BA Continuum India Pvt. Ltd. Vs Union of India and others (Bombay High Court)
The expression ‘opportunity of being heard’ is not an expression of empty formality. It is a part of the well-recognized principle of audi alteram partem which forms the fulcrum of natural justice and is central to fair procedure. The principle is that no one should be condemned unheard. It is not necessary to delve deep into the expression save and except to say that by way of judicial pronouncements the said expression has been made central to the decision making process, breach of which would be construed to be violation of the principles of natural justice thus adversely affecting the decision making process; a ground for invoking the power of judicial review.
When the law requires that no application for refund shall be rejected without giving an applicant an opportunity of being heard, the same cannot be substituted by telephonic conversations and exchange of e-mails. This is more so in the case of a claim for refund where no time-limit is fixed vis-a-vis rejection of claim. Under sub-section (7) of section 54, a time-limit of 60 days is prescribed for making of an order allowing claim of refund; but that period of 60 days would commence from the date of receipt of the application complete in all respects (emphasis is ours) without there being a corresponding provision for rejection of application not complete in all respects.
Admittedly in this case, no hearing was granted to the petitioner. Impugned orders, therefore, would be in violation of the proviso to sub-rule (3) of rule 92 of the CGST Rules and also in violation of the principles of natural justice.
That being the position, we are of the view that the matter should be remanded back to the original authority for a fresh decision in accordance with law after giving an opportunity of being heard to the Since respondent No.4 has already taken a view on merit by disclosing her mind which is adverse to the petitioner, it would be in the interest of justice and fairness if another competent officer is assigned the task of deciding the refund applications of the petitioner de novo on remand.
In the light of what we have discussed above, we set aside the impugned orders dated 26.06.2020. Applications of the petitioner for remand shall now be considered afresh by another proper officer to be allotted by respondent No.3. Let the applications for refund be heard by the new officer within a period of three months from the date of receipt of a copy of this order by respondent No.3 after giving an opportunity of being heard to the petitioner. All contentions are kept open.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Heard Mr. Prakash Shah, learned counsel for the petitioner and Ms. Jyoti Chavan, learned AGP for the respondents-State.
2. In this petition filed under Articles 226 / 227 of the Constitution of India, petitioner has assailed legality and correctness of five identical orders all dated 26.06.2020 passed by respondent No.4 for five quarters covering the period from April, 2018 to June, 2019 rejecting the refund claims made by the petitioner in respect of unutilized input tax credit.
3. Petitioner is a company incorporated under the Companies Act, 1956. It is engaged in the business of providing information technology and information technology enabled services to customers located outside India. It has its registered office at Andheri (East), Mumbai.
4. Under the erstwhile service tax regime, petitioner was registered with the service tax department. With effect from 01.07.2017, goods and services tax (GST) regime came into effect with the introduction of Central Goods and Services Tax Act, 2017 and the corresponding Maharashtra Goods and Services Tax Act, 2017 in so far State of Maharashtra is concerned. The erstwhile Central Excise Act, 1944 and Chapter V of the Finance Act, 1994 dealing with service tax stood subsumed in the Central Goods and Services Tax Act, 2017. All the assessees under the erstwhile two enactments dealing with central excise and service tax were required to migrate to the GST regime in terms of section 139(1) of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’hereinafter).
5. In compliance thereto petitioner migrated from service tax registration to GST registration and was allotted GST identification number in the State of Maharashtra.
6. It is stated that petitioner had entered into a master agreement dated 03.05.2004 with Bank of America National Association (for short ‘BANA’ hereinafter), a national banking association incorporated under the laws of United States of America. The agreement was entered into to provide for information technology and information technology enabled services by the petitioner to BANA. Details of the support services provided by the petitioner to BANA have been mentioned in the writ
7. In order to provide the mentioned output services, petitioner received various input services and availed the credit of tax paid thereon. According to the petitioner, the services provided by it to BANA qualifies as “export of service” as well as “zero-rated supply” in terms of sections 2(6) and 16 of the Integrated Goods and Services Tax Act, 2017 (‘IGST Act’ for short).
8. Petitioner exported the said services without payment of tax and filed related applications in the prescribed format on various dates claiming refund of unutilized input tax credit under section 16(3) of the IGST Act read with section 54 of the CGST Act and Rule 89 of the Central Goods and Services Tax Rules, 2017 (briefly ‘CGST Rules’ hereinafter). Petitioner filed five refund applications covering five different periods claiming total refund of Rs.9,58,13,338.00. Details of the refund applications have been provided in the writ petition which are extracted hereunder:-
