By S&S Co. Advocates & Solicitors · Published 6 May 2026 · Informational content, not legal advice
About this article: A general explainer prepared by S&S Co. Advocates & Solicitors on a recurring type of dispute. It does not report a specific judgment or order, names no parties and gives no case citation, so it should not be cited as authority. Law and practice change; please verify against the current statute and primary sources before relying on it.
Section 54 of the Central Goods and Services Tax Act, 2017 allows refund claims, including refunds of unutilised input tax credit on zero-rated supplies such as exports. The procedure is in Rule 89 and the following rules of the CGST Rules, 2017, and Rule 92 deals with the order sanctioning or rejecting a refund.
Rule 92(3) provides that where the proper officer is satisfied that the whole or part of the refund is not admissible, a notice must be issued stating the grounds, and the applicant must be given an opportunity to reply and an opportunity of being heard before the order is passed. High Courts have set aside rejection orders passed without a hearing, treating the requirement as more than a formality, especially where the rejection rests on a factual mismatch, such as a difference between shipping bill and invoice values, that the applicant could have explained.
A deficiency memo and a written reply do not necessarily satisfy the requirement of a hearing. Courts usually send the matter back to the refund authority for a fresh decision after a hearing, without deciding the merits of the claim themselves. Time limits for appeals and for refund claims continue to apply.