GST cash ledger is not tax and its refund is governed by the Limitation Act.

GSTAT Kolkata has held that a pre-deposit for a service tax appeal, paid by mistake through Form GST DRC‑03 from the Electronic Cash Ledger, is not tax under the CGST Act, so the two-year limit in Section 54(1) does not bar its refund. The general provisions of the Limitation Act apply instead. [Atanu Mondal v. Jhawar Suppliers, 2026-juristway.com-3316-GSTAT(Kolkata)-GST]

Satya Gopal Chattopadhyay, Member (Judicial), and Anindya Mitra, Member (Technical), decided the Revenue’s appeal under Section 112(3), with Anindya Mitra writing the order. The taxpayer had appealed against a service tax demand of ₹14,73,456 for 2015-16. Unable to log in to the ACES portal, it paid the 7.5% pre-deposit of ₹1,10,510 required by Section 35F of the Central Excise Act, 1944 through DRC‑03 on 27 May 2022, describing it as a service tax appeal pre-deposit.

On learning that DRC‑03 was not a valid mode, it paid the deposit again through the ICEGATE portal on 9 Apr 2024. After the service tax appeal succeeded, the second deposit was refunded, but the claim for refund of the DRC‑03 payment, filed on 3 Oct 2024, was rejected as made more than two years after payment. The first appellate authority allowed it, and the Revenue argued that the payment was ‘any other amount’ within Section 54(1).

Following Comsol Energy Private Limited v. State of Gujarat (R/Special Civil Application No. 11905 of 2020), the Bench held that Section 54 applies only to refunds of tax paid under the GST Acts, and that the deposit, paid under a mistake of law, falls outside the CGST Act. Relying on Suvidhe Ltd. v. Union of India (1996) and Circular No. 984/08/2014-CX, it also held that the doctrine of unjust enrichment does not apply to the refund of a pre-deposit made for an appeal.

The Bench upheld the order-in-appeal allowing refund of ₹1,10,510 and rejected the Revenue’s appeal.

2026-juristway.com-3316-GSTAT(Kolkata)-GST