Sahibabad Printers VS Additional Commissioner CGST (Appeals)

The writ petition at hand challenges two specific orders: the first dated September 14, 2020, which rejected the petitioner’s appeal against the second order dated April 7, 2020. The latter had denied the petitioner’s application for a refund. The petitioner has approached the court because the GST Act’s tribunal, which would typically handle such disputes, has not yet been established, leaving them without a remedial option.

To provide a brief background, the petitioner, who is a registered supplier under the GST Act, engaged in job work involving cloth and other materials from April 2018 to July 2018. The petitioner asserts that due to the inward supply of inputs with an inverted duty structure, they were eligible for a refund. Accordingly, they submitted a refund application in Form RFD-01, requesting Rs. 13,68,758 for the specified period. This application, dated February 24, 2020, was assigned a unique number.

Subsequently, on March 19, 2020, the respondent no. 2 issued a show cause notice in Form GST-RFD-08 to the petitioner. The notice required the petitioner to explain why the refund application should not be rejected, citing the reason as “Other” without providing further details. This notice initiated the procedural steps leading to the denial of the refund.

Given the lack of a functional tribunal to address the dispute, the petitioner is seeking relief from the High Court, emphasizing their entitlement to the refund and the procedural lapse in not providing sufficient grounds for the rejection. The court is thus being asked to intervene to ensure that the petitioner’s claim is duly considered and processed according to the provisions of the GST Act.

The present writ petition challenges two critical orders issued by the authorities concerning the petitioner’s claim for a GST refund. The first order, dated 14.09.2020, rejected the petitioner’s appeal against the second order dated 07.04.2020, which itself had denied the refund application submitted by the petitioner. The petitioner, finding the GST tribunal yet to be constituted, has turned to the court for relief, asserting that leaving him without recourse would be unjust.

The petitioner, registered under the GST Act, undertook job work on various textiles from April to July 2018. Due to the inward supply of inputs at an inverted rate, he was eligible for a refund, which he applied for via Form RFD-01, requesting Rs. 13,68,758. The application was dated 24.02.2020. Subsequently, on 19.03.2020, the respondent no. 2 issued a show cause notice (Form GST-RFD-08) to the petitioner, asking why the refund application should not be rejected, citing “Other” reasons. The petitioner contends that he could not respond to this notice due to the lockdown initiated on 22nd March 2020. Despite the lockdown, the respondent no. 2 proceeded to reject the refund application on 07.04.2020 without providing a hearing opportunity or notifying the petitioner of the hearing date.

The order rejecting the refund application lacked any explanation or reason, which the petitioner asserts was not communicated or uploaded on the GST portal. In response, the petitioner reached out to the GST Help Desk, which acknowledged the issue and promised a resolution. On 16.06.2020, the Help Desk informed the petitioner that the Tax Officer had not attached any documents with the RFD-06 notice. Consequently, the petitioner submitted a reply and uploaded supporting documents on the portal the same day. This submission was accepted by the authorities, primarily because the Tax Officer had not provided the necessary rejection documents by then.

The petitioner now seeks judicial intervention to address the procedural and substantive flaws in the handling of his refund application and to ensure that his rights under the GST Act are adequately protected.

The writ petition at hand challenges two key orders: the rejection of the petitioner’s appeal on 14.09.2020, and the initial rejection of the refund application on 07.04.2020 by the respondent no. 2. The petitioner, who is a registered supplier under the GST Act, sought a refund of Rs. 13,68,758 for the period of April to July 2018, citing entitlement under the inverted duty structure due to inward supply of inverted-rated inputs. The application for refund was filed in Form RFD-01 and assigned a number on 24.02.2020.

On 19.03.2020, a show cause notice was issued to the petitioner, requesting justification for the refund claim. The petitioner claims that due to the lockdown starting on 22nd March 2020, he was unable to respond to the notice. Despite the lockdown, the respondent no. 2 proceeded to reject the refund application on 07.04.2020 without providing the petitioner an opportunity for a hearing or detailing the reasons for rejection in the order. The petitioner contends that no intimation regarding the hearing date was ever received, and the reasons for the rejection were not included in the order, making it inaccessible on the GST portal.

The petitioner contacted the GST Help Desk, which, on 16.06.2020, informed him that the Tax Officer had not uploaded any documents to support the order. The petitioner then submitted the necessary documents and replied on the portal on the same date, which was later accepted, as it was evident that the required documentation was missing initially. On 19.06.2020, the petitioner received a copy of the order from the respondent no. 2, but it still did not provide any specific reasons for the rejection of the refund claim.

Subsequently, the petitioner appealed to the respondent no. 1 against the order dated 07.04.2020. However, the appeal was dismissed on 14.09.2020, primarily on the grounds that the petitioner had not responded to the show cause notice and failed to provide supporting documents even at the appellate stage. The counsel for the petitioner argues that all necessary documents had been submitted along with the refund application, and the failure to consider these documents was a fundamental flaw in the handling of the refund claim.

Given that the GST tribunal has not yet been constituted, the petitioner has sought recourse through this court, asserting that he should not be left without a remedy. The petitioner’s appeal and the handling of his refund application highlight significant procedural issues and a lack of clarity and communication from the authorities involved, which the court is urged to address.

Download PDF:

For Reference Visit:

Read Another Case Law:

GST Case Law: