Refund Rejection Order Passed Without Hearing Opportunity Violates Rule 92(3) Of CGST Rules, Principles Of Natural Justice: Bombay High Court
The Bombay High Court stated that refund rejection order passed without hearing opportunity violates rule 92(3) of CGST Rules, 2017 and principles of natural justice.
The Bench of Justices M. S. Sonak and Jitendra Jain observed that “……in any event, proviso to Rule 92(3) of the CGST Rules, 2017, contemplates reasonable opportunity to be heard, implying that such hearing should be after the assessee files the reply within the time prescribed in the show cause notice.”
Rule 92(3) of the CGST Rules, 2017 provides that no application for refund shall be rejected without giving the applicant an opportunity of being heard.
The assessee/petitioner received a show-cause notice granting 15 days to explain why their refund application should not be rejected. In response, the assessee submitted a reply on 16.04.2024, which was uploaded to the department's website. The refund rejection orders were subsequently uploaded on 25.04.2024. However, these orders do not mention any personal hearing, as required under Rule 92(3) of the CGST Rules, 2017.
The assessee has filed a petition before the Bombay High Court challenging the refund rejection orders posted on the department's website on 25.04.2024.
The bench observed that the show causes issued to the assessee gave the assessee 15 days to respond. Accordingly, they did respond by 17.04.2024. Therefore, it is rather incomprehensible how a hearing was allegedly given on 08.04.2024. The assessee has denied that any hearing was ever given. The show cause notice had also stated that the date and time of the hearing would be intimated to the assessee. There is no clear evidence of such intimation.
Further, the bench stated that in any event, proviso to Rule 92(3) of the CGST Rules, 2017, contemplates reasonable opportunity to be heard, implying that such hearing should be after the assessee files the reply within the time prescribed in the show cause notice.
“the impugned refund rejection orders are in breach of the requirements of Rule 92(3) of the CGST Rules, 2017 and the principles of natural justice and fair play” added the bench.
In view of the above, the bench quashed the refund rejection order and remanded the case to the department to reconsider the assessee's refund application, directing the department to provide the assessee a fair hearing.
Counsel for Petitioner/ Assessee: Prakash Shah, Jas Sanghavi, Mihir Deshmukh, Vikas Poojary and PDS Legal
Counsel for Respondent/ Department: Ram Ochani and Niyati Mankad
Case Title: Credit Agricole CIB Services Private Limited v. Union of India & Ors
Case Number: WPL.No.23325 of 2024