Page 96 - GSTL_23rd July 2020_Vol 38_Part 4

462 GST LAW TIMES [ Vol. 38
Rs. 2,38,00,000/- but not being entitled to recover the balance demanded amount.
It was not the case of the respondents before the Commissioner or before
CESTAT or before this Court that the deposit by the petitioner of
Rs. 2,38,00,000/- even though under protest, was within time and only the de-
mand for the balance amount was barred by time and thus the amount of
Rs. 2,38,00,000/- should be permitted to be appropriated. The Commissioner as
well as the CESTAT dealt with the entire demand as one and set aside the same
and now the same cannot be bifurcated.
9. Since the emphasis of the Counsel for the respondents, during the
hearing, also is on the Circular providing for refund of pre-deposit amount being
not applicable to deposit under protest, we have further enquired, how and un-
der what head have the respondents appropriated Rs. 2,38,00,000/-, when the
entire demand of Rs. 4,66,39,061/- of which it was a part, stands set aside.
10. We have yet further enquired from the Counsel for the respondents,
whether not the respondents, inspite of being State within the meaning of Article
12 of the Constitution of India and expected to not act to the prejudice of its citi-
zens, are acting as “finders keepers”, by inspite of having been held to be not
entitled in law to the entire amount of Rs. 4,66,39,061/-, refusing to refund what
has already been received and to which they have not been held to be entitled.
11. Though there is no clarity of the circumstances under which the pe-
titioner deposited the said sum of Rs. 2,38,00,000/- during audit/investigation
but the undisputed position remains that the deposit was under protest and
against anticipated liability and which liability though fructified by the respond-
ents was set aside by the CESTAT and which order has attained finality. It is not
the case of the respondents that the said deposit was voluntary or by way of self-
assessment and which has been accepted by the respondents and in which case
the respondents could perhaps have argued that the said deposit was voluntary
and not refundable, as was the case in Commissioner of Income Tax, Bhopal v. Shelly
Products, (2003) 5 SCC 461. On the contrary, the assessment done by the respond-
ents and the demand raised in pursuance thereto, of Rs. 4,66,39,061/- and
whereagainst Rs. 2,38,00,000/- was adjusted, has been set aside in entirety and as
of today there is no assessment which had attained finality assessing the liability
of the petitioner to tax of Rs. 2,38,00,000/-. The respondents as State can recover
and/or retain as tax only such amounts which are assessed and found due as tax
and which assessment has attained finality. The respondents, as State, cannot
retain even a single paise of the assessee, unless has been found due towards tax
liability and which is not the case here. At the time when the amount of
Rs. 2,38,00,000/- was deposited, there was no assessment and no demand.
12. The respondents are reminded of Article 265 of the Constitution of
India prohibiting any tax to be levied or collected except by authority of law. The
respondents have also not pleaded a case of the petitioner being not entitled to
refund, on the ground of the petitioner having passed of the liability to another
as illustrated in the Nine Judge Bench’s judgment of the Supreme Court in
Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536 = 1997 (89) E.L.T. 247
(S.C.). Allowing the respondents to retain the said amount, would also be in vio-
lation of Section 72 of the Contract Act, 1872, obliging a person to whom money
has been paid by mistake or under coercion, repay the same. The said provision
enshrines the principle of unjust enrichment and restitution and the respondents
State, by refusing to refund the sum of Rs. 2,38,00,000/-, are purporting to undu-
ly enrich themselves.
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