2026-VIL-238-GSTAT-THN
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SGST Tribunal

GST - Partial rejection of refund of accumulated input tax credit without issuing notice in FORM GST RFD-08 and without opportunity of being heard – Violation of mandatory procedure under Rule 92(3) of the CGST Rules, 2017 – Appellant-EOU exporting its products without payment of tax, filed refund claims of accumulated ITC under Section 16(3)(a) of the IGST Act, 2017 - The adjudicating authority sanctioned the refund in part and rejected the remaining portion in FORM GST RFD-06 on the sole ground of Mismatch of ITC - The FAA recorded that Rule 92(3) was not followed but still confirmed the rejection - Whether the partial rejection of a refund claim under Section 54 without issuing the notice in FORM GST RFD-08 and without an opportunity of being heard violates the principles of natural justice and Rule 92(3) - HELD - The language of Rule 92(3) is unambiguous and mandatory. The use of the word ‘shall’, combined with the absolute embargo in the proviso that no application for refund shall be rejected without giving the applicant an opportunity of being heard, leaves the adjudicating authority with no jurisdiction or discretion to reject a refund claim wholly or partially without first issuing FORM GST RFD-08 and affording a hearing - It is an admitted and undisputed fact that the order in FORM GST RFD-06 was issued directly. The Appellant is thereby deprived of the right to know the precise grounds of the alleged mismatch and to furnish a document-backed reply in FORM GST RFD-09. An order passed in defiance of a mandatory statutory procedure is void ab initio, in line with the principle that quasi-judicial authorities must follow prescribed procedure and pass reasoned orders - The rejection of refund without compliance with Rule 92(3) is bad in law and the orders of the adjudicating authority and the FAA are set aside - The matters are remanded to the Adjudicating Authority keeping all the issues open for fresh, de novo processing of the refund applications – The appeals are allowed by remand - Whether a hearing at the appellate stage cures the non-issuance of notice in FORM GST RFD-08 at the adjudication stage - Whether a foundational procedural defect of bypassing the original adjudication procedure can be cured by affording a hearing at the appellate stage - HELD - The right to a notice and a hearing before an adverse civil consequence is a fundamental statutory right rooted in the principle of audi alteram partem. A post-decisional hearing at the appellate stage cannot serve as a substitute for a pre-decisional statutory notice. The FAA, having noted the violation of Rule 92(3), ought to have remanded the matter instead of demanding documents and deciding the case on merits.
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