Raj Jaggi
Quick Summary
Ratio: Refund rejection without issuance of deficiency memo and opportunity of hearing in violation of Rule 92 is void ab initio and non-est in law, and consequential limitation cannot defeat the taxpayer's substantive rights. When Procedure Becomes a Barrier, Justice Must Break Through In taxat
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FAQ :
The court ruled that a refund rejection is void ab initio (from the beginning) and non-est in law if it violates Rule 92 of the CGST Rules, 2017, by not issuing a deficiency memo or providing an opportunity for a hearing.
Rule 92 outlines the mandatory procedure for sanctioning refunds, including stages like examining the application, identifying deficiencies, communicating them to the taxpayer, and providing an opportunity for response before making a decision. It acts as a comprehensive framework for valid refund adjudication.
No, the court held that limitation periods cannot defeat a taxpayer's substantive rights when the initial refund rejection was legally unsustainable due to procedural violations by the authority.
These terms mean that the order has no legal existence or validity from the moment it was made. It neither creates rights nor extinguishes them and cannot be relied upon as a valid exercise of statutory power.
The court noted that the department entertaining a fresh refund application and issuing a deficiency memo after an initial rejection indicated that the matter had not attained finality. This inconsistency was considered relevant in ensuring fairness to the taxpayer.
The ruling highlights that in a digital tax regime like GST, adherence to prescribed modes of communication, such as uploading orders on the GST portal, is essential for fairness, clarity, and effective taxpayer participation.
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