Court quashes refund rejection, mandates fair hearing for petitioner under CGST Rules

The Court quashed the orders confirming the rejection of the petitioner's refund application under the CGST Rules, 2017, as the petitioner was not afforded a hearing as mandated by Rule 92(3). The matter was remanded to the second respondent for reconsideration, with directions to provide a fair hearing to the petitioner and make a final decision within twelve weeks. The Court disposed of the writ petition without costs.

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Issues:
Challenge to Order in Appeal confirming rejection of refund application under CGST Rules, 2017 without affording hearing to petitioner.

Analysis:
The writ petition challenged the Order in Appeal confirming the rejection of the petitioner's application for refund under the Central Goods and Services Tax Rules, 2017. The petitioner contended that Rule 92(3) of the CGST Rules required the second respondent to hear the petitioner before rejecting the refund application. It was argued that the second respondent passed the rejection order without providing adequate opportunity for the petitioner to be heard. The Appellate Authority failed to remand the matter back to the second respondent for fresh consideration despite acknowledging the lack of hearing. The petitioner emphasized that the failure to grant a hearing violated Rule 92(3) of the CGST Rules, 2017.

The Court noted that Rule 92(3) of the CGST Rules mandates that no refund application should be rejected without giving the applicant an opportunity to be heard. The first respondent's order confirmed that no hearing was granted to the petitioner by the second respondent, yet the appeal was dismissed. The Court observed that both the second respondent and the first respondent had disregarded the requirement of providing a hearing before rejecting the refund application. Consequently, the Court ruled that the petitioner's refund application must be reconsidered on its merits in compliance with the law, ensuring the petitioner is given a fair hearing by the second respondent.

Therefore, the impugned orders dated 27.03.2019 and 20.08.2020 were quashed, and the matters were remanded to the second respondent for fresh consideration. The second respondent was directed to make a final decision on the refund application within twelve weeks from the date of receipt of the court's order, ensuring the petitioner's right to a fair hearing. The writ petition was disposed of without any costs being imposed.

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