GST update No 314 NON-SPEAKING ORDER FOR REFUND

It is commonly observed that the orders passed against the taxpayers do not contain the detailed discussion as regards the reasoning adopted for reaching to the point of conclusion. This often leads to challenging the said order as non-speaking order before the Courts. Recently, a similar decision was reported before hon'ble Telangana High Court in the case of AREF ABDUL SATTAR TEXTILES PVT. LTD. VS DEPUTY COMMISSIONER STATE TAX [W.P. NO. 19179 OF 2022] wherein it was held that the refund order rejecting the claim without assigning proper reasons is not legally tenable in the eyes of law. The analysis of this decision is the subject matter of discussion of our present update.
This writ petition is filed under Article 226 of the Constitution of India for quashing of order dated 16.03.2022 passed by respondent and rejecting the refund application of the petitioner for the period from July, 2017 to March, 2018. Petitioner further seeks a direction to the respondents to grant refund of Rs. 88,89,113/- along with applicable interest being excess
payment of tax by the petitioner for the aforesaid period.
Petitioner is registered under the Goods and Services Tax (GST) and is engaged in the business of textiles and sale of readymade garments. Petitioner has been filing GSTR-3B returns regularly, including for the period from July, 2017 to March, 2018. For the aforesaid period, petitioner filed refund application dated 14.01.2022 before respondent claiming refund of Rs.88,89,113/-, the breakup of which is as under -
Integrated Goods and Services Tax (IGST) - Rs.76,08,563.00;
Central Goods and Services Tax (CGST) - Rs.6,40,275.00; and
State Goods and Services Tax (SGST) - Rs.6,40,275.00
The refund application was made on the ground that there was excess payment of GST by the petitioner for the aforesaid period. A show cause notice dated 09.03.2022 was issued to the petitioner by the respondent stating that the refund application was barred by limitation as the petitioner ought to have claimed the refund within twoyears from the relevant date i.e., from the date of excess payment made in terms of Section 54 of the Central Goods and Services Tax Act, 2017. Therefore, respondent proposed to reject the claim of refund. Petitioner was called upon to file objection, if any, with documentary evidence. Petitioner submitted a detailed objection before respondent on 10.03.2022 wherein petitioner specifically pointed out that the refund application was within time and could not be construed to be beyond limitation. Thereafter, respondent passed the impugned order dated 16.03.2022 rejecting the claim of refund made by the petitioner. The reason for the refund amount being inadmissible, was "delay in refund application".
The hon'ble High Court held that the order is a non-speaking order as no reasons have been assigned for rejecting the refund application of the petitioner. Consequently, the impugned order dated 16.03.2022 was set aside and the matter was remanded back to the respondent to pass a fresh order on the refund application of the petitioner dated 14.01.2022 after giving reasonable opportunity of hearing to the petitioner.
The above decision depicts that departmental authorities pass non-speaking and non-reasoned order which ultimately leads to quashing of the said orders by the High Court. The departmental authorities should ensure that proper reasoning is provided to the taxpayers so that they are able to contest the same before higher judicial forum. Practically, it is observed that since the GST portal allows limited text to be mentioned in the order, the reasoning is not clear to the taxpayer due to which they have to knock the doors of High Court in the absence of GST Appellate Tribunal. It is hoped that the government considers the lacunae in the GST portal and allow the authorities to pass detailed adjudication orders.

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GST update No 314 NON-SPEAKING ORDER FOR REFUND

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