SAD Refund - hearing on 24th, notice sent on 18th - HC Frowns
AN importer filed a claim for refund of over eight lakh rupees being the amount paid against 4% additional duty of customs, on 4.5.2012. Though the Department is obliged to process the applications for refund within a period of three months and though the proper officer is required to return the application, if there are any defects, within 10 working days of receipt, the Department sent a notice after nearly two years only on 18.2.2014 pointing out only one defect in - that the Chartered Accountant's certificate was missing. The importer was called upon to appear before the proper officer on 24th, 25th or 26th of February 2014 along with the documents. The notice sent from Chennai on 18.02.2014 was received by the importer at New Delhi, on 24.02.2014 and so he could not comply.
The proper officer passed an Order in Original dated 5.5.2014 rejecting the refund claim. Though he had the alternate remedy of appeal, the importer filed a writ in the High Court.
The High Court was not impressed with the Department's action and observed,
The manner in which, the refund claim was processed and ultimately rejected, leaves much to be desired and this is not a fit case where the appellant should have been thrown to avail the alternative remedy.
The Regulations stipulate that whenever applications are found to be incomplete or defective, the same should be notified within 10 working days. Adequate time should be given to the assessee to set right the defects. All these have been overlooked in the Order in Original.
By sending a notice on 18.2.2014 from Chennai to an assessee in New Delhi asking them to appear for a personal hearing on the 24th, 25th and 26th February 2014, the Department cannot claim to have fulfilled the requirements of the Notification, the Regulations and the Circular.
There is no dispute about the fact that the appellant received the deficiency memo only on 24.2.2014. In such circumstances, the respondent cannot be said to have complied with the statutory requirements, while rejecting the application for refund and this is a case where there has been a gross violation of the principles of natural justice warranting exercise of jurisdiction under Article 226, despite the availability of an alternative remedy.