Unregistered Flat Buyers Win GST Refund Battle: Judicial Order Mandates Reconsideration of Claim Within 12 Weeks

HC remanded GST refund case for unregistered flat purchasers, quashing the original rejection order. The court directed Respondent to reconsider the Petitioners' refund claim within 12 weeks, ensuring procedural fairness and opportunity to present their case under evolving tax policy guidelines.

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Issues:
The case involves a dispute regarding the entitlement of the Petitioners to claim refund of Goods and Services Tax (GST) under section 54 of the Goods and Services Tax (GST) Act, 2017. The Petitioners allege a breach of principles of natural justice in the order passed by Respondent No. 1 rejecting their refund claim.

Entitlement to Refund of GST:
The Petitioners had entered into an agreement for sale of a residential flat with Respondent No. 6, leading them to believe they were entitled to claim a GST refund. However, Respondent No. 1 rejected their refund application, stating that individuals like the Petitioners are not eligible for such refunds. The Petitioners skipped the appeal process, claiming the order breached natural justice principles. Respondent No. 1 highlighted changes in refund application procedures for unregistered persons post the order, indicating a need for reconsideration.

Breach of Principles of Natural Justice:
The Court acknowledged the need to remand the proceedings if a breach of natural justice is proven, allowing the Petitioners an opportunity for refund claim reconsideration. Considering the evolving policy for refund applications by unregistered persons and the Petitioners' status as flat purchasers, the Court deemed it necessary to grant the Petitioners a chance to have their refund claim reassessed. The Court emphasized that the decision on the refund claim lies with Respondent No. 1, based on the policy and merits, after providing adequate opportunity to the Petitioners as per statutory provisions.

Judgment:
The High Court quashed and set aside the impugned order dated 8 September 2022, restoring the Petitioners' application to the Deputy Commissioner of State Tax for reconsideration. The Court directed the Respondent to decide on the application within twelve weeks from the date of the order upload, emphasizing a time-bound commitment. Consequently, the Writ Petition was disposed of in accordance with the Court's decision.

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