Defective Show Cause Notice is itself bad in law

Case Details:

Issue- In the above case, the petitioner was engaged in export of services as per the GST legislation. The petitioner opted for the option under sub-section 3(a) of section 16 of the Integrated Goods and Service Tax Act, 2017 (‘the IGST Act’). The petitioner exports its services under bond or letter of undertaking without payment of integrated tax and claims refund of unutilised input tax credit. Petitioner has applied for refund of Rs. 2,84,04,175/- but Show cause notice was issued for rejection of Rs. 36,85,893/- for which the reply was also submitted by petitioner. Due to officer concerned proceeded on leave on personal grounds and therefore, the matter was assigned to another officer, who was required to give a fresh opportunity of personal hearing to the petitioner but the officer without giving opportunity of hearing passed an order on 11/13-5-2021 rejecting the entire claim of refund amounting to Rs. 2,84,04,175/-

Held- It was held that once a show cause notice for the refund claim of Rs. 36,85,893/- is issued at the best, the rejection that can be made is for the amount for which the show cause notice is issued and surely not for any higher amount than specified in show cause notice. It is quite obvious that is a gross and apparent mistake that the authority concerned has travelled beyond the scope of show cause notice. That itself is the valid and opt ground for the Court to interfere and  So far as the non availment of the opportunity of hearing is concerned, the officer, who has heard the petitioner has not delivered the order and the one who has passed the order impugned has done so without availing a fresh opportunity to the petitioner. This is a ground which has been raised emphatically before the Court and rightly so. The officer concerned, if had any doubt or question on the issue to be addressed while deciding the matter on merit, the opportunity of hearing to the petitioner could have been given and then the matter ought to have been decided in accordance with law. Noticing the fact that the grievance is with regard to the non-availment of opportunity of hearing and being a breach on procedural side, let the same be ordered to be cured without quashing and setting aside the show cause notice itself. From the foregoing discussion, We deem it appropriate to quash and set aside the order and direct the respondent authority to avail an opportunity to the petitioner in relation to the show cause notice dated 16/18-3-2021 to schedule a day for hearing and if the physical hearing is not permitted, the authority concerned shall virtually hear the petitioner and decide the matter in accordance with law bearing in mind the basic requirement.