Judicial Corner: Adjudication order proceeded on a basis absolutely different than one indicated in SCN was to be set aside (10.03.2026)

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Adjudication order proceeded on a basis absolutely different than one indicated in SCN was to be set aside {Ankit Kanodia v. Union of India [2026] 182 taxmann.com 658 (Calcutta High Court)}

Facts

  • Department issued a Show Cause Notice alleging that the assessee had wrongly availed Input Tax Credit.
  • The allegation in the SCN was that ITC should be reversed proportionately because the assessee was making exempt supplies.
  • During adjudication, the authority changed the basis of the allegation.
  • The adjudication order stated that the invoices did not prove that the goods dealt with by the assessee were exempt products.

Issue

Whether an adjudication order can be passed on grounds different from those mentioned in the SCN.

Held

The Calcutta High Court held that the adjudication order was invalid, since it was passed on grounds completely different from those stated in the SCN.
An order cannot travel beyond the allegations in the SCN, as it violates the principles of natural justice.
Accordingly, the adjudication order was set aside