Where amount of penalty and interest raised in order was beyond amount specified in show cause notice, such order was in violation of provisions of section75(7) and could not be sustained {Shri Radhe Contractor vs Union of India [2025] 179 taxmann.com 450 (Allahabad)}
Facts of the Case
- Petitioner was issued a show cause notice dated 26.11.2023 under Section 74 of the CGST Act, 2017 for the period July 2017 to March 2018.
- The SCN proposed a demand of Rs.28,01,001 (tax, penalty, and interest).
- The notice was uploaded only on the GST portal under the tab “Additional Notice and Order” and not communicated by any other mode.
- The petitioner, unaware of the notice, did not file a reply, and the adjudicating authority passed an order dated 20.08.2024 raising a higher demand of Rs. 46,68,188, including additional penalty and interest beyond what was mentioned in the SCN.
Issue
Whether the order demanding tax, interest, and penalty beyond the amount specified in the show cause notice violates Section 75(7) of the CGST Act and principles of natural justice.
Held
- The Court held that the order violated Section 75(7), which clearly provides that the amount of tax, interest, and penalty cannot exceed what is mentioned in the SCN.
- Since the final demand exceeded the SCN amount and the notice was not properly communicated, the order was unsustainable.
- The Court quashed the impugned order and remanded the matter back to the authority to issue a fresh order after giving the petitioner an opportunity of hearing.
