TaxTMI 
TaxTMI 
TaxTMI 
Let us straight away go the legal provision which reads as '(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'. Despite this clear legal provisions, there are several orders being passed by the adjudicating officers which are sometimes also confirmed by first appellate authority in clear violation of the above provision of law. The tax officials normally presume that they are above law and may pass whatever order they may deem it fit irrespective of the fact that it is impermissible.
One such case came up before the High Court of Madras on 05/03/2026 in the matter of Ms Tirumala Milk Products Private Limited Versus The State Tax Officer Group I, Chennai - 2026 (3) TMI 424 - MADRAS HIGH COURT
The table of demand confirmed as well as demand raised in show cause notice is as below:
4. In the impugned order, the demand that has been confirmed against the petitioner towards the tax liability is Rs. 2,41,12,591/-
. However, in the aforesaid
Show Cause Notice in Form GST DRC-01 that preceded the impugned order, proposal was confined only to a sum of Rs. 1,37,54,141/- as detailed below:-
GST DRC-01 that preceded the impugned order, proposal was confined only to a sum of Rs. 1,37,54,141/- as detailed below:-
Sl. No | Tax Period From & To | Tax | Interest | Penalty | Total | Tax |
1 | APR, 2018 MAR, 2019 | 1,30,60,635 | 1,57,22,022 | 1,30,60,635 | 4,18,43,292 | 1,30,53,335 |
2 | APR, 2018 MAR, 2019 | 55,25,437 | 66,51,415 | 55,25,437 | 1,77,02,289 | 3,49,862 |
3 | APR, 2018 MAR, 2019 | 55,25,437 | 66,51,415 | 55,25,437 | 1,77,02,289 | 3,49,862 |
4 | APR, 2018 MAR, 2019 | 1,082 | 1,303 | 1,082 | 3,467 | 1,082 |
5 | APR, 2018 MAR, 2019 | |||||
Total | 2,41,12,591 | 2,90,26,155 | 2,41,12,591 | 7,72,51,337 | 1,37,54,141 |
5. The impugned order is thus contrary to Section 75 (7) of the respective GST Enactments and therefore, the impugned order is set aside and the case is remitted back to the Respondent to pass a fresh order on merits and in accordance with law.
Observations: 01) As this new dimension may not be noticed by several taxpayers as well as tax professionals, I appeal to all concerned to kindly take stock and recheck this aspect as to whether the amount confirmed in Order In Original exceeds the demand amount as contained in the show cause notice in respect of all orders passed during the recent past.
02) It is not necessary that there should be a significant difference in the excess demand in OIO than SCN. Even if the demand in OIO exceeds SCN amount by one rupee, the order is liable to be set aside as per provisions of 75 (7). In case there are such cases which are not appealed so far, we may make necessary steps for filing the appeal before GSTAT now.
03) As of today 2547 e appeals have already been filed before GSTAT out of which 799 pertain to current month which shows that e filing of appeals is progressing in GSTAT.
04) Most of the orders passed by the adjudicating officers have already been quashed or set aside by competent courts based on 75 (4) for violation of principles of natural justice.
05) It is observed from the above order of High Court that it pertains to recent period. In this case SCN was issued on 26/06/2025 and OIO was passed on 26/12/2025. Thus it is worth to review all orders passed under section 74 during 2025 or 2026 as the time limit is easily condonable by GSTAT.
06) It is time for all tax professionals as well as taxpayers to take full advantage of the provisions contained in section 75 as GSTAT is functional as on date. There is no need to file a writ before jurisdictional high court now, as GSTAT has inherent powers to handle the case now.
07) In the above case, the petitioner was directed to file a reply to SCN within 30 days from the date of the publication of above order and adjudicating officer was directed to decide the case on merits after providing an opportunity of personal hearing.
08) As the time limit for filing appeal before GSTAT for all cases pertaining to the period up to 31/03/2026 stands as 30/06/2026 as of now, there could not be a better time to review all old cases for deciding the merits on filing appeal than now.
09) While taking stock of all old orders even for the year 2017-18, as in case the same is appealed before first appellate authority and the taxpayer is aggrieved by the order passed under section 107, he is at liberty to file the appeal before GSTAT today, there are few other aspects as well which may also be taken care of.
10) Single SCN for multiple financial years under 73 or 74 is impermissible. We may look on this aspect as well while taking stock.
11) Invoking 73 or 74 for the period commencing from 01/04/2024 is impermissible. There are several such orders already passed by few officers as there is no awareness on 74A.
12) Thousands of orders are being passed day in and day out in gross violation of orders passed by jurisdictional high courts. The classic example is on 16 (2) (C) of the CGST Act on reversal of ITC for supplier default even in genuine case. This is simply impermissible as on date as the issue is already settled and orders are available in favour of taxpayer almost from all jurisdictional high courts.
13) Let us conclude by stating that the period from today till 30/06/2026 is ONE TIME OPPURTUNITY to review all cases on the above aspects so as to ensure that all orders passed in violation of the provisions of the CGST Act are set aside by GSTAT by preferring an appeal immediately.