Rajnandani Devi vs. Bikki Yadav

Held

The Court held that the order dated 08.05.2024 (which led to the appeal rejection) and the subsequent appellate order dated 09.09.2024 were liable to be set aside. The Court found that the order dated 08.05.2024 was a non-speaking order, lacking the necessary reasoning and split material information to justify the alleged demand of Rs. 97.28 lakhs. Citing the Supreme Court's decision in Oryx Fisheries Private Limited, the Court emphasized that quasi-judicial authorities must pass speaking orders supported by cogent reasons, which are essential for judicial review and maintaining faith in the justice delivery system. The Court directed the authority who passed the order dated 08.05.2024 to pass a fresh, detailed, and speaking order after providing an oral hearing to the petitioner, if statutorily provided. This exercise was to be completed within three months. The writ petition was allowed.

Facts

The petitioner, M/s Bishnu Flour Mills Pvt. Ltd., filed a writ petition challenging an order dated 09.09.2024 passed by the Additional Commissioner of State Tax (Appeal), Purnea Division, which rejected their appeal. The rejection was based on the ground that the petitioner had not paid 10% of the disputed amount as a pre-deposit. The petitioner argued that they were seeking a refund of excess deposit of Input Tax Credit (ITC) on export of goods and services without payment of IGST, and therefore, there was no disputed tax amount to be challenged. The petitioner also challenged an earlier order dated 16.05.2024 by the Joint Commissioner of State Tax, Katihar Circle, which rejected their refund application. This rejection was allegedly made without proper reasoning and despite a prior order allowing the refund. The amount of Rs. 97.28 lakhs mentioned in the proceedings relates to a discrepancy identified in a CAG Report for the financial year 2008-09.

Key Issues

1. Whether the Appellate Authority was justified in rejecting the petitioner's appeal solely on the ground of non-payment of 10% of the disputed amount as a pre-deposit, when the petitioner was seeking a refund of excess deposit and not challenging a tax demand, as per Section 107 of the BGST Act, 2017? 2. Whether the order dated 16.05.2024 passed by the Joint Commissioner of State Tax, rejecting the petitioner's refund application, was a non-speaking order and passed without proper justification, thereby violating principles of natural justice and the requirement for reasoned orders under GST law? Petitioner's Arguments: - The petitioner contended that no tax amount was disputed, as they were seeking a refund of excess deposit, making the pre-deposit requirement for appeal under Section 107 inapplicable. - They argued that the refund application rejection order was arbitrary, lacked reasoning, and was passed without considering their reply to the show-cause notice. They also claimed the reference to the CAG report and the amount of Rs. 97.28 lakhs was made without providing supporting documents or demand notices. Revenue's Arguments: - The judgment does not record specific arguments made by the revenue or state respondents.