The Rajasthan High Court in the case of Maple Luxury Homes v. State of Rajasthan vide D.B. CIVIL WRIT PETITION NO. 17061 OF 2023 dated 18.04.2024, has held that the issuance of a non-speaking notice was deemed an empty formality rather than a meaningful exercise. The proper officer must disclose tentative reasons for rejection in the notice to allow the applicant a fair opportunity to respond. The court held that the provisions in Rule 92(3) of the GST Rules, 2017, which mandates that the proper officer must disclose to the applicant the reasons for the tentative decision to reject the refund application to invite a response from the applicant. Since these principles were violated, the impugned order rejecting the refund was set aside.
Facts of the Case:- In this case, the petitioner is engaged in the construction and development business. They received advance payments for flat bookings and discharged its GST liability via GSTR-3B. The flat bookings were later cancelled due to a casualty, leading the petitioner to seek a GST refund for the payments made. The petitioner filed a refund application on 07.12.2022 for GST paid during several months in 2020 and 2021. The tax authority, unsatisfied with the claim, issued a notice in Form GST-RFD-08. The petitioner replied in Form GST-RFD-09, but the refund claim was rejected by the authority.
The petitioner argues that the principles of natural justice under Rule 92 of the GST Rules, 2017 were violated. The show cause notice in Form GST-RFD-08 was non-speaking, lacking any substantive reasons for rejection. The primary contention is that the notices issued to the petitioner did not comply with the legal mandate, violating principles of natural justice.
Held That:- The Court observed that notices issued were found to be vague and non-specific, failing to provide adequate reasons for proposed rejection. The proper reasons for rejection were revealed only in the final order, not in the initial notice, violating natural justice principles.
Further, the Court referred the provisions of Rule 92(3) of GST Rules, 2017, which mandates that the proper officer must disclose reasons for tentative rejection in the notice. The notice should invite a response from the applicant before passing a final order.
The Court held that the issuance of a non-speaking notice was deemed an empty formality rather than a meaningful exercise. The impugned orders are set aside due to the violation of natural justice principles. The case is remitted back to the authority for issuing a proper notice in Form GST-RFD-08, obtaining a reply from the petitioner, and passing an appropriate order thereafter. The writ petition is allowed.
To read the complete judgment 2024 Taxo.online 903
