Case Note & Summary
The petitioner, Haren Textiles Private Limited, applied for refunds under the CGST Act. The Deputy Commissioner of State Tax, Mumbai, passed orders granting refunds for some periods and rejecting them for others. Aggrieved by the rejections, the petitioner filed a writ petition challenging the orders to the extent they denied refunds. The primary grievance was non-compliance with Rule 92(3) of the CGST Rules, 2017, which requires the proper officer to issue a show cause notice in Form GST RFD-08, consider the reply in Form GST RFD-09, and provide a reasonable opportunity of hearing before rejecting a refund claim. The respondent filed an affidavit claiming that a hearing was given, but the court found that the requirements of Rule 92(3) were not satisfied. The court set aside the impugned orders to the extent they denied refunds and remanded the matter for fresh disposal in accordance with Rule 92(3). The court also noted that the petitioner had filed undertakings not to press for refund for certain periods, but left the controversy regarding the undertakings open for the respondent to decide afresh. All contentions of the parties were kept open.
Headnote
A) Goods and Services Tax - Refund Rejection - Rule 92(3) of CGST Rules, 2017 - Mandatory Procedure - The proper officer must issue a notice in Form GST RFD-08, consider the reply in Form GST RFD-09, and provide a reasonable opportunity of hearing before rejecting a refund claim. Failure to comply renders the rejection order unsustainable. (Paras 4-6)
B) Goods and Services Tax - Undertakings - Effect on Refund Claims - Undertakings given by the petitioner not to press for refund for certain periods do not preclude the petitioner from seeking refund for other periods, and the controversy regarding undertakings is left open for fresh adjudication. (Paras 7-10)
Issue of Consideration
Whether the impugned orders rejecting the petitioner's refund claims under the CGST Act are sustainable when the requirements of Rule 92(3) of the CGST Rules, 2017 (issuance of show cause notice, opportunity to reply, and hearing) were not complied with.
Final Decision
The court set aside the impugned orders to the extent they denied refunds and remanded the matter to the respondent for fresh disposal in accordance with law and by complying with the requirements of Rule 92(3) of the CGST Rules, 2017. All contentions of the parties, including those based on undertakings, were kept open. Rule made absolute with no order as to costs.
Law Points
- Rule 92(3) of CGST Rules
- 2017 mandates issuance of show cause notice in Form GST RFD-08
- opportunity to reply in Form GST RFD-09
- and personal hearing before rejecting refund claim
- Refund rejection without complying with Rule 92(3) is unsustainable
- Undertakings given by petitioner do not bar fresh consideration of refund claims
Case Details
2024 LawText (BOM) (10) 2526
Writ Petition (L) No.6775 of 2023
M. S. Sonak, Jitendra Jain
Vinay Shroff, Devakinandan R. Singh, Nikhil Rungta, Suchita Pawar, P. H. Kantharia, Jyoti Chavan, Sulbha Sanas Bhilare
Haren Textiles Private Limited
Deputy Commissioner of State Tax, Mumbai
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Nature of Litigation
Writ petition challenging orders rejecting refund claims under the CGST Act.
Remedy Sought
Petitioner sought setting aside of the impugned orders to the extent they denied refunds and a direction to the respondent to comply with Rule 92(3) of the CGST Rules, 2017.
Filing Reason
The respondent rejected the petitioner's refund claims without issuing a show cause notice or providing an opportunity of hearing as required under Rule 92(3) of the CGST Rules, 2017.
Previous Decisions
The respondent passed orders granting refunds for some periods and rejecting for others; the petitioner challenged the rejection portions.
Issues
Whether the impugned orders rejecting refund claims are sustainable when the mandatory procedure under Rule 92(3) of the CGST Rules, 2017 was not followed.
Whether the undertakings given by the petitioner bar the petitioner from seeking refund for certain periods.
Submissions/Arguments
Petitioner argued that the refund rejections were in violation of Rule 92(3) as no show cause notice was issued and no hearing was given.
Respondent argued that a hearing was given to the petitioner's representative, but the court found this not made good.
Respondent also argued that the petitioner had given undertakings not to press for refund for certain periods and had derived benefits from those undertakings.
Ratio Decidendi
Rule 92(3) of the CGST Rules, 2017 mandates that before rejecting a refund claim, the proper officer must issue a show cause notice in Form GST RFD-08, consider the reply in Form GST RFD-09, and provide a reasonable opportunity of hearing. Non-compliance renders the rejection order unsustainable and the matter must be remanded for fresh consideration.
Judgment Excerpts
Rule 92(3) contemplates issue of a notice to the applicant to show cause as to why refund should not be ordered and upon considering the reply of the applicant, an order has to be made.
Accordingly, we set aside the impugned orders to the extent they deny the Petitioner a refund. The Respondents will now have to comply with the requirements of Rule 92(3) and decide the matter afresh as expeditiously as possible.
Procedural History
The petitioner applied for refund; the respondent passed orders granting refunds for some periods and rejecting for others. The petitioner filed a writ petition challenging the rejection portions. The court heard the parties and passed the present order.
Acts & Sections
- Central Goods and Services Tax Rules, 2017: Rule 92(3)
