Radhey Gobind & Co engaged in the wholesale business particularly dealing in the product of which supply was exempt from tax under GST. Subsequently, tax was imposed on the sale of the product by a notification issue

Section 54 read with section 77 and Rule 89(2) under the CGST Act, 2017 allows refund of tax under various conditions which mainly cover payment of wrong tax by a registered person. One of the conditions for grant of refund to the applicant is that the burden of tax so claimed as refund should not have been passed on to any other person. Apex Court in the case of CCE v. Allied Photographic 2004 166 ELT 3 has held that even if there is no change in the price before and after the assessment (before and after imposition of tax), it does not lead to the irrebuttable conclusion that incidence of tax has not been passed on to the buyer as such uniformity may be due to various factors. Thus, even if the price remains the same before and after imposition of tax, the assessee has to establish with tangible evidence that he has not passed on the burden of tax to the buyer in any manner to the satisfaction of the proper officer. Thus, in the ordinary course, the refund claim made by Radhey Gobind & Co will be sanctioned but credited to the consumer welfare fund. However, if Radhey Govind & Co. adduces sufficient evidence to prove that such tax has not been recovered from the buyer, the refund claim can be granted thereto.