2023 (3) TMI 287 - HC - GST

GST Refund Case: Authority Must Reconsider Application After Fair Hearing, Ensuring Principles of Natural Justice Are Upheld

HC allowed petition challenging GST refund rejection. Order was quashed due to violation of natural justice principles, as petitioner was not given ... Refund of GST u/s 54 of the Central Goods and Services Tax Act, 2017 and the Central Goods and Service Tax, Rules, 2017 - passed passed on the grounds, never mentioned in the show cause notice - rejection mainly on the ground that order has been passed in violation of principle of natural justice and being a non-speaking and cryptic order - HELD THAT:- The order has been passed on those grounds which were never mentioned in the show cause notice. Even the petitioner was not granted an opportunity to meet with the grounds, upon which, the impugned order has been passed. The petition requires consideration - the impugned order dated 13.7.2021 passed by the respondent no.3- Deputy Commissioner of Sales Tax is hereby quashed and set aside. The respondent authority is directed to decide the case afresh after giving an opportunity of hearing to the petitioner and in accordance with law - petition allowed by way of remand. Issues:Challenge to order rejecting GST refund application under Section 54 of CGST Act, 2017 on grounds of violation of natural justice and non-speaking order.Analysis:The petitioner challenged the order rejecting their application for GST refund under Section 54 of the Central Goods and Services Tax Act, 2017, and the Central Goods and Service Tax Rules, 2017. The order was contested on the basis of being passed in violation of the principle of natural justice and being non-speaking and cryptic. The petitioner argued that they were not given an opportunity to address the grounds on which the order was based, which were not mentioned in the show cause notice. The petitioner's advocate referred to a similar case where the authority was directed to reconsider the refund application after providing a hearing to the petitioner.The High Court, after hearing both parties, found merit in the petitioner's argument regarding the lack of opportunity to address the grounds of the order. The Court held that the impugned order was passed on grounds not mentioned in the show cause notice, thus violating the principles of natural justice. Consequently, the Court quashed and set aside the order dated 13.7.2021 passed by the Deputy Commissioner of Sales Tax. The respondent authority was directed to reconsider the case after affording a hearing to the petitioner and in accordance with the law. The Court specified that the decision should be made within 12 weeks from the date of the order and clarified that the case was not examined on its merits. The rule was made absolute to the extent mentioned, and no costs were awarded in this matter.