GST: Refund of Accumulated ITC cannot be denied to Exporter without granting an Opportunity of being Heard, rules Rajasthan HC [Read Order]

The High Court (HC) of Rajasthan held that the refund of accumulated ITC cannot be denied to the exporter without granting an opportunity of being heard as per the provision of Rule 92(3) of the CGST Rules.

M/s. Chandni Crafts the petitioner challenged the orders passed by the Assistant Commissioner, Central Goods & Service Tax, Division-A, Jodhpur and the order passed by the Commissioner of Central Excise (Appeals) rejected the appeal filed by the petitioner.

The petitioner claimed a refund of the accumulated input tax credit on account of the export of goods under the letter of undertaking in terms of the provisions of Section 54(3) of the Central Goods & Service Tax Act, 2017 (‘CGST Act’) amounting to Rs.6,07,553/- and Rs.8,78,605/- for the months of July 2017 and August 2017.

The Assistant Commissioner issued provisional refund order dated 26.09.2018, partially sanctioning refund claims to the petitioner and rejecting the refund claim for the Integrated Goods & Service Tax (‘IGST’) and Central Goods & Service Tax (‘CGST’).

It was submitted by the petitioner that as per provisions of Section 54(3) of the CGST Act and Rule 92 of the CGST Rules, the refund could not have been rejected by the authority without providing the opportunity of hearing as it envisage issuance of notice in Form GST RFD-08 requiring the applicant to furnish a reply in Form GST RFD-09.

The revenue contended that as the appellate authority has considered all the issues sought to be raised by the petitioner, merely because the original authority did not provide the opportunity of hearing to the petitioner, cannot be a reason for questioning the validity of the orders on the said count alone and therefore, the petition deserves dismissal.

A Coram comprising Justice Arun Bhansali and Justice Ashok Kumar Jain observed that the provisions of Rule 92(3) of the CGST Rules, emphasize that the refund shall not be rejected without giving the applicant an opportunity of being heard. 

Further viewed that it was well settled that a failure of natural justice in the authority of the first instance cannot be cured by the sufficiency of natural justice in the appellate body. While allowing the writ petition, the Court quashed the impugned order and the matter was remanded back to the adjudicating authority to follow the provisions of Rule 92(3) of the CGST Rules.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates