High Court overturns decision denying refund application citing lack of reasons, orders fresh hearing and decision. The High Court of Bombay set aside the Order rejecting the Petitioner's refund application as it failed to provide reasons as required by Rule 92(3) of ...
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High Court overturns decision denying refund application citing lack of reasons, orders fresh hearing and decision.
The High Court of Bombay set aside the Order rejecting the Petitioner's refund application as it failed to provide reasons as required by Rule 92(3) of the Central Goods and Services Tax Rules, 2017. The Court deemed the absence of reasons in the Order as a violation of the rule and directed the Respondent to issue a fresh Order after giving the Petitioner an opportunity to be heard. The Petitioner was instructed to attend a personal hearing, and the Respondent was required to issue a new decision within three weeks of the hearing, independent of the previous Order, and communicate the outcome promptly.
Issues: Challenge to rejection of refund application without recording reasons as per Rule 92(3) of Central Goods and Services Tax Rules, 2017.
In the judgment delivered by the High Court of Bombay, the Petitioner had filed a petition under Article 226 of the Constitution of India challenging the Order dated 15th June 2020 passed by Respondent No.3, which rejected the application for refund made by the Petitioner. The main ground of challenge was that the Respondent No.3 failed to record reasons in the Order as required by Rule 92(3) of the Central Goods and Services Tax Rules, 2017. The Court observed that the impugned Order did not provide any reasons for the rejection, which was deemed mandatory under the said rule. Consequently, the Court held that the Order was in violation of the provisions and needed to be set aside. The Respondent No.3 agreed to pass a fresh Order in compliance with Rule 92(3) after giving the Petitioner an opportunity to be heard promptly. As a result, the Court quashed and set aside the impugned Order, restoring the refund application to be filed again before Respondent No.3. The Petitioner was directed to appear for a personal hearing on a specified date, and the Respondent No.3 was instructed to pass a fresh Order within three weeks of the hearing, not being influenced by the previous Order, and convey the decision to the Petitioner within a week of passing the new Order, if the refund application was allowed.
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