The Bombay High Court set aside denial of Golden Cryo Pvt. Ltd. Rs 23.67 crore GST refund, criticising officials for undue haste and procedural violations, holding such actions contrary to law and rule of law in refund adjudication process.
MUMBAI: The Bombay High Court has set aside an order denying Golden Cryo Pvt. Ltd.’s Rs 23.67 crore GST refund claim, reprimanding tax officials for acting in “undue haste” and breaching mandatory legal procedures.
Golden Cryo sought a refund of accumulated input tax credit (ITC) for September 2025 on zero-rated exports. While the refund application was acknowledged in October, the company received a show-cause notice on December 12 alleging that certain suppliers had issued fake invoices.
The firm sent a preliminary reply by email on December 19 and requested a personal hearing. Despite this, the Assistant Commissioner rejected the refund the next day without considering the reply or holding any hearing.
Advocate Sujay Kantawala, representing Golden Cryo, contended that the action violated Rule 92(3) of the CGST Rules, which requires a 15-day response period and a personal hearing before any adverse order is passed.
The Revenue defended its conduct by saying that, because the reply was not uploaded on the GST portal, it was deemed not to have been filed.
A division bench of Justices Girish Kulkarni and Aarti Sathe found “much substance” in the petitioner’s arguments and described the officer’s conduct as “totally flawed”.
The bench noted,
“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 court observed that the officer had unlawfully shortened the response period to seven days.
Declaring the notice itself illegal, the judgment said,
“The officer has taken on himself to sideline the Rule… by substituting the period… from fifteen days to seven days,”
Criticising the precipitous action, the court remarked:
“Such approach… is certainly in the teeth of the regime of law… and opposed to the rule of law.”
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It further pointed out that such conduct causes substantial prejudice to taxpayers and generates needless litigation, wasting judicial resources.
Order was set aside and fresh proceedings ordered by the court.
The court allowed the petition, quashed the December 20, 2025 order, and directed authorities to issue a fresh notice in strict compliance with Rule 92(3), consider the petitioner’s reply, and grant a personal hearing before passing any new order.
The court added,
“All contentions of the parties are kept open,”
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