ATANU MONDAL vs JHAWAR SUPPLIERS

IN THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL
KOLKATA BENCH
COURT NO. 1
Appeal No. APL/122/KLK/2026

ATANU MONDAL

…..Appellant

Versus

JHAWAR SUPPLIERS
….Respondent

In appearance :
For the Appellant : Shri Indrajit Mondal , Superintendent , CGST
For the Respondent : Mr. Rip Das, CA

CORAM:

Shri Satya Gopal Chattopadhyay : Hon’ble Judicial Member
Shri Anindya Mitra : Hon’ble Technical Member

FINAL ORDER
Date of Hearing: 13.10.2026
Date of Order : 06.11.2026

Per Anindya Mitra , Technical Member :
[1] This appeal has been filed u/s 112(3) by the Revenue assailing the
Appellate Order (No. 419/CGST/Kol-North/2025 dated 19.08.2025) passed
by Joint Commissioner, CGST & CX, Kolkata Appeal- I Commissionerate in
respect of M/s. Jhawar Suppliers (GSTIN 19AAHFJ0709N1Z2).
[2] The facts of the case in brief.
(I) M/s. Jhawar Suppliers had filed an appeal before the Commissioner of
Central Tax, Kolkata Appeal -I Commissionerate against an O-I-O demanding
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service tax of Rs.14,73,456/- along with interest and penalty for the F.Y.
2015-16.
(II) Section 35F of the Central Excise Act, 1944 requires that the Tribunal
or the Commissioner (Appeals), as the case may be, shall not entertain any
appeal unless the appellant has deposited 7.5% of the duty, in case where
duty or duty and penalty are in dispute, or penalty, where such penalty is in
dispute.
(III) However, due to login issues in ACES portal, the appellant could not
deposit the mandatory appeal pre deposit of Rs. 1,10,510 through ACES
portal. So, he paid it by Form DRC 03(Intimation of payment made
voluntarily or made against the show cause notice) on 27.05.2022 under
CGST Act, utilizing the balance available in his Electronic Cash Ledger in GST
portal. It was mentioned by the taxpayer in DRC 03 that the payment was
“Service Tax Appeal Fees for Period 2015-2016. OIO No.: 26/ST/AC-
BKP/Jharwar Supplier/2021-22 dated 07.03.2022. REF: C. No.:
V(3)15/CGST & CX/Adjn./BKP/Jharwar Supplier/2020-21/64”.
(IV) When the appellant come to know that payment through Form DRC
03 is not a valid mode of payment for Service Tax appeal pre deposit, he paid
the pre deposit of Rs.1,10,510/- on 09.04.2024 through CBIC ICEGATE
portal.
(V) In the Appellate Order dated 25.07.2024, the impugned demand for
Service Tax was set aside. On receipt of the Appellate Order, the appellant
filed following two refund applications:
i. One towards refund of Service Tax appeal pre-deposit of
Rs.1,10,510/- paid on 09.04.2024 through Service Tax Challan
which was sanctioned by the Revenue on 05.09.2024.
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ii. The other refund application was filed in GST RFD-01 in respect of
service tax appeal pre deposit of Rs.1,10,510/- which was paid
through DRC 03 on 27.05.2022.
(VI) The later application was rejected on the ground of limitation. The
Assistant Commissioner CGST & CX, Barrackpore Division took the view
that the refund claim was to be decided as per section 54(1) of CGST
Act,2026 which reads as under :
“Any person claiming refund of any tax and interest, if any, paid on such tax
or any other amount paid by him, may make an application before the expiry
of two years from the relevant date in such form and manner as may be
prescribed”.
As per Explanation to clause 2(h) of Section 54 of CGST Act, 2017, the
“relevant date” for such refund claim is the date of payment of tax.. In the
instant case, the date of payment is 27.05.2022 and the refund application
was filed in “Any Other Category” on 03.10.2024 i.e., after more than two
years from the relevant date (date of payment)”.
[3] THE REASONING IN THE IMPUGNED ORDER-IN-APPEAL (O-I-A)
The First Appellate Authority allowed the claim of refund. His reasoning
was as follows: -
i) The payment of ₹1,10,510/- was not made towards any tax, interest,
or liability under the CGST Act, 2017, but was a pre-deposit to comply with
the provisions of Section 35F of the Central Excise Act, 1944, which was
applicable to Service Tax vide Section 83 of the Finance Act, 1994. This
position is reaffirmed by CBEC Circular No. 984/08/2014-CX dated
16.09.2014, which clarifies that pre-deposits made under Section 35F are
mandatory for filing an appeal and refundable upon favourable disposal.
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ii) Section 54 of the CGST Act, 2017 governs refund of taxes and interest
paid under GST laws. However, pre-deposit made for appeals under legacy
laws is not a 'tax' under CGST, as held by the Hon'ble Gujarat High Court in
Comsol Energy Pvt. Ltd. v. State of Gujarat [2021 (47) G.S.T.L. 11 (Guj.)].
Similarly, the Hon’ble Jharkhand High Court in BLA Infrastructure Pvt. Ltd.
v. State of Jharkhand [W.P.(T) No. 6527 of 2024] has ruled that limitation
under Section 54 cannot be invoked to deny refund of statutory pre-deposit
once the appeal has been allowed in favour of the assessee.
iii) As per Article 265 of the Constitution of India, "No tax shall be levied
or collected except by authority of law." The amount in question was neither
a tax nor collected under any statutory authority under GST, and hence,
cannot be retained by the department without authority.
iv) Although the payment was routed through Form DRC-03 (a form
prescribed under Rule 142(2) of the CGST Rules, 2017), the purpose was
clearly indicated as "Service Tax Appeal Pre-deposit for FY 2015-16". There
is no express bar under the CGST Rules, 2017, prohibiting the use of DRC-
03 for making payments unrelated to GST, especially when administrative
exigencies warranted it (due to ACES portal inaccessibility).
V) The CBIC Circular No. 125/44/2019-GST dated 18.11.2019 (para 3.2)
clarifies that refund of excess balance in cash ledger is not governed by the
two-year time limit under Section 54. The amount paid through DRC-03
being debited from the Electronic Cash Ledger, can be construed as excess
balance, especially when not applied against GST liabilities.
vi) The doctrine of unjust enrichment, under Section 54(8), is not
attracted here as the appellant paid the pre-deposit from its own funds, and
the burden was not passed on to any customer.
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vii) Intent of the Law: The procedural difficulty (login issue) forced the
appellant to adopt an alternate route for making payment. Denial of refund
due to procedural formality would be against the spirit of natural justice and
would result in unjust enrichment of the Revenue.
[4] GROUNDS OF APPEAL BY THE REVENUE .
According to the Revenue, the Order-in-Appeal is erroneous, legally
unsustainable, and contrary to the provisions of the CGST Act, 2017, and
therefore liable to be set aside.
(i) The appellant filed the refund application of the said amount under
‘any other’ category. Although the amount paid by the appellant is not tax
and interest, it is covered by the clause "any other amount" and therefore,
the refund of such amount is to be governed by the provision of Section
54(1) of the CGST Act. Further, as per provisions of Section 54(1) of CGST
Act,2017, “Any person claiming refund of any tax and interest, if any, paid on
such tax or any other amount paid by him, may make an application before
the expiry of two years from the relevant date in such form and manner as
may be prescribed”. The relevant date for such refund claim, as per
Explanation clause 2(h) of Section 54 of CGST Act, 2017 is the date of
payment. In the instant case, the date of payment is 27.05.2022 and the
refund application is filed in “Any Other Category” on 03.10.2024 i.e., after
more than two years from the date of payment.
(ii) Hence the application for refund was barred by limitation and it was
erroneous to allow the claim.
[5] ANALYSIS AND DECISION
We have heard the Revenue and Mr. Rip Das, CA appearing for the taxpayer
and also perused the records.
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I). The Hon’ble Gujarat High Court dealt with a similar situation in
COMSOL ENERGY PRIVATE LIMITED Versus STATE OF GUJARAT
(R/SPECIAL CIVIL APPLICATION NO. 11905 of 2020).
The writ-applicant filed the refund claims of the Integrated Goods and
Services Tax paid on the Ocean Freight under the reverse charge mechanism
after the decision of the Gujarat High Court in the writ-applicant’s own case
which was connected with the main petition of Mohit Minerals (Pvt) Ltd. vs.
Union of India and others (Special Civil Application No.726 of 2018). The
Hon’ble High Court, vide Order and Judgment dated 23.01.2019, held that
the Notification No.8/2017 – Integrated Tax (Rate) dated 28.06.2017 and
the Entry No.10 of the Notification No.10/2017 under the Integrated Tax
(Rate) dated 28.06.2017 lack legislative competency and the same were
accordingly declared as unconstitutional.
When the writ petitioner filed refund claims, the Revenue issued Deficiency
Memo on the premise that the refund claims were not filed within the
statutory time limit provided under Section 54 of the CGST Act as Section
54 does not provide separate category for claiming refund of such amount.
The High Court observed:
“7. Section 54 of the CGST Act is applicable only for claiming refund of any tax
paid under the provisions of the CGST Act and/or the GGST Act. The amount
collected by the Revenue without the authority of law is not considered as tax
collected by them and, therefore, Section 54 is not applicable. In such
circumstances, Section 17 of the Limitation Act is the appropriate provision
for claiming the refund of the amount paid to the Revenue under mistake of
law, which is as under:
“Section 17(1) of the Limitation Act, 1963
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(1) Where, in the case of any suit or application for which a period of
limitation is prescribed by this Act, —
(a) the suit or application is based upon the fraud of the defendant or
respondent or his agent; or
(b) *
(c) the suit or application is for relief from the consequences of a mistake; or
(d) ” *
The Hon’ble Court quashed the deficiency memos and ordered refund
alongwith interest.
II) The Hon’ble Gujarat High Court, in the case of Binani Cement Ltd. vs.
Union of India, reported in 2013 (288) ELT 193 (Guj), held that where the
duty is collected without any authority of law, such collection of duty is
considered as collected without authority of law and, therefore, is opposed
to Article 265 of the Constitution of India and, thus, unconstitutional. It was
held that the assessee was not bound by the limitation prescribed under the
special law for claiming the refund of the excess duty or duty collected
illegally. The period of limitation prescribed under the Limitation Act would
apply.
III) In the case of Joshi Technology International vs. Union of India,
reported in 2016 (339) ELT 21 (Guj), the Gujarat High Court held that the
statutory time limit provided under Section 11B of the Central Excise Act is
not applicable to the claim of refund of duty paid under mistake as the same
was paid under mistake of law and, therefore, such claim is considered as
outside purview of enactment. It was held that general provisions provided
under the Limitation Act is applicable to claim refund of such duty.
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IV) Similarly, in the case of 3E Infotech Ltd. vs. CESTAT, reported in
2018(18) GSTL 410 (Mad.), the Madras High Court held that the service tax
paid under mistake of law is to be returned to the assessee irrespective of
the period covered under the refund application. It was held that refusing
to return the amount would go against the mandate of Article 265 of the
Constitution of India. The Hon’ble Court observed: -
“13. On an analysis of the precedents cited above, we are of the opinion, that
when service tax is paid by mistake a claim for refund cannot be barred by
limitation, merely because the period of limitation under Section 11B had
expired. Such a position would be contrary to the law laid down by the
Hon'ble Apex Court, and therefore we have no hesitation in holding that the
claim of the Assessee for a sum of Rs.4,39,683/- cannot be barred by
limitation, and ought to be refunded.”
V) In our considered view, the issue in the present appeal is squarely
covered by the above precedents.
Section 54 of the CGST Act is applicable only for claiming refund of any tax
paid under the provisions of the CGST Act and/or the IGST Act. The amount
of Rs.1,10,510/- paid by the taxpayer through Form DRC 03 on 27.05.2022
under major head CGST was a pre deposit payable for preferring appeal
against an order of demand of service tax. Therefore, the statutory time
limit provided under section 54 of CGST Act,2017 is not applicable to the
claim of refund of the pre deposit as the same was paid under mistake of
law and, therefore, such claim is outside purview of CGST Act. The general
provisions provided under the Limitation Act is applicable to claim refund
of such amount.
VI) Following the ratio of the Hon’ble Bombay High Court in the case of
Suvidhe Ltd. Vs. Union of India reported in 1996 (82) ELT 177 (Bom.), we
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hold that the principle of unjust enrichment is not applicable to refund of
pre-deposit made for preferring appeal.
The Hon’ble Bombay High Court declared in the case of Suvidhe Ltd. Vs.
Union of India reported in 1996 (82) ELT 177 (Bom.)
“In respect of a deposit made under Section 35F, provisions of Section 11B can
never be applicable. A deposit under Section 35F is not a payment of Duty but
only a pre-deposit for availing the right of appeal. Such amount is bound to be
refunded when the appeal is allowed with consequential relief…… In respect
of such a deposit the doctrine of unjust enrichment will be inapplicable .”
SLP filed against the above judgement by the Union of India was rejected by
the Hon’ble Supreme Court. Subsequently, The Central Board of Excise &
Customs issued Circular no. 984/08/2014-CX dated September 16, 2014
which reiterated:
“ 5.2 Pre-deposit for filing appeal is not payment of duty. Hence, refund of pre-
deposit need not be subjected to the process of refund of duty under Section
11B of the Central Excise Act, 1944 or Section 27 of the Customs Act, 1962. ….”
VII) We therefore, uphold the impugned order-in -appeal of the First
Appellate Authority allowing refund of Rs. Rs.1,10,510/- paid by the
taxpayer through Form DRC 03 and reject the appeal of the Revenue.
Digitally signed by SATYA GOPAL CHATTOPADHYAY

SATYA GOPAL CHATTOPADHYAY
Date: 2026.11.06 13:15:07 +05'30'

S.G Chattopadhyay
Judicial Member

ANINDYA MITRA
Digitally signed by ANINDYA MITRA
Date: 2026.11.06 13:29:37 +05'30'

Anindya Mitra
Technical Member
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