Section 54 of the CGST Act, 2017 —Refund --The Petitioner challenged the refund rejection order dated 25 July 2022. The Petitioner had exported its services under LUT without payment of integrated tax in terms of section 16 (3) of the IGST Act. The main contention of the Petitioner is that the procedure adopted by the Respondents to reject the refund claim is contrary to law and in breach of principles of natural justice. The court observed that the deficiencies ought to have been communicated, as per Rule 90 (3). Instead were made a ground to issue a show cause notice for rejection of the refund. There was no opportunity given to rectify lacunae, and the deficiencies which are to be informed through Form GST RFD-03 were sent in a file attached in Form GST RFD-08. There is non adherence with the procedure envisaged. Therefore, the methodology adopted by the Respondents in rejecting the application is completely contrary to the scheme of the CGST Rules of 2017.

Held that:- The Hon’ble High Court set aside the impugned order and restored the application made under Form-GST RFD-01  to file. The Respondent No. 3 will process the application as per the procedure and decide whether the Petitioner is entitled to a refund on its own merits.