Rejection of CGST refund due to wrong provision citation is improper; natural justice requires hearing before adverse findings

The HC held that rejection of the CGST refund claim based on citation of a wrong provision or typographical error was improper, as the petitioner was entitled to the refund. The appellate authority erred by not adjudicating the claim on merits and dismissing it on a technicality. Further, adverse findings without affording the petitioner an opportunity of hearing violated natural justice. Consequently, the impugned orders were quashed, and the matter was remitted to the appellate authority for fresh determination in accordance with the court's observations. The petition was allowed by way of remand.

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The Allahabad High Court, through Hon'ble Ajay Bhanot, J., quashed the impugned orders rejecting the petitioner's refund claim of excess CGST due to a technical error wherein the refund amount was mistakenly filed under the IGST head instead of the CGST head in form GST RFD 01. The appellate authority had held the petitioner ineligible under Section 77(1) of the CGST Act, 2017, citing lack of evidence and incorrect filing. The Court emphasized that "citation of a wrong provision or typographical error in the forms submitted... cannot be the basis for rejecting the substantive claims" and that the claim must be adjudicated on merits. Further, the appellate authority's adverse finding that the petitioner failed to adduce evidence was made without notice or opportunity of hearing, violating principles of natural justice. Accordingly, the Court allowed the writ petition, quashed the impugned orders dated 29.12.2023 and 03.12.2024, and remitted the matter for fresh adjudication by the competent authority in light of these observations.

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