Radbacs Remedies vs. State Of Uttarakhand
Held
The Court held that the petitioner was indeed entitled to a personal hearing before their refund application was rejected. The Court found substance in the petitioner's submission, noting that when input tax credit accumulates due to an inverted duty structure, it is incumbent upon the Proper Officer to grant a personal hearing to the taxpayer before rejecting a refund application. The Court explicitly referred to the proviso to sub-rule (3) of Rule 92, stating that it unequivocally provides for an opportunity of hearing. Consequently, the impugned rejection order dated October 31, 2022, was quashed. The Court directed the Proper Officer to reconsider the petitioner's refund application after affording them an opportunity of hearing. No other issues were expressly left undecided.
Facts
The petitioner sought a refund of tax accumulated in their E-Credit Ledger for the period July 2020 to May 2022, under the inverted duty structure. The Proper Officer/Assistant Commissioner, State Tax, Kotdwar, rejected the refund application via an order dated October 31, 2022. Aggrieved by this rejection, the petitioner approached the High Court. The petitioner's primary contention was that they were entitled to a personal hearing before their refund application was rejected, citing Rule 92(3) of the Central Goods and Services Tax Rules, 2017, and its proviso.
Key Issues
1. Whether the petitioner was entitled to a personal hearing before their application for refund of accumulated input tax credit under the inverted duty structure was rejected, as per the proviso to sub-rule (3) of Rule 92 of the Central Goods and Services Tax Rules, 2017? Petitioner's Arguments: The petitioner argued that the proviso to sub-rule (3) of Rule 92 mandates that no application for refund shall be rejected without giving the applicant a reasonable opportunity of being heard. They relied on judgments from the Punjab & Haryana High Court in *Fiscalnote India Pvt. Ltd. Vs. Commissioner of Central Tax & another* and the Bombay High Court in *M/s Knowledge Capital Services Private Limited Vs. Union of India, State of Maharashtra Through Its Additional Chief Secretary (Finance) Assistant Commissioner of State Tax, Mumbai*. Revenue's Arguments: The judgment does not record any specific arguments made by the revenue or State.
Sections Cited
Rule 92(3)
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WPMS No.2302 of 2023 Hon’ble Manoj Kumar Tiwari, J.
Mr. Tarun Pande, Advocate for the petitioner.
Mr. Mohit Maulekhi, Brief Holder for the State of Uttarakhand.
Petitioner sought refund of tax under inverted duty structure of the amount of tax which accumulated in his E-Credit Ledger for the month of July, 2020 to May, 2022. His application was rejected by Proper Officer/Assistant Commissioner State Tax, Kotdwar, (Garhwal) vide order dated 31.10.2022. Thus, feeling aggrieved by rejection order, petitioner has approached this Court.
The core contention raised by learned counsel for the petitioner is that petitioner was entitled for personal hearing while rejecting his application for refund. Rule 92 of the Central Goods and Services Tax, 2017 deals with Orders sanctioning refund. Clause (3) of Rule 92 of the said Act is reproduced below:
“(3) Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount cl
The judgment continues below.
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