GST Delay Condonation Cannot Be Rejected Without a Reasoned Order and Opportunity of Hearing: Punjab and Haryana High Court
Case Overview
Case: Huawei Telecommunications (India) Company Private Limited Vs Excise And Taxation Commissioner And Ors.
Court: Punjab and Haryana High Court
Provision in Question: Rule 96A(1)(b) of the Central Goods and Services Tax Rules, 2017
Background of the Dispute
The Punjab and Haryana High Court recently adjudicated upon a writ petition filed by Huawei Telecommunications (India) Company Private Limited, challenging a communication dated 24.05.2022 issued by the Excise and Taxation Commissioner. The said communication purported to reject the assessee's application for condonation of delay in receiving remittance in convertible foreign exchange against export of services, as mandated under Rule 96A(1)(b) of the CGST Rules, 2017.
The assessee had approached the High Court seeking quashing of the impugned order, raising several substantive grounds in its favour. However, before the Court could even venture into examining those arguments on merits, a more fundamental and procedural infirmity in the matter came to light — one that rendered the entire exercise of passing the so-called "order" legally untenable.
Submissions Advanced by the Assessee
The assessee, through its learned counsel, raised multiple contentions before the Court:
Absence of a Statutory Time Limit: It was argued that neither
Rule 96Aof the CGST Rules, 2017 nor any other provision of the applicable statute prescribes a specific time period within which remittance against export of services must be received. Consequently, the very premise of rejecting a condonation application stood on shaky legal ground.No Time Limit for Condonation Application Either: The assessee further submitted that there is no statutory prescription governing the time within which an application for condonation of delay in such remittance must be filed. The rejection, therefore, lacked a legal foundation.
COVID-19 Pandemic Period: It was additionally contended that the competent authority was obligated to take cognizance of the extraordinary circumstances prevailing during the outbreak of the COVID-19 pandemic, which significantly disrupted cross-border financial transactions and remittance timelines globally. The authority's failure to account for this period while rejecting the application rendered the decision unreasonable.
Notably, the Court consciously chose not to go into the merits of these arguments at this stage, as a more pressing procedural issue demanded immediate attention.