Natural justice in GST refund matters requires a personal hearing before rejection, with fair time to reply to notice.

A GST refund claim cannot be rejected without a meaningful opportunity of personal hearing under Rule 92(3), and an adverse order passed despite a request to reschedule violates natural justice. The Bombay HC held that such non-compliance renders the refund adjudication procedurally unsound and warrants fresh consideration. The shorter time granted to reply to the show cause notice was also treated as a fairness issue to be examined in the fresh proceedings. The refund proceedings were therefore set aside and remitted for de novo adjudication after a fresh notice, hearing, and speaking order in accordance with law.

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Issues: (i) Whether rejection of the refund claim without granting a personal hearing, despite a request for rescheduling, violated the principles of natural justice and Rule 92(3) of the Central Goods and Services Tax Rules, 2017; (ii) Whether the shorter time granted to reply to the show cause notice, contrary to the prescribed period under Rule 92(3) of the Central Goods and Services Tax Rules, 2017, vitiated the refund adjudication.

Issue (i): Whether rejection of the refund claim without granting a personal hearing, despite a request for rescheduling, violated the principles of natural justice and Rule 92(3) of the Central Goods and Services Tax Rules, 2017.

Analysis: The proviso to Rule 92(3) mandates that no refund application shall be rejected without giving the applicant an opportunity of being heard. An adverse order passed without affording such hearing, particularly where a specific request to reschedule was made due to inability to attend, breaches the requirement of fair hearing and renders the adjudication procedurally unsound.

Conclusion: The rejection order was vitiated for breach of natural justice and non-compliance with Rule 92(3), and fresh consideration after granting a hearing was warranted.

Issue (ii): Whether the shorter time granted to reply to the show cause notice, contrary to the prescribed period under Rule 92(3) of the Central Goods and Services Tax Rules, 2017, vitiated the refund adjudication.

Analysis: The challenge to the curtailed period for filing the reply was considered relevant to the fairness of the proceedings and was directed to be examined by the authority before passing a fresh order on the refund claim. The defect formed part of the procedural infirmities requiring de novo adjudication.

Conclusion: The reply period objection was left for reconsideration in fresh proceedings, and the prior adjudication could not be sustained.

Final Conclusion: The refund proceedings were set aside and remitted for fresh adjudication after issuance of a fresh show cause notice, grant of personal hearing, and passing of a speaking order in accordance with law.

Ratio Decidendi: A refund claim under the GST regime cannot be rejected without affording the applicant a meaningful opportunity of hearing, and non-compliance with the mandatory hearing requirement under Rule 92(3) vitiates the adjudication.

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