IMPORTANT POINT
The rejection of a refund claim without a hearing violates principles of natural justice, necessitating remand for proper proceedings.

JUDGMENT :

(Deepak Roshan J.) :

Heard learned counsel for the parties.

2. The instant writ application has been preferred by the petitioner for the following reliefs:

“(i) For quashing and setting aside the impugned Order-in-Appeal No. 18/CGST/RAN/2021 dated 01.03.2021 (Annexure-7) passed by the Appellate Authority i.e., Joint Commissioner (Appeals), CGST, Ranchi.

(ii) For quashing and setting aside the Order-in-Original dated 31.07.2020 (Annexure-6) passed by the Respondent No. 3, whereby the said Adjudicating Authority without considering the show-cause reply dated 31.07.2020 (Annexure-5) filed by the petitioner, issued a rejection order in Form GST RFD-06 dated 31st July, 2020 rejecting the petitioner's claim of Rs. 1,93,21,127/- pertaining to cess paid on inputs used in making exports supplies, on the ground that PH scheduled on 30.07.2020 in this case was not attended and no documents uploaded/submitted to clarify/resolve the discrepancies pointed in the SCN uploaded dated 15.07.2020 in Form RFD-08 (Annexure-3).

(iii) For a direction upon the concerned respondents to pass a fresh order-in-original allowing the petitioner's claim of refund of Rs. 1,93,21,127/; pertaining to cess paid on inputs used in making export supplies, after affording due opportunity of hearing to the petitioner and also after taking into account the show-cause reply dated 31.07.2020 (Annexure-5) filed by the petitioner before respondent no. 3.”

3. The brief facts of the case as it appears from the writ application is that the petitioner company is engaged in manufacturing of steel products like TMT Bars, Steel Rods etc. and for Financial Year 2017-18, the petitioner has made certain inwards supplies of coal on which compensation cess was charged by the supplier. The petitioner also imported coal and paid cess over the same and also claimed Input Tax Credit (ITC) of Rs. 41,92,74,925/- on such cess paid to the supplier or to the Government for the Financial Year 2017-18. The Coal was used in domestic supplies as well as zero-rated supplies. The petitioner, therefore, claimed proportionate refund of cess i.e., cess paid on coal which was utilized in zero-rated supplies.

Petitioner filed two claims for refund of cess separately for export supplies and supplies to SEZ units. Petitioner also filed an appeal in Form GST APL-01 against rejection of refund on export supplies and also filed a refund application for claiming refund of cess for the Financial Year 2017-18 in GST RFD-01 on 13.03.2020 for refund of an amount of Rs. 2,01,53,182.00/- on account of SEZ and direct export and accordingly a Refund ARN Receipt was duly issued to the petitioner (Annexure-1). After filing of the said refund application dated 13.03.2020 (Annexure-1), the petitioner Company once again filed a revised refund application dated 26.06.2020 claiming refund of Rs. 1,93,21,127/- on account of export sales without payment of tax for the Financial Year 2017-18 (Annexure-2).

After filing of the refund application dated 26.06.2020 (Annexure-2), the petitioner was served with a show-cause notice for rejection of application for refund in Form GST-RFD-08 dated 15.07.2020, asking the petitioner, as to why the claim of refund, to the extent of the amount specified above, should not be rejected (Annexure-3).

4. The case of the petitioner is that the SCN dated 15.07.2020 (Annexure-3), was served upon the petitioner on 16th July, 2020 at 3:20 p.m. via mail. He was given 15 days’ time from the date of service, to reply to the reasons mentioned by the respondent no. 3 i.e., by 31st July, 2020 (Annexure-4). However, the respondent no. 3 without considering the time limit of 15 days from the date of service of show-cause notice, asked the petitioner to appear before him on 30th July, 2020 at 11:30 A.M. as mentioned in the aforesaid notice dated 15.07.2020 (Annexure-3).

Petitioner filed its reply to the above show-cause notice on 31.07.2020 before the respondent no. 3, giving reply to the reason me