GST Refund Rejection without Hearing Opportunity Violates Natural Justice Principles: HC

Case Details: DL Support Services India (P.) Ltd. v. Additional Commissioner CGST Appeals II - [2023] 149 taxmann.com 324 (Delhi)

Judiciary and Counsel Details

• • Vibhu Bakhru & Amit Mahajan, JJ.
  • Sujit Ghosh, Mannat Waraich & Ms Anshika Agarwal, Advs. for the Petitioner.
  • Akshay Amritanshu, Ashutosh Jain, Divyansh Singh & Samyak Jain, Advs. for the Respondent.

Facts of the Case

The petitioner was involved in export of services and sought a refund of tax paid on export of services. The application was accepted but later on Adjudicating Authority denied refund on ground that petitioner-assessee and service recipient(s) were not distinct persons.

It filed appeal against the rejection of refund and Appellate Authority proceeded to deny refund on an absolutely new ground that petitioner was an intermediary under section 2(13) of Integrated Goods and Services Tax Act, 2017. It filed writ petition and contended that refund was rejected without any notice or opportunity of hearing and it was not open for the Appellate Authority to suo moto set up a new case.

High Court Held

The Honorable High Court noted that the petitioner was not given an opportunity to meet case when it was held that it was not entitled to refund being an intermediary. Therefore, the impugned order was passed in violation of principles of natural justice. The Court also held that the matter to be remanded to Appellate Authority to decide petitioner’s appeal afresh, including question as to whether Appellate Authority has jurisdiction to set up a new case against petitioner, which was not a subject matter of either show cause notice or enquiry before Adjudicating Authority.