2025 (5) TMI 767 - HC - GST

Scope of SCN - demand exceeded the amount specified in the SCN - violation of Section 75(7) of Goods and Services Tax Act 2017 - HELD THAT - Section 75 deals with general provisions relating to determination of tax and sub-section (7) specifically stipulates that the amount of tax interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice. Admittedly in the present case the show-cause notice merely indicates the amount of Rs. 8, 81, 080/- as representing the tax interest and penalty and the demand qua the three components has been raised at Rs. 32, 97, 336/- which is ex facie contrary to the provisions of Section 75(7) of the Act - on account of violation of provisions of Section 75(7) of the Act the order impugned cannot be sustained. Petition allowed.

Summary

The Allahabad High Court, in a petition challenging the order dated 18.11.2023 demanding Rs. 32,97,336/- under the Goods and Services Tax Act, 2017, held that the demand exceeded the amount specified in the show-cause notice dated 29.09.2023, which was for Rs. 8,81,080/-. Citing Section 75(7) of the Act-"The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice"-the Court found the impugned order violative of this provision. The Court emphasized that the demand including penalty and interest cannot exceed the notice amount, rejecting the respondent's contention that statutory charging of interest and penalty justified the excess. Consequently, the writ petition was allowed, the order dated 18.11.2023 was quashed, and the matter was remanded for fresh proceedings after affording the petitioner an opportunity to respond, ensuring compliance with Section 75(7).