Failure of natural justice by the first authority cannot be cured by providing opportunity in appeal proceedings: High Court

Facts:

This writ petition has been filed by the petitioner aggrieved against the orders dated 29.10.2018 passed by the Assistant Commissioner, CGST and order dated 15.01.2020 passed by the Commissioner of Central Excise (Appeals) rejecting the appeal filed by the petitioner.

It is, inter-alia, indicated in the petition that the petitioner claimed refund of accumulated input tax credit on account of export of goods under letter of undertaking in terms of the provisions of Section 54(3) of CGST Act 2017 amounting to Rs.6,07,553/- and Rs.8,78,605/- for the months of July, 2017 and August, 2017. The Assistant Commissioner issued provisional refund order dated 26.09.2018, partially sanctioning refund claims to the petitioner and rejecting the refund claim for the IGST & CGST. Whereafter, the refund sanction / rejection orders dated 29.10.2018 were passed, inter-alia, rejecting the claims of the petitioner.

Feeling aggrieved, the petitioner filed appeal before the Commissioner (Appeals), who by order dated 15.01.2020, rejected the appeal filed by the petitioner.

Petitioner:

It is submitted by the petitioner with reference to provisions of Section 54(3) of CGST Act and Rule 92 of CGST Rules that the refund could not have been rejected by the authority without providing opportunity of hearing, inasmuch as, the provisions of Rule 92(3) envisage issuance of notice in Form GST RFD-08 requiring the applicant to furnish a reply in Form GST RFD-09 and after considering the reply, order can be made in Form GST RFD-06 and that no application for refund shall be rejected without giving the applicant an opportunity of being heard. However, the said provision was violated by the authority.

The appellate authority by its impugned order on the issue of violation of the principles of natural justice though held in favour of the petitioner, by observing that the natural justice has been duly followed during the appeal proceedings and the case is heard on the basis of merits, rejected the appeal.

It is submitted that the action is contrary to the provisions of the Rules and the orders having been passed in violation of principle of natural justice deserves to be set-aside.

Revenue:

Learned counsel for the respondents vehemently opposed the submissions. It was submitted that the plea raised by the petitioner seeking refund had no substance and therefore, both the authorities were justified in rejecting the claim of the petitioner for grant of refund and therefore, the order impugned does not call for any interference.

It was submitted that as the appellate authority has considered all the issues sought to be raised by the petitioner, merely because the original authority did not provide opportunity of hearing to the petitioner, cannot be a reason for questioning the validity of the orders on the said count alone and therefore, the petition deserves dismissal.

Held by High Court:

:

Principle of Natural Justice

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