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Case Law Details

Case Name : Kec International Limited Vs Union of India (Allahabad High Court)
Appeal Number : Writ Tax No. - 63 of 2024
Date of Judgement/Order : 01/02/2024
Related Assessment Year :

Kec International Limited Vs Union of India (Allahabad High Court)

Introduction: In a recent case before the Allahabad High Court, Kec International Limited contested the cancellation of their GST refund without being afforded an opportunity for a hearing. The court’s decision sheds light on the importance of procedural fairness in such matters.

Detailed Analysis: The petitioner, Kec International Limited, challenged the order passed by the Joint Commissioner (Corporate Circle), State Tax, Saharanpur, which reversed the refund earlier granted to them under the Uttar Pradesh Goods and Services Tax Act, 2017. The crux of the petitioner’s argument lay in the denial of their right to a fair hearing, as mandated by Section 75(4) of the Act.

The impugned order was preceded by a notice and a fixed date for hearing. However, despite the petitioner’s request for a two-week adjournment, supported by an e-filed application, the revenue authority proceeded to reject the application without providing any valid reason. This action, undertaken without affording the petitioner an opportunity for a hearing, was deemed a violation of their statutory right to natural justice.

Section 75(4) of the Act clearly stipulates the right of the petitioner to be personally heard before any adverse order may be passed. The court, recognizing the significance of this provision, held that the impugned order could not be sustained in light of the denial of this fundamental right.

The court further emphasized that the existence of alternate remedies, such as the right to appeal, should not preclude the petitioner from seeking redress through a writ petition when procedural fairness is compromised. Upholding the principles of the rule of law, the court underscored the obligation of revenue authorities to ensure that opportunities for hearing are duly enforced, thus preventing unnecessary and avoidable litigation.

In light of the revenue authorities’ failure to adhere to principles of procedural fairness, the court allowed the writ petition, setting aside the impugned order and remitting the matter back to the respondent for fresh consideration. The petitioner was granted the opportunity to file a detailed reply to the show cause notice and afforded a proper hearing before a new order is passed.

Conclusion: The Allahabad High Court’s ruling in the case of Kec International Limited vs Union of India highlights the importance of procedural fairness in matters concerning GST refunds. By remanding the matter due to the denial of a fair hearing, the court reaffirmed the principle that statutory rights to natural justice must be respected by revenue authorities to prevent needless litigation and uphold the rule of law.


1. Heard Shri Bharat Raichandani (through VC) along with Shri Namit Kumar Sharma, learned counsel for the petitioner, Sri Ankur Agarwal, learned Standing Counsel for the State-revenue authorities and Shri Anant Kumar Tiwari, learned counsel for the Union of India.

Allahabad HC Remands Matter GST Refund Cancellation Without Hearing

2. Challenge has been raised to the order dated 22.11.2023 passed by Joint Commissioner (Corporate Circle), State Tax, Saharanpur, Headquarter-Muzaffarnagar referable to Rule 142(5) of the Uttar Pradesh Goods and Services Tax Act, 2017 (hereinafter referred to as ‘Act, 2017’) for the period January, 2021. By that order, the revenue authorities have reversed the refund earlier granted to the petitioner for the said period.

3. Short submission has been advanced by learned counsel for the petitioner. The impugned order was preceded by a solitary notice dated 16.10.2023. The date fixed for hearing was 16.11.2023. Though, it is undisputed to the revenue authorities that the petitioner had sought adjournment of two weeks by e-filing adjournment application dated 15.11.2023, the revenue authority has proceeded to reject that application on a perverse reasoning of repeated adjournment sought. Without affording any opportunity of hearing and in complete denial of the petitioner’s right to that under Section 75(4) of the Act, 2017, the impugned order has been passed only to deny the refund that is otherwise due to the petitioner.

4. While learned counsel for the Revenue has strenuously urged that the petitioner may avail statutory remedy of appeal against the order, on query put to him, he could not deny either the fact that the first date fixed in the proceeding was 16.11.2023 or the fact that the petitioner had filed adjournment application for the date fixed. These facts are borne out from the face of the record. The impugned order itself recites in its 3rd paragraph that adjournment application was uploaded by the petitioner on the portal. However, no reason has been ascribed to reject the same.

5. Section 75(4) of the Act, 2017 gives perfect right to the petitioner to be personally heard before any adverse order may be passed.

6. For the facts noted above, the impugned order cannot be sustained.

7. Since the statutorily incorporated right of natural justice has been violated for no good reason, we observe that alternate remedy that otherwise exists may not operate as a bar to entertain the present petition. Besides the fact that the petitioner has a right of hearing, rule of law also commends that obligation to provide such an opportunity be duly enforced on the revenue authorities as may not give rise to fruitless and wholly avoidable litigation as has arisen in the present petition.

8. Since the learned counsel for the Revenue has made a fair statement, we do not propose to impose cost that otherwise is invited by the conduct offered by the revenue authorities.

9. Accordingly, the writ petition is allowed. The order dated 22.11.2023 is set aside. The matter is remitted to the respondent no. 3 to pass a fresh order after affording opportunity of hearing to the petitioner. It is further provided that the petitioner may file its detailed reply to the show cause notice within a period of two weeks from today. Thereupon the said authority may fix a proper date for hearing with at least 15 days notice in advance and pass appropriate order thereafter, as expeditiously as possible, preferably within a period of one month from the date of hearing.

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April 2024