Ms Viral Buildon PVT LTD vs. Assistant Commissioner Of State Tax Office Of The Assistant Commissioner State Tax Sector 2

Held

The Court held that the impugned order dated 24.02.2026 was passed in clear violation of Rule 93(3) of the CGST Rules. It was not disputed that the petitioner, in response to the Show Cause Notice dated 06.02.2026, had requested a date for personal hearing by virtual mode in their reply submitted on 12.02.2026. However, the Department proceeded to pass the impugned order without considering this request and without fixing any date for hearing. Rule 93(3) of the CGST Rules specifically mandates granting an opportunity of hearing before any rejection order is passed concerning a refund application. Therefore, the Court quashed the impugned order and remitted the matter back to respondent no.1 for proceeding strictly in accordance with law. The writ petition was allowed to this extent. No issue was expressly left undecided.

Facts

The petitioner, M/s Viral Buildcon Pvt. Ltd., challenged an order dated 24.02.2026 passed by the Assistant Commissioner of State Tax, respondent no.1. This order rejected the petitioner's refund application filed under Section 54 of the GST Act, citing it as barred by limitation. The petitioner contended that the order was passed in violation of Rule 92(3) of the CGST Rules, which mandates an opportunity of being heard before rejecting a refund application. The petitioner had submitted a reply to a Show Cause Notice on 12.02.2026, requesting a virtual hearing, but the department passed the impugned order without fixing any such hearing. The Revenue, in response, stated that the Show Cause Notice dated 06.02.2026 had fixed 13.02.2026 for both reply submission and personal hearing, and that the petitioner had the option to file an appeal under Section 107 of the Act.

Key Issues

1. Whether the impugned order dated 24.02.2026, rejecting the petitioner's refund application, was passed in violation of Rule 92(3) of the CGST Rules, which mandates an opportunity of hearing before rejection? Petitioner's arguments: The petitioner argued that the order was passed in gross violation of Rule 92(3) of the CGST Rules. They specifically requested a virtual hearing in their reply to the Show Cause Notice dated 06.02.2026, but the department proceeded to pass the impugned order without granting this opportunity. They relied on Rule 92(3) of the CGST Rules. Revenue's arguments: The Revenue stated that the Show Cause Notice dated 06.02.2026 had granted time to submit a reply by 13.02.2026 and fixed the same date for personal hearing. They also pointed out that the petitioner had the option to file an appeal under Section 107 of the Act, which they had not availed.