The ICFAI University Sikkim Vs. Union of India

The petitioner, ICFAI University Sikkim, is aggrieved by a communication bearing No. C No: V(19)04/ADJ/ST/COMM/SLG/2016/1176 dated 23.01.2018 issued by the Joint Commissioner of CGST and Central Excise (respondent no.3). This impugned communication referred to an application for rectification of mistake dated 12.01.2018 in the Order-in-Original No.02/ST/SLG/17-18 dated 09.05.2017. Pursuant to the impugned communication, it transpires that a demand notice bearing C No. GEXCOM/TAR/MISC/55/2022/402 dated 12.05.2022 was issued to the petitioner under section 174(2) of the CGST Act, 2017. The learned Senior Advocate appearing for the petitioner submits that the impugned communication is in the teeth of section 74 (1) of the Finance Act, 1994 (74 Act), which provides: “with a view to rectifying any mistake apparent from the record, the Central Excise Officer who passed any order under the provisions of this chapter may, within two years of the date on which such order was passed, amend the order.” The petitioner contends that the Joint Commissioner has overstepped his jurisdiction by issuing a demand notice that should have been barred by the statutory time limit prescribed for rectification of errors in the original order. The petitioner argues that the rectification of mistake application was well within the two-year period allowed under the Finance Act, 1994, and thus the subsequent demand notice is unjust and contrary to the legal provisions governing such matters. Furthermore, the petitioner points out that the impugned communication fails to take into account the substantive and procedural safeguards designed to ensure fair play and justice in administrative proceedings. The issuance of the demand notice, without duly considering the rectification application, undermines the principle of natural justice and deprives the petitioner of its right to a fair hearing. The petitioner highlights that the administrative oversight and procedural lapses by the respondent authorities have led to a situation where an unjust and legally untenable demand has been raised against the petitioner, causing undue hardship and financial strain. The petitioner emphasizes that the actions of the respondent authorities not only contravene the specific provisions of the Finance Act, 1994, but also violate the broader principles of equity and justice enshrined in the legal framework governing tax administration in India. The petitioner prays for the quashing of the impugned communication and the consequent demand notice, asserting that the rectification sought was well within the permissible limits and should have been addressed accordingly. The petitioner submits that the delay in addressing the rectification application and the subsequent issuance of the demand notice reflects a gross administrative lapse that must be corrected to uphold the integrity of the legal process. The petitioner requests the Court to intervene and provide relief by setting aside the impugned communication and the demand notice, thereby restoring the petitioner’s right to fair administrative treatment and ensuring that justice is served in accordance with the law.

According to the learned Senior Counsel for the petitioner, the provision makes it apparent that it is the Commissioner who passed the Order-in-Original who was required to deal with an application for rectification of mistake under section 74 of the Finance Act, 1994. A perusal of the impugned communication dated 23.01.2018 reflects that it was the Joint Commissioner who had communicated to the petitioner, stating that the Commissioner of CGST Siliguri Commissionerate was of the opinion that the points raised in the application were not covered under section 74 of the Act and that the application for rectification of mistakes stood disposed of. Quite evidently, there is no written order from the learned Commissioner of CGST disposing of the application for rectification of mistake as required under section 74 of the Act. This procedural lapse undermines the due process and the principles of natural justice that mandate a reasoned and written order by the appropriate authority. The learned Deputy Solicitor General of India, appearing for the respondents, fairly submits that in such a view of the matter, it would be appropriate if the application for rectification of mistake is considered by the learned Commissioner and disposed of by a written order. This submission by the respondent’s counsel acknowledges the procedural irregularity and suggests a remedy to ensure compliance with the statutory requirements. The petitioner contends that the impugned communication and the subsequent actions based on it are invalid due to the failure to adhere to the prescribed legal procedures. The petition highlights the necessity of following the correct statutory process to uphold the integrity of administrative actions and ensure that decisions are made transparently and accountably. By not providing a written order from the Commissioner, the respondent authorities have neglected their duty to offer a clear, documented rationale for the rejection of the rectification application, thereby depriving the petitioner of the opportunity to understand and respond to the grounds for dismissal. The petitioner asserts that the lack of a formal order not only contravenes the specific procedural requirements of section 74 but also violates the broader principles of fairness and justice that govern administrative proceedings. The petitioner seeks the quashing of the impugned communication and the related demand notice, arguing that the rectification application was legitimate and should have been addressed through the proper channels and procedures. The petitioner emphasizes that adherence to the correct procedures is essential for maintaining trust in the administrative process and ensuring that decisions are made fairly and justly. The procedural failure in this case has led to an unjust demand being placed on the petitioner, causing undue hardship and financial strain. The petitioner calls for the rectification application to be reconsidered by the appropriate authority, with a written order issued as required by law. This request aims to ensure that the petitioner’s rights are protected and that the administrative process operates in a manner consistent with statutory and constitutional principles. The Court is urged to intervene and provide relief by setting aside the impugned communication and demand notice, thereby ensuring that the petitioner is treated fairly and justly in accordance with the law. The petitioner seeks to restore the integrity of the administrative process and ensure that justice is served by requiring the respondent authorities to adhere to the proper legal procedures in considering and disposing of rectification applications.

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