GST Authorities Must Provide Hearing Before Rejecting Refund Claims: HC:

The Uttarakhand High Court on 8 May set aside a GST refund rejection order passed against M/s Viral Buildcon Pvt. Ltd., holding that the department violated the mandatory requirement of granting an opportunity of hearing before rejecting a refund application under the GST law. A Division Bench comprising Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay quashed the order passed by the Assistant Commissioner, State Tax, which had rejected the refund claim on limitation grounds. The Court pointed out that

“Rule 93(3) of CGST Rules specifically provides for grant of opportunity of hearing before any rejection order is passed in respect of prayer for refund.”

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The petitioner challenged the order dated 24.02.2026 passed under Section 54 of the GST Act, contending that although a Show Cause Notice was issued on 06.02.2026, the department failed to provide a proper hearing before rejecting the refund application. The petitioner submitted that a detailed reply had already been filed on 12.02.2026, wherein a specific request was made seeking personal hearing through virtual mode to clarify the department’s queries.

The Revenue argued that the Show Cause Notice itself had mentioned 13.02.2026 as the date fixed for personal hearing and also pointed out that the petitioner had an alternative remedy of appeal under Section 107 of the Act.

However, the High Court observed that after receiving the petitioner’s reply requesting virtual hearing, the department proceeded to pass the impugned order without considering the request and without fixing any effective date of hearing.

The Bench noted that the requirement of providing opportunity of hearing before rejection of refund is mandatory under the CGST Rules and non-compliance with the same vitiates the entire proceedings.

The Court held that there was a clear violation of Rule 93(3) of the CGST Rules and consequently quashed the refund rejection order dated 24.02.2026. The matter was remitted back to the concerned authority for fresh consideration in accordance with law after granting proper opportunity of hearing to the petitioner.

Thus, the writ petition was partly allowed.

To Read Full Judgment, Download PDF Given Below