Precautions while claiming refund to avoid doctrine of unjust enrichment :
If the burden has been passed on to customer, there is no point in applying for refund of GST.
In other cases, to establish that burden has not been passed on to customer, the amount should be shown as ‘claim receivable’ in books of account and should not be charged to profit and loss account.
In Jaipur Syntex Ltd. v. CCE 2002(143) ELT 605 (CEGAT), assessee had paid higher duty and the differential amount was treated in accounts as ‘claims receivable’. This was treated as part of Balance Sheet and not charged to P&L account. It was held that it is evident that incidence of duty has not been passed on to customers. [In this case, duty was not shown separately in invoice].
In CC v. Virudhunagar Textile Mills (2008) 230 ELT 411 (Mad HC DB), differential duty on capital goods was shown as duty receivable from customs department and balance sheet with CA certificate was produced.
It was held that refund is admissible.
In CC v. Maruti Udyog Ltd. 2003 (155) ELT 523 (CEGAT), amount claimed as refund of duty was grouped in ‘Current Assets’ in Balance Sheet as ‘Claim Receivable’. It was held that refund claim to assessee is admissible – similar order in Hero Honda Motors Ltd. v. CC 2000(126) ELT 1014 = 40 RLT 597 (CEGAT) * Welspun Gujarat Stahal v. CC (2014) 306 ELT 513 (CESTAT SMB) * New Tech Stewing Telecom v. CCE (2014) 301 ELT 105 (CESTAT SMB) * CCE v. Shankar Printing Mills (2015) 321 ELT 295 (CESTAT) * Shreyas Intermediates v. CCE (2016) 333 ELT 380 (CESTAT).
In CCE v. Dabur India (2014) 46 GST 233 = 46 59 (All HC DB), duty was paid under protest. Amount was shown as receivable. MRP/wholesale price was not increased. It was held that refund is admissible and unjust enrichment provisions are not applicable.
[This is probably the only scientific way by which assessee can establish that he has not passed on the burden to customers, and is based on accounting principles.]