Adisan Laboratories PVT. LTD. And Anr vs. Union Of INDIA Thr The Revenue Secretary Dept. Of Revenue And Ors

Held

The Court held that the impugned order rejecting the refund claim was bad in law because the Petitioners were not afforded an adequate opportunity of being heard as mandated by Rule 92(3) of the Central Goods and Services Tax Rules, 2017. The Court noted that the Petitioners' assertion of not receiving the notice, nor it being available on the GSTN portal, went uncontroverted by the Respondents. Consequently, the Court found that the opportunity of hearing envisaged under Rule 92 was impaired. The Court quashed and set aside the impugned order and restored the Petitioners' refund application. The Respondents were directed to follow the methodology under Rule 92 of the CGST Rules, 2017, and complete the further procedure within eight weeks from the date the order is uploaded. The Court clarified that the decision was based on the procedural ground and not on the merits of the refund claim.

Facts

The Petitioners, Adisan Laboratories Pvt. Ltd. and its Managing Director, challenged an order dated 31 May 2022 passed by the Assistant Commissioner, Central Goods and Services Tax, Pune. This order rejected their refund claim of Rs. 14,90,629/- for Input Tax Credit accumulated due to an inverted duty structure for the period April 2019 to March 2020. The Petitioners filed their refund claim on 30 March 2022. They received an email on 4 March 2022 indicating a notice was issued, but they claimed not to have received it nor found it on the GSTN portal. They communicated this to the Respondents on 17 May 2022. Subsequently, they received the impugned rejection order on 27 May 2022. The Petitioners contended that the order was invalid as they were not given a proper opportunity to be heard as required by law.

Key Issues

1. Whether the impugned order rejecting the refund claim is bad in law for non-compliance with the principles of natural justice, specifically the requirement of providing an opportunity of being heard, as mandated by Rule 92(3) of the Central Goods and Services Tax Rules, 2017? Petitioners' Contention: The Petitioners argued that they were not provided with any notice or opportunity to be heard before the rejection of their refund claim, violating Rule 92(3) of the CGST Rules, 2017. They asserted that they had informed the Respondents that the notice was neither received nor available on the GSTN portal. They relied on Section 54(3) of the CGST Act, 2017, which allows refund of unutilised Input Tax Credit in cases of inverted duty structure, and Rule 92 of the CGST Rules, 2017, for the procedural methodology. Respondents' Contention: The judgment records no specific arguments from the Respondents regarding the procedural lapse.