GST demand cannot exceed the show-cause notice or rely on new grounds, leading to remand for fresh adjudication.

Section 75(7) of the GST Act bars an adjudicating authority from confirming tax, interest or penalty beyond the amount stated in the show-cause notice or on grounds not set out in that notice. The impugned demand exceeded the notice amount and relied on grounds not covered by it, so it was inconsistent with the statutory limit. The Allahabad HC allowed the writ petition and remanded the matter for a fresh decision after response and hearing.

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Issues: Whether a demand order under the Goods and Services Tax Act, 2017 can sustain a tax, interest and penalty amount exceeding the sum specified in the show-cause notice and on grounds not stated in the notice.

Analysis: Section 75(7) bars the amount of tax, interest and penalty in the order from exceeding the amount specified in the notice and also forbids confirmation of demand on grounds other than those set out in the notice. The notice in the present case specified a lower aggregate amount, whereas the impugned order raised a substantially higher demand. The order was therefore inconsistent with the statutory limitation contained in Section 75(7).

Conclusion: The demand order could not be sustained as it was beyond the show-cause notice and contrary to Section 75(7); the writ petition was allowed and the matter was remanded for a fresh decision after response and hearing.

Ratio Decidendi: Under Section 75(7), the adjudicating authority cannot confirm a demand for tax, interest or penalty in excess of the amount stated in the show-cause notice or on grounds not specified therein.

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