Natural justice in GST refund claims requires fair consideration of transporter declarations before rejecting excess service tax refunds.

Refund of excess Service Tax paid on GTA services was rejected for alleged non-production of transporter declarations and on the ground that incidence of tax had been passed on. The record showed that only a sample declaration had been considered and the assessee was not given an effective opportunity to place all relevant declarations and supporting material on record. Since those documents were material to verification of the refund claim, the failure to consider them and to afford a reasonable hearing violated natural justice. The rejection orders were therefore set aside and the matter remanded for fresh adjudication after examination of the declarations.

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Issues: Whether the rejection of refund of excess Service Tax paid on GTA services, on the ground of non-production of transporter declarations and alleged passing on of incidence, was vitiated by denial of a reasonable opportunity and liable to be remanded for fresh adjudication.

Analysis: The refund claim arose from payment of Service Tax on GTA services without availing the abatement under Notification No. 32/2004. The lower authorities rejected the claim for want of complete declarations from transporters and on the premise that the incidence had not been shown to remain with the appellant. The appellate record showed that only a sample declaration had been considered at the adjudication stage and that the appellant was not afforded an effective opportunity to place all relevant declarations and supporting material on record. The lower appellate authority also did not provide a proper opportunity to meet the case against it. Since the declarations were relevant to verification of the refund claim, refusal to consider them amounted to violation of natural justice.

Conclusion: The rejection orders were set aside and the matter was remanded to the original adjudicating authority for fresh consideration after examining the declarations and granting a reasonable opportunity to the appellant.

Ratio Decidendi: Where material documentary evidence relevant to a refund claim has not been fairly considered and the assessee is denied a reasonable opportunity to produce it, the adjudication is vitiated and the matter must be remanded for fresh decision.

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