TaxTMI 
TaxTMI 
TaxTMI 
This question may look odd but in my professional capacity I came across more than 100 cases where the adjudication order is confirmed by the first appellate authority due to silly reasons despite the case having strong merits in appeal. By merely rejecting the appeal even in meritorious cases, the first appellate authority is proving the entire world that his quasi judicial role is not properly understood by him as well as his lack of understanding the case in an appropriate manner spoils his name.
If at all in almost all cases the first appellate authority is going to reject the appeal under flimsy grounds, then why should not we delete section 107 and make a provision that the appeal against all adjudication orders shall lie before the GSTAT?.
One such case which moots this question came up before the Allahabad high Court on 11/11/2025 in M/s R.A.A. Builders And Developers Versus Commissioner Of Commercial Tax And 2 Others - 2025 (11) TMI 1529 - ALLAHABAD HIGH COURT. The chronology of the events are described below.
For the period from April 2018 to March 2019, a show cause notice under section 73 was issued on 31/01/2024 raising a total demand of Rs 45,66,398/= based on differences in GST Returns. The taxpayer replied and without considering such replies, adjudication order was passed on 30/04/2024 imposing a total demand amount of Rs 68,07,953/= in clear violation of Section 75 (7) which reads as “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”.
Thus by confirming a demand of 68 lakhs as against permissible amount of 46 lakhs, the adjudicating authority have no shame in declaring the world that he is not even aware of the provisions contained in section 75, which is on determination of tax.
The taxpayer preferred an appeal before the first appellate authority which was rejected on 13/02/2025. The Appellate Authority, who is higher in rank than the adjudicating authority is eagerly willing to declare that he is no more different in awareness of section 75 and not even bothered to note that his order is liable to be set aside by the jurisdictional high court at a later date.
The operative portions are reproduced to create awareness amongst all tax professionals to verify the adjudication orders to ensure that the final demand raised does not exceed amount specified in SCN even in a single case. In case such cases are identified now, we may still go for appeal with First appellate authority or GSTAT as the case may be to ensure proper justice to the taxpayer. In case the first appeal is rejected on limitation, that strengthens the case to become fit for appeal in GSTAT.
8. Identical issue has been decided by the Division Bench of this Court in Unique Computer & Communication Shop (supra); wherein, it has been held as under:-
'7. Provisions of Section 75(7), inter alia, read as under:
'(7) 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.'
8. A perusal of the above would reveal 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 on the grounds other than the grounds specified in the notice.
9. Admittedly, in the present case, the show-cause notice merely indicates the amount of Rs. 45,66,398/- as representing the tax, interest and penalty and the demand qua the three components has been raised at Rs. 68,07,953/-, which is ex facie contrary to the provisions of Section 75(7) of the Act.
10. So far as the plea pertaining to not providing any opportunity of personal hearing is concerned, once it is the case of the petitioner that it was unaware of the issuance of the show-cause notice, the fact that in the notice issued to the petitioner, the date of filing of reply was indicated, looses its significance and it cannot be said that on account of such indication, the notice, on its own, would stand vitiated.
11. In view of the above discussion, on account of violation of provisions of Section 75(7) of the Act, the order impugned cannot be sustained. '
9. The issue in hand is squarely covered by the above-noted judgement as relied upon by the petitioner.
10. In view of the aforesaid facts & circumstances of the case, the impugned orders cannot be sustained in the eyes of law. The same are hereby quashed.
11. The writ petition succeeds and is allowed.
12. The matter is remanded back to the respondent no. 2 to provide an opportunity to the petitioner to file response to the show cause notice and after providing opportunity of hearing, pass a fresh order in accordance with law.