Ms H P Biswas And Company Through Its Partner Aloke Kumar Biswas vs. Ms B C C L Through Its C M D

Held

The Court held that the impugned order rejecting the petitioner's claim for reimbursement of Service Tax was not tenable. The Court found that the dispute primarily arose from the contractual terms, where Clause 14 of the Work Order stipulated that BCCL was liable to reimburse the Service Tax amount of Rs. 18,25,269/-. While the respondents argued that BCCL could not avail CENVAT credit due to the petitioner's delayed actions, the Court noted that the work was completed as per norms, and the Service Tax was paid. The Court observed that the GST regime commenced after the petitioner's claim was raised. The Court invoked Section 142(3) of the CGST Act, 2017, and the 'Doctrine of Necessity' to allow the petitioner's claim to be considered for carrying forward the accrued credit to the electronic credit ledger of the GST regime, rather than a cash refund. The Court set aside the impugned order and remitted the matter back to the respondents for reconsideration under Section 142(3) of the CGST Act, 2017, directing that the claim be considered for carrying forward credit to the electronic ledger within six weeks, after providing an opportunity of hearing to the petitioner. The Court also directed BCCL to verify and process the claim in accordance with the agreement, and Union of India to ensure credit is extended to BCCL.

Facts

The petitioner, M/s H.P. Biswas & Company, was awarded a contract by Bharat Coking Coal Limited (BCCL) for the "Diversion of Kumari Jore (Balance Work)" for approximately Rs. 7.43 crore. The petitioner deposited Rs. 18,25,269/- as Service Tax against the first R.A. Bill for this work, which was completed on June 8, 2015. The petitioner sought reimbursement of this Service Tax amount from BCCL. After previous litigation, the petitioner was directed to file a fresh representation. Subsequently, BCCL, through Respondent No. 2 (General Manager, Area No. IV), rejected the reimbursement claim via an order dated February 1, 2019. The petitioner contended that the rejection violated the contract terms and was unjustified, especially as no proceedings were initiated against them by the Service Tax Department.

Key Issues

1. Whether the rejection of the petitioner's claim for reimbursement of Service Tax by BCCL, based on the delayed deposit of Service Tax and the ineligibility of BCCL to claim CENVAT credit under the CENVAT Credit Rules, 2004, is justified and in accordance with the contract and applicable tax provisions? Petitioner's arguments: The impugned order is liable to be set aside as it violates the terms of the contract and contractual obligations. The petitioner has not faced any proceedings from the Service Tax Department and has undertaken not to claim reimbursement elsewhere. Withholding the reimbursement is illegal and unjustified. The order is also contrary to previous court directions, causing financial hardship. Respondents' arguments: Under Rule 4(7) of the CENVAT Credit Rules, 2004, CENVAT credit could only be availed within one year of the invoice date. The petitioner's delayed Service Tax registration and deposit made BCCL ineligible to claim CENVAT credit. The petitioner failed to comply with statutory requirements like obtaining registration and issuing proper tax invoices, and did not provide certificates regarding pending proceedings. The deposit was made after the cut-off date, making it ineligible for credit under the erstwhile Service Tax Act and the current GST Act.