Vaishnodevi Adivsory Private Limited Vs State of Bihar (Patna High Court)
Patna High Court has intervened in a Goods and Services Tax (GST) Input Tax Credit (ITC) refund case, ruling that a rejection order based on extraneous material, not part of the initial show-cause notice, violates principles of natural justice. The court has directed the refund rejection order itself to be treated as a fresh show-cause notice, mandating a new opportunity for the petitioner to present its case.
Vaishnodevi Advisory Private Limited, the petitioner, sought a refund of ITC amounting to Rs. 44,44,328 on the export of goods without payment of integrated tax. The initial refund claim was rejected by the Joint Commissioner of State Tax on December 6, 2023. This rejection was subsequently affirmed by the appellate authority on July 22, 2024, leading the petitioner to file the present writ petition.
The core of the petitioner’s argument was that while it had provided replies to the show-cause notice and submitted relevant information, the refund rejection order incorporated “extraneous material” that was never part of the original show-cause notice. This meant the petitioner was denied an opportunity to explain or respond to these new materials, a fundamental breach of natural justice. The petitioner also highlighted that an agreement between the seller and buyer, which seemed to be a point of contention, is not a mandatory requirement for claiming such refunds.
