22.02.2022- A Refund Rejection Order Passed Without Stating Any Reasons For Rejection Is Against The Law Stated In Rule 92(3) Of The CGST Rules, 2017

The Hon’ble High Court of Bombay vide its order dated 25.01.2022 in the matter of Colgate Global Business Services Pvt. Ltd.  Vs.  Union of India through the Ministry of Finance, Department of Revenue, New Delhi, Commissioner of State Tax, Mumbai, Deputy Commissioner of State Tax, Mumbai in Writ Petition No. – 802/2021 held that the order passed for rejection of refund claim without stating any reason for rejection of the same is bad in law and liable to be set-aside being in breach of the provisions of the law.

The Petitioner preferred the Writ petition before the Hon’ble High Court challenging the order dated 15th June 2020 passed by the respondents whereby the application of refund made by the Petitioner was rejected.

Appellants Plea:It was contended on behalf of the petitioner that the impugned rejection order of refund claim was passed without recording any reason and as per Rule 92(3) of the CGST Rules, 2017, the respondents were bound to record reasons while rejecting the application of refund filed by the Petitioner.

On the other hand, the respondents admitted the fact and submitted that a fresh order would be passed in the matter in compliance to Rule 92(3) of the CGST Rules, 2017 after affording an opportunity of hearing to the Petitioner.

Held:The Hon’ble High Court after considering the submissions, facts and law and after the perusal of the impugned order held that the application for refund has been rejected without recording any reason for rejection, which is a mandate as per Rule 92(3) of the CGST Rules, 2017, thus the order passed by the respondents is in breach of the provision of law.

The Hon’ble High Court with above findings restored the refund application of the petitioner to the file before the respondents and quashed and set-aside the impugned order with a direction to the respondents to pass a fresh order after providing a personal hearing to the petitioner not later than three weeks of hearing.

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