2024 (8) TMI 953 - HC - GST

Rejection of refund application of the petitioner - order has been passed without any application of mind and without considering the reply filed by the petitioner - violation of principles of natural justice - HELD THAT - On perusal of the documents that the situation is otherwise, while the respondents have rejected the refund claim application, reasons for rejecting the refund and amount, have been given in the detailed order attached with it. In the detailed order of rejection, after considering the nature of business of the petitioner, the authority has noticed that there were certain deficiencies, as observed in the refund application, which were pointed out to the petitioner. Thereafter, petitioner has failed to meet-out the said deficiencies. It is also noticed that there is a specific provision for filing of appeal against the said order. Petitioner has, however, chosen not to file an appeal and has directly approached this Court. It is well settled that under Article 226/227 of the Constitution of India, the Appellate Authority not acted upon and factual aspects are not required to be examined by us. It is only in rarest of rare cases, when this Court would directly entertain a writ petition, more so, in cases, where there is a blanket violation of provision of law. Moreover, under Article 226 of the Constitution of India, exercising the jurisdiction like an appellate Court, is neither warranted nor appreciated by the Hon ble Apex Court. Thus, as per the dictum of the Hon ble Apex Court, rendered in SYED YAKOOB VERSUS KS. RADHAKRISHNAN 1963 (10) TMI 26 - SUPREME COURT , this Court does not find any substantial reason to deviate from the view point taken by the learned Tribunal. The Hon ble the Apex Court has unequivocally established that the jurisdiction of the High Courts under Article 226, while issuing the writ of Certiorari, is limited. It is primarily aimed at rectifying the errors of jurisdiction or instances of violation of the principles of natural justice. Therefore, it constitutes a supervisory role, and High Courts ought to abstain from assuming the function of an appellate court while dealing with the issue of writ of Certiorari. High Courts should refrain from re-examining the evidence, particularly with regards to its sufficiency or adequacy. While exercising its power under Article 226 of the Constitution, High Court must cause interference only when there is error of law, which requires correction and not in general, when there is error of fact. The canvas at the level of Appellate Authority, is much larger than the scope at the writ petition. The petitioner ought to have failed to avail the remedy of appeal, should have been now, we allow the petitioner to go in appeal, if so advised - petition dismissed.

Summary

Issues:
1. Rejection of refund application without proper consideration and reasons.
2. Allegation of non-application of mind in passing the order.
3. Comparison with a similar case of non-application of mind.
4. Reference to a judgment by Delhi High Court regarding remand for fresh examination.
5. Examination of reasons for rejecting the refund application.
6. Authority's observation of deficiencies in the refund application.
7. Petitioner's failure to address deficiencies despite being given an opportunity.
8. Jurisdiction of High Court under Article 226/227 of the Constitution.
9. Limitation of High Court's jurisdiction as a supervisory role.
10. Emphasis on rectifying errors of jurisdiction or violation of natural justice principles.
11. The need for an error of law for High Court's interference.
12. Restraint from acting as an appellate court under Article 226.
13. Reference to Supreme Court judgments on the limits of High Court's jurisdiction.
14. Dismissal of the writ petition and direction to avail remedy through the Appellate Authority.

Analysis:
The judgment pertains to the rejection of a refund application by the petitioner, challenged on grounds of non-consideration and lack of reasons. The petitioner argued that the order lacked proper application of mind and failed to address the reply filed. Reference was made to a similar case where non-application of mind was alleged. Additionally, a judgment by the Delhi High Court was cited, emphasizing the need for a fresh examination in such cases. However, upon scrutiny, the High Court found that the detailed order of rejection did provide reasons for the decision. The authority identified deficiencies in the petitioner's application, including discrepancies in tax liabilities and pending demands. Despite being given an opportunity to address these issues, the petitioner did not rectify the deficiencies, leading to the rejection of the refund claim.

The High Court highlighted the limited jurisdiction under Article 226/227 of the Constitution, emphasizing a supervisory role aimed at rectifying errors of jurisdiction or violations of natural justice principles. It was noted that the High Court should not act as an appellate authority and should only intervene in cases of errors of law, not errors of fact. Citing precedents, the judgment reiterated the need for a clear error of law for the High Court to intervene. The Court emphasized that findings of fact by the tribunal cannot be challenged unless there is a legal error apparent on the record.

Ultimately, the High Court dismissed the writ petition, directing the petitioner to pursue remedies through the Appellate Authority. The Court stressed that the scope of examination at the appellate level is broader than in a writ petition and that the petitioner should have availed the remedy of appeal. The judgment concluded by allowing the petitioner to file an appeal within a specified period, ensuring that the Appellate Authority would decide on the merits without the issue of limitation.