Case Law Details
Knowledge Capital Services Private Limited Vs Union of India (Bombay High Court)
Bombay High Court held that rejection of refund application without granting an opportunity of hearing is contrary to the proviso to Rule 92(3) of the CGST Act and hence rejection order is liable to be set aside.
Facts- The Petitioner is engaged in the business of providing information technology-enabled services and is granted a valid registration certificate. The Petitioner had exported its services under a Letter of Undertaking without payment of integrated tax in terms of section 16(3) of IGST Act which also permits to claim of refund of the unutilised input tax credit on supply of goods or services or both without payment of integrated tax. Accordingly, the Petitioner claimed a refund of accumulated ITC on account of the export of services amounting to Rs.9,63,033/- from April 2020 to March 2021 in terms of section 16 of IGST Act read with section 54(3) of the CGST Act. The refund application for this period was filed on 1 July 2022, and a receipt of which was acknowledged.
Thereafter, Respondent No.3 issued a show cause notice to the Petitioner on 8 July 2022, proposing to reject the refund claim for the reason alleged in the defect sheet. According to the Petitioner, the defect sheet was never received by the Petitioner. Thereafter, Respondent No.3 passed an impugned order on 25 July 2022, rejecting the refund claim. Being aggrieved by the action taken by Respondent No.3, the Petitioner has filed this petition.
Conclusion- It is an admitted position that no hearing was given to the Petitioner before the rejection of the refund application contrary to the proviso to Rule 92(3) of the Rules, the impugned order needs to be set aside on this ground as well.
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