2021 (3) TMI 857

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....me besides being in utter disregard of the provisions of the Central Goods and Service Tax Act, 2017 ["the Act"] and the Rules framed thereunder, is also in violation of the principles of natural justice. 2. It is submitted that the petitioner having become entitled for refund of excess tax paid in term of Section 54 of the Act, submitted a refund claim before respondent No.1 in FORM-GST-RFD-06. Respondent No.1 instead of directing the refund issued a show cause notice calling upon the petitioner to show cause as to why his refund claim to the extent of amount claimed should not be rejected or the amount erroneously refunded should not be recovered for the reason that the claim for refund is belated having been filed after the expiry of ....

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....that once the claim of refund filed by the petitioner was found to be within time, it was incumbent upon respondent No.1 to put the petitioner again on show cause notice as to the merits of the claim, once it had proposed to reject the refund claim. 5. Learned counsel for the petitioner has invited our attention to Section 54 of the Act and Rule 92 of the Central Goods and Service Tax Rules, 2017 ["the Rules of 2017"], wherein it is specifically provided that no order rejecting the claim of refund shall be passed unless the person claiming refund is given an opportunity of being heard. 6 Mr. D.C.Raina, learned Advocate General appearing for the respondents takes a preliminary objection with regard to the maintainability of the petition. ....

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....on under Article 226 of the Constitution of India, availability of alternative remedy notwithstanding. We agree with the learned counsel for the petitioner. 9. It is trite that alternative remedy is not a complete bar to the entertaining of writ petition filed for enforcement of any of the fundamental rights or where there has been a violation of principles of natural justice or where the order under challenge is wholly without jurisdiction or the vires of statute are under challenge. Hon'ble the Supreme Court has, thus, recognized some exceptions to the Rule of alternative remedy in the case of Wirlpool Corporation v. Registrar of Trademarks,, (1998) 8 SCC 1. In paragraph Nos. 14 & 15 the Supreme Court observed thus:- "14. ....

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....se where the petitioner has alleged violation of principles of natural justice, exercise of writ jurisdiction by this Court is not barred by availability of equally efficacious statutory remedy of appeal provided under Rule 107 of the Rule of 2017. 10. Admittedly, the claim for refund was initially sought to be rejected by respondent No.1 on the ground that it was barred by limitation. Section 54 of the Act provides a period of two years for making an application for refund from the relevant date. The delay, however, was explained by the petitioner by bringing it to the notice of respondent No.1 two notifications dated 03.04.2020 and 27.05.2020 issued by respondent No.3 providing for extension of limitation upto 31.08.2020 on account of ....

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....iven any opportunity to explain his position. It is, thus, clear case of violation of principle of natural justice as also proviso to Rule 92(3) of the Rules of 2017. In the similar set of circumstances, Madras High Court in the case R. Ramadas v. Joint Commissioner of C.Ex., Puducherry, 2021 (44) G.S.T.L. 258 (Mad.) observed thus:- "7. It is a settled proposition of law that a show cause notice, is the foundation on which the demand is passed and therefore, it should not only be specific and must give full details regarding the proposal to demand, but the demand itself must be in conformity with the proposals made in the show cause notice and should not traverse beyond such proposals." 13. Observations of the Madars High Court ....