Non-speaking refund rejection orders are liable to be set aside and remanded for fresh reasoned adjudication after hearing.

A refund rejection order that failed to consider the assessee's reply, supporting documents and hearing submissions was treated as a non-speaking order lacking proper reasons. The High Court held that an adjudication must record a reasoned determination on the material issue, including the nature of the services and the contention that the supplies constituted export of services. Because the order showed non-application of mind, it was set aside and the matter was remanded for de novo consideration and a fresh reasoned order after granting a proper hearing.

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Issues: Whether the rejection of the refund claim was liable to be quashed for being a non-speaking order passed without considering the petitioner's submissions and whether the matter required remand for fresh adjudication.

Analysis: The refund rejection order contained no specific finding dealing with the petitioner's reply, documents, and hearing submissions. The impugned order proceeded on the premise that the petitioner was rendering intermediary services, without recording a reasoned determination on the nature of the services or addressing the contention that the supplies constituted export of services. In these circumstances, the order suffered from the vice of non-application of mind and did not meet the standard of a reasoned adjudication. Consistent with the settled approach applied in similar refund matters, the appropriate course was to set aside the order and require a fresh decision after granting a proper hearing.

Conclusion: The refund rejection was quashed and the matter was remanded to the adjudicating authority for de novo consideration and a fresh reasoned order, after affording the petitioner an opportunity of hearing.

Final Conclusion: The petitioner obtained relief against the impugned refund rejection, but the substantive refund claim was left to be determined afresh by the adjudicating authority.

Ratio Decidendi: A refund rejection order passed without considering the assessee's reply and without recording reasons on the material issue is a non-speaking order liable to be set aside, with the matter remitted for fresh adjudication after hearing the assessee.

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