Atanu Mondal

1. Whether refund of a service tax appeal pre-deposit paid through Form GST DRC-03 is subject to the two-year limit in Section 54(1).

2. Whether the doctrine of unjust enrichment applies to such a refund.

Section 54 confined to tax under the GST law (para 5(I)–(V))

The Hon'ble Tribunal relied on the Hon'ble Gujarat High Court in Comsol Energy. There, IGST paid on ocean freight under reverse charge became refundable after the levy was struck down in Mohit Minerals. The High Court held that an amount collected without authority of law is not tax, so Section 54 does not apply and Section 17 of the Limitation Act governs a claim based on mistake.

The Hon'ble Tribunal also relied on Binani Cement and Joshi Technology International, where the Hon'ble Gujarat High Court held that statutory limits for refund of duty do not apply to amounts collected without authority of law or paid under mistake of law. In 3E Infotech, the Hon'ble Madras High Court held that service tax paid by mistake must be refunded although the Section 11B period had expired, since retention would offend Article 265.

Applying these decisions, the Hon'ble Tribunal held that the Rs. 1,10,510 paid under the CGST head was a pre-deposit for a service tax appeal. It was not tax under the CGST or IGST Act, and the claim was outside the CGST Act. The statutory limit in Section 54 did not apply, and the general provisions of the Limitation Act governed the claim.

Unjust enrichment (para 5(VI))

Following the Hon'ble Bombay High Court in Suvidhe Ltd., against which the Union's SLP was rejected, the Hon'ble Tribunal held that a deposit under Section 35F is not payment of duty but a condition for exercising the right of appeal. It must be refunded when the appeal succeeds, and the doctrine of unjust enrichment does not apply. Circular No. 984/08/2014-CX reiterated that refund of pre-deposit is outside the Section 11B process.