The Commissioner of GST and CX (Appeals), Mumbai, granted the service tax refund in case of flat cancellation.

The appellant had booked a residential flat in a project of M/s. Bharat Infrastructure & Engineering Pvt. Ltd. for the total agreement value of Rs. 52,58,245.

M/s. Bharat Infrastructure & Engineering Pvt. Ltd., issued invoice to Mr. Haresh V Kagrana (HUF) on receipt of Rs. 25,00,000 and 27,50,000 from the appellant for service tax amounting to Rs. 90,625 and Rs. 99,688 respectively.

The appellant cancelled the flat however, M/s. Bharat Infrastructure & Engineering Pvt. Ltd. did not refund the service tax amount to the appellant.

The Commissioner (A), Nazim Arshi held that no service has been provided by the builder to the appellant as the consideration for service was returned and the service contract was terminated.

It was further noted that the provision of the relevant date of one year and date of payment as per Section 11B of CEA can not be made applicable in the present case. The service tax paid by the appellant is in the nature of the deposit and not service tax.

“The date of cancellation of the flat will be considered as the relevant date for calculating the time limit of one year, as the event that led to the refund of taxes is the cancellation by the buyer,” the order said.

Therefore the claim is not hit by the doctrine of unjust enrichment.