Bombay HC Sets Aside ₹23.67 Crore GST Refund Rejection, Raps Officer For Breach Of Due Process And Rule 92(3)

Mumbai, March 28: In a sharp reminder to tax authorities to strictly follow statutory procedure, the Bombay High Court has set aside an order rejecting a Rs 23.67 crore GST refund claim of Golden Cryo Pvt. Ltd., holding that the decision was passed in “undue haste” and in clear violation of legal requirements.

Refund claim and show cause notice

The petitioner had applied for refund of accumulated input tax credit (ITC) for September 2025 on exports made without payment of tax. Although the application was acknowledged in October, the company was later issued a show cause notice on December 12 alleging that its suppliers were involved in issuing fake invoices.

Golden Cryo submitted a preliminary reply via email on December 19 and sought a personal hearing. However, the very next day, the Assistant Commissioner rejected the refund claim without considering the reply or granting any hearing.

Violation of procedural rules

Appearing for the petitioner, advocate Sujay Kantawala argued that the action was in complete breach of Rule 92(3) of the CGST Rules, which mandates a 15-day period to respond and requires a personal hearing before passing an adverse order.

The Revenue defended the order, claiming that since the reply was not filed on the GST portal, it was presumed that no response had been submitted.

Court finds officer’s approach flawed

A bench of Justices Girish Kulkarni and Aarti Sathe, however, found “much substance” in the petitioner’s case and termed the officer’s approach “totally flawed”.

“There is a specific requirement under Rule 92(3)… that a time of fifteen days be made available… and only after considering the reply and after granting an opportunity of hearing, an order can be passed,” the bench observed.

Notice termed illegal

It also flagged that the officer had unlawfully curtailed the response time to seven days. “The officer has taken on himself to sideline the Rule… by substituting the period… from fifteen days to seven days,” the court said, calling the notice itself illegal.

Court criticises haste and impact

Coming down heavily on the haste shown, the court remarked: “Such approach… is certainly in the teeth of the regime of law… and opposed to the rule of law.”

It added that such conduct not only causes serious prejudice to taxpayers but also leads to avoidable litigation, wasting valuable judicial time.

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Order quashed, fresh process directed

Allowing the petition, the court quashed the December 20, 2025 order and directed the authorities to issue a fresh notice in compliance with Rule 92(3), consider the petitioner’s reply, and grant a personal hearing before passing a new order.

“All contentions of the parties are kept open,” the court said.

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