TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 241
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....rvices Tax Rules, 2017 (for short, "the Rules"). February 8, 2022 Show Cause Notice issued under Rule 92(3). February 23, 2023 Date of reply fixed as per Show Cause Notice dated February 8, 2022. 3. Learned counsel appearing for the appellant submits that the respondent-Authorities failed to adhere to the timelines stipulated under the Act and the Rules. Whereas Section 54(7) of the Act provides that the Proper Officer (PO) shall issue the order under sub-section (5) of Section 54 within 60 days from the date of receipt of the application, complete in all respect, in the present case, the notice itself, issued under Rule 92(3) of the Rules, stipulated the date of reply on February 23, 2022, that is, beyond the period of 60 days. Also, the acknowledgment under Rule 92(3) was issued on January 10, 2022, beyond the period of 15 days from the date of the application, as specified under the Rules. It is argued that the timelines provided under the Act and the Rules being mandatory, contravention of the same vitiates the entire order. 4. Learned counsel relies on the judgment passed by a Division Bench of the Delhi High Court in the matter of Smartadmedia v. Commissioner of Delhi....
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....ppellant has been conducting its business activities and exporting goods from the self-same premises all along after being granted GST registration by the Department. 9. By relying on G.S. Industries v. Commissioner of Central Goods and Services Tax, Delhi, reported at (2023) 7 Centax 87 (Del.), it is argued that the Delhi High Court observed that there could not be a rejection of an application for refund without corroborative evidence. 10. Learned counsel for the appellant next argues that the alleged absence of E-way Bill was de hors the law since Rule 138(14)(b) of the Rules provides that where the goods are being transported by a non-motorised conveyance, no E-way Bills are required to be produced, as in the present case. 11. Learned counsel next contends that the reliance placed by the respondent-Authorities on alleged information received from the Customs Department of the Kingdom of Bhutan was vague, since the goods of the appellant were already cleared by the Indian Custom Frontier Authorities. Since the appellant furnished shipping bills and Export General Manifest (EGM) details, as reflected in the ICEGATE Portal of the Central Board of Indirect Taxes and Customs, the....
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....tted under the proviso to Section 75(5) of the Act. 18. On the basis of the arguments of parties, the following issues fall for consideration in the present case: i. Whether the period of 60 days under Section 54(7) of the Act is mandatory; ii. Whether the orders of rejection of the appellant's claim of refund by the Assistant Commissioner and the Appellate Authority are otherwise bad in law; iii. The scope of interference in the present intra-court appeal. 19. The court comes to the following conclusions on the above issues: i. Whether the period of 60 days under Section 54(7) of the Act is mandatory; 20. The relevant provisions of the Act and the Rules are required to be considered to ascertain the present issue. At the outset, the argument of the appellant based on Section 75(5) of the Act has to be turned down, since Section 75 is an umbrella provision covering Section 73 and Section 74, which pertain to determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised, either on the ground of fraud, wilful misstatement or suppression of facts, or otherwise. Thus, Section 75, which comes under Chapter XV of the Act, pe....
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....O is to make an order in FORM GST RFD-06 sanctioning a refund in whole/part or rejecting the claim of refund. 27. The proviso to Rule 92(3) stipulates that there shall not be any rejection of application without giving the applicant an opportunity of being heard. 28. While considering the issue at hand, thus, the above timelines are required to be looked into. The overarching outer limit of passing an order under Section 54(5) is 60 days from the date of the application filed under Section 54(1), in terms of Section 54(7) of the Act. It is to be noted that the expression "shall" has been used in Section 54(7), as opposed to "may". As held by the Supreme Court in Vidarbha Industries Power Limited v. Axis Bank Limited, reported at (2022) 8 SCC 352, the expression "shall" postulates a mandatory requirement and raises a presumption that the concerned provision is imperative, unless such presumption is rebutted by other considerations such as the scope of the enactment and the consequences flowing from the construction. 29. Regarding the scope of the enactment in the instant case, there is no manner of doubt that since the Act is a taxing statute, the governing rule of interpretation....
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....nowledgment (15 days) and the time between the Show Cause Notice and the date of reply (15 days) comes to 30 days and leaves 30 more days for the order under Section 54(5), as per stipulation of Section 54(7), to be passed, keeping in view the outer limit of 60 days. 34. The proviso to Rule 92(3) introduces a further stage into the process by stipulating that no application for refund shall be rejected without giving the applicant an opportunity of being heard. The negative language, in which the proviso is couched, manifestly makes its stipulation mandatory. 35. Thus, the PO, before passing the order within 60 days, does not only have to "consider the reply", as mandated by Rule 92(3), but also to give the applicant an opportunity of hearing under the proviso to the said sub-rule. The dual requirement of consideration of reply and opportunity of hearing makes it quite obvious that the date of reply has to precede the date of hearing, since otherwise, the hearing being granted to the applicant would be an empty formality, without the pleading of the applicant in the form of his reply being on record. 36. Thus, the balance number of days left for completion of the 60-day outer li....
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....der to leave sufficient time of further 15 days for the reply to be given, thereafter opportunity of hearing to be given by a notice to the applicant and upon such hearing, a consideration to be given to the reply and to pass the final order, all within 60 days from the application. 40. The respondents have argued in the present case that Section 56 of the Act provides for interest as a sanction to the non-adherence to the 60 days' stipulation, which dilutes the mandatory nature of the time-limit under Section 54(7). 41. However, there are several fallacies to such argument. 42. First, the Circular issued by the Board in this regard, as referred to above, itself indicates that the entire process has to be completed within 45 days in order for disbursal to be made within the mandatory timeline of 60 days. 43. The mode of disbursal as contemplated in the Act and the Rules implies that the same has to be simultaneous with the order. 44. Section 56, instead of mitigating the mandatory nature of Section 54(7,) highlights the same. It is to be kept in mind that the issue pertains to the depletion of the Public Exchequer in the event interest has to be paid to an individual applicant....
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....Rule of interpretation applies, by occasioning such delay, the PO lost his right to point out any deficiency in the refund claim, going by the ratio of Jian International (supra) and M.D. Securities (supra). 50. Not stopping there, the Show Cause Notice was issued under Rule 92(3) only on February 8, 2022, an inordinately long 29 days after the issuance of the acknowledgement, which is clearly contrary to the intention of the statute and the Rules framed thereunder. 51. The date of reply fixed was on February 23, 2022, which was itself beyond the 60 days' outer limit for passing the order, which period expired on or about February 22, 2022. 52. As per Rule 92(3) and the proviso thereto, even if the reply was filed on the appointed day, an opportunity of hearing on the same was to be given to the applicant and only thereafter, on a consideration of the reply in the light of such hearing, an order had to be made by the PO under Section 54(5), which entire process would then extend much beyond the outer limit of 60 days. 53. As such, the non-adherence to the timelines of Section 54(7), read with Rule 90(2) and Rule 92(3) and its proviso, vitiated the impugned order dated February ....
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....ue to the applicant - nothing more, nothing less. In the present case, the appellant provided not only the shipping bill details along with Export General Manifest details as reflected in the concerned portal, but also the "Late Export Orders (LEO)" in respect of the goods, issued by the Indian Customs Authorities. 59. Section 16 of the Customs Act, 1962 provides that the rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force- (a) in the case of goods entered for export under Section 50 thereof, on the date on which the Proper Officer makes an order permitting clearance and loading of the goods for exportation under Section 51. (b) in the case any other goods, on the date of payment of duty. 60. Thus, the relevant date, on which the duty, along with other charges, were to be deemed to have been paid applicant/appellant, is the date on which the Indian Customs Authorities issued clearance. 61. The limited charter of the GST Authorities is merely to ascertain whether such duties and charges have been duly payable, which is amply proved in the instant case by the Customs documents issued by the Indian Customs Authorit....