A Division Bench of the Bombay High Court has directed fresh adjudication, remanding a matter of request of refund of unutilised Integrated Goods and Services Tax ( IGST ) on export of services, wherein an order was passed without due notice or opportunity of hearing to the Petitioner.
It was the case of the Petitioner that, as per Section 2(6) of the Integrated Goods and Service Tax Act, 2017 (IGST Act), the transaction which was the subject matter of the said Agreements qualified as a transaction for export of services.
It was further submitted that, as per Section 16 of the Integrated GST Act, export of goods or services or both is termed as “Zero rated supply”. Accordingly, as per the provisions of Section 54 of the Central Goods and Services Tax Act (“CGST Act”), the Petitioner had filed applications for refund of unutilised IGST credit on such export of services without payment of tax and refund of tax paid on such export of goods in case of export of services with payment of tax.
Out of the above refund claims, the refund claimed for the periods July 2017, September 2017 to March 2018 and April 2020 to December 2021 were sanctioned by Deputy Commissioner of Sales Tax i.e. Respondent No.3. For the remaining refund claims, show cause notices were issued rejecting the refund claims, without affording an opportunity of hearing to the petitioner.
Since there was no communication from Respondent No.4 regarding the adjudication of the Appeals, the Petitioner, by a letter dated 14th June 2019, sought a personal hearing and also inquired about the status of the Appeals. Thereafter, the Petitioner filed a letter on 4th July 2019, seeking a personal hearing.
In the light of repeated reminders by the Petitioner, the Petitioner was called upon to attend personal hearings through various personal hearing notices. The Petitioner attended the hearings on 3rd September 2021, 14th September 2021 and 27th September 2021. However, it is the case of the Petitioner that, in all the above instances, a record of hearing was not provided to the Petitioner, and, further, the hearing was conducted by an assistant of Respondent No.4 and not by Respondent No.4 himself.
Thereafter, by a letter dated 25th September 2021, the Petitioner filed additional submissions in respect of all refund periods in the backdrop of a Circular issued by the Department.
The Petitioner did not receive any order post-hearing. Hence, by a letter dated 16th February 2022, the Petitioner enquired about the status of the matter and as to whether any orders had been passed in the Appeals.
It is the case of the Petitioner that, in the following Appeals, the Petitioner has not been given any personal hearing by Respondent No.4 nor has any order been passed therein.
In the aforesaid circumstances, the Petitioner has filed the present Petition seeking a personal hearing from Respondent No.4 in the said Appeals and also seeking that Respondent No.4 should pass reasoned Orders in the said Appeals in a time bound manner.
It was observed that, “In our view, the principles of natural justice would require that Respondent No.4, which is the Appellate Authority which has to decide the said Appeals and pass orders therein, must give a personal hearing to the Petitioner in the said Appeals.”
It was further observed that, “Further, even if a statute does not prescribe the time within which the Order is required to be passed by the Appellate Authority, such an Order must be passed within a reasonable period of time.”
It was thus directed by the Bench of Justice G S Kulkarni and Justice Firdosh P Pooniwalla that, “Respondent No.4 (Joint Commissioner of State Tax, Appeals 1) is ordered and directed to pass orders in the said Appeals within a period of six weeks from the date this Order is intimated to Respondent No.4 after giving the Petitioner an opportunity of personal hearing in each of the said Appeals.”
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