Commissioner of Service Tax v. Hardy Exploration & Production (India) Ltd.

What happened

Service tax on a floating-rig arrangement was paid through the supplier Aban Offshore and economically passed to Hardy Exploration. The taxpayer sought a refund of tax wrongly collected as mining service; Revenue invoked limitation, procedure and unjust enrichment.

Questions before the court

• Could the State retain tax not authorised on this transaction despite evidence that Hardy bore the incidence and the appellate authorities granted refund?

Why the court ruled this way

The court accepted the record-based finding that the tax had been passed to Hardy, rejected the asserted unjust-enrichment objection on the certificates and documents, and found that unlawful tax collection could not be retained on the technical grounds advanced.

Controlling point

The court accepted the record-based finding that the tax had been passed to Hardy, rejected the asserted unjust-enrichment objection on the certificates and documents, and found that unlawful tax collection could not be retained on the technical grounds advanced.

Order and next steps

All five substantial questions answered against Revenue; its appeal dismissed and refund relief left in place without costs.

Practical implications

The operative result is case-specific: All five substantial questions answered against Revenue; its appeal dismissed and refund relief left in place without costs. Apply it within the court’s stated limit: This result depends on the transaction classification and documentary proof of who bore the tax; it does not abolish refund procedures generally.

Limits of this ruling

• This result depends on the transaction classification and documentary proof of who bore the tax; it does not abolish refund procedures generally.