Facts of the Case

The petitioner-company's claim for refund of unutilised input tax credit under the Central Goods and Services Tax Act, 2017, for the tax period September 2019 to July 2020, was rejected by the second respondent, the Assistant Commissioner, Visakhapatnam, vide order dated 26.10.2020. The appeal filed against this rejection was also dismissed by the Appellate Authority vide Order-in-Appeal No. VIZ-GST-000-APP-018-21- 22 (Appeal No.47/2020 (V) GST) dated 30.07.2021, served on 16.08.2021, which affirmed the refund rejection order. The petitioner approached the High Court for the State of Telangana at Hyderabad under Article 226 seeking a writ of mandamus quashing both orders. The certified copy of the order made available does not record the petitioner's name; the proceedings refer to it throughout as "the petitioner-company".

Issues Involved

  1. Whether the refund rejection order dated 26.10.2020 was passed before the date fixed for the petitioner's personal hearing, in violation of natural justice.
  2. Whether the Appellate Authority erred in not addressing this specific ground and instead deciding the appeal on merits.

Petitioner's Arguments

  • The notice dated 22.10.2020 fixed the petitioner's appearance before the Assistant Commissioner, Visakhapatnam, for 30.10.2020 at 6.06 p.m., yet the rejection order was passed on 26.10.2020 itself, without giving the petitioner any opportunity to present its case.
  • The refund rejection, based merely on the petitioner's failure to mention export turnover in Table 3.1(b) up to February 2020, was a technical ground that required proper examination rather than outright rejection.
  • This specific ground — that the order predated the fixed hearing — was raised in appeal but was never answered by the Appellate Authority.

Respondent's Arguments

  • Respondent Nos. 1 and 2 contended that a personal hearing had in fact been granted on 16.03.2021, at which the petitioner's authorised representative appeared through video conference, so the order could not be said to violate natural justice.
  • The respondents further contended that the petitioner had failed to place all necessary documents on record, justifying the order impugned.

Court Order/Findings

  • The Court found from the record that the notice fixed the hearing for 30.10.2020 at 6.06 p.m., yet the impugned order was passed on 26.10.2020 at 5.11 p.m. — before the date fixed for hearing.
  • The appellate authority had not answered this specific ground at all, and instead proceeded to decide the matter on merits.
  • Holding that the primary authority passed its order without hearing the petitioner and prior to the date fixed for hearing, the Court allowed the writ petition and set aside the order under challenge.
  • The matter was remanded to the Assistant Commissioner (second respondent) to decide afresh, in accordance with law, after hearing the petitioner, preferably within three months from receipt of the order. No costs were awarded.

Important Clarification

  • An order passed before the date actually fixed for personal hearing in the show-cause or intimation notice is vitiated for want of a genuine opportunity of hearing, regardless of whether some other hearing occurred at an unrelated later date.
  • Where an appellate authority fails to address a specific procedural ground raised before it and instead decides only on merits, the writ court can independently examine that ground and grant relief on it alone.

Sections Involved

  • Section 54, CGST Act, 2017 — refund of tax, including of unutilised input tax credit.

Decision – In Favour of

In favour of the Assessee — the refund rejection order and the appellate order affirming it were set aside, and the matter remanded for fresh consideration on merits after a genuine hearing.

Related Case Laws

No related case laws are available on this site at present for cross-reference on this specific point.

Case Details

  • Court: High Court for the State of Telangana at Hyderabad
  • Case No.: Writ Petition No.20849 of 2021
  • Parties: Petitioner-company (name not recorded in the certified order copy) vs Assistant Commissioner, Visakhapatnam & Ors.
  • Coram: Justice C. Praveen Kumar and Justice V. Sujatha
  • Date of Order: 22.03.2022

Link to Download the Order

Download the full order

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