Nammo INDIA PVT LTD vs. Commissioner Of Central Good And Services Tax Delhi East And Anr.

Facts

The petitioner, Nammo India Pvt Ltd, filed a writ petition challenging an order dated 05.12.2020 rejecting its refund application and an appellate order dated 28.12.2021 upholding it. The petitioner sought a refund of integrated tax paid on services it claimed were exports and zero-rated supplies. The proper officer initially raised discrepancies regarding invoices, returns, and FIRC. While most queries were clarified, an issue remained concerning remittance details for Invoice No.IND032018. The proper officer rejected the entire refund claim, holding that the services fell within the definition of an "intermediary" and thus could not be considered export of services. This issue was not raised in the show cause notice, denying the petitioner an opportunity to address it. The Appellate Authority affirmed this decision.

Held

The Court held that the petitioner was indeed denied a fair opportunity to present its case. The crucial issue of whether the services rendered by the petitioner qualified as those of an "intermediary" was raised for the first time in the order-in-original, without being included in the show cause notice. This violated the principles of natural justice, as the petitioner was not given a chance to explain or provide arguments on this specific classification. The Court noted that the precise nature of services is vital for determining if they are rendered by an "intermediary" and that the petitioner must be provided a full opportunity to explain this before the concerned officer. Consequently, the impugned orders were set aside, and the matter was remanded to the proper officer for fresh consideration.

Key Issues

1. Whether the petitioner was denied a fair opportunity to present its case regarding the classification of its services as an "intermediary" under the GST law, given that this ground was not raised in the show cause notice? Petitioner's contention: The petitioner argued that the rejection of its refund claim on the ground that its services were those of an "intermediary" was unsustainable as this issue was not part of the show cause notice dated 05.11.2020. Consequently, the petitioner was not afforded an opportunity to address this specific ground, violating principles of natural justice. Revenue's contention: The judgment records no specific contention from the revenue regarding this issue. However, the revenue supported the orders passed by the authorities below.