Budgetary support claims must be examined unit-wise, with a reasoned order and personal hearing before partial rejection.

Budgetary support under the scheme had to be assessed unit-wise, not mechanically on the basis of a common GSTIN. Credit attributable to a non-eligible unit could not be automatically used to deny support to the eligible unit where the scheme and circular contemplated segregation of multiple business premises. A later-quarter rejection was also unsustainable because no personal hearing was given and no reasons were recorded for the partial disallowance. The claims were therefore remitted for fresh consideration after hearing the petitioner, leaving substantive entitlement open.

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Issues: (i) Whether budgetary support under the scheme had to be examined with reference to the eligible unit and whether input tax credit pertaining to a non-eligible unit operating under the same GSTIN could be ignored for computing the claim; (ii) Whether the rejection of the claim for the later quarter was sustainable when no personal hearing was afforded and no reasons were recorded for partially rejecting the claim.

Issue (i): Whether budgetary support under the scheme had to be examined with reference to the eligible unit and whether input tax credit pertaining to a non-eligible unit operating under the same GSTIN could be ignored for computing the claim.

Analysis: The scheme and the circular were treated as operating qua the eligible unit. The petitioner had two manufacturing units under the same GSTIN, but only one unit was eligible under the budgetary support scheme. The earlier rejection proceeded on the footing that the entire credit ledger balance under the common GSTIN could be used to deny support, without examining the petitioner's specific plea that the credit balance related to the other, non-eligible unit. The material on record indicated that the authority had not addressed the relevance of the segregation contemplated by the circular for multiple business premises under one GSTIN.

Conclusion: The claim required fresh consideration on the basis that credit attributable to the non-eligible unit could not be mechanically used to deny support to the eligible unit.

Issue (ii): Whether the rejection of the claim for the later quarter was sustainable when no personal hearing was afforded and no reasons were recorded for partially rejecting the claim.

Analysis: The order for the later quarter showed no notice of hearing and no explanation for the partial disallowance. Since the scheme entailed civil consequences, principles of natural justice were held to apply. An authority deciding such a claim was required to afford an opportunity of hearing and pass a reasoned order based on material put to the claimant.

Conclusion: The partial rejection was unsustainable and had to be set aside for reconsideration after hearing the petitioner.

Final Conclusion: The matters concerning both quarters were set aside and sent back for fresh decision in accordance with law after granting a personal hearing, leaving the substantive entitlement open for reconsideration.

Ratio Decidendi: A claim under the budgetary support scheme affecting civil consequences must be decided by a reasoned order after giving a personal hearing, and the claim must be assessed with reference to the eligible unit rather than mechanically on the basis of a common GSTIN where the scheme and circular contemplate unit-wise treatment.

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