Madras HC: Limitation for Service Tax Refund Runs from SIPCOT Certificate Date, Not Presidential Assent
Case Overview
Case Name: Shen Long Bio-Tech (India) Private Limited Vs Commissioner of GST And Central Excise (Madras High Court)
Forum: Madras High Court
Nature of Proceedings: Civil Miscellaneous Appeal against Tribunal order
Background and Context
The present matter arose out of a Civil Miscellaneous Appeal filed before the Madras High Court, wherein the assessee challenged the order of the Appellate Tribunal that had rejected its service tax refund claim. The refund had been sought under the provisions of the Finance Act, 2017, which had granted retrospective recognition to a pre-existing exemption relating to service tax on long-term industrial plot leases.
The core dispute revolved around whether the refund application filed by the assessee was within the permissible limitation period, and critically, from which date that limitation period ought to be computed — the date of Presidential assent to the Finance Bill, 2017, or the date on which the concerned authority issued the requisite certificate confirming entitlement to the refund.
The Exemption and Legislative Framework
Notification No. 41/2016
The Ministry of Finance, Government of India, issued Notification No. 41/2016 dated 22.09.2016, which exempted taxable services rendered by State Government Industrial Development Corporations or Undertakings to industrial units — specifically, the grant of long-term leases of industrial plots — from service tax leviable under Section 66B of the Finance Act.
Section 104 of the Finance Act, 2017
To provide retrospective coverage and statutory backing to this exemption, the Finance Act, 2017 introduced Section 104, which reads as follows:
(1) Notwithstanding anything contained in section 66, as it stood prior to the 1st day of July, 2012, or in section 66B, no service tax, leviable on one time upfront amount (premium, salami, cost, price, development charge or by whatever name called) in respect of taxable service provided or agreed to be provided by a State Government industrial development corporation or undertaking to industrial units by way of grant of long term lease of thirty years or more of industrial plots, shall be levied or collected during the period commencing from the 1st day of June, 2007 and ending with the 21st day of September, 2016 (both days inclusive).
(2) Refund shall be made of all such service tax which has been collected, but which would not have been so collected, had sub-section (1) been in force at all material times.
(3) Notwithstanding anything contained in this Chapter, an application for claim of refund of service tax shall be made within a period of six months from the date on which the Finance Bill, 2017 receives the assent of the President.
In essence, Section 104(1) of the Finance Act, 2017 retrospectively exempted service tax for the period 1 June 2007 to 21 September 2016. Section 104(2) mandated that service tax already collected during this period be refunded, and Section 104(3) prescribed a six-month window for filing refund applications, calculated from the date the Finance Bill, 2017 received Presidential assent.