Delhi High Court Overturns GST Appeal Decision, Citing Violation of Natural Justice

Court mandates fresh hearing for M/s A.L. Exports after procedural lapses in GST refund appeal process

In a significant judgment delivered by the Delhi High Court, the bench comprising Justices Prathiba M. Singh and Shail Jain has set aside a GST appeal decision, emphasizing the breach of natural justice principles. The case revolves around M/s A.L. Exports, which sought a refund of Rs. 36,61,166 on account of Input Tax Credit (ITC) related to exports of goods and services without payment of integrated tax. The refund claim was initially rejected due to alleged non-submission of necessary documents by the petitioner.

The petitioner challenged the rejection through an appeal, during which significant procedural irregularities were noted. Despite the issuance of hearing notices by speed-post, these were not uploaded on the GST portal, leading to a lack of proper notification to the petitioner. Furthermore, a personal hearing was scheduled for July 2, 2025, but the appeal decision had already been rendered on June 30, 2025. This premature decision-making without affording the petitioner an opportunity for a hearing prompted the court to intervene.

Justice Singh, delivering the oral judgment, highlighted the necessity for the Appellate Authority to ensure hearing notices are communicated effectively, including uploading them on the GST portal, to uphold the principles of natural justice. The court observed that the petitioner had appeared for the scheduled hearing, demonstrating diligence, only to find the appeal had been pre-decided.

The High Court's ruling mandates a fresh hearing for M/s A.L. Exports, instructing the Appellate Authority to provide a fair opportunity for the petitioner to present their case. The court has directed the Authority to communicate through the specified email and mobile number, ensuring compliance with procedural norms.

This judgment serves as a crucial reminder of the importance of procedural fairness and transparency in legal processes, particularly in tax-related appeals. The court's decision underscores the need for systematic improvements within the GST framework to prevent similar occurrences in the future.

Bottom Line:

Principles of Natural Justice - Violation of natural justice due to non-affording of opportunity for personal hearing in appellate proceedings under GST - Order passed before the scheduled hearing date, held to be unsustainable. 

Statutory provision(s): Articles 226 and 227 of the Constitution of India, GST Laws

M/s A. L. Exports v. Union of India, (Delhi)(DB) : Law Finder Doc Id # 2786364