2024 (11) TMI 38 - HC - GST

Refund of double tax paid by the petitioner along with interest for the month of November and December, 2020 - non-filing of GSTR-3B for the period of July 2020 to December, 2020 - HELD THAT - It is for the petitioner to claim the refund by making appropriate application before the appropriate authority in respect of the amount of tax paid by IRP as the IRP had obtained the GST registration number as per the Notification No. 11/2020 in the name of the petitioner only which has now been suspended. So far as levy of interest and penalty is concerned, it is an admitted position that the petitioner was not served with any show-cause notice as required by section 126 (3) of the Act to provide an opportunity of hearing. Therefore, the impugned order so far as confirms levy of interest and penalty upon the petitioner is concerned, the same is hereby quashed and set aside and the matter is remanded back to the adjudicating authority i.e. respondent No. 2 to issue a fresh show-cause notice to the petitioner so as to enable the petitioner to avail opportunity of hearing as provided under sub-section (3) of section 126 of the GST Act. Such exercise shall be completed within a period of Twelve weeks from the date of receipt of copy of this order. Petition disposed off by way of remand.

Summary

Issues:
1. Refund of double tax paid by the petitioner for November and December 2020.
2. Validity of penalty and interest levied without issuing a show-cause notice under section 126(3) of the CGST Act.

Analysis:

Issue 1: Refund of double tax paid by the petitioner for November and December 2020
The petitioner sought a writ of Certiorari to quash the order passed by the Commissioner, GST & Central Excise, Appeals, Vadodara-II, and a Writ of Mandamus directing respondent No. 2 to refund the double tax paid for November and December 2020. The petitioner was involved in insolvency proceedings under the Insolvency Bankruptcy Code, 2016 (IBC) since 2018. The National Company Law Tribunal (NCLT) appointed an Interim Resolution Professional (IRP) for the petitioner, who failed to obtain the required GST registration promptly. The petitioner regained control in December 2021 and paid the tax dues, which were already paid by the IRP. The appeal against the order passed by respondent No. 2 was rejected, leading to this petition. The court directed the petitioner to claim the refund by applying to the appropriate authority, considering the circumstances of the IRP obtaining GST registration in the petitioner's name, which is now suspended.

Issue 2: Validity of penalty and interest levied without issuing a show-cause notice
The petitioner argued that the interest and penalty levied by respondent No. 2 were unjust as no show-cause notice was issued, violating section 126(3) of the CGST Act. Respondent No. 2 acknowledged the absence of the requisite notice. The court found that the petitioner was indeed not provided with the opportunity of a hearing before the penalty was imposed, as mandated by the law. Consequently, the court quashed the order confirming the levy of interest and penalty, remanding the matter back to respondent No. 2. The adjudicating authority was directed to issue a fresh show-cause notice to the petitioner within twelve weeks to ensure compliance with the statutory requirement of providing an opportunity for a hearing.

In conclusion, the court disposed of the petition, granting relief to the petitioner regarding the refund and setting aside the penalty and interest levied without due process.