Case Note & Summary
The University of Mumbai, established under the Bombay University Act, 1953 and later governed by the Maharashtra Public Universities Act, 2016, filed a writ petition under Article 226 of the Constitution of India challenging an order-in-original dated 27 January 2025 and a summary order dated 28 January 2025 issued by the respondent authorities. The impugned orders confirmed a Goods and Services Tax (GST) demand of Rs.16,90,05,337/- against the petitioner under Section 74(1) of the Central Goods & Services Tax Act, 2017 read with corresponding provisions of the Maharashtra Goods and Services Tax Act, 2017 and Section 20 of the Integrated Goods and Services Tax Act, 2017, along with an equivalent penalty under Section 74(1) read with Section 122 of the CGST Act. The petitioner also sought quashing of a rectification order dated 23 June 2025, Circular No. 151/07/2021-GST dated 17 June 2021, and certain instructions issued by the Central Board of Indirect Taxes. The primary grievance was that the impugned order was passed without granting any personal hearing to the petitioner, despite the petitioner's request for the same, thereby violating the principles of natural justice. The court noted that the circulars and instructions relied upon by the petitioner mandated that personal hearing be granted before passing an adverse order. The court held that the adjudicating authority was bound by these circulars and the failure to grant a personal hearing vitiated the entire proceedings. Consequently, the court quashed the impugned order-in-original, the summary order, and the rectification order, and directed the respondent authorities to afford a fresh opportunity of hearing to the petitioner, including a personal hearing, before passing any fresh order. The court also held that the circulars and instructions were valid and binding, and their non-compliance rendered the impugned orders illegal.
Headnote
A) Constitutional Law - Natural Justice - Audi Alteram Partem - Right to Personal Hearing - The impugned order confirming GST demand of Rs.16,90,05,337/- was passed without granting any personal hearing to the petitioner, despite the petitioner's request for the same. The court held that the principles of natural justice require that before an adverse order is passed, the party must be afforded a reasonable opportunity of being heard, which includes a personal hearing if requested. The failure to do so vitiates the order. (Paras 1-10) B) GST Law - Section 74(1) of CGST Act, 2017 - Demand and Penalty - The demand was confirmed under Section 74(1) of the CGST Act read with corresponding provisions of MGST Act and Section 20 of IGST Act, along with equivalent penalty under Section 74(1) read with Section 122 of CGST Act. The court quashed the order as it was passed in violation of natural justice. (Paras 2-3) C) GST Law - Circulars and Instructions - Binding Nature - Circular No. 151/07/2021-GST dated 17.06.2021 and instructions dated 05.10.2018 and 22.06.2020 issued by the Central Board of Indirect Taxes mandated that personal hearing be granted before passing an adverse order. The court held that these circulars are binding on the adjudicating authority and their non-compliance renders the order illegal. (Paras 5-7) D) GST Law - Rectification Order - Validity - The rectification order dated 23.06.2025 was also quashed as it was passed without jurisdiction and in violation of natural justice. (Para 4)
Issue of Consideration
Whether the impugned GST demand order passed without granting personal hearing to the petitioner is sustainable in law, and whether the circulars and instructions mandating personal hearing before passing an adverse order are binding on the adjudicating authority.
Final Decision
The court allowed the petition, quashed the impugned order-in-original dated 27.01.2025, summary order dated 28.01.2025, and rectification order dated 23.06.2025, and directed the respondent authorities to afford a fresh opportunity of hearing to the petitioner, including a personal hearing, before passing any fresh order. The court also held that the circulars and instructions were valid and binding.
Law Points
- Natural Justice
- Audi Alteram Partem
- Personal Hearing
- GST Demand
- Section 74 CGST Act
- Circular Ultra Vires
- Rectification Order
- Writ of Certiorari
