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The grounds on which the rejection of refund order has been passed were never proposed to the petitioner nor was he ever given any opportunity to explain his position. It is, thus, clear case of violation of principle of natural justice. we allow this petition, quash the impugned order and remand the case back to respondent for passing order afresh

Section 54 of the CGST Act, 2017—Refund- Personal Hearing – The petitioner challenged the refund rejection order dated 02.12.2020 on the ground that the same is in violation of the principles of natural justice. The petitioner has filed refund in term of Section 54 of the Act, but Respondent issued a SCN for rejection as the refund has been filed after the expiry of two years from the relevant date. The petitioner replied and relied upon notification No.35/2020-CT dated 03.04.2020 and Notification No.55/2020-CT dated 27.06.2020, whereby due to outbreak of corona virus pandemic, time limit/due date for various compliances has been extended up to 31.08.2020. The explanation on delay by the petitioner in light of the aforesaid notifications was accepted but the respondent rejected the refund claim, without giving any PH. The petitioner counsel submitted that under section 54 and rule 92 it is specifically provided that no order rejecting the claim of refund shall be passed unless the person claiming refund is given an opportunity of being heard. The respondent counsel submitted that the petitioner is having alternative remedy against the impugned order under Section 107 by way of appeal. The court observed that the order is fundamentally flawed and passed in violation of the principles of natural justice. Further, no notice of show cause was given to the petitioner to explain as to why his claim for refund may not be rejected on merits. The grounds on which the impugned order has been passed were never proposed to the petitioner nor was he ever given any opportunity to explain his position. Held that:- The Hon’ble High Court allowed the petition and quashed the impugned order and remanded the case back to respondent for passing order afresh after putting the petitioner to proper show cause notice and after affording him a reasonable opportunity of being heard.
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