Failure to grant a reasonable opportunity of hearing before rejecting a refund application and the requirement for providing sufficient reasons for rejecting a refund application.

ORDER

Rajiv Shakdher, J. (Oral). - The substantive prayers made in the writ petition are as follows:

'a) quash and set aside the refund rejection order dated 30.12.2020 passed by the Assistant Commissioner Central GST, Delhi South;

b) direct the respondent to grant refund of Rs.98,54,248/-claimed under CGST, SGST & Cess for the period September, 2020;

c) direct the respondent to grant interest in terms of Section 56 under CGTST/SGST;

2. Notice in this writ petition was issued on 30.09.2021, whereupon the respondent has filed a counter-affidavit in the matter, followed by a rejoinder being lodged by the petitioner.

2.1. The grievance that the petitioner articulated on the very first day of hearing i.e., 30.09.2021 was that, even though the proviso to sub-rule 3 of Rule 92 of the Central Goods and Service Tax Rules, 2017 [in short, CGST Rules'] required the respondent to grant personal hearing to the petitioner before rejecting its application for refund, the regime set forth in the said rule was not complied with.

2.2. We may note that on that date, when notice was issued by a coordinate bench of this court i.e., 30.09.2021, Mr Aditya Singla, who appears on behalf of respondent, had screen-shared the details available on the respondent's GST portal to demonstrate that the date of hearing had, in fact, been fixed and it was the petitioner who did not appear in support of its refund application on the date and time allocated in that regard. Mr Singla had, thus, conveyed to the court that the date fixed for grant of personal hearing was 29.12.2020, and the time allotted was 03:00 P.M.

2.3. In consonance with the directions issued by the court on that date, a counter-affidavit, as noted above, has been filed on behalf of the respondent, which seeks to take the same stance, as was portrayed before the court on 30.09.2021.

3. The petitioner, on the other hand, has filed a rejoinder, in which it is averred that the only site available to the petitioner for obtaining information with regard to his case is services.gst.gov.in. The petitioner also goes on to aver that the web page, which has been placed on record by the respondent is from a website i.e., gstprod.cbec.gov.in/cbec.aces.gst.ui.

3.1. Therefore, according to the petitioner, the screenshot which was screen-shared by Mr Singla on 30.09.2021, could not be viewed by the petitioner.

3.2. In support of this plea that there was, in fact, no date fixed for grant of personal hearing, the petitioner has also relied upon the audit history of the case which was generated, concededly, by the respondent. [See page 41 of the case file, exhibited as Annexure P-2 (colly).]

3.3. A perusal of the audit history does establish the veracity of the assertions made by the petitioner, which is, that it does not reveal that hearing for its refund application was fixed on 29.12.2020. Since the audit history, as noticed above, is a document generated by the respondent, it is clear that the respondent has not been able to discharge the onus which is placed on it, to demonstrate that a date had been fixed for grant of personal hearing to the petitioner.

4. That being the position, the impugned order passed in the petitioner's refund application, in our view, is flawed, as the proviso to sub-rule 3 of Rule 92 of the CGST Rules clearly obliges the respondent to grant a reasonable opportunity to the petitioner of hearing before rejecting the application for refund.

4.1. For the sake of convenience, the relevant provision is extracted hereafter:

"92. Order sanctioning refund.

(1) xxx xxx xxx

(2) xxx xxx xxx

(3) Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in FORM GST RFD-08 to the applicant, requiring him to furnish a reply in FORM GST RFD-09 within a period of fifteen days of the receipt of such notice and after considering the reply, make an order in FORM G