2024 (6) TMI 1237 - HC - GST

Recovery of erroneous refund on account of inverted duty structure - SCN does not provide any particulars beyond stating that an excess refund was made to the petitioner on account of inverted duty structure - Violation of principles of natural justice - HELD THAT - On examining the impugned order, it is noticeable that the only reason specified therein is that the CAG para pointed out that the taxpayer was issued excess refund on account of inverted duty structure and that the excess amount is Rs. 7,51,961/-. Unless the show cause notice sets out sufficient particulars to enable the assessee to understand the nature of claim being made against such assessee, it is not possible for such assessee to respond in a meaningful way to the show cause notice. In this case, both the SCN and the impugned order are bereft of particulars. Therefore, the order calls for interference. The impugned order is quashed and the matter is remanded for re-consideration. The respondents are directed to issue a fresh show cause notice to the petitioner setting out all relevant particulars so as to enable the petitioner to respond thereto - Petition disposed off by way of remand.

Summary

Issues involved:
Challenge to order for liability of erroneous refund and lack of particulars in show cause notice.

Analysis:
The petitioner, engaged in manufacturing machines, accumulated unutilized ITC due to inverted duty structure. Refund claims were made and received. After a show cause notice, the petitioner requested a break-up of the specified erroneous refund amount of Rs. 7,51,961/- but did not receive it. The impugned order was issued without providing the requested particulars, leading to a challenge by the petitioner.

The petitioner argued that the show cause notice lacked particulars on how the erroneous refund amount was calculated, hindering the ability to respond effectively. The impugned order only cited a CAG para mentioning the excess refund without providing detailed breakdown. The lack of specifics in both the notice and order rendered it difficult for the petitioner to understand the claim against them and respond appropriately.

The Additional Government Pleader for the respondents acknowledged the excess refund mentioned in the notice but failed to provide further details or breakdown despite the petitioner's requests. The court emphasized that without adequate particulars in the show cause notice, the assessee cannot respond meaningfully, necessitating interference in the order.

As a result, the court quashed the impugned order and remanded the matter for reconsideration. The respondents were directed to issue a fresh show cause notice with all relevant particulars to enable the petitioner to respond properly. The subsequent proceedings were to be conducted in accordance with the law. The case was disposed of without costs, and related applications were closed.