2022 (6) TMI 766 - HC - GST

Maintainability of SCN - refund of accumulated credit of compensation cess - principal grounds of challenge to the show cause notices and subsequent orders are that the refund despite being due to the petitioner in law has been wrongly denied and the consequential orders of refusal to refund are non-speaking - violation of principles of natural justice - HELD THAT - The claim for refund has been declined by assigning reasons which may be cryptic on bare perusal but are sufficient to enable the assessee to know the exact cause for rejection of the claim for refund. The reasons assigned could have been more elaborate but that by itself cannot render the impugned orders vitiated. The reasons assigned are sufficient to save the orders from being sacrificed at the alter of natural justice (non-speaking order). Pertinently, the reasons assigned cannot categorize the impugned orders to be non-speaking since they do not dissuade the assessee from knowing the mind of the adjudicating authority or dissuading from filing an appeal. Certain other reasons have been assigned by the Revenue to support impugned orders, which this Court declines to go into in the face of the unavailed alternative statutory remedy of appeal u/S. 107 of the C.G.S.T. Act. Petition dismissed.

Summary

Issues:
Challenging show cause notices and refusal of refund of accumulated credit of compensation cess.

Analysis:
The High Court addressed two writ petitions challenging show cause notices and refusal of refund of accumulated credit of compensation cess. The petitions argued that the refund rightfully due to the petitioner had been wrongly denied, and the subsequent refusal orders lacked justification. The Revenue contended that the refund claim was time-barred under Section 54(14)(2) of the Central Goods and Services Tax Act, 2017, and untenable under Section 16(4) of the CGST Act, 2017. Additionally, it was argued that the petitioner applied for refund under the wrong category. The Revenue also questioned the maintainability of the petition due to the petitioner's failure to utilize the statutory remedy of appeal under Section 107 of the CGST Act.

Upon examination, the Court found that the orders declining refund contained reasons in the remarks column, such as the claim being time-barred, unavailability of ITC of cess, and inadmissibility based on a specific circular. While some orders lacked the reason of being time-barred, the Court held that the reasons provided were sufficient for the assessee to understand the basis of rejection. The Court emphasized that although the reasons could have been more detailed, they were not inadequate to render the orders non-speaking or unjust. The Court declined to delve into additional reasons provided by the Revenue, citing the availability of the statutory remedy of appeal under Section 107 of the CGST Act.

Ultimately, the Court dismissed both writ petitions, directing the petitioner to pursue the remedy of appeal under Section 107 of the CGST Act within sixty days. The Court assured that the appeal would be considered on its merits without dismissal based solely on limitation.