Order Date – 12 June 2023

Parties: Steel Authority of India Limited (Bokaro Steel Plant) Vs The State of Jharkhand, Joint Commissioner of State Taxes (Administration), Deputy Commissioner of State Taxes and State Tax Officer

Facts – 

• The Petitioner, Steel Authority of India Limited (Bokaro Steel Plant), applied for refund of unutilized ITC for the period 2017-18 and the same was sanctioned and received such communication in its online portal as well as e-mail, payment advice in RFD-05 was not issued by the jurisdictional officer due to some technical difficulties.
• After a lapse of about two and half years, petitioner was communicated that its application for refund has been rejected and the amount towards accumulated ITC has been credited in Petitioner’s electronic credit ledger on 22.10.2019.
• The petitioner applied for the entire order sheet, however no order rejecting refund was supplied to them.

Issue – 

• Whether rejection of sanctioned ITC is in order?

Order –

• The Divisional Bench of Hon’ble High Court observed that petitioner was communicated for the first time that its refund application has been rejected. However, copy of the said refund rejection order is not available in the record of the Department. Admittedly, no opportunity of hearing has been granted to the Petitioner before passing of the purported order of rejection of refund.
• This Court, vide order dated 30.01.2023, held that in absence of any order either sanctioning or rejecting refund application being available on record, no decision can be said,under law, to be taken on the refund application of the Petitioner.
• Even if any order was passed rejecting application of the Petitioner, said order was passed in utter violation of the principles of natural justice and without complying with Rule 92(3) of the CGST Rules, which provides for grant of opportunity of hearing before rejection of refund application of an applicant.
• If Petitioner is directed to apply for refund application afresh, the Petitioner would lose the benefit of statutory interest in terms of Section 56 of the CGST Act, which, otherwise, the Petitioner is entitled as its refund application has been purportedly illegally rejected contrary to the statutory provisions.
• Alleged order by which refund application of the Petitioner has been purportedly rejected by the Respondent, is non-est in the eye of law being a non-existing order. Respondents are directed to process the claim of refund along with interest @ 6% per annum till the date of payment of refundable amount to the Petitioner.