Bharat Heavy Electricals LTD. vs. The Assistant Commissioner Of

Held

The Court held that the respondent had violated the principles of natural justice. The petitioner's contention that the show cause notices dated 25.05.2018 were served only on 04.06.2018, the date fixed for hearing, was not disputed by the respondent. Furthermore, the petitioner's subsequent letters dated 05.06.2018 requesting a 15-day extension to appear with documents were not considered by the respondent. The Court found that the respondent had hurriedly passed the impugned orders dated 14.06.2018 without providing sufficient opportunity to the petitioner. Consequently, the Court set aside the impugned orders and remanded the matter to the respondent for fresh consideration. The petitioner was directed to appear for a personal hearing on 04.09.2018 with relevant documents, and the respondent was directed to pass appropriate orders on merits within one week thereafter.

Facts

Bharat Heavy Electricals Limited (BHEL), the petitioner, filed two writ petitions challenging orders dated 14.06.2018 passed by the Assistant Commissioner of CGST & Central Excise, the respondent. These orders rejected BHEL's refund claims for amounts paid towards Education Cess, Secondary and Higher Education Cess, and Krishi Kalyan Cess. BHEL, a public sector undertaking, had utilized input tax credit of these cesses for clearing final products. As it could not carry forward the unutilized credit, it filed refund claims on 30.12.2017. The respondent issued show cause notices on 25.05.2018, requiring BHEL to produce documents and appear for a hearing on 04.06.2018. BHEL received these notices only on 04.06.2018 and requested a 15-day extension, which was not considered before the impugned orders were passed.

Key Issues

1. Whether the respondent violated the principles of natural justice by rejecting the petitioner's refund claims without providing sufficient opportunity for a personal hearing and submission of documents, contrary to the provisions of the CGST Act and relevant procedural norms? Petitioner's Arguments: The petitioner contended that the show cause notices dated 25.05.2018, requiring them to appear on 04.06.2018, were served only on 04.06.2018, the date of the scheduled hearing. This prevented them from submitting necessary documents and participating effectively. They further argued that their request for a 15-day extension, communicated via letters dated 05.06.2018, was ignored. The respondent hastily passed the impugned orders without considering these circumstances, thus violating the principles of natural justice. Respondent's Arguments: The respondent stated that the petitioner did not furnish documents or appear on the scheduled date, leading to the decision being made based on available records. The respondent did not dispute the petitioner's claim of delayed service of the show cause notice.