We all know George C. Scott refused the Oscar in 1970 for 'Patton' but what was the reason why?

George C. Scott held nothing but contempt for the Oscar organization. He called it a '2 hour meat parade'. He said the whole thing was offensive, barbarous, and innately corrupt.

Finlady is correct as usual. Here is a little more information if you need or want it.

Only two people have ever refused to accept an Academy Award. Both were Best Actors. GEORGE C. SCOTT refused his 1970 award for the title role in 'Patton: Lust For Glory' because he detested the actual character of the man he had portrayed (although he had also stated in 1961 that he would never accept an Oscar award) decrying the competition of awards shows, and MARLON BRANDO refused his 1972 award for the title role in 'The Godfather' as a means of publicizing the cause of Native American Indians. In order to protest Hollywood's (and America's) poor treatment of Native Americans, Brando sent a woman who called herself SACHEEN LITTLEFEATHER to make a 'refusal speech' on his behalf. In true Hollywood fashion however, she was later revealed as not a true Native American but just an actress playing the part of one. See:
http://www.eudesign.com/oscars/osc-curi.htm