Court grants relief under Article 226 for violation of natural justice principles in refund rejection order.

The court found in favor of the petitioner, emphasizing the violation of natural justice principles in the refund rejection order. Despite the availability of an alternative remedy for appeal, the court allowed the writ petition under Article 226 due to the breach of fundamental rights. The impugned order was quashed, and the case was remanded for a fresh decision, directing respondent No.1 to provide the petitioner with a proper opportunity to be heard in accordance with the law.

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Issues:
1. Refund rejection order challenged on grounds of violation of natural justice.
2. Availability of alternative remedy under Section 107 for appeal.
3. Adjudicating authority's denial of opportunity of being heard before rejecting refund claim.
4. Violation of principles of natural justice and Article 14 of the Constitution.
5. Consideration of writ petition under Article 226 despite alternative remedy.

Issue 1: Refund Rejection Order and Violation of Natural Justice
The petitioner challenged the refund rejection order issued by respondent No.1, alleging that it violated the provisions of the Central Goods and Service Tax Act, 2017, and the Rules framed thereunder. The petitioner contended that the order was passed without granting an opportunity of being heard, which is a violation of the principles of natural justice. The petitioner had submitted a refund claim, which was initially questioned on the grounds of being time-barred. However, after the petitioner explained the delay citing relevant notifications due to the COVID-19 pandemic, the claim was processed and ultimately rejected without further notice or opportunity for the petitioner to present their case on the merits.

Issue 2: Availability of Alternative Remedy under Section 107
The Advocate General for the respondents raised a preliminary objection regarding the maintainability of the petition, citing the availability of an alternative remedy under Section 107 for appeal before the Appellate Authority. However, the petitioner argued that the impugned order not only lacked clarity but also breached the principles of natural justice. The court acknowledged that while an alternative remedy exists, the violation of fundamental rights or natural justice can still warrant a writ petition under Article 226 of the Constitution.

Issue 3: Denial of Opportunity of Being Heard
The court emphasized that the petitioner, as per Section 54 of the Act and Rule 92 of the Central Goods and Service Tax Rules, should have been given an opportunity of being heard before the rejection of the refund claim. It was noted that the impugned order failed to adhere to the proviso to Rule 92(3) of the Rules of 2017, which necessitates granting such an opportunity. The unilateral decision to reject the claim without affording the petitioner a chance to present their case on the merits was deemed a violation of natural justice.

Issue 4: Violation of Principles of Natural Justice and Article 14
The court agreed with the petitioner's contention that the impugned order, passed without providing an opportunity of being heard, was fundamentally flawed and violated the principles of natural justice. It was highlighted that such orders, which contravene natural justice principles and Article 14 of the Constitution of India, can be challenged through a writ petition under Article 226, despite the availability of an alternative statutory remedy.

Issue 5: Consideration of Writ Petition under Article 226
In light of the alleged violation of natural justice, the court held that the availability of an alternative statutory remedy does not bar the consideration of a writ petition under Article 226. Citing exceptions recognized by the Supreme Court, the court concluded that in cases involving violations of natural justice, the writ jurisdiction can be exercised even when an alternative remedy exists. The court allowed the petition, quashed the impugned order, and remanded the case back to respondent No.1 for a fresh decision after providing the petitioner with a proper show cause notice and an opportunity to be heard.

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