2022 (6) TMI 552 - HC - GST

Validity of refund order - Failure to get Certificate of Export in time - the revisional authority passed an order assessing the tax liability of the appellant/writ petitioner - undue benefit of circumstances which are beyond the control of the appellant/writ petitioner - HELD THAT - The appellant/writ petitioner received the document dated August 25, 2021 which impacts the tax liability of the appellant/writ petitioner. The appellant/writ petitioner is not at all fault in not receiving the document dated August 25, 2021 that the appellant/writ petitioner seeks to place before the revisional authority. It is not a case that the appellant/writ petitioner was in possession of certain documents which the appellant/writ petitioner did not place before the revisional authority. Rather, it is a case where the appellant/writ petitioner received a document subsequent to the order of the revisional authority. Tax authorities are to adjudicate upon the tax liability in accordance with law. The liability to taxation in respect of assessee should not escape assessee and likewise where the assessee was not in a position to show certain evidences which impacts the tax liability, reasonable opportunity should be afforded to such assessee to bring such evidences to the notice of the tax authorities. Another opportunity should be granted to the appellant/writ petitioner to place the document dated August 25, 2021 before the revisional authority - the appellant/writ petitioner is at liberty to approach the revisional authority within fortnight from date with regard to the order of assessment dated May 3, 2021. If so approached, the revisional authority is requested to reconsider its order passed on refund taking into account the document dated August 25, 2021 in accordance with law. Application disposed off.

Summary

Issues:
1. Whether the order of refund warrant interference under Article 226 of the Constitution of India?
2. Should the appellant be entitled to refund based on the Certificate of Export received after the order of refund?
3. Can the tax authorities derive undue benefit from circumstances beyond the control of the appellant?
4. Is the appellant entitled to bring forth additional evidence impacting tax liability after the completion of adjudication by the revisional authority?

Analysis:
1. The appeal challenged an order that found no material irregularity in the refund order despite the appellant receiving further evidence post the order. The appellant argued that the Certificate of Export received after the refund order should entitle them to a refund. The High Court noted the importance of considering all relevant evidence in tax matters and granted the appellant an opportunity to present the document to the revisional authority for reconsideration.

2. The appellant contended that the tax authorities should not benefit from circumstances beyond their control and should give proper credit for tax paid. The High Court agreed, emphasizing that tax authorities must assess liability accurately and not deprive the appellant of entitled benefits. The Court directed the revisional authority to reevaluate the tax liability in light of the new evidence presented by the appellant.

3. The State argued that the tax liability was finalized with the revisional authority's order before the appellant received the document impacting tax liability. However, the High Court held that the appellant's receipt of new evidence post the order was not due to any fault on their part. The Court stressed the importance of allowing taxpayers to present evidence that affects their tax liability, ensuring a fair assessment process.

4. In conclusion, the High Court directed the appellant to approach the revisional authority within a specified timeframe to submit the new document for reconsideration. The Court highlighted the need for tax authorities to consider all relevant evidence to prevent the escape of tax liability for the assessee. The judgment emphasized the principle of affording taxpayers a reasonable opportunity to present evidence impacting their tax assessments, ensuring a just and lawful adjudication process.