Case Law Details
Huawei Telecommunications (India) Company Privaте Limited Vs Excise And Taxation Commissioner And Ors (Panjab Haryana high court)
Absence of a Reasoned Order While Rejecting Condonation Plea is Unsustainable in Law: Panjab & Haryana High Court
Summary : The Punjab and Haryana High Court held that rejection of an application for condonation of delay in receipt of export remittances under Rule 96A(1)(b) of the Central Goods and Services Tax Rules, 2017 (“the CGST Rules”) through a mere communication is legally unsustainable. The petitioner had sought condonation for delayed receipt of export proceeds, but the authority rejected the request via an intimation stating lack of satisfactory grounds. Upon examination, the Court found that no formal, reasoned order had been passed by the Excise and Taxation Commissioner, and only internal notes existed. The Court emphasized that administrative or quasi-judicial decisions must reflect proper application of mind, consideration of facts, and provide an opportunity of hearing. Since these principles were not followed, the impugned communication was set aside. The matter was remitted back to the authority for fresh consideration in accordance with law after granting due opportunity to the petitioner.
Facts:
Huawei Telecommunications (India) Company Pvt Ltd (“the Petitioner”) exported services and sought condonation of delay in receipt of remittance in convertible foreign exchange in terms of Rule 96A(1)(b) of the Central Goods and Services Tax Rules, 2017. The Petitioner submitted an application before the Excise and Taxation Commissioner requesting condonation of delay in receipt of export proceeds.
Excise and Taxation Commissioner and Ors. (“the Respondent”) rejected the Petitioner’s request through a communication dated February 06, 2023, stating that the application had been considered and that there was no satisfactory ground for seeking condonation of delay, and therefore the application stood rejected.
The Petitioner contended that there had been no consideration whatsoever of the grounds raised by the Petitioner, and further submitted that there is no statutory time limit for seeking condonation of delay or for receipt of export remittances under the statute, and that the authority ought to have been cognizant of the relevant period during which COVID-19 pandemic disruptions had occurred.
The Respondent contended that the application had been examined and rejected since no satisfactory grounds existed for condonation of delay, as indicated in the communication sent by the Department.
Aggrieved by the rejection of the condonation request by way of a mere communication, without passing a formal reasoned order and without due consideration of the facts and grounds raised, the Petitioner approached the Hon’ble Punjab and Haryana High Court by filing a writ petition seeking setting aside of the communication dated February 06, 2023.
Issue:
Whether rejection of an application for condonation of delay in receipt of export remittances under Rule 96A(1)(b) of the CGST Rules, 2017 through a mere communication without passing a reasoned order is sustainable in law?
Held:
The Hon’ble Punjab and Haryana High Court in CWP-5822-2023 held as under:
- Observed that, a perusal of the impugned order dated February 06, 2023 indicated that the same was merely a communication and intimation of an order purportedly passed by the Excise and Taxation Commissioner rejecting the petitioner’s application or representation.
- Noted that, the said communication was sent by the Deputy Excise and Taxation Commissioner (GST) on behalf of the Commissioner and stated that: “In this regard, you are hereby intimated that your application was perused by Worthy Excise and Taxation Commissioner and has been filed on 23.01.2023 observing that matter was heard on last date and there is no satisfactory ground for seeking condonation of delay. Therefore, your application has been rejected.”
- Observed that, when the Department was called upon to produce the actual order allegedly passed by the Excise and Taxation Commissioner, the original record was produced before the Court.
- Noted that, learned counsel for the Respondents was unable to deny that no order as such had been passed by the Excise and Taxation Commissioner, and that only internal notes dated January 24, 2023 and January 23, 2023 existed stating that there was no satisfactory ground for condonation of delay.
- Observed that, it was apparent that no order had been passed in accordance with law after considering the facts, circumstances and issues involved and after affording an opportunity of hearing to the Petitioner and held that, such action by the authority without a proper order reflecting consideration of the facts and circumstances is unsustainable in law.
- Directed that, the memo dated February 06, 2023 was set aside and the matter was remitted to the Excise and Taxation Commissioner to consider the issue afresh and disposed of the writ petition accordingly.
Our Comments:
The judgment reiterates the requirement that administrative and quasi-judicial authorities must pass a reasoned order after due consideration of facts and after granting opportunity of hearing before rejecting an application affecting rights of a taxpayer. The High Court emphasised that the impugned rejection was merely a communication sent by the Department stating that the application had been rejected, without any formal order reflecting application of mind by the Excise and Taxation Commissioner.
Relevant Provisions:
Rule 96A(1)(b) of the CGST Rules
“96A. Export of goods or services under bond or Letter of Undertaking.-
(1) Any registered person availing the option to supply goods or services for export without payment of integrated tax shall furnish, prior to export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the jurisdictional Commissioner, binding himself to pay the tax due along with the interest specified under sub-section (1) of section 50 within a period of –
(a) fifteen days after the expiry of three months or such further period as may be allowed by the Commissioner, from the date of issue of the invoice for export, if the goods are not exported out of India; or
(b) fifteen days after the expiry of one year, or the period as allowed under the Foreign Exchange Management Act, 1999 (42 of 1999) including any extension of such period as permitted by the
Reserve Bank of India, whichever is later, from the date of issue of the invoice for export, or such further period as may be allowed by the Commissioner, if the payment of such services is not received by the exporter in convertible foreign exchange or in Indian rupees, wherever permitted by the Reserve Bank of India.”
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
1. Prayer in this writ petition is for setting aside order dated 06.02.2023 (Annexure P-1) passed by respondent No. 1 whereby petitioner’s request for condonation of delay on receipt of remittance in convertible foreign exchange against export of services in terms of Rule 96A(1)(b) of Central Goods and Services Tax Rules, 2017 , has been rejected
2. Various arguments have been raised by learned counsel for petitioner including the one that there has been no consideration whatsoever of the grounds as raised by petitioner inasmuch as there is no time limit for seeking condonation of delay in receipt of exports remittance. Furthermore, there is no such time limit in the Statute prescribing the period for remittance. It is further submitted that in any case, authority had to be cognizant of period in question wherein there was an outbreak of pandemic COVID-19.
3. However, at this juncture without considering the arguments as above, we note that a perusal of impugned “order” dated 06.02.2023 indicates that the same is only a communication and intimation of order, purportedly passed by Excise and Taxation Commissioner rejecting petitioner’s application/ representation. This is admittedly a communication sent by Deputy Excise and Taxation Commissioner (GST) for Excise and Taxation Commissioner, Panchkula. Relevant part of communication reads as under:-
“In this regard, you are hereby intimated that your application was perused by Worthy Excise and Taxation Commissioner and has been filed on 23.01.2023 observing that matter was heard on last date and there is no satisfactory ground for seeking condonation of delay. Therefore, your application has been rejected.”
4. In view of above, learned counsel for the Department was called upon to produce copy of the order which was actually passed by Excise and Taxation Commissioner. In compliance thereof, original record has been produced before us today.
5. Learned counsel for respondents is unable to deny that no order as such has been passed by Excise and Taxation Commissioner. There is a note dated 24.01.2023 by Deputy Excise and Taxation Commissioner, GST in this regard and thereafter there is note by the Commissioner, peculiarly dated 23.01.2023, to the effect that:-
” Matter was heard on last date. There is no satisfactory ground for seeking condonation of delay. Therefore, application is rejected.”
6. It is apparent that no order as such has been passed by Excise and Taxation Commissioner in accordance with law after considering the facts, circumstances and issues involved after affording an opportunity of hearing to petitioner. In our considered opinion, such action is unsustainable.
7. Keeping in view the admitted position as above, memo dated 06.02.2023 is set aside; matter is remitted to the Excise and Taxation Commissioner to consider the same after affording due opportunity to petitioner in accordance with law and taking into consideration all the grounds as raised by petitioner.
8. Writ petition is, accordingly, disposed of
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