SCN Without Interest Quantification Invalid Under Section 75(7) | HC

Case Details: Sanjay Construction vs. State of U.P. - [2026] 184 taxmann.com 576 (Allahabad)

Judiciary and Counsel Details

• Shekhar B. Saraf & Manjive Shukla, JJ.
• Deepak Kumar Pandey, Piyush Agnihotri & Shailesh Sachan for the Petitioner.

Facts of the Case

The petitioner filed a writ petition challenging the adjudication order passed under whereby tax, interest, and penalty were imposed pursuant to a show cause notice (SCN). It was submitted that although the show cause notice proposed demand of tax, interest, and penalty, it failed to quantify the interest liability despite the relevant period being known at the time of issuance. It was contended that such non-quantification of interest in the SCN was in violation of Section 75(7) of the CGST Act and rendered the entire proceedings invalid. It was further contended that reliance on Section 75(9) to cure such defect was misplaced, as the said provision pertains to non-quantification in the adjudication order and not in the SCN. The matter was accordingly placed before High Court.

High Court Held

The High Court held that Section 75(7) of the CGST Act mandates proper specification of demand in the SCN, including quantification of interest where the liability pertains to a known period. It observed that in the present case, the interest was ascertainable at the time of issuance of the SCN, and therefore, failure to quantify the same constituted a clear statutory violation. The Court further held that Section 75(9) could not be invoked to cure defects in the SCN, as it applies only to non-quantification in the adjudication order and not at the stage of initiation of proceedings. Accordingly, the impugned show cause notice and the consequent adjudication order were held invalid and quashed.

List of Cases Referred to

• Vrinda Automation v. State of Uttar Pradesh [2025] 175 taxmann.com 826/111 GST 254/99 GSTL 411 (Allahabad) (para 7).