Case Details: Virtusa Consulting Services Pvt. Ltd. vs. Union of India (2025) 37 Centax 201 (Kar.)
Judiciary and Counsel Details
- S.R. Krishna Kumar, J.
- Smt. Ananya Kapoor & Shri Ankur Pai Dhungat, Advs., for the Petitioner.
- Smt. Jyoti M. Maradi, HCGP & Shri Goreppa, CGC, for the Respondent.
Facts of the Case
The petitioner-company sought a refund of IGST, pursuant to which a show cause notice in Form GST RFD-08 was issued proposing rejection of the refund claim on the grounds of a mismatch between the supporting documents and the claim, restriction of turnover to figures reflected on the GST portal, and alleged non-compliance with relevant circulars. The refund claim was thereafter rejected by the assessing authority through an order in Form GST RFD-06. Aggrieved, the petitioner filed a statutory appeal under section 107(11) of the CGST read with the Karnataka GST Act, contending that the rejection was erroneous and that the refund claim had not been examined in accordance with law. The appellate authority dismissed the appeal by merely referring to the records and affirming the reasons recorded by the assessing officer, without undertaking any independent analysis or consideration of the petitioner’s submissions. The matter was accordingly placed before the High Court.
High Court Held
The Karnataka High Court held that the appellate order suffered from serious infirmities as it was laconic, cryptic, and entirely unreasoned. Interpreting sections 54 and 107 of the CGST read with the Karnataka GST Act, the Court held that an appellate authority is required to independently examine the issues raised and apply its mind to the facts and law before affirming or reversing an order. Applying the law to the facts, the Court found that the appellate authority had merely reiterated the conclusions of the assessing officer without analysis, thereby rendering the order non-speaking and arbitrary. The Court consequently held that such an order could not be sustained in law, set aside the appellate order, and remitted the matter to the stage of reply to the show cause notice for fresh consideration in accordance with law, while keeping rival contentions open.
