Facts:The petitioner association challenged GST liability on services rendered to its members under various welfare schemes. It relied on the doctrine of mutuality, contending that services by an association to its members are not taxable. Amendments introduced by the Finance Act, 2021 inserted Section 7(1)(aa) deeming such transactions as taxable supplies retrospectively from 01.07.2017. The Single Judge upheld the validity of levy but struck down the retrospective operation, leading to cross appeals by both parties.  Court Decision:The Division Bench upheld the constitutional validity of Sections 2(17)(e) and 7(1)(aa) of the CGST/KGST Acts, holding that the legislature was competent to treat transactions between an association and its members as taxable supplies. It held that the amendment validly removes the basis of the doctrine of mutuality for GST purposes. However, the Court held that giving retrospective effect to the amendment from 01.07.2017 was not legally sustainable on principles of fairness. Accordingly, retrospective operation of the amendment was set aside, while upholding its prospective applicability.  Cases Referred by Court:•    State of West Bengal v. Calcutta Club Ltd. •    Ranchi Club Ltd. v. Chief Commissioner of Central Excise & Service Tax •    Secretary, Madras Gymkhana Club Employees Union v. Management of Gymkhana Club •    Cricket Club of India Ltd. v. Bombay Labour Union •    JCTO v. Young Men’s Indian Association •    State of Madras v. Gannon Dunkerley & Co. •    Union of India v. Martin Lottery Agencies Ltd. •    Jayam & Co. v. State of Tamil Nadu •    Rai Ramakrishna v. State of Bihar •    Star India Pvt. Ltd. v. CCE •    Union of India v. Exide Industries Ltd.  

Facts:The petitioner challenged the requirement of pre-deposit under Section 107(6) of the CGST Act for filing an appeal against proceedings arising from a show cause notice dated 14.06.2022 alleging wrongful availment of input tax credit for the period 2017-18 to 2019-20. The petitioner sought waiver of the pre-deposit on the ground of financial hardship and amounts allegedly receivable from Government departments.Court Decision:The Court held that Section 107(6) mandates payment of the admitted amount of tax, interest, penalty and a pre-deposit of 10% of the disputed tax for filing an appeal. The provision does not confer discretion on the Court to waive the statutory pre-deposit requirement.The Court declined the request for waiver of pre-deposit and held that the petitioner must comply with the statutory requirement. However, the petitioner was permitted to approach the Appellate Authority and request adjustment of amounts already lying with the department or government entities towards the pre-deposit. The writ petition was disposed of with liberty to pursue the remedy before the appellate authority.Cases Referred by Court:Shubh Impex v. Union of India, (2018) 361 ELT 199 (Del)Anjani Technoplast Ltd. v. CCE, (2017) 348 ELT A132 (SC)Diamond Entertainment Technologies (P.) Ltd. v. Commissioner of Central Goods and Tax Commissionerate, Dehradun & Anr.Pioneer Corporation v. Union of India, (2016) 340 ELT 63Manoj Kumar Jha v. DRI, (2019) 365 ELT 166 (Del)Vice-Chancellor, University of Allahabad v. Dr. Anand Prakash MishraA.B. Bhaskara Rao v. CBIManish Goel v. Rohini GoelState of Bihar v. Arvind Kumar

BackgroundThe Respondent-assessee was subjected to proceedings under Section 74(9) of the CGST Act. A tax and penalty of more than Rs. 9.40 Crores was imposed upon him. During the enquiry, the proper officer recorded statements of third parties and entirely based his opinion of guilt on those statements, which were subsequently relied upon while passing the impugned order. The assessee requested an opportunity to cross-examine those persons — a request that was denied. Despite the availability of an appellate remedy, the assessee filed a Writ Petition before the Single Judge of the Kerala High Court alleging a serious infraction of the principles of natural justice. The Single Judge allowed the Writ Petition and set aside the impugned order, relying on Andaman Timber Industries v. Commissioner of Central Excise, Kolkata-II [(2016) 15 SCC 785]. The Revenue preferred the present Writ Appeal challenging that judgment.Relevant FactsThe Revenue contended that Section 74 of the CGST Act contains no express provision for cross-examination of witnesses, and therefore no such right can be insisted upon as a matter of law. The Revenue further argued that the Single Judge wrongly relied on Andaman Timber Industries, which was rendered without considering the binding three-Judge Bench decisions of the Supreme Court in Kanungo & Co. v. Collector of Customs [1983 (13) ELT 1486 (SC)] and Surjeet Singh Chhabra v. Union of India [1997 (89) ELT 646 (SC)]. The assessee countered that the principles of natural justice must be read into the statute regardless of express provision, and that denial of cross-examination — when statements of third parties formed the entire evidentiary foundation against him — rendered the proceedings void. The Division Bench also considered, suo motu, that certain persons were arrayed as co-noticees in the same proceedings and distinguished the right of cross-examination in respect of independent witnesses from co-noticees.Court Observations (Verbatim)"The question of maintainability of the writ petition, despite the existence of an alternate remedy, is no longer res integra...when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation." — However, since the challenge was on the ground of violation of natural justice, the writ petition was held to be perfectly maintainable.  — Para 9 & 10 (relying on CIT v. Chhabil Dass Agarwal)"It is now settled law that in every quasi-judicial proceedings, the rule of natural justice has to be followed. The rule of natural justice is the tenet of every adjudication proceedings, a violation of which renders the proceedings void. When courts are called upon to decide the validity of quasi-judicial proceedings on the ground of violation of principles of natural justice, it cannot shut its eyes and adopt a pedantic approach and hold that unless the said principle is specifically extended under plenary legislation or the rules framed under it, the insistence of the principles is not mandatory."— Para 15"The entire basis for the formation of an opinion of guilt against the petitioner was the statements of third parties recorded by the proper officer. If the writ petitioner was to prefer an effective representation against the proposals in the notice, he had to know the basis of the allegations against him and test the evidence used against him. It was therefore imperative for the proper officer to have granted the opportunity of cross-examination to the petitioner."— Para 14"A breach of the principles of natural justice strikes at the fundamental core of procedural fairness, rendering the decision invalid unless exceptional circumstances justify such deviation...the denial of natural justice at the initial stage cannot be cured at the appellate stage...the principles of natural justice are the cornerstone of justice, ensuring that no person is condemned unheard."— Para 16 (relying on Krishnadatt Awasthy v. State of M.P., 2025 SCC Online 179)"Principles of natural justice that are reflected in Article 311, are not an empty incantation. They form the very bedrock of Article 14 and any violation of these principles tantamounts to a violation of Article 14 of the Constitution...principles of natural justice guaranteed under Article 14, prohibit a decision-making adjudicatory authority from taking any arbitrary action, be it substantive or procedural in nature."— Para 22 (relying on Aureliano Fernandes v. State of Goa [(2024) 1 SCC 632], Para 35-36)"We hold that in appropriate cases, extending an opportunity of cross-examination in a proceedings under Section 74(9) of the CGST Act 2017 is an integral part of the principles of natural justice, a violation of which will render the proceedings void."— Para 25 (Court's final conclusion)Important Limitation (Para 24): The right to cross-examine does NOT extend to co-noticees. The assessee can only request the proper officer to supply copies of replies submitted by co-noticees — not seek their cross-examination.Final VerdictWrit Appeal filed by Revenue dismissed. Single Judge's order setting aside the impugned GST order confirmed and upheld. Division Bench held that in proceedings under Section 74(9) of the CGST Act, the right to cross-examine independent witnesses whose statements form the basis of the impugned order is an integral part of the principles of natural justice — denial thereof renders the order void. No costs.Cases Referred by CourtAndaman Timber Industries v. Commissioner of Central Excise, Kolkata-IIRelied upon(2016) 15 SCC 785 — Supreme Court — Single Judge's basis for allowing writ petition; upheld by Division BenchKanungo & Co. v. Collector of Customs, Calcutta and OthersDistinguished1983 (13) ELT 1486 (SC) — Supreme Court — Rendered under Sea Customs Act, 1878 (repealed); held inapplicable; cannot have universal applicationSurjeet Singh Chhabra v. Union of IndiaDistinguished1997 (89) ELT 646 (SC) — Supreme Court — Relied upon by Revenue; not accepted by Division BenchCommissioner of Income Tax & Ors. v. Chhabil Dass AgarwalRelied upon(2014) 1 SCC 603 — Supreme Court — Four exceptional circumstances where writ lies despite alternate remedy, including violation of natural justiceKrishnadatt Awasthy v. State of M.P. and OthersRelied upon3-Judge Bench2025 SCC Online 179 — Supreme Court — Breach of natural justice strikes at fundamental core of procedural fairness; denial at initial stage cannot be cured at appellate stageAyaaubkhan Noorkhan Pathan v. State of MaharashtraRelied upon(2013) 4 SCC 465 — Supreme Court — Non-extension of cross-examination opportunity vitiates decision; part of principles of natural justiceAjay Saraogi v. Union of IndiaRelied upon2024 (136) GSTR 330 — Calcutta High Court (Division Bench) — Right of cross-examination imbued under Customs Act; principles of natural justice not excludedUnion of India & Another v. Tulsiram PatelRelied uponConstitution Bench(1985) 3 SCC 398 — Supreme Court — Principles of natural justice cannot be altogether excluded even by plenary/subordinate legislation; if excluded, such rule is ultra viresKothari Filaments and Another v. Commissioner of Customs (Port) Kolkata and OthersRelied upon(2009) 2 SCC 192 — Supreme Court — Customs Act does not specifically exclude natural justice; denial of cross-examination of relied-upon witnesses renders confiscation order invalidAureliano Fernandes v. State of Goa and OthersRelied upon(2024) 1 SCC 632 — Supreme Court — Natural justice is not empty incantation; forms bedrock of Article 14; violation tantamounts to violation of Article 14; Audi Alteram Partem is a twin anchor of natural justiceManeka Gandhi v. Union of IndiaRelied upon7-Judge Bench(1978) 1 SCC 248 — Supreme Court — Referenced within Aureliano Fernandes; life and liberty cannot be restricted except by procedure that is just, fair and reasonable

BackgroundThe petitioner, a transport firm, was issued a scrutiny notice under Section 61 of the GST Act on 30.11.2023 pointing out discrepancies in its returns. The petitioner remained unaware of the notice as it was uploaded only on the departmental portal and accordingly filed no reply. A subsequent show cause notice under Section 73 of the Act was issued on 27.01.2024, requiring reply by 27.02.2024 and fixing personal hearing on 20.02.2024. The petitioner again did not respond. Consequently, the Deputy Commissioner, State Tax, Sector-3, Sonbhadra passed a demand order dated 27.04.2024 under Section 73(9) of the Act, creating a tax liability of ₹85,84,759/-. A rectification application filed by the petitioner under Section 161 of the Act was also rejected vide order dated 25.10.2024. Both orders were challenged by way of the present writ petition. Court Observations (Verbatim)Para 7: "A bare look at the order impugned dated 27.04.2024 passed under Section 73(9) of the Act reveals that the same only makes reference to issuance of two notices, the fact that they have not been responded to, and a demand has been raised."Para 8: "The manner of passing of order dated 27.04.2024 falls foul of the requirements of Section 75(6) of the Act, which requires that 'the proper officer, in his order shall set out the relevant facts and the basis of his decision', the statutory requirements for passing an order by setting out relevant facts and basis for the decision are totally missing from the order dated 27.04.2024. Even if no response was filed to the notices issued under Sections 61 and 73 of the Act, it was incumbent on respondent no.2 to pass an order in compliance of the provisions of Section 75(6) of the Act, as a final order should be self contained and merely making reference to the previous notices while passing the said order does not suffice for making it a self contained order." Final VerdictThe writ petition was allowed. The demand order dated 27.04.2024 was quashed and set aside. The matter was remanded back to the Deputy Commissioner, State Tax, Sector-3, Sonbhadra, with a direction to afford the petitioner an opportunity to file a reply to the Section 73 show cause notice within four weeks, followed by a personal hearing, and thereafter pass a fresh order in accordance with law.👍 In favour of the Assessee Cases / Provisions ReferredNo case laws cited by the Court. The following statutory provisions of the GST Act, 2017 were referred to:Section 61 — Scrutiny of ReturnsSection 73 — Determination of tax not paid / short paid (Show Cause Notice)Section 73(9) — Order of demand after adjudicationSection 75(6) — General provisions relating to determination of tax: requirement to set out relevant facts and basis of decision in the orderSection 161 — Rectification of errors apparent on the face of record  

Facts:The petitioner challenged Order-in-Original No.04/2025-GST ADC dated 06.01.2025 and the consequential rectification order dated 30.04.2025 passed for the period July 2017 to March 2023. The petitioner contended that the department issued a single show cause notice and passed a single order covering multiple financial years, which is contrary to the scheme of the GST Act.Court Decision:The Court held that under the GST Act, show cause notices must be issued based on the “tax period”. Where the assessment is based on annual returns, the relevant tax period corresponds to the respective financial year.The Court relied on its earlier decision dated 21.07.2025 in a batch of cases holding that show cause notices cannot be clubbed for more than one financial year. Since the impugned order covered the period from July 2017 to March 2023 through a single proceeding, the action was held to be without jurisdiction.Accordingly, the Court quashed the assessment order dated 06.01.2025 and the rectification order dated 30.04.2025 and granted liberty to the department to initiate separate proceedings for each financial year in accordance with law.Cases Referred by Court: W.P. Nos.29716 of 2024 etc. batch (Madras High Court, Order dated 21.07.2025)