2024 (6) TMI 1167 - HC - GST

Refund of IGST paid - rejection order passed without giving any reasons and also without application of mind - violation of principles of natural justice - Rejection of the ground of time limitation - no sufficient cause for delay provided. Refund of IGST paid - rejection order passed without giving any reasons and also without application of mind - violation of principles of natural justice - HELD THAT - The impugned order does not disclose why the refund application has been rejected. Further, the impugned order dated 21st September 2019 appears to be from a template used and though the amount of refund being allowed is Nil, the officer has not bothered to even delete the paragraph that the amount is to be paid to the bank account specified by applicant in his application. The officer, however, has deleted the other portions. Therefore, there has been even non application of mind by respondent no. 2 and on these grounds alone, the impugned order should be set aside. Rejection of the ground of time limitation - no sufficient cause for delay provided - HELD THAT - Respondent no. 3 could not be blamed because he did not have the power to condone this delay Judicial conscience does not permit to reject this cause shown as bogus particularly in view of the fact that petitioner was an individual and the GST regime was at a nascent stage. Moreover, in both the orders impugned in the petitions there is no whisper about the merits of the application. The matter is remanded to respondent no. 2 for denovo consideration. Petitioner shall submit the deficient documents, which it says it attempted to submit on 18th September 2019 and again on 25th September 2019, within one week of this order being uploaded. Respondent no. 2 shall pass orders on the refund application in accordance with law but before passing any order, shall give a personal hearing to petitioner, notice whereof shall be communicated atleast five working days in advance. Petition disposed off.

Summary

Issues:
1. Timeliness of filing an appeal for refund of IGST.
2. Rejection of refund application without reasons and lack of application of mind.
3. Power to condone delay in filing an appeal under GST law.
4. Judicial review under Article 226 of the Constitution of India.
5. Quashing and setting aside of orders by respondent no. 2 and respondent no. 3.
6. Remand of the matter for denovo consideration.

Analysis:
1. The petitioner challenged the orders of the Assistant Commissioner and the Commissioner regarding the refund of IGST. The Commissioner rejected the appeal as it was filed 29 days late, beyond the prescribed time limit. The Court agreed with the Commissioner's decision, noting the limitation period and lack of power to extend it after the allowed one-month period.

2. The rejection of the refund application by the Assistant Commissioner was deemed arbitrary as it lacked reasons and showed a lack of application of mind. The Court found the rejection order to be template-based, with crucial details missing and signs of non-application of mind, leading to the order being set aside.

3. The Commissioner's order, citing a delay of 25 days in filing the appeal, was challenged by the petitioner, citing lack of awareness of procedures and legal expertise, difficulties in handling business matters, and the novelty of GST laws. The Court, having the power to condone the delay, accepted the reasons provided by the petitioner, considering the nascent stage of the GST regime and the individual's circumstances.

4. The Court invoked its jurisdiction under Article 226 of the Constitution of India to review the decisions and found the causes shown for delay in filing the appeal to be genuine, especially given the petitioner's lack of legal expertise and the complexity of GST laws at the time.

5. Consequently, the Court quashed and set aside both orders by respondent no. 2 and respondent no. 3, remanding the matter to respondent no. 2 for fresh consideration. The petitioner was instructed to submit deficient documents within a week, and respondent no. 2 was directed to give a personal hearing before deciding on the refund application.

6. The Court clarified that it did not determine the exact amount of refund the petitioner was entitled to, leaving the merits of the application to be decided by respondent no. 2 during the denovo consideration. Both petitions were disposed of accordingly.