Case Law Details
Knowledge Capital Services Pvt. Ltd. Vs Union of India & Ors. (Bombay High Court)
The petition was filed under Article 226 of the Constitution challenging an order dated 25 July 2022 passed by the Assistant Commissioner of State Tax, whereby the petitioner’s application for refund under Section 16 of the Integrated Goods and Services Tax Act, 2017 read with Section 54 of the Central Goods and Services Tax Act, 2017 was rejected. The refund pertained to the period from April 2019 to March 2020. The primary grievance raised by the petitioner was that the impugned order was passed ex parte without granting an opportunity of hearing, thereby violating procedural requirements.
The petitioner submitted that a similar issue had previously arisen in its own case before the High Court, where an identical order had been set aside. In that earlier decision, the Court had directed restoration of the refund application for fresh consideration, with instructions that any deficiencies be communicated to the petitioner in the prescribed format and the application be processed in accordance with law. It was argued that the present case was identical and warranted similar relief.
The respondents relied on their reply affidavit to justify the impugned order. However, it was not disputed that no opportunity of hearing had been provided and that the order had been passed ex parte without following due procedure.
Upon hearing both parties and examining the record, the Court found that the present matter was covered by its earlier decision in the petitioner’s own case. The Court observed that the prescribed procedure under the GST framework had not been followed, particularly in passing an ex parte order without granting a hearing.
Accordingly, the Court allowed the petition and quashed the impugned order dated 25 July 2022. The refund application was restored to the file of the concerned authority for fresh adjudication in accordance with law. The Court directed that any deficiencies in the application be communicated to the petitioner within three weeks, and the refund application be decided within ten weeks from the date of placing the order on record. All contentions of the parties were kept open. The petition was disposed of without any order as to costs.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. This petition under Article 226 of the Constitution challenges an order dated 25 July 2022 passed by Assistant Commissioner of State Tax, (ACS) Goregaon-East, whereby the petitioner’s application for refund of the tax as made under Section 16 of the Integrated Goods and Services Tax Act, 2017 read with Section 54 of the Central Goods and Services Tax Act 2017, stands rejected.
2. The grievance of the petitioner is that the impugned order is an ex-parte order and has been passed without providing for an opportunity of a hearing to the petitioner. The period in question, in regard to the refund application, is from April 2019 to March 2020.
3. Raichandani, learned counsel for the petitioner would submit that in an identical situation, the petitioner was required to approach this Court in the proceedings of Writ Petition No. 61 of 2023 (M/s Knowledge Capital Service Pvt. Ltd. Vs. Union of India & Ors.) on which a coordinate Bench of this Court by its judgment dated March 29, 2023 reported in 2023 PIOL-476-HCMUM-GST had set aside the order impugned therein which was similar to the order as impugned in the present proceedings, with a direction that the refund application be restored to the file of the authority to be processed as per the procedure as applicable and as discussed in the said judgment. It was also directed that if there was any deficiency in the petitioner’s application, the same be informed to the petitioner as per form – GST-RFD-2003 and that the application be processed as per law. Mr. Raichandani would submit that the present case is not different from what had fell for consideration in this Court Writ Petition No.61 of 2023 filed by the petitioner. He submits that for the similar reasons, the impugned orders are required to be set aside and the matters remanded to respondent No.3 for fresh orders to be passed by following the due procedure and in accordance with law.
4. On the other hand, Mr. Takke, has placed reliance on the reply-affidavit as filed on behalf of the respondents to justify the impugned order, however, the fact remains that the petitioner was not granted hearing on that and hence the order itself was ex-parte order and not passed by following the procedure, which cannot be disputed by Mr. Takke.
5. Having heard learned counsel for the parties, having perused the record, as also the impugned order, we are in agreement with Mr. Raichandani that the present proceeding would stand covered by the decision of the Division Bench of this Court in the petitioners own case “M/s. Knowledge Capital Pvt. Ltd. Vs. Union of India” (supra). For the reasons as recorded in such judgment, we are of the opinion, that the respondent No.3 needs to follow the procedure which has been set out in the rules. We find that such a procedure was not followed in the present case by respondent No.3 passing the ex-parte order.
6. We accordingly allow the present petition in terms of the following order.
ORDER
(I) The impugned order dated 25 July 2022 is quashed and set aside.
(II) The application of the petitioner for refund as filed under Section 16 of the IGST read with Section 54 of the CGST Act, is restored to the file of respondent No.3 to be decided a fresh by following the appropriate procedure and in accordance with law.
(III) If there are any deficiencies on the application, the same be intimated to the petitioner as expeditiously as possible and within a period of three weeks from today.
(IV) Let the refund application be decided within a period of ten weeks from the date the present order is placed on record before respondent No.3.
(V) All contentions of the parties are expressly kept open.
7. Disposed of in the above terms. No costs.
Author Bio
