2020 (10) TMI 848 - Commissioner - GST

Principles of Natural Justice - Refund of accumulated ITC - export of goods/services without payment of tax - rejection on the ground that the appellant has submitted their refund claim on portal but no relevant documents has been provided physically thus refund claim found inadmissible in terms of Para 7 of Circular No.79/53/2018-GST dated 31.12.2018 issued by the CBIC - case of appellant is that neither Deficiency memo was served, nor opportunity of hearing was provided to appellant - HELD THAT - The appellant has mainly contested in their appeal memo that adjudicating authority had not issued any deficiency memo in Form RFD-03 and show cause notice in the Form of RFD-08. Also, no opportunity of being heard has been given - As per sub rule (3) of Rule 90 of the CGST Rules, 2017- Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application after rectification of such deficiencies. The adjudicating authority while rejecting the refund claims of the appellant neither given any show cause notice in the FORM RFD-08 nor issued any deficiency memo in the FORM RFD-03 to the appellant and also not granted any opportunity of personal hearing. I also find that non-passing of speaking order indeed amount to denial of natural justice. Show Cause Notice should have been issued and at least speaking order should have been passed by giving proper opportunity of personal hearing to the appellant and detailing factors leading to rejection of refund claim. Such order is not sustainable in the eyes of law and accordingly set aside. The appellant is directed to submit all relevant documents to the adjudicating authority and the claims will be processed as per the provisions and procedure as per prescribed under CSGT Act, 2017 and CCST Rules - Matter on remand.

Summary

Issues:
Refund claim rejection without issuance of show cause notice, deficiency memo, and opportunity of being heard under GST Law and principles of natural justice.

Analysis:
The Commissioner (Appeals) Central Goods and Service Tax, Jaipur addressed two appeals filed by M/s Social Scape Tech LLP against Orders-in-Original passed by the Assistant Commissioner, Central Goods & Service Tax Division-H, Jaipur. The appeals were filed under Section 107 of the Central Goods and Service Tax Act, 2017. The appellant sought refund claims under Section 54 of the CGST Act, 2017 for different periods related to the accumulation of Input Tax Credit (ITC) due to export of services or goods/services. However, the refund claims were rejected by the adjudicating authority based on the absence of physical submission of relevant documents despite being filed on the portal, rendering them inadmissible as per Circular No. 79/53/2018-GST.

The appellant contested the rejection of the refund applications on various grounds, primarily arguing the violation of GST Law and principles of natural justice. They claimed that the rejection lacked the issuance of a show cause notice, deficiency memo in GST RFD-03, and an opportunity of being heard. The personal hearing for both cases was conducted through video conference, where the appellant's representative detailed the case and requested a prompt decision.

Upon reviewing the case records and submissions, the Commissioner found that the adjudicating authority failed to follow the prescribed procedures. Specifically, it was noted that no deficiency memo in Form RFD-03 or show cause notice in the Form of RFD-08 was issued to the appellant, and no opportunity of being heard was provided. The Commissioner highlighted the importance of adhering to the rules under the CGST Act, 2017, emphasizing the necessity of issuing show cause notices and providing opportunities for personal hearings before rejecting refund claims.

Referring to Rule 90 and Rule 92 of the CGST Rules, 2017, the Commissioner emphasized the requirement for proper communication of deficiencies and the issuance of notices before rejecting refund claims. The failure to issue a speaking order and provide an opportunity for the appellant to be heard was deemed a denial of natural justice. Consequently, the Commissioner set aside the rejection of the refund claims and directed the appellant to submit all relevant documents for processing in accordance with the prescribed provisions and procedures under the CGST Act, 2017 and CGST Rules.

In conclusion, both appeals were disposed of in favor of the appellant, emphasizing the importance of following due process and principles of natural justice in adjudicating refund claims under the GST Law.