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TMI Blog2021 (4) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... accumulated ITC on account of Inverted Tax structure under Section 54(3) of the CGST Act, 2017. 2.2 On scrutiny of refund application submitted by the appellant, the adjudicating authority has issued a Show Cause Notice in the Form RFD-08, dated 08-04-2020 reason being "Miss Match of ITC" and directed to the appellant to furnish a reply to show cause notice within fifteen days from the date of service of notice. Further, the adjudicating authority has rejected the refund claim amounting to Rs. 6,04,638/- and passed the impugned order in the Form of RFD-06 vide reference No. ZN0804200416904, dated 23-4-2020 reason being that the "appellant has not submitted any explanation regarding mismatch in ITC" and accordingly rejected amount of Rs. 5,04,638/ from the total claim amount Rs. 8,06,112/-. 3. Being aggrieved with the impugned order in FORM-GST-RFD-06 vide reference No. ZN0804200416904, dated 23-4-2020, the appellant has filed the appeal on 23-7-2020 on the following grounds :- (1) As per the facts and circumstances of the case the Ld. Adjudicating Authority has failed to provide opportunity of hearing to the Appellant. (1.1) It is humbly submitted that the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out considering the said reply and the existing circumstances, the Ld. Adjudicating Authority passed the Impugned Order without providing any personal hearing to the Appellant. This act of the hi Adjudicating Authority clearly proves that he was in haste to reject the refund of the Appellant and thus he has not only contravened the law but has also violated the principle of natural justice of 'audi alteram partem' (1.4) In light of above submissions and decisions, it is humbly submitted that in present case, the Ld. Adjudicating Authority has not only acted in contravention to the provisions of the CGST Act r /w CGST Rules, but also against the principle of natural justice. Hence, on this very ground only, the Impugned Order is liable to be quashed and set aside. (2) The Ld. Adjudicating Authority, has erred, in not considering Notification No. 35/2020-Central Tax, dated 3-4-2020. (2.1) Without prejudice to above submissions, it is humbly submitted that while passing the Impugned Oder, the Ld. Adjudicating Authority failed to consider extension of time limit for submitting reply as per Notification No. 35/2020-Centrel Tax, dated 3-4-2020 thereinafter referred as 'Notif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplies. Thus, in terms of Section 54(3)(b) of the CGST Act, the Appellant is liable to Get refund of the entire amount of unutilized input tax credit accumulated due to inverted duty rate structure. Further, as per Rule 89 of the CGST Rules, procedure has been prescribed according to which refund application may be filed for claiming refund. As per 89(2)(h) of the CGST Act, while filing the refund application in Form GST RFD-01, the applicant has to submit the statement containing the number and date of invoices received and issued during the tax period for which refund claim is filed in case of refund under Section 54(3)(b) of the CGST Act. The relevant rule is reproduced below : Rule 89 of CGST Rules : Application for refund of tax, interest, penalty, fees or any other amount. (2) The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in Annexure 1 in Form GST RFD-01, as applicable, to establish that a refund is due to the applicant, ..... (h) a statement containing the number and the date of the invoices received and issued during a tax period in a case where the claim pertains to refund of any unutilised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier. In such cases, it may happen that the invoices may get uploaded by the supplier in its GSTR-1, either in earlier/following month than the month in which credit of the same is taken by the recipient in its GSTR-3B. Thus, the said credit is reflected in the GSTR-2A of the registered person either in earlier or the following month. In this regard, the Circular mentions that the credit in respect of which refund is filed has to be reflected in the GSTR-2A of the recipient. However, it is nowhere mentioned that the same has to be reflected in the GSTR-2A of the month for which refund is filed. In absence of such a language, it can be inferred that the Legislature allows refund of the credit of supplies which are reflected even in the GSTR-2A of the registered person for earlier or subsequent month than the month for which refund application is filed. (3.6) In the light of above submissions, it is humbly submitted that the difference/mismatch in the Net ITC in Form GSTR-2A and GSTR-3B may occur due to various reasons. However, as mentioned above, the refund should be granted even in case of the mismatch in ITC as per the language of the provisions and the Circular. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the adjudicating authority has rejected the appellant's refund claim amounting to Rs. 6,04,638/- as appellant did not submit any explanation regarding mismatch in ITC. Further, I find that before passing the said order adjudicating authority had issued show cause notice in Form RFD-08, dated 8-4-2020 reason stated therein that it appears refund application is liable to be rejected on account of mismatch of ITC amount Rs. 6,04,638/- and it was directed to appellant to furnish a reply to this notice within 15 days from the date of service of this notice and also directed to appear before adjudicating authority on 23-4-2000. In response to the said show cause notice, appellant submitted GST RFD-09, dated 9-4-2020 where-in, he stated that he is not able to submit their reply due to lockdown period and requested to allow them to submit their reply within 7 days after lifting of lock down period and also attached a letter in this regard with the RFD-09. 8. Further, I find that the appellant has taken the main plea in their ground of appeal that adjudicating authority has rejected the refund claim without providing the opportunity of personal hearing in the instant matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent refund is allowed : Provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard. 12. In view of the above legal provisions, I find that the adjudicating authority while rejecting the refund claim of the appellant neither considered their request nor their first request for seeking adjournment of personal hearing due to COVID-19 lockdown in terms of Notification No. 35/2020-Central Tax, dated 3-4-2020. Moreover, the adjudicating authority did not discuss elaborately mismatch of ITC aspect. I also find that passing of non-speaking order indeed amount to denial of natural justice. Before passing of order their request for seeking adjournment for personal hearing in the matter should have been considered and speaking order should have been passed by giving proper opportunity of personal hearing in the matter to the appellant and detailing factors leading to rejection or refund claim should have been discussed. Else such order would not be sustainable in the eyes of law, Therefore, I remand back the case to the adjudicating authority for decide the case afresh by following the principle of natural justice and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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