GST Authorities Must Give Full 15-Day Period to File Reply as u/R 93(2): Calcutta HC Invalidates [Read Order]

The Calcutta High Court ruled that the GST ( Goods and Services Tax ) authorities must grant taxpayers the complete statutory period of 15 days to respond to show-cause notices related to tax refunds as mandated under Rule 93(2) of GST Rules.

The bench of Justice Kausik Chanda, by invalidating a refund rejection order, said that the department ignored this required time limit.

The petitioner, CBF Component Private Limited applied for a GST refund underSection 54 of the Central Goods and Services Tax (CGST) Act, 2017, for the May to June 2023 period. In response, the refund authority issued a show-cause notice on April 30, 2024, but gave the petitioner only seven days to reply, scheduling a hearing for May 7, 2024.

The petitioner requested an adjournment on May 5, asking for an extension until May 22 to file a proper response. The authority denied this request and subsequently issued an order on May 17, 2024, rejecting the refund claim entirely.

The Revenue argued that granting an adjournment is not an automatic right and that the authority was obliged to pass the refund rejection order within 60 days from the date of issuance of the show-cause notice.

However, the Court, observing the contentions, pointed out that Rule 92(3) of the Central Goods and Services Tax Rules, 2017 guarantees taxpayers 15 days to answer a show-cause notice during refund proceedings. Any deviation from this specific statutory rule makes the entire process legally defective.

Furthermore, the Court observed “Rule 19(3) of the Central Goods and Services Tax Rules, 2017, provides for the grant of a personal hearing to the petitioner. While it is true that a petitioner cannot claim an adjournment as a matter of right, it is equally true that the authority, as a matter of practice and fairness, cannot decline to grant an adjournment without any justifiable reason, particularly where the rule mandates a personal hearing.”

The bench noted that the petitioner requested for adjournment and the refund rejection order was passed without affording an opportunity to submit his reply within the fifteen-day period mandated under Rule 92(3) of the GST Rules, 2017.

The court set aside the rejection order and directed the department to grant a fresh hearing, ensuring a 15 days time period to file a reply. Additionally, the Court said that the date for the next hearing must be communicated to the petitioner at least 72 hours in advance.

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