2024 (1) TMI 321 - HC - GST

Rejection of Refund claim - tax evasion - HELD THAT - It is a clear stand of Revenue that this is not a case of any defect in the application for refund but instead is a case of tax evasion as detected in the inquiry conducted by Revenue, for which separate notice has been issued to petitioner. Accordingly, it is obvious that this case involves disputed questions of fact which ought not to be gone into while exercising writ jurisdiction under Article 226 of the Constitution. This Court declines interference and relegates petitioner to avail remedy of appeal u/S 107 of the GST Act, which if availed by filing an appeal u/S 107 of the GST Act by petitioner within a period of 30 days from today alongwith copy of this order, the same shall be entertained and decided on merits without being dismissed on limitation alone. Petition disposed off.

Summary

Issues involved:
The issues involved in this case are the quashment of the order rejecting a claim for refund u/s 54 of the CGST Act, violation of principles of natural justice, and the availability of the remedy of appeal u/s 107 of the GST Act.

Quashment of Order:
The petitioner filed a petition seeking the quashment of an order rejecting their claim for refund u/s 54 of the CGST Act. The rejection was based on the grounds that the petitioner was not entitled to a refund and that their case appeared to be one of tax evasion. The petitioner contended that they were not afforded a reasonable opportunity to be heard as required by Rule 92 of the GST Rules. The Revenue argued that the petitioner was not entitled to a refund and that the remedy of appeal u/s 107 of the GST Act had not been availed by the petitioner.

Violation of Principles of Natural Justice:
The petitioner argued that there was a gross violation of principles of natural justice as they were not given an opportunity to rectify any deficiencies in their refund application as required by Rule 90 of the CGST Rules. The Revenue contended that the case was not about deficiencies but about the petitioner not being entitled to a refund. The Court noted that the show cause notice had been issued to the petitioner and their response had been received, fulfilling the requirement of compliance with the rules of natural justice.

Availability of Remedy of Appeal:
The Court observed that the case involved disputed questions of fact, which should not be addressed under Article 226 of the Constitution. Consequently, the Court declined to interfere and directed the petitioner to avail the remedy of appeal u/s 107 of the GST Act. The petitioner was given 30 days to file an appeal, and it was emphasized that no comments on the merits of the claim had been made. The petition was disposed of with the liberty to file an appeal within the specified period.