2019 (11) TMI 658 - HC - Central Excise

Rejection of part refund claim - refund claim in respect of two different periods - While in one case, the second respondent has chosen to partly accept and partly reject the claim, in the other case, he totally rejected the claim - opportunity of personal hearing - principles of Natural Justice - HELD THAT - It is an admitted fact that in both the cases, the second respondent, before passing the impugned orders, not heard the petitioner. As rightly pointed out by the learned counsel for the petitioner, if the authority chooses to reject the refund claim either in part or whole, he should put the petitioner on notice and seek for explanation and decide the matter thereafter on providing an opportunity of personal hearing as well. The scope of affording an opportunity of personal hearing was considered in similar refund claim matter in the case of M/S. SRI GAYATHRI CASHEWS VERSUS THE ASSISTANT COMMISSIONER OF GST AND CENTRAL EXCISE, 2019 (1) TMI 610 - MADRAS HIGH COURT and directed the respondent therein to afford an opportunity of personal hearing to the petitioner therein. The parties are directed to treat the impugned orders as show cause notices issued on the petitioner - the second respondent shall pass fresh orders on merits and in accordance with law, after affording an opportunity of personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Challenging orders rejecting refund claims, violation of principles of natural justice, maintainability of writ petitions, opportunity of personal hearing.

Analysis:
The judgment pertains to two writ petitions challenging orders rejecting refund claims made by the petitioner for two different periods. The impugned orders were passed without providing an opportunity of personal hearing to the petitioner. The petitioner contended that the orders violated principles of natural justice as no show cause notice was issued. The counsel for the petitioner argued that the writ petitions were maintainable before the court due to this violation. On the other hand, the senior standing counsel for the respondents argued that the authority had considered the merits of the claim and passed the orders after seeking clarifications from the petitioner. However, she acknowledged that no opportunity of personal hearing was granted. She suggested treating the impugned orders as show cause notices and allowing the petitioner to respond to enable fresh orders to be passed in accordance with the law.

The court noted that the second respondent had not heard the petitioner before passing the impugned orders, which is essential when rejecting a refund claim, either partially or wholly. Citing previous judgments, the court emphasized the importance of providing an opportunity of personal hearing in such cases. The court referred to its previous decisions where it directed authorities to afford a personal hearing to petitioners in similar refund claim matters. In light of these considerations, the court disposed of both writ petitions by directing the parties to treat the impugned orders as show cause notices, allowing the petitioner to file objections/reply within four weeks. The second respondent was instructed to pass fresh orders after considering the objections/reply and providing an opportunity of personal hearing to the petitioner. No costs were awarded in this judgment.