Refund rejection invalid where statutory reply period and fair hearing under GST rules were denied

Under Rule 92(3) of the CGST Rules, a refund rejection cannot stand where the applicant is not given the full fifteen-day period to respond to the show-cause notice and is denied a fair opportunity of hearing. The authority required a reply within seven days, rejected the adjournment request without communicating that rejection, and proceeded to reject the refund application before the statutory response period expired. Although adjournment is not a matter of right, the rule of fairness and the statutory scheme require a reasonable opportunity to file a reply and be heard. The Calcutta HC set aside the rejection and directed a fresh opportunity to respond.

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Issues: Whether the refund rejection order could stand when the petitioner was not given the full fifteen-day period contemplated by Rule 92(3) of the Central Goods and Services Tax Rules, 2017 and was not afforded a fair opportunity to file a reply and be heard.

Analysis: The refund application was issued a show-cause notice requiring a reply within seven days, although Rule 92(3) provides fifteen days to furnish a reply after receipt of the notice and also prohibits rejection without giving the applicant an opportunity of being heard. The authority rejected the petitioner's adjournment request and passed the refund rejection order without communicating the rejection of adjournment and without allowing the petitioner the statutory period to respond. A party may not claim adjournment as of right, but fairness and the statutory scheme require a reasonable opportunity to answer the notice before adverse action is taken.

Conclusion: The refund rejection order could not be sustained and was rightly set aside; the petitioner was entitled to a fresh opportunity to reply and be heard.

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