Lenovo India Private Limited Vs Assistant Commissioner of GST & Central Excise (Madras High Court)
The Hon’ble Madras High Court in M/s. Lenovo India Private Limited Vs Assistant Commissioner of GST & Central Excise in [W.P.No.1863 of 2023 and W.M.P.No.1965 of 2023 dated February 01, 2023] quashed the Order passed by the Revenue Department rejecting the refund application of the assessee, on the grounds that, no opportunity of personal hearing was provided, which is against the principles of natural justice. Further, directed the Revenue Department to pass an order after adhering to the principles of natural justice, considering on merits and in accordance with law within a period of 12 weeks.
M/s. Lenovo India Private Limited, (“the Petitioner”) has challenged the order dated December 13, 2022 (“the Impugned Order”) rejecting their application seeking refund claim for INR 8,52,78,067/- which being Integrated Goods and Services Tax (“IGST”) paid on supply of goods to SEZ Units on the ground of violation of principles of natural justice.
A Show Cause Notice dated November 12, 2022 (“the Impugned SCN”) was issued to the Petitioner by the Revenue Department (“the Respondent”) proposing to reject the refund application of the Petitioner and calling upon the Petitioner to submit a reply within a period of 15 days. Further, the Petitioner was called upon to appear on November 28, 2022 through physical/virtual hearing. The Petitioner submitted a reply dated December 02, 2022 requesting for a personal hearing, which was not afforded to the Petitioner and consequently, the Impugned Order was passed.
Being aggrieved, the writ petition has been filed.
Whether the principles of natural justice have been violated while rejecting the refund claim?
The Hon’ble Madras High Court in W.P.No.1863 of 2023 and W.M.P.No.1965 of 2023 held as under:
- Stated that, that the Respondent should not have scheduled a physical/virtual hearing within seven days from the date of issue of the Impugned SCN as the Petitioner was given 15 days to submit a reply to the Impugned SCN.
- Observed that, no personal hearing was afforded to the Petitioner and the objections raised by it were also not considered.
- Further observed that, principles of natural justice have been violated by the Respondent before passing of the Impugned Order by not providing the opportunity of hearing to the Petitioner.
- Quashed the Impugned Order.
- Remanded the matter back to the Respondent for fresh consideration on merits and in accordance with law.
- Directed the Respondent to pass an order within a period of 12 weeks.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner has challenged the impugned order dated 13.12.2022, rejecting their application seeking refund, on the ground of violation of principles of natural justice.
2. The petitioner claims that a show cause notice was issues to them on 21.11.2022 at 18:17:33 hrs, calling upon the petitioner to submit their reply within 15 days from the date of service of the notice. However, in the notice dated 21.11.2022, the operative portion calls upon the petitioner to appear before the respondent on 28.11.2022 at 03.00 p.m. either through physical / virtual hearing. It also states that if the petitioner fails to furnish a reply within the stipulated date or fails to appear for hearing on the appointed date and time, the case will be decided exparte on the basis of the available records and on merits.
3. Admittedly, the show cause notice dated 21.11.2022 issued at 18:17:33 hrs to the petitioner, calls upon the petitioner to submit a reply within a period of 15 days. But, however, in the very same show cause notice, the petitioner has been called upon to appear before the respondent on 28.11.2022 at 03:00 p.m. either through physical / virtual hearing. Having given time for the petitioner to submit a reply within a period of 15 days from 21.11.2022 at 18:17:33 hrs, the respondent ought not to have called the petitioner for physical / virtual hearing on 28.11.2022 at 03:00 p.m. within a period of seven days from 21.11.2022 being the date of the show cause notice.
4. The petitioner has also submitted a reply thereafter on 02.12.2022 to the show cause notice dated 21.11.2022 sent by the respondent at 18:17:33 hrs. In the reply dated 02.12.2022, the petitioner has also sought for a personal hearing. However, as seen from the impugned assessment order, no personal hearing has been afforded to the petitioner and the objection raised by the petitioner in its reply dated 02.12.2022 has also not been considered.
5. Learned standing counsel appearing for the respondent has also received instructions and does not dispute the statements made by the petitioner in the Affidavit filed in support of this Writ Petition with regard to the dates and events referred to supra. Therefore, it is made clear that the principles of natural justice has been violated by the respondent before passing of the impugned order rejecting the petitioner’s application seeking for refund.
6. Hence, the impugned order has to be quashed and the matter has to be remanded back to the respondent for fresh consideration on merits and in accordance with law, within a time frame to be fixed by this Court.
7. Accordingly, the impugned order is hereby quashed and the matter is remanded back to the respondent for fresh consideration on merits and in accordance with law. The respondent shall pass final orders within a period of twelve weeks from the date of receipt of a copy of this order, after adhering to the principles of natural justice and by affording a personal hearing to the petitioner.
8. Accordingly, this Writ Petition is disposed of. No Costs. Consequently, the connected Writ Miscellaneous Petition is closed.
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