The Hon’ble Madras High Court in the case of 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] has dealt with the issue of violation of principles of natural justice in the rejection of the GST refund application. In this case, the Revenue Department had rejected the GST refund application of the Petitioner (M/s. Lenovo India Private Limited) for INR 8,52,78,067/-, which was the Integrated Goods and Services Tax (IGST) paid on the supply of goods to SEZ Units.
The Revenue Department had issued a Show Cause Notice (Impugned SCN) dated November 12, 2022, proposing to reject the refund application and calling upon the Petitioner to submit a reply within a period of 15 days. The Petitioner was also 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.
The Hon’ble Madras High Court observed that the Revenue Department should not have scheduled a physical/virtual hearing within seven days from the date of the Impugned SCN as the Petitioner was given 15 days to submit a reply to the Impugned SCN. The court also observed that no personal hearing was afforded to the Petitioner and the objections raised by it were also not considered. The court held that the principles of natural justice have been violated by the Revenue Department before passing the Impugned Order by not providing the opportunity of a hearing to the Petitioner.
As a result, the Hon’ble Madras High Court quashed the Impugned Order and remanded the matter back to the Revenue Department for fresh consideration on merits and in accordance with law. The court directed the Revenue Department to pass an order within a period of 12 weeks, adhering to the principles of natural justice.
In conclusion, the Hon’ble Madras High Court has emphasized the importance of following the principles of natural justice in the administration of justice. The court has ensured that the Revenue Department, while passing the order, should follow the principles of natural justice, consider the matter on merits, and pass the order in accordance with law. This case is a clear indication of the judiciary’s commitment to upholding the principles of natural justice and ensuring that justice is delivered fairly and impartially.
