Demand Order under Rule 96B Set Aside and Matter Remanded for Fresh Consideration

Case: M/s Nagina International v. State of Uttar Pradesh & Anr.
Court: High Court of Judicature at Allahabad (Chief Justice’s Court)
Petition Number: Writ Tax No. 981 of 2025
Judgment Date: 18.04.2025
Category of Dispute: Refund of IGST / Jurisdiction / Rule 96B applicability
Relevant Sections & Rules:

• Section 73, Section 61 – U.P. GST Act, 2017

• Section 4 – IGST Act, 2017

• Rule 96B – CGST Rules, 2017 (inserted w.e.f. 23.03.2020)

Facts of the Case (Paras 1–7)

• The petitioner was issued SCN under Section 61 for discrepancies between GSTR-1, GSTR-3B, GSTR-9 & GSTR-9C (Para 2).

• Later, notices under Section 73 demanded IGST liability on exports; petitioner paid part liability via DRC-03 (Para 3).

• A further SCN dated 17.05.2024 sought explanation for refund of ₹33,71,562/- IGST claimed on exports for FY 2019-20 (Para 6).

• The petitioner argued refund was sanctioned by Central GST officer; State authority lacked jurisdiction; also filed BRCs, invoices, and bank statements (Para 6).

• However, by order dated 30.08.2024, demand for refund recovery was raised under Rule 96B alleging non-production of BRC (Para 7).

Questions in Consideration

1. Whether the State GST Authority had jurisdiction to adjudicate issues relating to IGST refund? (Para 8, 11)

2. Whether fixing the reply date and hearing date on the same day violated natural justice? (Para 8, 12, 13)

3. Whether Rule 96B, introduced on 23.03.2020, can be applied retrospectively to FY 2019-20 refund claims? (Para 9, 14)

4. Whether CBIC Circular dated 18.11.2019, which dispensed with BRC for refund, overrides the demand? (Para 8, 14)

Observations of the Court (Paras 11–14)

• Jurisdiction: Section 4 of the IGST Act authorises State Tax Officers as proper officers; hence plea of lack of jurisdiction rejected (Para 11).

• Opportunity of Hearing: The SCN fixed 17.06.2024 as both reply and hearing date; no subsequent notice was given before passing order on 30.08.2024. This violated principles of natural justice (Para 12–13).

• Legal Pleas Ignored: Authority did not consider applicability of Circular 18.11.2019 or non-retrospective nature of Rule 96B (Para 14).

Judgment of the Court (Paras 15–16)

• The demand order dated 30.08.2024 was set aside.

• The matter was remanded back to the Deputy Commissioner, State Tax, Bijnor.

• Petitioner directed to file reply by 02.05.2025, and authority to grant proper hearing before passing a fresh order in law.

Between Fine Lines (Simplified Summary in 5 Lines)

The Allahabad High Court held that State GST officers can adjudicate IGST matters.
However, the order was quashed since no fair hearing was granted to the petitioner.
Rule 96B cannot be applied retrospectively to refunds of FY 2019-20.
CBIC Circular of 2019 removing BRC requirement was ignored by the authority.
The case is remanded for fresh decision after proper opportunity of hearing.

Summary of Referred Cases

(No external precedents referred in judgment; only statutory provisions & CBIC Circular discussed.)

Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”