Ttec INDIA Customer Solutions Private Limited vs. Deputy Commissioner Of Sales Tax, Circle 2

Held

The Court held that the order rejecting the entire refund claim was unsustainable. Firstly, it was a gross and apparent mistake for the authority to travel beyond the scope of the show cause notice, which was limited to Rs. 36,85,893/-. The rejection could not exceed the amount specified in the show cause notice. Secondly, the Court found a clear violation of the principle of natural justice as the successor officer passed the impugned order without granting a fresh opportunity of hearing to the petitioner. The Court reasoned that if the officer had any doubts, a hearing should have been provided. Therefore, the Court quashed and set aside the rejection order dated May 11/13, 2021. The matter was remitted to the respondent authority to provide the petitioner an opportunity of hearing in relation to the show cause notice dated March 16/18, 2021, and to decide the matter afresh in accordance with law. The Court explicitly chose not to enter into the merits of the refund claim.

Facts

The petitioner, TTEC India Customer Solutions Private Limited, engaged in export of services, applied for a refund of unutilised Input Tax Credit (ITC) amounting to Rs. 2,84,04,175/- for the period February 2019 to March 2020. The Deputy Commissioner of Sales Tax, Circle 2, Ahmedabad, issued a show cause notice on March 16/18, 2021, proposing to reject the refund claim to the extent of Rs. 36,85,893/-. The petitioner responded to the notice and attended a personal hearing. However, the officer who conducted the hearing proceeded on leave, and a new officer passed an order on May 11/13, 2021, rejecting the entire refund claim of Rs. 2,84,04,175/- without granting a fresh opportunity of hearing. The petitioner's attempt to get the order rectified was unsuccessful, and an appeal filed before the Appellate Authority was not listed. Consequently, the petitioner approached the High Court.

Key Issues

1. Whether the rejection of the entire refund claim of Rs. 2,84,04,175/- is valid when the show cause notice was issued only for a partial amount of Rs. 36,85,893/-? (Question of law turning on principles of natural justice and procedural fairness). The petitioner argued that the authority travelled beyond the scope of the show cause notice, which is a gross and apparent mistake. The revenue or State did not present arguments on this issue. 2. Whether the order rejecting the refund claim is vitiated by a violation of the principle of natural justice due to the non-grant of a fresh opportunity of hearing by the successor officer? (Question of law turning on principles of natural justice). The petitioner contended that the new officer passed the order without affording a fresh hearing, despite the initial officer proceeding on leave. The revenue or State had no answer to this contention.