2019 (1) TMI 610 - HC - GST

Refund of integrated tax (IGST) - opportunity of personal hearing - principles of natural justice - Held that - It is evident that the respondent has chosen to pass the impugned order not only by ignoring the reply submitted by the petitioner dated 13.07.2018, filed in response to the deficiency memo dated 04.07.2018 and also in violation of the principles of natural justice, as admittedly the petitioner was not afforded with the personal hearing, even though such request was specifically made by the petitioner through their reply dated 13.07.2018. Perusal of the impugned order would show that the respondent has chosen to reiterate the deficiencies already pointed out in the deficiency memo, as the reason for rejecting the refund application, without considering the explanation given by the petitioner, as to how such deficiencies pointed out by the respondent are either improper or not warranted - this Court is of the view that the respondent should consider the application already filed by the petitioner once again on merits based on the petitioner s reply dated 13.07.2018 and also after affording a personal hearing to the petitioner - petition allowed by way of remand.

Summary

Issues:
Petitioner's refund claim rejection without considering explanations or providing a personal hearing.

Analysis:
The petitioner sought a refund of integrated tax amounting to ?75,67,642 based on grounds mentioned in their refund application. The respondent issued a deficiency memo pointing out certain deficiencies and advised the petitioner to file a fresh refund application after rectification. The petitioner replied, explaining that the application was in order and requested a personal hearing if the respondent disagreed. However, the impugned order rejecting the refund claim was passed without considering the petitioner's explanations or providing a personal hearing. The petitioner argued that the deficiencies pointed out were not factually correct, and a personal hearing should have been granted.

The respondent contended that the petitioner should have filed a fresh refund application instead of requesting a reconsideration. Although the respondent admitted to not providing a personal hearing, it was argued that it was not necessary in the circumstances. The Court noted that the respondent passed the impugned order ignoring the petitioner's reply and in violation of natural justice by not affording a personal hearing despite the petitioner's request. The Court refrained from expressing a view on the merits of the refund claim but directed the respondent to reconsider the application based on the petitioner's reply and provide a personal hearing.

The Court found that the respondent rejected the refund application without considering the petitioner's explanations and reiterated the deficiencies without proper evaluation. Consequently, the impugned order was set aside, and the matter was remitted back to the respondent for a fresh decision within six weeks. The Court emphasized the need for the respondent to consider the petitioner's reply and provide a personal hearing before passing a new order. No costs were awarded, and the case was closed.