M/S. RAHUL PACKAGING
VERSUS
UNION OF INDIA & ORS.
Citation: 2024 taxo.online 778
In the case of M/s Rahul Packaging v. Union of India & Ors., the High Court of Delhi, comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, addressed the issue of rejection of a refund claim under the Central Goods and Services Tax Act, 2017 (“CGST Act”). The petitioner contested the rejection of their refund application, citing procedural irregularities.
The adjudication order, dated 14.12.2021, rejecting the refund application, was preceded by a Show Cause Notice (SCN) issued on 23.11.2021 (noticed as 25.11.2021 in the impugned order) by a Superintendent. The petitioner argued that the Superintendent lacked the authority to issue the SCN, contending that only officers of the rank of Assistant Commissioner and above were authorized to do so.
Upon review, the Court found that the SCN was indeed issued by an incompetent authority, and further, the reply to the SCN was considered by another incompetent authority. Despite this, the Adjudicating Authority proceeded to reject the refund application, relying solely on the report of the Superintendent. The Appellate Authority upheld this decision, even after acknowledging the procedural irregularities.
However, the Court held that once it was established that the SCN was issued and considered by incompetent authorities, the entire proceeding was flawed. The Appellate Authority should not have assumed original jurisdiction and proceeded with the matter but should have nullified the SCN and associated proceedings. Consequently, the Court set aside the impugned order to the extent that it decided the petitioner's claim on merits.
In summary, the Court directed the appropriate authority to reconsider the petitioner's refund application expeditiously and in accordance with the law, emphasizing the importance of procedural fairness and competent adjudication in tax matters under the CGST Act.
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