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of <h1>Adjudication must be confined to show-cause notice issues; fresh adjudication with GST back-office data disclosure required</h1> Dominant issue: Whether an adjudication can extend beyond the confines of the show-cause notice. Reasoning: Section 75(7) (statutory mandate) and settled ... Notice to show-cause confines and limits of adjudication - Prohibition on confirmation of demand on grounds other than those specified in the notice - Natural justice opportunity of hearing and disclosure of material - Special knowledge GST back-office data and right to access - Appellate jurisdiction under Section 107 WBGST/CGST - Adjudication proceedings - HELD THAT:- It is now very well settled that an order cannot travel beyond the confines of the preceding notice to show-cause and a person who has been issued a notice to show cause on a particular point cannot be blindsided by passing an order on an entirely different point. In fact Section 75(7) of the said Act of 2017 is a statutory expression of the said very well settled principle of law only. It is noticed that the appellate authority has acknowledged the aforesaid point raised by the petitioner but has trivialised the same by stating that it was a “technical issue” as it pertained to mere quantification. In the considered opinion of this Court, the issue could not have been said to be a mere technical issue. The issue involves the question as to whether or not the supplies made by the petitioner under the Reverse Charge Mechanism could also be treated as having been made under the Forward Charge Mechanism on the strength of the said notification dated August 22, 2017. The adjudicating authority’s interpretation of the situation could not have been unilaterally imposed on the petitioner in violation of a mandatory statutory provision. The appellate authority should also not have made light of such statutory violation by a statutory authority by calling it a mere technicality. Since the notice to show-cause is based on ‘data available in GST B.O. portal’ i.e. data available in the GST back office portal therefore they may not have access to the same as the same would be within the special knowledge domain of the GST authorities. In such a situation the petitioners would not have effective opportunity to deal with the notice to show cause. It is clarified that if additional show-cause notice is notice is issued and/or the adjudication proceedings are conducted and adjudication order is passed in terms of this order, the petitioner shall not be entitled to raise any objection to the same on the ground of limitation unless the petitioner was entitled to raise such ground at the time when the initial show-cause notice was issued. It is needless to mention that since the appellate order has been set aside, therefore the Proper Officer shall, while deciding the matter, not be influenced by any observation made therein. The writ petition is allowed. Issues: Whether the adjudication order and the appellate order are invalid for confirming demand on a ground other than those specified in the notice to show-cause, in violation of Section 75(7) of the WBGST Act, 2017, and whether the petitioners must be furnished the back-office data and afforded fresh opportunity of hearing; and whether the impugned orders require setting aside and remand.Analysis: The notice to show-cause was confined to alleged understatement of turnover in GSTR-3B. The adjudicating authority based its demand on a different premise treating supplies under reverse charge as forward charge pursuant to a notification thereby changing the basis of the notice. Section 75(7) prohibits confirmation of demand on grounds other than those specified in the notice. The appellate authority acknowledged the deviation but characterised it as a mere technical/quantification issue; however the change involved a substantive re-framing of liability and could not be treated as mere quantification. Further, where the notice relies on data from the GST back-office portal (special knowledge of the tax authority), the petitioner must be provided the relevant information to enable an effective reply and hearing. Given these defects, the adjudication and appellate orders cannot stand without fresh adjudication after providing information and opportunity.Conclusion: The appellate order dated April 25, 2025 and the adjudication order dated May 17, 2023 are set aside; the matter is remanded to the Proper Officer for reconsideration after furnishing the petitioners with the relevant back-office information and affording them an opportunity of hearing; the Proper Officer may, if necessary, issue an additional show-cause notice framing grounds in accordance with law.
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