The Gujarat High Court quashed a GST refund rejection where the show cause notice (SCN) cited only 'other' or 'error in adjusted total turnover' without specific grounds, holding such vague reasoning invalid.
SCN Must State Specific Grounds for GST Refund Rejection
The Gujarat High Court has quashed an order rejecting a GST refund where the show cause notice (SCN) merely cited 'other' or 'error in adjusted total turnover' without specifying clear or intelligible grounds. The Court ruled that such vague or non-specific reasoning violates principles of natural justice and denies the taxpayer a fair opportunity to respond.
Justice Sandeep Kotecha emphasized that SCN must contain precise details of alleged discrepancies, particularly when refund claims are concerned. A blanket reference to generic categories like 'other' fails to inform the assessee of the specific objections, rendering the adjudication process fundamentally flawed.
The requirement of a speaking order is well settled; arbitrary or boilerplate rejections of refund claims cannot stand in law.
Practitioners must ensure that all SCNs are scrutinized for specificity. Where rejections are based on non-specific or omnibus grounds, judicial remedies should be pursued. This decision reinforces procedural fairness in GST proceedings and strengthens taxpayer rights under the regime.
