Gaurav Agarwal Vs Assistant Commissioner (Calcutta High Court)
Calcutta High Court has set aside an order by the Goods and Services Tax (GST) Appellate Authority that rejected a refund appeal filed by Gaurav Agarwal. The High Court’s decision, which highlighted a series of procedural irregularities and a lack of opportunity for hearing, has remanded the matter for a fresh adjudication on its merits. The ruling underscores the judiciary’s commitment to ensuring that tax authorities adhere to fundamental principles of natural justice and fair play.
The case revolved around Gaurav Agarwal’s claim for a refund of Input Tax Credit (ITC) amounting to ₹97,45,520, related to the export of goods and services without payment of integrated tax for the period of January to March 2020.
Chronology of Events and Procedural Breaches
The sequence of events leading to the High Court’s intervention revealed several points of contention:
1. Initial Refund Application: Gaurav Agarwal filed a refund application in Form GST RFD-01 under Section 54 of the Central Goods and Services Tax Act, 2017 (CGST Act) on August 17, 2021.
2. Registration Cancellation: Before the refund application could be processed, the petitioner’s GST registration was cancelled by the Assistant Commissioner on October 4, 2021. This cancellation was made with retrospective effect from October 25, 2019, based on a finding that the petitioner was “non-existent at the declared place of business.”
3. Refund Rejection (Without Hearing): Critically, on October 5, 2021—the very next day after the registration cancellation—the petitioner’s refund application was rejected via an order in Form GST RFD-06. The sole stated reason for rejection was the cancellation of the petitioner’s registration. According to the petitioner, no opportunity of hearing was provided, nor was a show cause notice (Form GST RFD-08, as required under Rule 92(3) of the CGST Rules, 2017) issued prior to this rejection.
4. Appeal Against Cancellation & Restoration of Registration: The petitioner appealed the cancellation of registration on October 20, 2021. This appeal was successful, and the petitioner’s GST registration was restored with retrospective effect from October 25, 2019, by an order of the Senior Joint Commissioner, State Tax, Kolkata South Circle, on March 28, 2022.
5. Post-Restoration Pursuit of Refund: Immediately after the restoration of registration, Gaurav Agarwal approached the Assistant Commissioner for the refund. He claimed he was instructed to file an application in Form GST PMT-03, which he did on June 15, 2022. This form, as highlighted by the Appellate Authority, contained an undertaking that the petitioner would not file an appeal regarding the refund determination.
6. Continued Non-Crediting of Refund: Despite the restored registration and the PMT-03 application, the ₹97,45,520 was not credited to the petitioner’s electronic credit ledger. The petitioner’s grievances lodged with public grievance officers also yielded no results.
7. Appeal Rejection (Delay & Undertaking): Unable to file a fresh refund application for the same period, the petitioner filed an appeal against the original refund rejection order (dated October 5, 2021), albeit with a delay of four and a half months. The Appellate Authority rejected this appeal on December 11, 2023, primarily on two grounds: the delay in filing the appeal and the declaration given in Form GST PMT-03 not to file an appeal.
High Court’s Critical Observations and Directives
