2024 Taxo.online 412

In a recent judicial ruling, a company engaged in manufacturing steel products, while also importing coal and claiming Input Tax Credit (ITC) for the financial year 2017-18, faced challenges in obtaining GST refunds for export supplies and SEZ units. Despite filing refund applications, these were rejected, leading to subsequent appeals.

The crux of the issue lay in the alleged violation of principles of natural justice. The rejection of the refund application occurred without providing the petitioner with a fair opportunity of hearing. Although the petitioner submitted a show-cause reply within the stipulated timeframe, the rejection order was prematurely issued, devoid of due consideration for the petitioner’s submissions. The appellate authority’s dismissal of the petitioner’s appeal further compounded the situation, leaving the petitioner without recourse.

Upon examination of the legal framework, it was evident that the rejection of the refund application without affording the petitioner a fair opportunity of hearing contravened Rule 92(3) of the Central Goods and Services Tax Rules, 2017. This rule mandates that no application for refund shall be rejected without granting the applicant an opportunity of being heard. The respondent authority failed to adhere to this fundamental principle of natural justice.

Moreover, the rejection order lacked proper reasoning, rendering it unsustainable under Rule 92(3). The absence of a Document Identification Number (DIN) on both the show-cause notice and the rejection order further invalidated the proceedings, as per Circulars issued by the Ministry of Finance.

Consequently, the court remanded the case back to the respondent authority, emphasizing the necessity for a proper opportunity of hearing and adherence to the principles of natural justice. The petitioner’s submissions must be duly considered, and a fresh order should be passed in accordance with the law.

This ruling serves as a poignant reminder of the critical significance of procedural fairness and adherence to legal requirements in administrative proceedings. It underscores the imperative for thorough scrutiny and reasoned decision-making to uphold the integrity of the legal system and ensure justice for all parties involved.

 

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