GST Refund Claim Cannot Be Rejected Unless Mandatory Procedure Under Rule 92(3) CGST Rules Is Followed: Jharkhand High Court

The High Court of Jharkhand has set aside GST refund rejection orders passed against Carbon Resources Private Limited, holding that the tax department violated mandatory procedure and principles of natural justice while rejecting the refund claim. A Division Bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar was hearing two writ petitions challenging a refund rejection order and a subsequent rectification order passed by the Assistant Commissioner, Central GST, Giridih. The assessee, Carbon Resources Private Limited had contended that the refund was rejected without following Rule 92(3) of the CGST/JGST Rules, 2017, which requires issuance of a show cause notice in Form GST RFD-08, grant of 15 days' time to reply, and an opportunity of personal hearing before rejection. Accepting the submission, the High Court noted that only seven days' time was granted instead of the statutory 15 days and that no effective opportunity of hearing was provided to the assessee before passing the refund rejection order. The Bench further observed that the subsequent rectification order merely reiterated the original decision and failed to cure the fundamental procedural defect. Holding that the mandatory safeguards under Rule 92(3) were not complied with, the Bench quashed both the refund rejection order and the rectification order. The Bench remanded the matter to the Assistant Commissioner, Central GST, Giridih, directing the authority to grant the assessee 15 days' time to file a reply, afford a personal hearing, and thereafter pass a fresh reasoned order in accordance with law. In view of the above, the Bench allowed the writ petitions, and the parties were directed to appear before the adjudicating authority for further proceedings. Case Title: Carbon Resources Private Limited Vs. Union of India & Ors. Case No.: W.P.(T) No. 3532 of 2025 with W.P(T) No. 3825 of 2025 Appearance for Petitioner: Mr. Ankit Kanodia, Advocate (Through VC) Mr. Deepak Kr. Sinha, Advocate Ms. Diksha Dwivedi, Advocate Appearance for Respondents: Mr. Amit Kumar, Sr. S.C. (CGST) Click Here To Read/Download Order

GST Refund Claim Cannot Be Rejected Unless Mandatory Procedure Under Rule 92(3) CGST Rules Is Followed: Jharkhand High Court

Rajnandini Dutta

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