SCN can be issued against refund granted as per order passed after adjudication

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  • Last Updated on 14 April, 2022

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Refund; Erroneous refund; Show cause notice;

Case Details: Ganesh Ores (P.) Ltd. v. State of Orissa - [2022] 137 taxmann.com 164 (SC)

Judiciary and Counsel Details

    • A. M. Khanwilkar and Abhay S. Oka, JJ.
    • Saswat Kumar Acharya, Abhijit Agarwal, Ms. Priyadharshni G., Advs. and Rahul Shyam Bhandari, AOR for the Petitioner.

Facts of the Case

The refund order was passed in favour of petitioner after adjudication. Later, the department issued notice under Section 74(1) against refund order. The petitioner contended before High Court that against an order of erroneous refund it was open to department to file an appeal but the department can’t reopen refund granted pursuant to an adjudication on refund application by resorting to Section 74.

High Court Held

The High Court held that Section 74(1) does not make any distinction between refund orders that have been passed without adjudication and those have been passed after adjudication. The provisions of Section 74 do not indicate that an order of refund after adjudication can’t be sought to be reopened thereunder and dismissed the petition.

The petitioner filed special leave petition against the same. The Honorable Apex Court held that it is open to petitioner to urge before concerned authority that show cause notice travels beyond reasons delineated in Section 74. The Supreme Court dismissed the petition and declined to interfere.

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