2021 (7) TMI 1213 - Commissioner - GST

Appellate authority remands case due to procedural errors, emphasizing natural justice principles. Fresh decision required.

IN RE : CASTROL INDIA LTD.

IN RE : CASTROL INDIA LTD. - 2021 (48) G. S. T. L. 215 (Commr. Appl. - GST - Raj.) Issues Involved:1. Rejection of refund claims under Section 54 of the CGST Act, 2017.2. Time-barred nature of refund applications.3. Violation of principles of natural justice by the adjudicating authority.Detailed Analysis:Issue 1: Rejection of Refund ClaimsThe appellant, engaged in the manufacture of lubricating oils, filed refund claims under Section 54 of the CGST Act, 2017, for taxes paid under the incorrect head (IGST instead of CGST and SGST). The refund claims were rejected by the adjudicating authority on the grounds that the applications were time-barred, as per Section 54 of the CGST Act, 2017. The appellant argued that the rejection ignored the facts and documentary evidence provided, and that the tax was paid twice due to a bona fide mistake. The appellant cited Section 77 of the CGST Act, 2017, which allows for a refund of taxes paid under the wrong head, and argued that the correct tax was paid via DRC-03 forms in December 2019.Issue 2: Time-Barred Nature of Refund ApplicationsThe adjudicating authority's rejection was based on the claim that the refund applications were filed beyond the two-year limit prescribed by Section 54(1) of the CGST Act, 2017. The appellant contended that the relevant date for calculating the time limit should be the date of payment of the correctly assessed tax (December 2019), not the date of the original incorrect payment. The appellant also argued that the GSTN portal issues prevented them from filing the refund application under the correct category, leading them to file under 'Excess payment of tax' as a precaution.Issue 3: Violation of Principles of Natural JusticeThe appellant claimed that the adjudicating authority violated the principles of natural justice by not granting an opportunity for a personal hearing and by not considering their reply to the show cause notices. The show cause notices directed the appellant to reply within fifteen days and set a hearing date within this period, which coincided with the COVID-19 lockdown. The appellant submitted their reply online within the prescribed period but could not attend the hearing due to the lockdown. The adjudicating authority proceeded to reject the claims without considering the appellant's request for an adjournment or their submitted evidence.Conclusion:The appellate authority found that the adjudicating authority failed to consider the appellant's submissions and requests for adjournment, and did not provide a proper opportunity for a personal hearing, thereby violating the principles of natural justice. The orders were deemed non-speaking and lacking in detailed reasoning. Consequently, the case was remanded back to the adjudicating authority to be decided afresh, ensuring adherence to the principles of natural justice and the issuance of a speaking order after considering all relevant submissions and documents from the appellant. The appeals were disposed of accordingly.