2022 (4) TMI 296 - HC - GST

Refund of amount including CGST, SGST and cess - non-grant of personal hearing to the petitioner - applicability of proviso to sub-rule 3 of Rule 92 of the Central Goods and Service Tax Rules, 2017 - HELD THAT - The respondent has been unable to discharge the onus, as to whether the hearing in the matter was fixed on 29.12.2020 - Since the respondent was mandatorily required to grant reasonable opportunity to the petitioner before rejecting its application for refund, there has been, as contended by Mr Jain, a breach of the principles of natural justice. Furthermore, the order of rejection i.e., the impugned order has given no reasons as to why refund sought by the petitioner was neither admissible nor payable. Mr Jain is right that the only ground given was that the supplier of the petitioner was reported as risky , which, to our minds, does not convey much - Upon a show cause notice being issued by the respondent, which is, dated 22.12.2020, the petitioner filed its reply on 23.12.2020, with due alacrity, even though the timeframe given was 7 days, which was, concededly, less than what is required to be granted under sub-rule 3 of Rule 92. The respondent shall hear the petitioner in support of its refund application, before passing a fresh order with regard to the same - respondent will pass a speaking order and a copy of the same will be furnished to the petitioner - petition disposed off.

Summary

Issues:
Refund rejection order challenge, Compliance with procedural requirements, Opportunity of personal hearing, Reasons for rejection, Timeframe for filing reply, Breach of principles of natural justice.

Analysis:
The petitioner challenged the refund rejection order and sought directions for refund and interest under CGST/SGST. The respondent contended that a personal hearing was fixed but the petitioner did not appear. However, the petitioner disputed this, claiming the information was not accessible on the GST portal. The audit history supported the petitioner's claim of no fixed hearing date. The court found the rejection flawed as the respondent failed to grant a reasonable opportunity for a hearing, as mandated by Rule 92 of the CGST Rules.

The petitioner argued that the rejection lacked valid grounds and violated the principles of natural justice. The respondent's rejection was solely based on the supplier being reported as 'risky', which the court found insufficient. The petitioner applied for a refund for export-related taxes, complying with the reply timeframe despite being shorter than required. The court noted the absence of a personal hearing and ordered the rejection to be set aside.

The court directed the respondent to conduct a fresh hearing, issue a notice to the petitioner, and pass a speaking order within two weeks post the hearing. The judgment emphasized the importance of complying with procedural requirements, granting a fair opportunity for a hearing, and providing valid reasons for rejection in accordance with the law. The writ petition was disposed of accordingly, ensuring a fair and just resolution in the matter.