2024 (1) TMI 236 - HC - GST

Violation of principles of natural justice - Rejection of refund of excess tax paid - HELD THAT - The authority, while rejecting the application appears to have been convinced that the appellant is entitled to the benefit of the order passed by the Hon ble Supreme Court by which the period of limitation under the various statues stood extended. However, the claim was rejected on a new ground, which was not forming the part of the showcause notice dated 7th June, 2022 stating that the appellant has not shown the excess payment in either the monthly return i.e. GSTR-3B or annual return i.e. GSTR 9. This ground appears to have not been specifically mentioned in the show-cause notice dated 7th June, 2022 and therefore, the rejection of the application for claim for refund on the said ground is in total violation of the principles of natural justice - That apart, the appellant had also made a request for postponing the personal hearing by adjournment request dated 14th June, 2022, which has also not been considered. The application for refund made by the appellant has to be reconsidered in accordance with law after affording an opportunity of hearing to the appellant - the order of rejection of the refund application dated 25th July, 2022 is set aside and the matter stands remanded back to the authority for fresh consideration - Appeal allowed by way of remand.

Summary

Issues involved:
The issues involved in the judgment are the delay in filing the appeal and the challenge against the rejection of a refund application.

Delay in filing the appeal:
The Court noted a delay of 149 days in filing the appeal but found that sufficient cause was shown for the delay. Consequently, the delay in filing the appeal was condoned.

Challenge against rejection of refund application:
The appellant had challenged the rejection of their refund application, which was dismissed on the grounds of not availing alternate remedies under the CGST Act. The appellant contended that the rejection of the refund claim was based on a ground not mentioned in the show-cause notice, violating principles of natural justice. Additionally, the appellant's request for postponing the personal hearing was not considered.

The Court held that the refund application should be reconsidered, providing an opportunity for the appellant to be heard. The order rejecting the refund application was set aside, and the matter was remanded back to the authority for fresh consideration. The appellant was directed to submit a reply regarding the excess payment not being shown in the returns within 15 days. The authority was instructed to schedule a fresh date for a personal hearing and pass orders in accordance with the law.

The Court clarified that the issue of the refund application being time-barred was decided in favor of the appellant and cannot be reopened based on the current order. The connected application was disposed of with no costs awarded.

Separate Judgement:
The judgment was delivered by the Hon'ble Chief Justice T.S. Sivagnanam, with agreement from Mr. Justice Supratim Bhattacharya.