2022 (2) TMI 506 - HC - GST

GST Refund Claim Upheld: Assistant Commissioner Cannot Ignore Appellate Orders While Awaiting Tribunal Formation

The HC allowed the writ petition, quashing the Assistant Commissioner's order that rejected the petitioner's GST refund claim. The court held that the ... Refusal to comply with appellate order - duty to comply with orders of Commissioner (Appeals) - no prerogative to decline compliance on ground of departmental intention to appeal - requirement to decide refund claim after granting opportunity of hearingRefusal to comply with appellate order - duty to comply with orders of Commissioner (Appeals) - no prerogative to decline compliance on ground of departmental intention to appeal - requirement to decide refund claim after granting opportunity of hearing - Validity of the Assistant Commissioner's refusal to comply with the Commissioner (Appeals) orders and the consequent direction in respect of the refund claims for Q2 and Q3 (July to September 2018 and October to December 2018). - HELD THAT: - The Assistant Commissioner declined to give effect to the Commissioner (Appeals-II)'s orders dated 14/10/2019 and 29/10/2020, recording reasons as if sitting in appeal and relying on the department's decision to challenge that appellate order before the GST Tribunal. The High Court held that the Assistant Commissioner had no authority to refuse compliance with his superior authority's orders on the ground that those orders were allegedly erroneous or were intended to be impugned; such conduct effectively amounts to acting as an appellate forum. The Court quashed the impugned order and directed that the Assistant Commissioner must comply with the Commissioner (Appeals-II)'s orders, pass an appropriate order in accordance with law, and do so only after granting the petitioner an opportunity of being heard. Timelines for compliance and communication of the fresh order were imposed to secure finality; the Assistant Commissioner was expressly admonished not to refuse compliance on the basis of any departmental intention to appeal the appellate order. [Paras 11, 12]Impugned order quashed; Assistant Commissioner directed to comply with the Commissioner (Appeals-II)'s orders, hear the petitioner and pass an appropriate order in accordance with law within the stipulated time, and communicate the same to the petitioner.Final Conclusion: Writ petition allowed; the Assistant Commissioner's order dated 12/02/2021 is quashed and set aside, and the Assistant Commissioner is directed to comply with the Commissioner (Appeals-II)'s orders in relation to the refund claims for Q2 and Q3 (July to September 2018 and October to December 2018), after hearing the petitioner and within the time prescribed by the Court. Issues:1. Writ of certiorari for quashing Order rejecting refund claim.2. Refusal to comply with Order of Commissioner (Appeals-II).3. Validity of Assistant Commissioner's decision to challenge Orders before GST Tribunal.Analysis:Issue 1: The Petitioner sought a writ of certiorari to quash the Order rejecting the refund claim for Q2 and Q3. The Petitioner's appeal before the Additional Commissioner resulted in setting aside the initial rejection orders. However, the Respondent No. 3 subsequently rejected the claim again, citing a review Order directing to file an appeal against the previous decision. The Assistant Commissioner found errors in the appellate orders and held that the refund claim was filed prematurely due to pending appeals before the GST Tribunal.Issue 2: The Assistant Commissioner refused to comply with the Orders passed by the Commissioner (Appeals-II), citing a decision to challenge them before the GST Tribunal. The Court observed that the Assistant Commissioner cannot sit in appeal against the superior authority's order and must comply with it. The Court quashed the Assistant Commissioner's Order and directed compliance with the Orders in Appeal within a specified timeline.Issue 3: The Respondents attempted to justify the Assistant Commissioner's decision to challenge the appellate orders before the GST Tribunal, which was not yet constituted. The Court found that the Assistant Commissioner's refusal to comply with the superior authority's orders was unjustified. The Court directed the Assistant Commissioner to pass an appropriate order in accordance with law, granting an opportunity of being heard to the Petitioner and ensuring compliance with the appellate orders without delay.In conclusion, the Court allowed the writ petition, quashed the impugned Order, and directed the Assistant Commissioner to comply with the appellate orders within a specified timeframe. The parties were instructed to act on the authenticated copy of the Court's Order, and no costs were awarded in the matter.