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2023 (7) TMI 643 - HC - GSTRejection of refund claim - petitioner not replied to SCN - opportunity of hearing not provided to petitioner - violation of principles of natural justice - HELD THAT - It is known fact that from 23rd March 2020 onwards, there was a total disruption of the normal human activities as also of every economic activity world over, on account of the pandemic. The whole world had virtually come to a stand still. It is, however, surprising that the show cause notice was issued during the pandemic that is on 30th September 2020, certainly it could not be expected that the Petitioner could immediately reply to the same. Thus, the reason as furnished for extension of time to file a reply to the show cause notice by the Petitioner on account of pandemic was a sufficient reason. The Respondent No. 2, in these circumstances, ought to have given a reasonable time for the Petitioner to file its reply, however, Respondent No. 2 gave only three days to file the reply, which cannot be termed on the facts of the present case any reasonable time or an adequate opportunity of a hearing - This application of the Petitioner has not been rejected by Respondent No. 2 and, therefore, Respondent No. 2 cannot be said to have given adequate opportunity of hearing to the Petitioner to reply to the show cause notice. The impugned order is required to be set aside on account of violation of principle of natural justice - Petition allowed.
Issues Involved:
The issues involved in the judgment are the rejection of a refund application by the Assistant Commissioner of State tax without providing adequate opportunity of hearing to the Petitioner, and the violation of the principle of natural justice due to the rejection order. Issue 1: Rejection of Refund Application without Adequate Opportunity of Hearing The Petitioner, engaged in the business of 'placement and supply service of personnel,' applied for a refund of IGST, CGST, SGST for a specific period. Respondent No. 2 issued a show cause notice pointing out defects in the refund application and granted a short extension of three days for the Petitioner to reply. The Petitioner requested a longer extension due to the pandemic, which was only partially granted. The rejection of the refund application by Respondent No. 2 was based on the Petitioner not replying to the show cause notice within the limited time provided. The Petitioner argued that the rejection without a proper hearing violated natural justice and requested the matter to be restored for fresh adjudication. Issue 2: Violation of Principle of Natural Justice The Respondent contended that adequate opportunity of hearing was provided to the Petitioner through the show cause notice and the short extension granted. However, the Court found that the Petitioner's request for an extension of two weeks due to the pandemic disruption was reasonable. The Court noted the global disruption caused by the pandemic and criticized the short time given to the Petitioner to respond. Despite the Petitioner's repeated requests for a longer time, the Respondent did not reject the extension request, indicating a lack of adequate opportunity for the Petitioner to present their case. Consequently, the Court held that the rejection of the refund application was unjustified and set aside the order, directing a fresh show cause notice, reply period, and a speaking order with a personal hearing opportunity. Separate Judgment: No separate judgment was delivered by the Judges in this case. This summary highlights the key issues addressed in the judgment, focusing on the rejection of the refund application without proper hearing and the subsequent violation of the principle of natural justice. The Court emphasized the importance of providing adequate opportunity for the Petitioner to present their case, especially considering the extraordinary circumstances of the pandemic.
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