2023 (7) TMI 145 - HC - GST

Rejection of claim for refund of the un-utilised input tax credit - rejection on the ground that additional place of business was never in the possession of the appellant - HELD THAT - On a reading of the order passed by the Appellate Authority, it is found that the Appellate Authority has proceeded on a different footing by restricting the consideration of the grounds of appeal with reference to the correctness of the order passed by the original authority. The Appellate Authority has recorded a finding that he has reason to believe that the evidence does not prove the claim of the appellant that the goods were exported and, therefore, the refund claim is not sustainable. It is rather doubtful as to whether the appellate authority could have rendered such findings since the appellant has already received input tax credit for valid export. This is also one of the errors which has crept in. In any event, the appellate authority could not have travelled beyond the allegation of the show cause notice as pointed out earlier, the show cause notice itself is defective on account of non-consideration of the submission of the appellant to the memo dated 27.01.2022 and non-consideration of the documents which were produced by the appellant alongwith its response to the said show cause notice. The matter shall stand remitted to the Original Authority. The Original Authority shall allow the assessee to submit additional explanation to the allegations contained in the show cause notice dated 28th August, 2021 and file additional documents and after which an opportunity of personal hearing to the authorized representative of the appellant shall be afforded - petition allowed.

Summary

Issues Involved:
The judgment involves the refusal of an interim order in a writ petition seeking to quash an order rejecting a claim for refund of un-utilised input tax credit, along with the appellate authority's affirmation of such order.

Issue 1: Refusal of Interim Order in Writ Petition
The appellant's principal and additional places of business were inspected by authorities, leading to allegations communicated via memo. The appellant requested an extension to reply and copies of documents. Despite submitting a reply mentioning voluminous documents, a show cause notice was issued without considering the appellant's response to the memo and the documents submitted. The show cause notice, alleging the additional place of business was not in the appellant's possession, led to the rejection of the refund claim. The appeal to the Appellate Authority was dismissed, with errors noted in the authority's findings and failure to consider appellant's submissions adequately. The Court found fundamental errors in the process, requiring a fresh hearing to provide the appellant with a fair opportunity to present their case.

Decision
The Court allowed both the appeal and the writ petition, setting aside the orders of the Original Authority and the Appellate Authority. The matter was remitted to the Original Authority, directing them to allow the appellant to provide additional explanations and submit additional documents in response to the show cause notice. The Original Authority was instructed to consider all submissions made by the appellant and make a decision on merit, without being influenced by previous observations. The connection application was also allowed as a result of the judgment.