The central legal point established in the judgment is that under Rule 92(3) of the Central Goods and Services Tax Rules, 2017, any application for refund can only be rejected after affording sufficient opportunity of hearing to the party seeking the refund.

JUDGMENT :

(Prayer: Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus, to call for the records pertaining to the impugned order-in-appeal No.03/2020 TRY (GST) dated 20.08.2020 and quash the same and further direct the second respondent to sanction the refund as claimed by the petitioner in their revised refund claim dated 27.03.2019 along with applicable interest within the reasonable time frame to be fixed by this Court.)

1. This writ petition has been filed challenging the Order in Appeal, dated 20.08.2020 passed by the first respondent, confirming the order, dated 27.03.2019 passed by the second respondent, rejecting the petitioner's application for refund under the Central Goods and Services Tax Rules, 2017.

2. Heard Mr. Derrick Sam, learned counsel representing Mr.Hari Radhakrishnan, learned counsel for the petitioner and Mr.R.Aravindan, learned Senior Panel counsel for the respondents.

3. The learned counsel for the petitioner would submit that under Rule 92(3) of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the “CGST Rules”), the petitioner ought to have been heard by the second respondent before rejecting his application for refund of CGST. Referring to the impugned order dated 27.03.2019 passed by the second respondent, the learned counsel for the petitioner would point out that, without affording sufficient opportunity of hearing to the petitioner, the said order has been passed rejecting the petitioner's application for refund.

4. The learned counsel for the petitioner drew the attention of this Court to the impugned order dated 20.08.2020 passed by the first respondent in the appeal and would point out that even though the Appellate Authority has confirmed that no hearing was granted to the petitioner by the second respondent, has failed to remand the matter back to the second respondent for fresh consideration. But, instead has confirmed the findings of the second respondent which according to him is not in accordance with Rule 92(2) of the CGST Rules, 2017.

5. Admittedly, no hearing was afforded to the petitioner by the second respondent before passing of the impugned order dated 27.03.2019 rejecting the petitioner's application for refund. Rule 92(3) of the Central Goods and Services Tax Rules, 2017, reads as follows:-

“92.(1)..

92.(2)..

92.(3).Where the proper office 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 GST RFD-06 sanctioning the amount of refund in whole or part, or rejecting the said fund claim and the said order shall be made available to the applicant electronically and the provisions of Sub-Rule (1) shall, mutatis mutandis, apply to the extent refund is allowed:

provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard.”

6. As seen from the aforesaid Rule, it is clear that any application for refund can be rejected only after affording sufficient opportunity of hearing to the party, who seeks for refund. The first respondent in the impugned order dated 20.08.2020 has also confirmed that no hearing was afforded to the petitioner by the second respondent and despite the same, has dismissed the appeal erroneously. The operative portion of the order of the first respondent dated 20.08.2020 reads as follows:-

“7.The appellant also argued that principles of natural justice has not been followed in their case inasmuch as they were not put under notice before the claim was rejected. Though the appellant has valid argument, that alone would not rescue the appellant's cause on merit in view of the fact that they had not complied th