God holds the departed in his hand at Judgment and enumerates their sins; some are embarrassed and hide in his sleeve. They are chosen to be reincarnated (I think).
It's A Vision of Judgment by H. G. Wells, of all people.
The twist is that everyone, no matter how virtuous they thought themselves to be, is revealed as laughably inadequate, dishonest and weak, but God, in his infinite mercy, shakes them all out of his sleeve on to a new planet, in orbit around Sirius, to start again 'now that we know each other a little better'.
The story was first published in 1899, so is easily available online, e.g. at Project Gutenberg.