Export proceeds realization proof and foreign remittance documents in rectification request; rejection set aside for natural justice breach, remanded.

The dominant issue was whether rejection of a rectification application concerning proof of realization of export proceeds was vitiated for non-consideration of documents and breach of natural justice. The HC found that the taxpayer's representation and supporting foreign inward remittance documents were in fact produced, yet the authority failed to consider them while passing the impugned order, rendering the decision illegal, arbitrary, and contrary to law; the HC also applied its earlier ruling that similar refund-related interference lacked jurisdiction and authority of law. Consequently, the impugned order was set aside and the matter remitted to the authority to reconsider the rectification application afresh in accordance with law, with the petition allowed in part.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the appellate authority's rectification order was vitiated for rejecting the rectification application on the premise of "non-production" of proof of foreign inward remittance / bank realisation, despite the petitioner having produced such documents along with a written representation, and for not examining those materials.

(ii) Whether the rectification order required interference for failure to bear in mind and consider a binding decision of the same Court on the relevance and evaluation of documents evidencing receipt of export proceeds while deciding similar disputes.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Non-consideration of documents produced with the representation while rejecting rectification

Legal framework: The Court noted that the rectification application was made under Section 161 of the Karnataka Goods and Services Tax Act, 2017 and the Central Goods and Services Tax Act, 2017.

Interpretation and reasoning: The rectification order recorded a finding that the petitioner had not produced relevant proof such as BRC/FIRC and, on that basis, refused rectification. The Court compared that finding with the material placed before the appellate authority and found, from the representation and annexed documents, that the petitioner had in fact submitted export realisation-related materials (including bank realisation advice/letters and bank statements correlating to invoices). Since the rectification order proceeded on an assumption contrary to the record-i.e., that the documents were not produced-the Court held that the rectification rejection could not stand without reconsideration of the materials actually furnished.

Conclusion: The Court quashed the rectification order and remitted the rectification application for fresh consideration, directing the appellate authority to bear in mind the representation and documents earlier submitted and to provide a reasonable opportunity, including consideration of any additional materials.

Issue (ii): Failure to consider a relevant judgment of the same Court while deciding rectification

Legal framework: The Court treated the earlier decision of the same Court (referred to in the judgment) as relevant guidance that ought to have been considered by the appellate authority in deciding the rectification request.

Interpretation and reasoning: The Court expressly held that the appellate authority had not considered the earlier decision while passing the impugned rectification order. Given that the rectification request turned on evaluation of documentary proof of foreign inward remittance/bank realisation and related treatment, the Court found that omission to consider the earlier decision contributed to the infirmity requiring interference and remand.

Conclusion: The Court directed reconsideration of the rectification application afresh in accordance with law, specifically requiring the appellate authority to consider both the documents submitted with the representation and the earlier judgment of the Court.

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