HC Sets Aside Excess GST Demand Beyond SCN | Orders Matter Remand

Case Details: R.T.S. Electricals and Civil India (P.) Ltd. vs. State of U.P. - [2025] 179 taxmann.com 386 (Allahabad)

Judiciary and Counsel Details

• Shekhar B. Saraf & Prashant Kumar, JJ.
• Prem Chandra Chauhan & Arvind Kumar for the Petitioner.

Facts of the Case

The petitioner was issued a show-cause notice dated under Section 74 of the Goods and Services Tax Act. The notice called upon the petitioner as to why tax, penalty, and interest to the tune of Rs. 2,10,04,200 be not imposed. Subsequently, an order was passed, raising the demand to the tune of Rs. 3,04,55,800, including penalty and interest.

High Court Held

On writ, the Allahabad High Court held that Section 75 deals with general provisions relating to the 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. In the instant case, the show-cause notice merely indicated the amount of Rs. 2,10,04,200 as representing the tax, interest, and penalty. However, the demand with respect to the three components was raised at Rs. 3,04,55,800, which is contrary to the provisions of Section 75(7) of the Act. Thus, the violation of the provisions of Section 75(7) of the Act, the order impugned cannot be sustained.