2020 (12) TMI 1039 - Commissioner - GST

Appeals allowed due to lack of hearing violating natural justice principles

M/s State Bank of India Versus Assistant Commissioner Central Goods and Service Tax Division-H, Jaipur

The appeals involved refund claims under Section 54 of the CGST Act, 2017, rejected by the adjudicating authority due to deficiencies. The appellant ... Refund of the tax paid - tax paid under protest - Reverse Charge Mechanism - refund claim rejected on the ground that the appellant has not submitted the final outcome of the referred SCN whether the issue has been finally decided in favour of the assessee or not - HELD THAT:- The refund claims filed by the appellant is not covered by any of the refund category mentioned in Section 54 and claimed under any other category and there is no specific provision for refund of the tax paid under RCM. The appellant bas mainly contested in their appeal memo that the adjudicating authority has passed the ex-parte order and had not granted any opportunity of hearing and rejected the refund claim filed by them. Further, they stated that the show cause notice dated 14.10.2019 for fixing the date of personal hearing in the matter fixed on 18.10.2019 was received on 16.10.2019, since the matters are being handled centrally from their Corporate Centre, Mumbai and not possible at a very short period of time to attend the hearing - But instead of giving some time and accepting the request of the appellant for seeking of time to submit the reply, the adjudicating authority has passed the Orders-in-Original rejecting the refund claims filed by the appellant. Thus, the appellant did not avail the opportunity of personal hearing and without considering his submission the adjudicating authority has passed the order. The adjudicating authority while rejecting the refund claims of the appellant neither considered their first request for seeking 15 days time to submit reply to show cause notice nor granted any sufficient opportunity of time to attend the personal hearing despite their written request dated 22.10.2019 - Also, non-passing of speaking order indeed amount to denial of natural justice. Before passing of orders atleast their request for seeking 15 days time to submit their reply to show cause notice should have been considered and at least speaking order should have been passed by giving proper opportunity of personal hearing to the appellant and detailing factors leading to rejection of refund claims. Such order is not sustainable in the eyes of law and accordingly set aside. Appeal allowed by way of remand. Issues:- Refund claims under Section 54 of the CGST Act, 2017 rejected by the adjudicating authority.- Lack of submission of final outcome of the referred SCN.- Appellant's contention of passing ex-parte order without granting a hearing.- Applicability of natural justice principles in rejecting refund claims.- Rejection of refund claims without sufficient opportunity of hearing.- Non-consideration of appellant's request for additional time for reply.- Denial of natural justice due to non-passing of speaking order.- Directions for submission of relevant documents and processing of claims.Analysis:The appeals involved refund claims filed by the appellant under Section 54 of the CGST Act, 2017, for ITC of 50% of IGST paid under reverse charge mechanism. The adjudicating authority rejected the refund claims due to deficiencies, including the non-submission of the final outcome of the referred SCN. The appellant contested that the orders were passed ex-parte without granting a proper hearing, violating natural justice principles. The appellant argued that the GST law mandates providing an opportunity for a hearing before rejecting refund applications. The adjudicating authority failed to consider the appellant's request for additional time to respond to the show cause notice, leading to a denial of natural justice.During the personal hearing, the appellant reiterated their grounds of appeal and requested a fair decision. The Additional Commissioner found that the adjudicating authority had not granted a proper opportunity for a hearing and rejected the refund claims without due consideration. It was noted that the rejection without a speaking order amounted to a denial of natural justice. The Additional Commissioner set aside the impugned orders and directed the appellant to submit all relevant documents for further processing by the adjudicating authority in accordance with the provisions of the CGST Act, 2017, and CGST Rules.In conclusion, the appeals were disposed of by setting aside the orders rejecting the refund claims. The Additional Commissioner emphasized the importance of following natural justice principles, granting sufficient opportunity for a hearing, and passing speaking orders in such matters. The appellant was directed to comply with the prescribed procedures for the processing of their refund claims, ensuring a fair and transparent adjudication process.