The Bombay High Court has set aside an ex-parte order rejecting a GST refund claimholding that the adjudicating authority failed to provide the taxpayer with a reasonable opportunity of being heard before passing the refund rejection order.
The bench of Justice Suman Shyam and Justice Advait M. Sethna directed the GST department to conduct a fresh adjudication after granting the petitioner an opportunity to present its case and to pass a reasoned order in accordance with law.
The writ petition was filed under Article 226 of the Constitution challenging an order dated 20 December 2025, passed under Rules 92(1), 92(3), 92(4), 92(5), and 96(7) of the Central Goods and Services Tax Rules, 2017, read with Sections 73 and 74 of the CGST Act. The impugned order had rejected the petitioner’s GST refund application filed on 14 October 2025.
Buy Now: 130 GST Judgments – E-Magazine July 2026
Appearing for the petitioner, Senior Advocate Dr. Sujay Kantawala contended that the refund rejection order was passed ex-parte without considering the taxpayer’s reply dated 15/19 December 2025 to the show cause notice issued on 12 December 2025.
The petitioner argued that the order was cryptic, non-speaking, and passed in complete violation of the principles of natural justice, causing serious prejudice. It was further submitted that the adjudicating authority ignored the detailed reply already filed by the petitioner and proceeded to reject the refund claim without granting an effective hearing. The petitioner relied upon the Bombay High Court’s earlier decision in Golden Cryo Pvt. Ltd. v. Union of India, where similar relief had been granted.
During the hearing, counsel appearing for the GST authorities fairly admitted that the impugned refund rejection order had indeed been passed without affording the petitioner a reasonable opportunity to present its case.
On instructions, the respondents agreed that the proceedings could be remanded to the adjudicating authority for de novo adjudication, acknowledging the procedural defect in the original proceedings.
After examining the record, the Division Bench observed that both parties were in agreement that the adjudicating authority had passed the refund rejection order without considering the taxpayer’s reply to the show cause notice.
The Court held that the petitioner had not been given a reasonable opportunity to present its case before the adverse order was passed. Such denial of hearing amounted to a violation of the principles of natural justice, making the order legally unsustainable.
The Bench also noted that a coordinate Bench of the High Court had recently adopted the same approach in Golden Cryo Pvt. Ltd., where an ex-parte refund rejection order was quashed and the matter remanded for fresh consideration.
Court Quashes Refund Rejection Order
Allowing the writ petition, the High Court quashed the impugned order dated 20 December 2025 and directed the jurisdictional GST authority to issue a fresh notice fixing a date of hearing.
The Court further directed that the adjudicating authority must consider the petitioner’s reply already submitted to the show cause notice, grant a proper personal hearing, and thereafter pass a reasoned order strictly in accordance with law.
Importantly, the Bench clarified that the fresh proceedings would recommence from the stage of consideration of the petitioner’s reply dated 15/19 December 2025, thereby preserving the procedural steps already completed before the defective order was passed.
While granting relief, the High Court expressly clarified that it had not examined the merits of the taxpayer’s refund claim. All rival contentions were left open for consideration by the adjudicating authority during the fresh proceedings.
Membership Required to Access Case Details & Order Copy
To view the complete Case Details and Download Order Copy, you must have an active membership. Please subscribe to continue.
