This appeal has been filed under Section 107 of the Central Goods and Services Tax Act, 2017 by Sh. Manoj Kumar (M/s. Shree Nath G. Traders) S/ o Gopal Singh Jat, Muhari, Weir, Bharatpur-321408 (Raj.) (hereinafter also referred to as “the appellant”) against the Order-in-Original No, dated 28-9-2019 (hereinafter called as the impugned order”) passed by the Assistant Commissioner, Central Goods & Services Tax Division-F, Bharatpur (hereinafter called as the “adjudicating authority”)

2. Brief facts of the case :

2.1    The appellant having GSTIN No. 08DONPK9666C2ZD has filed refund application of ₹ 1,44,072/- accumulated ITC for the period of October, 2018 to December, 2018 of Export of Goods/ Services without payment of tax under Section 54 of the CGST Act, 2017.

2.2    On scrutiny of refund claim filed by the appellant, the adjudicating authority has rejected the refund claim amounting to ₹ 1,44,027/- and passed the impugned order in the Form of RFD-06 vide C. No. V(GST)19/REFUND/SNG/ 19-20/1756, dated 28-9-2019 reason being that “The appellant has filed a refund application of ₹ 1,44,072/- (IGST) for the period of October, 2018 to December, 2018 of Export of Goods/Services without payment of tax (accumulated ITC) for the said period while the Taxpayer shown Nil Zero-rated supply during the months of October, 2018 to December, 2018, whereas on checking the detail on the common portal, there is no transaction for the given period. Therefore, the refund is rejected and re-credited in the electronic credit ledger as the taxpayer did not clarify the same”

3.  Being aggrieved with the impugned order in FORM-GST-RFD-06 vide reference No. C. No. V(GST)19/REFUND/SNG/19-20/1756  dated 28-9-2019, the appellant has filed the appeal on 17-8-2020 on the following grounds :-

• that Learned AC has rejected the refund without providing notice and proper opportunity of being heard and was against the principle of natural justice.
• that we had filed a refund of ITC in regard to Exports of Goods or Services without payment of tax under Section 54 of the CGST Act, 2017 vide ARN No. AB0812182295318, dated 20-5-2019 for a sum of ₹ 1,44,072/- for the period of Oct., 2018 to Dec., 2018 on GST Common portal.
• that in respect of above refund we had filed GSTR-3B for the period Oct., 2018 to Dec., 2018 whose ARN and dates are as follows :

• that also we have filed GSTR-1 for the period Oct., 2018 to Dec., 2018 vide ARN AB081218136873W, dated 25-2-2019 showing the Export Supply under Table-6A of the said return.
• that before exporting the goods, we have also filed the Form GST RFD-II i.e. letter of undertaking vide ARN AD080918000565V, dated 28-9-2018 for FY 2018-19.
• that we have also submitted the following, manually vide letter dated 20-6-2019 : –

Refund Application Acknowledgement with ARN

Statement containing details of outward   inward supply.

Declaration (1 to 8)

Cancelled Cheque

Electronic Credit Ledger for related period.

GSTR-3B for related period

GSTR-1 for related period

Copy of outward and inward bills.

Further, the Learned Asstt. Commissioner, CGST Dn,-F, Bharatpur issued form GST RFD-03, dated 9-7-2019 to submit the following :

(a)  copy of RFD-01A

(b)  Self declaration u/ s 54

(c)  Declaration under Rule 91(1)

(d)  Copy of Credit ledger for the refund period showing the amount debited from ledger.

(e)  Statement 3 : Showing details of export invoices and their FIRC’s (a) Date of Export, (b) Mathematical Calculation of Value including exchange rate, (c) BRC’s date and amount.

(f)  Statement 3A : (a) calculation of Refund claimed as per rule 89(4)-(Turnover of Zero-rated supply * Net input tax credit)/ Adjusted Total Turnover) (b) Verify the export turnover and local turnover and calculated the amount accordingly as per Rule 89(4).

(g)  GSTR-3B, refund related period.

(h)  GSTR-1 refund related period.

The Learned AC has also taken the reference of Circular No. 17/17/2017-GST, dated 15-11-2017 (related to Manual filing and  Processing of Refund Related to Zero-rated Supplies), Circular No. 24/24/2017-GST, dated 21-12-2017 (related to Manual Filing and Processing of Refund claim of account of inverted Duty Structure,  Deemed Exports and Excess Balance in Cash Ledger) and Circular No. 59/33/2018-GST, dated 4-9-2018 (related to some clarification in regards to refund filed).

• that in reply of the RFD-03 we have submitted all the document vide our letter dated 4-9-2019.

Further, the Learned AC has passed the impugned order of Rejection of Refund under Form RFD-06 on dated 28-9-2019 stated “The taxpayer has filed a refund claim of Export of Goods/ Services W/O payment of Tax (Accumulated ITC) for the months of October, 2018 to December, 2018 whereas on checking the detail of common portal, there is no transaction for the given period. Therefore, the refund is rejected and re-credited in the electronic credit ledger of taxpayer as the taxpayer did not clarify the same.” Which was not even communicated to us till 14-7-2020.

• that no notice under GST RFD-08 has been issued. No opportunity of being heard has been given which clearly violate the principle of natural justice and also against the GST Law.
• that there is very set and clear procedure to issue the memo or notice or order in case of GST refund under Sec 54 of the CGST Act and Rules made thereunder. Chapter X of the CGST Rules 2017 clearly specify the procedure in relation to refund. Where Rule 89(1) relates to filing of application in Form GST RFD-01, which was duly complied bv LIS. Further AC has issued RFD-03 under Rule 90 of the above-mentioned rules to file the documents which was duly complied by the assessee. Rule 92(3) which is to be read as under :-

Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in FORM GST RFD-08* to the applicant, requiring him to furnish a reply in FORM GST RFD-09* within a period of fifteen days of the receipt of such notice and after considering the reply, make an order in FORM GST RFD-06* sanctioning the amount of  refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the applicant electronically and the provisions of sub-rule (1) shall, mutatis mutandis, apply to the extent refund is allowed :

Provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard.

The above rule clearly said that in case of rejection of refund a notice in Form GST RFD-08 is to be issued and also the proviso also confirms the law of “opportunity of being heard”. But the Learned AC has neither issued any notice in Form GST RFD-08 nor give any opportunity of being heard to us. The said rule also requires to communicate the order under Form-RFD-06 but they also failed to comply the same and not communicate the order till 10 months  from the date of order.

• that under the facts, circumstances and legal position of the case the Learned AC has erred by not providing proper opportunity of being heard to the assessee.

4.  Personal hearing in virtual mode through video conference was held on 5-1-2021. Shri Shobhit Goyal, Chartered Accountant appeared on behalf of the appellant and explained the case. Further, he stated that before rejecting the claim of refund of his client by the adjudicating authority no show cause notice was issued by him and no opportunity was given to being heard. Further, RFD-06 was also not communicated to him. In view of the above submission, he requested to grant the refund. He has nothing more to add.

5.  I have gone through the facts of the case and written submissions made by the appellant in their appeal memo as well as oral submission at the time of personal hearing and accordingly I proceed for deciding the appeal.

6.  On carefully going through the case records and written as well as oral submission of the appellant I find that the Adjudicating Authority has rejected the refund claim of the appellant which was filed on account of zero-rated supply of goods or services or both without payment of tax. The Adjudicating Authority has stated the following reason in RFD-06.

“The Taxpayer has filed refund claim of Export of Goods/ Services without payment of tax (accumulated ITC) for the months of October, 2018 to December, 2018 while the taxpayer shown Nil Zero-rated supply during the months of October 2018 to December 2018 whereas on checking the details on the common portal, there is no transaction for the given period. Therefore, the refund is rejected and re-credited in the electronic credit ledger as the taxpayer did not clarify the same”

7. In this context, appellant submitted that in reference to their refund application Learned Asstt. Commissioner had issued (deficiency memo, GST RFD-03) for submission of additional documents which were submitted by him vide letter dated 20-7-2019. Thereafter, Learned Asstt. Commissioner has passed said impugned order of rejection of refund. The said impugned order was issued without issue of show cause notice in Form GST-08 and no opportunity of being heard was given to him which violates the principle of natural justice and against the GST laws. In their support the appellant referred the Rule 92(3) of CGST Rules, 2017 which is as under :-

RULE 92. Order sanctioning refund. – (3) Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in FORM GST RFD-08* to the applicant, requiring him to furnish a reply in FORM GST RFD-09* within a period of fifteen days of the receipt of such notice and after considering the reply, make an order in FORM GST RFD-06* sanctioning the amount of refund in whole or part, or rejecting the said refund claim and the said order shall be made available to the applicant electronically and the provisions of sub-rule (1) shall, mutatis mutandis, apply to the extent refund is allowed ;

Provided that no application for refund shall be rejected without giving the applicant an opportunity of being heard.

8. Further, it would be worth to mention here that as per Rule 90(3) of CGST Rules, 2017 – wherein it has been provided that where any deficiencies are  noticed, the proper officer shall communicate the deficiencies to the appellant,  requiring him to file afresh refund application after rectification of such deficiencies. While in the instant case, I find that the proper officer had directed to the appellant in reference to the deficiencies memo, for submission of certain documents and thereafter passed the impugned order in reference to the refund application filed by the appellant earlier.

Procedure for manual processing of refund application has been given in Circular No. 17/17/2017-GST, dated 15-11-2017 in the said circular it is clearly stated that after issuance of deficiency memo, the fresh refund application shall be filed by the applicant/ claimant.

9.  On perusal of records, I find force in the appellant’s plea that the said impugned order was passed without issuing the notice and without being heard to him. In view of the above legal provisions, I am of the opinion that it would be appropriate to remand back the matter to the Adjudicating Authority for providing the proper opportunity of being heard to the appellant and pass the reason/ speaking order. Further, I also order to the appellant to submit their submission before the Adjudicating Authority.

10.  Accordingly, the appeal is disposed of in above manner.