Suchita Millenium Projects PVT. LTD. vs. Assit Commissioner CGST And Central Exise, B.B.D. Bag I Division, Range-V, Kol North Commi And Ors.

Facts

Suchita Millenium Projects Private Limited (the appellant) filed an intra-Court appeal against the order of the learned Single Bench that dismissed its writ petition. The writ petition had challenged an order dated 25th July, 2022, rejecting the appellant's application for a refund of excess tax paid. The Single Bench dismissed the writ petition, stating that the refund was rejected on grounds other than time-bar, and the appellant should pursue the alternate remedy under the CGST Act. The appellant's refund application was initially subject to a show-cause notice dated 7th June, 2022, questioning its timeliness. The appellant contended it was filed within the extended limitation period as per a Supreme Court order and relied on Madras and Bombay High Court decisions. However, the refund was rejected on a new ground not mentioned in the show-cause notice: that the excess payment was not reflected in the GSTR-3B or GSTR-9 returns. The appellant's request for postponement of personal hearing was also not considered.

Held

The Court held that the rejection of the appellant's refund application on the ground that the excess payment was not shown in the GSTR-3B or GSTR-9 returns, when this ground was not part of the show-cause notice dated 7th June, 2022, constituted a violation of the principles of natural justice. The Court also noted that the appellant's request for postponing the personal hearing was not considered. Consequently, the Court found that the application for refund needed to be reconsidered in accordance with law after affording the appellant an opportunity of hearing. The appeal was allowed, the order of the writ petition was set aside, and the writ petition was allowed. The order rejecting the refund application dated 25th July, 2022, was set aside, and the matter was remanded back to the authority for fresh consideration. The Court directed the appellant to file a reply to the new allegation within 15 days and the authority to fix a fresh personal hearing. The issue regarding the refund application being time-barred was held in favour of the appellant and could not be reopened. The ratio is that a refund application cannot be rejected on grounds not communicated in the show-cause notice, violating natural justice, and personal hearing requests must be considered.

Key Issues

1. Whether the rejection of the refund application on a ground not specified in the show-cause notice violates the principles of natural justice, and if so, what is the consequence? (Question of law turning on principles of natural justice and procedural fairness under GST law). 2. Whether the appellant's request for postponement of the personal hearing was wrongly disregarded, impacting the fairness of the proceedings? (Question of mixed law and fact concerning procedural compliance). Petitioner's Arguments: The appellant argued that the rejection of its refund application on the ground of non-reflection of excess payment in GSTR-3B or GSTR-9 was a violation of natural justice as this ground was not part of the show-cause notice dated 7th June, 2022. The appellant also contended that its request for postponing the personal hearing was not considered. They relied on the Supreme Court's order extending limitation periods and decisions from the High Court of Madras (M/s. GNC Infra LL Vs. Assistant Commissioner) and the High Court of Bombay (Saiher Supply Chain Company Vs. UOI Writ Petition (L.) No.1275 of 2021). Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or CGST Authority in response to the appellant's contentions regarding the violation of natural justice or the non-consideration of the adjournment request.