Ms Cholayil Private Limited vs. Assistant Commissioner Central Goods And Services Tax

Held

The Court held that while granting more time was within the Department's discretion, the haste shown in passing the impugned order was wholly unwarranted. The Court noted that the petitioner had applied for more time on the day following the receipt of the show-cause notice to gather necessary documents and prepare a response. Consequently, the Court quashed the order dated 15.04.2026. The petitioner was granted two weeks to file their reply along with relevant documents to the show-cause notice dated 09.04.2026. Following this, the Department was permitted to pass a fresh order on the petitioner's refund application. The ratio decidendi is that administrative authorities must act with reasonable dispatch and not exhibit undue haste, especially when a party seeks a legitimate extension to present their case, thereby ensuring principles of natural justice are upheld.

Facts

The petitioner, M/s Cholayil Pvt. Ltd., filed a writ petition challenging an order dated 15.04.2026, issued by the Assistant Commissioner, Central Goods and Services Tax. The petitioner had applied for a refund of accumulated Input Tax Credit on 24.02.2026. The Department issued a show-cause notice on 09.04.2026, requiring a reply within four days. The petitioner, on 10.04.2026, requested more time to submit a reply and relevant documents. Despite this, the impugned order rejecting the refund request was passed on 15.04.2026. The revenue stated it had not received instructions from the Department.

Key Issues

1. Whether the respondent authority erred in rejecting the petitioner's request for further time to reply to the show-cause notice and proceeding to pass an order within four days, thereby acting with unwarranted haste? The petitioner argued that the respondent erred in rejecting the request for further time and passing the order immediately after four days. The petitioner contended that they had applied for an extension on the very next day of receiving the show-cause notice to collect relevant documents and file a proper reply. The revenue stated that it had not been provided with instructions by the Department.