Nabi Ishrat Security Agency, A-46 vs. The Union Of INDIA

Facts

The petitioner, Nabi Ishrat Security Agency, sought to set aside the order dated February 10, 2021, which rejected their refund claims for February 2019 and March 2019. The petitioner contended that this rejection violated principles of natural justice and Rule 92(3) of the Central Goods and Services Tax Rules, 2017. Specifically, the show cause notices were issued on February 5, 2021, requiring a reply by February 9, 2021, which did not provide the mandatory minimum 15-day period for response before the rejection order was passed on February 10, 2021. The respondents are various authorities of the Central and State Tax departments.

Held

The Court held that the respondent authorities had indeed violated Rule 92(3) of the CGST Rules, 2017, by not affording the petitioner the mandatory minimum statutory period of 15 days to respond to the show cause notices. The show cause notices dated February 5, 2021, directed the petitioner to file a reply on February 9, 2021, which was less than the mandated 15 days. The assessing officer proceeded to pass an ex parte order of rejection before the expiry of this period. The Court found this to be a violation of the mandate of law. Consequently, the Court quashed the show cause notices dated February 5, 2021, and the orders of assessment dated February 10, 2021. The Court directed the assessing officer to issue a fresh notice in light of the statutory provisions and pass an appropriate order in accordance with law, ensuring all proceedings are complied with.

Key Issues

1. Whether the rejection of the petitioner's refund for February 2019 and March 2019 by the respondent authorities, vide order dated February 10, 2021, was in gross violation of the principles of natural justice and Rule 92(3) of the Central Goods and Services Tax Rules, 2017? Petitioner's Argument: The petitioner argued that the respondent authorities violated Rule 92(3) of the CGST Rules, 2017, which mandates a minimum of 15 days' notice for show cause before rejecting a refund. They pointed out that the show cause notices were issued on February 5, 2021, demanding a reply by February 9, 2021, and the rejection order was passed on February 10, 2021, well within the statutory 15-day period. This, they contended, was a violation of natural justice. Revenue's Argument: The judgment does not record any specific arguments made by the respondent authorities.