M/S Batra Enterprises vs. Sales Tax Officer, Class Ii & Ors.

Facts

The petitioner, M/s Batra Enterprises, filed a writ petition seeking directions to the Sales Tax Officer and other respondents to sanction GST refunds under Section 54(3) of the CGST Act for the period October 2023 to March 2024. The petitioner contended that the statutory 60-day period for granting refunds had expired without action. Subsequently, the respondents issued five Show Cause Notices (SCNs) in Form GST RFD-08, proposing rejection of the refund applications. Four SCNs were dated 29.08.2024 and one was dated 23.08.2024, covering October 2023 to February 2024. The petitioner received an opportunity for a personal hearing, but the date fixed for the hearing (10.09.2024) was prior to the deadline for filing a reply. The petitioner also sought to amend the petition to challenge these SCNs.

Held

The Court directed the petitioner to file its reply to the five Show Cause Notices by 20.09.2024. The concerned authority is to provide the petitioner an opportunity for a hearing and thereafter process the refund applications within two weeks of 20.09.2024, i.e., by 06.10.2024. If the refund is allowed, the concerned officer must ensure it includes statutory interest. If the refund is denied, a reasoned order considering the petitioner's contentions must be passed. Regarding the March 2024 refund application, the Court held that the respondents had forfeited their right to issue a deficiency memo due to the expiry of the time period. Consequently, the respondents were directed to process this refund application expeditiously, preferably within four weeks from the date of the order. All contentions of the parties, including the scope of inquiry under Section 54, were expressly reserved.

Key Issues

1. Whether the Show Cause Notices (SCNs) issued by the respondents are beyond the scope of proceedings under Section 54 of the CGST Act, 2017? 2. Whether the respondents have forfeited their right to issue a deficiency memo for the refund application pertaining to March 2024, given the expiry of the time period for acknowledgment and deficiency under GST RFD-03? Petitioner's Arguments: The petitioner argued that the issues raised in the SCNs fall outside the ambit of Section 54 of the CGST Act. They also contended that for the March 2024 refund application, the respondents failed to issue any notice of deficiency within the prescribed time, thereby forfeiting their right to do so and should proceed to sanction the refund. Revenue's Arguments: The judgment records no specific arguments from the revenue or state respondents regarding the SCNs or the March 2024 refund application. However, the court noted that it was open for the petitioner to advance their contentions before the concerned officer.