Cadila Healthcare Limited Vs CST-Service tax, Ahmedabad
Forum-CESTAT Ahmedabad
Date-27th April,2021
Sub-When a partner can not render service to the partnership firm as they are treated as one and same, whether the erroneously paid service tax on self assessment is eligible for refund

The Ahmedabad Bench of CESTAT in the case of Cadila Healthcare was called upon to decide refund claim of Rs 3.96 crores which was erroneously paid on a misconception that the partner rendered services to the firm as the definition of person at the relevant time did not include firm within its fold. The appellant relied on the decision of the apex court in the case of Commissioner of Income Tax vs R. M. ChidambaramPillai1977 (106) ITR 292(SC). The Revenue argued that no appeal having been filed against the self assessment paid , following the decision of the apex court in the case of 2019-TIO-418-SC-CUS-LB- ITC Vs. CCE, Kolkata-V, where the apex court had held that ITC Ltd having not filed any appeal against the provisional assessment of Bill of entry under the Customs Act , it was not eligible for refund. However, the Bench allowed the appeal of the assessee by relying on the decision of the apex court in 106 ITR above by observing that what the partner receives from the firm by dint of his labour is nothing but share of profit and there cannot be said to be any service provider or receiver relationship between the partner and firm. The decision of the apex court in ITC was also distinguished by saying that the decision was rendered in the context of Customs Act whereas in service tax there was no Pari materia provisions regarding filing of appeal against self assessment.

This judgement though pronounced in the light of law existing before 1-7-2012, will be helpful in dealing with issues regarding other types of refund claim paid erroneously under the service tax legislation.

Ramesh Patodia
03-05-2021.