2021 (4) TMI 323 - Commissioner - GST

Refund of accumulated ITC - zero-rated supply of goods or services or both without payment of tax - Section 54 of the CGST Act, 2017 - HELD THAT - As per Rule 90(3) of CGST Rules, 2017 it has been provided that where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the appellant, requiring him to file afresh refund application after rectification of such deficiencies - While in the instant case, it is found that the proper officer had directed to the appellant in reference to the deficiencies memo, for submission of certain documents and thereafter passed the impugned order in reference to the refund application filed by the appellant earlier - Procedure for manual processing of refund application has been given in Circular No. 17/17/2017-GST, dated 15-11-2017 in the said circular it is clearly stated that after issuance of deficiency memo, the fresh refund application shall be filed by the applicant/ claimant. There are force in the appellant's plea that the said impugned order was passed without issuing the notice and without being heard to him - it would be appropriate to remand back the matter to the Adjudicating Authority for providing the proper opportunity of being heard to the appellant and pass the reason/ speaking order - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection without notice and opportunity of being heard.

Analysis:
The appellant filed a refund application under Section 54 of the CGST Act, 2017 for accumulated ITC of ?1,44,072 for the period of October to December 2018. The adjudicating authority rejected the claim citing lack of transactions on the common portal for the given period, leading to the refund rejection and re-crediting in the electronic credit ledger. The appellant contended that the rejection violated principles of natural justice as no notice was provided, and no opportunity of being heard was granted.

The appellant submitted various documents, including GSTR-3B, GSTR-1, and a letter of undertaking, to support their refund claim. Additionally, the appellant complied with the deficiency memo (GST RFD-03) issued by the Assistant Commissioner, providing all requested documents. However, the impugned order rejecting the refund was issued without a show cause notice in Form GST-08 and without granting the appellant an opportunity to be heard, contrary to Rule 92(3) of the CGST Rules, 2017.

The Commissioner noted that the impugned order lacked proper issuance of notice and opportunity for the appellant to present their case. Referring to Rule 90(3) of the CGST Rules, 2017, which requires communication of deficiencies to the appellant for rectification, the Commissioner found that the proper officer did not follow the prescribed procedure. The Commissioner also highlighted Circular No. 17/17/2017-GST, which mandates the filing of a fresh refund application after the issuance of a deficiency memo.

Considering the legal provisions and procedural lapses, the Commissioner decided to remand the matter back to the Adjudicating Authority. The Commissioner directed the Adjudicating Authority to provide the appellant with a proper opportunity to be heard and to issue a reasoned order. The appellant was instructed to submit their arguments before the Adjudicating Authority. Consequently, the appeal was disposed of in the manner outlined above.