UNJUST ENRICHMENT

UNJUST ENRICHMENT: A Deep Dive

Thoughts, Insight and Research by: Abhishek Raja Ram, 9810638155

1. Shapoorji Pallonji & Co. Pvt. Ltd. - Andhra Pradesh High Court

TS-873-HC(AP)-2024-GST

Principle of unjust enrichment does not apply to refund of electronic cash ledger in terms of section 49(6) read with section 54. HC sets aside rejection of refund claim for left over TDS accumulated as credit balance in cash ledger with a direction for ‘reconsideration’.

2. M/s NAM Estates Pvt. Ltd. - Karnataka High Court

2025-VIL-39-KAR

Respondent contracted for goods and paid an advance including GST. The supplier didn't deliver, so the contract was canceled. The respondent then applied for a GST refund.

HELD: Tax is on the transaction, so if it fails, advance payments should be refunded. With no GST liability, the respondent is entitled to a refund.

Section 54 of the CGST Act, can't be used to deny a refund to the purchaser. The Revenue shouldn't have refused the refund over the lack of a Credit Note, as it wasn't needed since the goods were never delivered. The Revenue must refund the full GST amount to the respondent.

3. EDELWEISS SECURITIES LIMITED - Tribunal Bombay

(2016) 44 STR 429

CESTAT approves refund of excess service tax on brokerage for stock-broker services following downward adjustments shown in credit notes. It dismisses Revenue's claim of unjust enrichment, noting that credit/debit notes are long-standing, enforceable documents in commercial disputes, and cannot be deemed unreliable merely for being paper scrips.

4. BAJAJ AUTO LTD. - Tribunal Mumbai

(2017) 347 ELT 519

Refund - Unjust enrichment bar not applicable if amount shown in Balance Sheet as receivables from the Department - Section 27 of Customs Act, 1962.

5. Finolex Industries Ltd. - Tribunal Mumbai

(2023) 385 ELT 58

Where provisionally assessed duty was higher than finally assessed duty, order of original authority rejecting refund for reason of unjust enrichment was not in accordance with provisions of Section 18(2) of Customs Act, 1962; therefore, matter was to be remanded.

Hope you will find these cases useful.

Warm Regards,

Abhishek Raja Ram

9810638155