Case Law Details
Adisan Laboratories Pvt. Ltd. Vs Union of India (Bombay High Court)
The Petitioners have challenged the order passed by the Assistant Commissioner, Central Tax, Pune -1 Commissionerate, Pune dated 31 May 2022 rejecting the claim of the Petitioners for refund due to account of Input Tax Credit accumulated due to inverted duty structure.
The procedure for seeking refund is provided under chapter XI section 54 of the Central Goods and Services Tax Act, 2017 thereof. Section 54 (3) of the Act of 2017 provides for refund and states that a registered person may claim refund of any unutilised Input Tax Credit at the end of any tax period, except two categories stated therein no refund shall be allowed. According to the Petitioners, the Petitioners were in the category where credit is accumulated on the ground of rate of tax on inputs being higher than the rate of output supplies. The methodology in respect of dealing with the application for refund is provided under the Rules framed under the Act of 2017.
Rule 92 of the Central Goods and Services Tax Rules, 2017 lays down the methodology for processing the application. Rule 92 (3) of the Rules of 2017 states that if the proper Officer is satisfied, for reasons to be recorded in writing, the refund is not payable either in part or in full, notice in form of GST RFD-08 is to be issued to the Applicant and reply has to be given within 15 days. Rule 92 (3) of the Rules of 2017 contains proviso that no application for refund shall be rejected without giving the Applicant an opportunity of being heard. Therefore, issuance of the notice under Rule 92 (3) of the Rules of 2017 is not a formality but it is in aid of provision giving an opportunity to the Applicant to demonstrate that the refund is payable.
In the present case, the Petitioners have not only asserted that notice was not received by the Petitioners nor it was available on GSTN portal in the petition, but before passing the impugned order, the Petitioners had communicated to the Respondents that notice was not received nor it was available on portal. These facts have gone uncontroverted. Proceeding on the basis that the notice was neither received by the Petitioners nor it was made available on GSTN portal, it will have to be held that the opportunity of hearing to the Petitioners as envisaged under Rule 92 of the Rules of 2017 was impaired.
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