Revenue Fails To Discharge Onus Of Grant Of Personal Hearing, Delhi High Court Quashes Order Rejecting Refund Application Under GST Act
The Delhi High Court has quashed the order rejecting an applicant's refund application under GST Act on the ground that the revenue authority had breached the principles of natural justice by not affording a reasonable opportunity to the applicant before rejecting its refund application The Bench, consisting of Justices Rajiv Shakdher and Poonam A. Bamba, ruled that the authority...
The Delhi High Court has quashed the order rejecting an applicant's refund application under GST Act on the ground that the revenue authority had breached the principles of natural justice by not affording a reasonable opportunity to the applicant before rejecting its refund application
The Bench, consisting of Justices Rajiv Shakdher and Poonam A. Bamba, ruled that the authority had failed to discharge its onus that a date for grant of personal hearing had been fixed before rejecting the applicant's refund application.
The petitioner/applicant Richie Rich Exim Solutions filed an application for refund under the GST Act, which was rejected by the Assistant Commissioner CGST. The petitioner filed a writ petition before the Delhi High Court challenging the order of the Assistant Commissioner.
The Counsel for the petitioner Richie Rich Exim contended before the Delhi High Court that Rule 92(3) of the Central Goods and Service Tax Rules, 2017 requires the proper officer to grant personal hearing to the applicant before rejecting its application for refund, which was not followed by the Assistant Commissioner. The revenue department submitted that a date had been fixed for hearing and the petitioner had not appeared before the authorities in support of its refund application. The petitioner Richie Rich Exim relied upon the audit history generated by the respondent Commissioner of CGST to contend that no date was fixed for grant of personal hearing.
The High Court held that a perusal of the audit history generated by the Commissioner established that no personal hearing was granted to the petitioner with respect to its refund application. The Court ruled that since the audit history is a document generated by the respondent Commissioner of CGST, the Commissioner had failed to discharge the onus placed on it to demonstrate that a date for grant of personal hearing had been fixed before the petitioner's application for refund was rejected.
The Court ruled that the order passed by the revenue authority rejecting petitioner's refund application was flawed since the provisions of Rule 92(3) of the CGST Rules were not followed by it. The Court added that the respondent was unable to discharge its onus under the Rules.
The Court held that the respondent Commissioner was mandatorily required to grant a reasonable opportunity to the petitioner before rejecting its refund application, and therefore there was a breach of the principles of natural justice.
Therefore, the Court quashed the order passed by the revenue authority rejecting the petitioner's refund application. The Court ordered the Commissioner of CGST to hear the petitioner in support of its refund application, before passing a fresh order.
Case Title: Richie Rich Exim Solutions versus Commissioner of CGST Delhi South
Citation: 2022 LiveLaw (Del) 310
Dated: 30.03.2022 (Delhi High Court)
Counsel for the Petitioner: Mr Rajesh Jain, Mr Virag Tiwari and Mr Ramashish
Counsel for the Respondent: Mr Aditya Singla, Sr. Standing Counsel with Mr Utsav Vasudeva