GST adjustment plea affecting interest and penalty must be considered; limited remand ordered for fresh decision.

A plea seeking adjustment of CGST and SGST liability against available IGST balance, where it could affect interest and penalty exposure, must be expressly addressed by the adjudicating authority. Where the demand under GST was otherwise determined but this specific adjustment request was omitted, the proper course is limited reconsideration of that issue after hearing the taxpayer. The impugned order and demand notice were set aside only to that extent, and the matter was remitted for fresh decision on the adjustment plea without disturbing the demand otherwise.

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Issues: Whether the petitioner's request to adjust the CGST and SGST demand against the available IGST balance, with consequential impact on interest and penalty under the GST regime, had to be considered afresh by the Authority.

Analysis: The demand had been raised after issuance of notice under Section 73 of the Central Goods and Services Tax Act, 2017. The record showed that while the demand itself was determined, the specific plea for adjustment of the CGST and SGST liability from the available IGST balance was not addressed. Since that plea had a possible consequence on interest and penalty, the omission required corrective consideration by the Authority.

Conclusion: The impugned order and demand notice were set aside only to the limited extent necessary for reconsideration of the petitioner's adjustment request, and the Authority was directed to decide that request after hearing the petitioner.

Final Conclusion: The matter was remitted for limited reconsideration of the adjustment plea, while the original demand was not otherwise disturbed.

Ratio Decidendi: A plea that directly affects the incidence of tax, interest, and penalty must be expressly considered by the adjudicating authority; failure to do so warrants limited remand for fresh decision on that aspect.

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