Virtual hearing record safeguards are mandatory; non-compliance with hearing procedure violated natural justice in refund rejection.

Refund proceedings under the Section 104 mechanism required compliance with the prescribed virtual hearing procedure, including recording the submissions as a personal hearing record and communicating it to the appellant for verification or correction within the stipulated time. The appellate authority conducted the hearing through video conferencing but did not follow that procedure. Because the safeguards were intended to ensure fairness in virtual hearings, the non-compliance amounted to denial of a meaningful opportunity of hearing. The appellate order rejecting the refund claim was therefore vitiated by breach of natural justice and was liable to be set aside.

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Issues: Whether the appellate order rejecting the refund claim was vitiated for non-compliance with the prescribed procedure for virtual hearing and maintenance of the record of personal hearing, thereby violating principles of natural justice.

Analysis: The refund claim arose from the statutory exemption and refund mechanism introduced by Section 104 of the Finance Act, 1994. The hearing before the appellate authority was conducted through video conferencing, and the applicable instructions required the submissions to be reduced into a record of personal hearing and communicated to the appellant for verification or correction within the stipulated time. The order showed non-compliance with that procedure. Since the procedure was designed to secure fairness in virtual hearings, its breach amounted to denial of a meaningful opportunity of hearing.

Conclusion: The appellate order was vitiated by violation of the principles of natural justice and was liable to be set aside.

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