Show-cause notice limits in forfeiture proceedings require full consideration of material objections before adverse action can stand.

An adjudicatory forfeiture under the Telangana VAT regime cannot travel beyond the amount proposed in the show-cause notice; an order that exceeds the notice scope reflects non-application of mind and denies a fair opportunity to meet the case ultimately decided. The authority must also consider material objections, including the applicability of the government order and whether the taxpayer acted as a sub-contractor under an EPC turnkey contract. Because these aspects were not properly examined, the forfeiture order was unsustainable, was set aside, and the matter was remitted for fresh consideration after hearing the taxpayer.

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Issues: (i) whether an order of forfeiture under the Telangana VAT regime could travel beyond the amount proposed in the show-cause notice; (ii) whether the authority had applied its mind to the applicability of the government order and the petitioner's status as a sub-contractor under an EPC turnkey contract.

Issue (i): Whether an order of forfeiture under the Telangana VAT regime could travel beyond the amount proposed in the show-cause notice.

Analysis: The impugned order forfeited a higher amount than what had been proposed in the show-cause notice. An adjudicating order cannot exceed the scope of the proposal put to notice, and doing so reflects non-application of mind and denial of a fair opportunity to meet the case ultimately decided.

Conclusion: The forfeiture order was invalid to the extent it exceeded the proposal in the show-cause notice.

Issue (ii): Whether the authority had applied its mind to the applicability of the government order and the petitioner's status as a sub-contractor under an EPC turnkey contract.

Analysis: The record showed no proper consideration of whether the government order relied upon was applicable to a sub-contractor or whether the EPC turnkey nature of the contract affected the proposed forfeiture. The absence of such consideration rendered the decision unsustainable.

Conclusion: The authority failed to apply its mind to material aspects relevant to forfeiture.

Final Conclusion: The forfeiture order was set aside and the matter was sent back for fresh consideration after hearing the petitioner.

Ratio Decidendi: An adjudicatory order cannot exceed the case made out in the show-cause notice, and material factual and legal objections bearing on liability must be considered before adverse action is sustained.

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