Navneet R Janwar vs. State Tax Officer Circle R Jammu And Kashmir Goods And Service Tax And Others

Held

The Court held that the writ petition is maintainable, agreeing with the petitioner that the impugned order was passed in violation of the principles of natural justice. The Court cited the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trademarks, which establishes exceptions to the alternative remedy rule, including violations of natural justice. The Court found that the initial show cause notice only addressed the limitation period, which was subsequently accepted. The rejection order was passed on grounds not proposed in the show cause notice, and without affording the petitioner an opportunity to be heard on these grounds. This constituted a violation of natural justice and proviso to Rule 92(3) of the CGST Rules, 2017. The Court relied on the Madras High Court's judgment in R. Ramadas v. Joint Commissioner of C.Ex., Puducherry, which held that a demand must conform to the proposals in the show cause notice. Consequently, the impugned order was quashed, and the case was remanded to respondent No.1 for fresh consideration after issuing a proper show cause notice and providing a reasonable opportunity of being heard.

Facts

The petitioner, Navneet R. Jhanwar, filed a writ petition challenging an order dated 02.12.2020 passed by the State Tax Officer (respondent No.1) rejecting his GST refund claim. The petitioner had sought a refund of excess tax paid, filing a claim in FORM-GST-RFD-06. Respondent No.1 initially issued a show cause notice alleging the claim was belated, filed after the two-year period stipulated in Section 54(1) of the CGST Act, 2017. The petitioner responded, citing notifications extending due dates due to the COVID-19 pandemic. Respondent No.1 accepted this explanation, processing the claim. However, without further notice, the refund was rejected by the impugned order, which the petitioner argued violated principles of natural justice and Section 54 of the Act read with Rule 92 of the CGST Rules, 2017.

Key Issues

1. Whether the writ petition is maintainable despite the availability of an alternative remedy under Section 107 of the CGST Act, 2017? (Mixed question of law and fact, turning on Article 226 of the Constitution and principles of natural justice). 2. Whether the order rejecting the refund claim was passed in violation of the principles of natural justice and the proviso to Rule 92(3) of the CGST Rules, 2017? (Question of law, turning on Section 54 of the CGST Act, 2017 and Rule 92 of the CGST Rules, 2017). Petitioner's arguments: The impugned order is fundamentally flawed and in violation of natural justice as no opportunity of being heard was granted before its passing. The initial show cause notice addressed only the limitation period, which was explained and accepted. Once the limitation issue was resolved, a fresh show cause notice should have been issued regarding the merits of the claim before rejection. Reliance was placed on Section 54 of the Act and Rule 92 of the Rules. Respondent's arguments: The petition is not maintainable due to the availability of an alternative remedy under Section 107 of the CGST Act, 2017.