GST adjudication beyond show-cause notice scope is unsustainable; demand and penalty must stay within the notice

An adjudication under GST cannot exceed the scope or quantum set out in the show-cause notice, and no demand can be confirmed on grounds not specified in that notice. The High Court found that the impugned order travelled beyond the notice, particularly on penalty and interest, and that the taxpayer was not given an effective opportunity to respond before the order was passed. The order was therefore set aside for breach of Section 75(7), and the matter was remanded for fresh decision after allowing a response and hearing.

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Issues: Whether the assessment order could be sustained when the demand raised exceeded the amount and grounds set out in the show-cause notice under the goods and services tax law.

Analysis: Section 75(7) of the goods and services tax law mandates that the tax, interest and penalty demanded in the order shall not exceed the amount specified in the notice and that no demand shall be confirmed on grounds other than those specified in the notice. The demand in the impugned order went beyond the notice, particularly in respect of penalty and interest, and the petitioner was not afforded an effective opportunity to respond to the notice before the order was passed.

Conclusion: The impugned order was held unsustainable for breach of the statutory limitation in Section 75(7) and was set aside, with the matter remanded for a fresh decision after granting the petitioner an opportunity to file a response and be heard.

Final Conclusion: The demand order did not survive judicial scrutiny and the adjudication was reopened for reconsideration in accordance with law.

Ratio Decidendi: An adjudication under the goods and services tax law cannot travel beyond the scope or quantum specified in the show-cause notice, and any demand so raised is liable to be set aside.

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