Bombay HC sets aside rejection of GST refunds claimed by Colgate Global

The Bombay High Court has quashed an order by the GST authorities which had rejected the refund claim of Colgate Global Business Services Ltd.

The court has set aside the order since the deputy commissioner of state tax did not provide any reasons while rejecting the order.

The court said providing reasons is mandatory under Rule 92(3) under the Central GST Act. As such the order passed by the tax official was in breach of this provision and deserves to be set aside.

The company, engaged in the computer and related activities business, had claimed a refund of Rs 4.33 crore for a period from July 2017 to March 2018.

The court has asked the officer to pass a fresh order without being influenced by the observations made and the conclusions drawn in the impugned order within three weeks of granting personal hearing to the company.

The court also set the timeline for follow-up action. It said the order of the official will be conveyed to the company within one week from the date of passing it. If refund is allowed, the government will refund the amount to the company within two weeks from passing the order. If the order is adverse against the company, it would be at liberty to file appropriate proceedings.

Sandeep Sehgal, partner at AKM Global, said the court has reiterated the well-settled principle that the revenue must issue a speaking order. "The court has rightly held that rejection of refund with a non-speaking order is violation of principles of natural justice,"he added.