Court Orders Fresh Hearing After Noting Inadequate Response Time and Lack of Personal Hearing in Refund Process
In a significant ruling on November 26, 2025, the Jharkhand High Court set aside the GST refund rejection orders issued by the Assistant Commissioner of Central Goods and Services Tax, Division Giridih, citing non-compliance with the principles of natural justice and procedural irregularities under Rule 92(3) of the CGST/JGST Rules, 2017. The judgment was delivered by a division bench comprising Chief Justice Tarlok Singh Chauhan and Justice Rajesh Shankar in the case of Carbon Resources Private Limited versus the Union of India.
The petitioner, Carbon Resources Private Limited, challenged the refund rejection order dated May 23, 2025, and the subsequent rectification order dated May 30, 2025. The court noted that the petitioner was only granted seven days to respond to the notice instead of the prescribed 15 days as stipulated under Rule 92(3). Furthermore, no opportunity for a personal hearing was provided before the orders were passed, which the court identified as a violation of the principles of natural justice.
The court's decision highlighted the importance of adhering to procedural rules that ensure fairness and transparency in administrative processes. The bench observed that the rectification order failed to address the procedural deficiencies of the initial order, further underscoring the need for strict compliance with the rule.
Consequently, the court quashed both the refund rejection order and the rectification order, remanding the matter back to the Assistant Commissioner for a fresh decision. The court instructed the Assistant Commissioner to provide the petitioner with a 15-day period to furnish a reply and to ensure a personal hearing before making any final decision on the refund claim.
The parties have been directed to appear before the Assistant Commissioner on December 10, 2025, to proceed with the hearing. This decision underscores the judiciary's role in safeguarding procedural fairness and ensuring that statutory provisions are followed in the administration of tax laws.
Bottom Line:
Refund rejection orders issued without adherence to principles of natural justice or compliance with Rule 92(3) of the CGST/JGST Rules, 2017 are liable to be set aside - Matters must be remanded for fresh decisions ensuring proper opportunity for reply and personal hearing to the aggrieved party.
Statutory provision(s): Rule 92(3) of the CGST/JGST Rules, 2017
Carbon Resources Private Limited v. Union of India, (Jharkhand)(DB) : Law Finder Doc Id # 2829073
