Desk of CA. Praveen Sharma – 1056 Series (CAPS)

Bombay High Court in the case of Haren Textiles Private Limited v. Deputy Commissioner of State Tax & Ors.

Issue: Refund/Appeal rejected without following the principles of natural justice.

The Bombay High Court held that an order affecting the rights of a taxpayer cannot be sustained if it is passed without granting a proper opportunity of hearing.

The Court observed that adherence to the principles of natural justice is mandatory before rejecting a taxpayer's refund claim or appeal.

The authority failed to follow the mandatory procedure prescribed under the CGST Act and Rules before rejecting the claim.

A show cause notice must clearly specify the precise grounds on which the proposed adverse action is based so that the taxpayer can effectively respond.

A reasonable opportunity of personal hearing must be provided before passing any adverse order.

As the statutory procedure and hearing requirements were not followed, the High Court set aside the impugned order.

The matter was remanded to the proper officer for fresh adjudication in accordance with law after granting due opportunity to the taxpayer.

The authority was directed to objectively consider the taxpayer's submissions and pass a reasoned and speaking order.

The judgment reiterates that compliance with procedural fairness and the principles of natural justice is indispensable under GST, and any order passed without following due process is liable to be quashed.

LINK:CA. Praveen Sharma on Linkedin

Regards
CAPS