Demand Limitation in Show Cause Notices: confirmation beyond proposed amount requires setting aside and fresh adjudication.

An adjudicating authority lacks jurisdiction to confirm a demand in excess of the amount specified in the show cause notice; where an order confirms a higher demand the order is set aside and the matter remitted for fresh adjudication. The affected party must be treated as entitled to respond to any enlarged demand by permitting a proper reply and the impugned order to be treated as an addendum to the original notice; the respondent must pass a fresh order on merits after giving due notice and considering the petitioner's reply.

---

---

Issues: Whether an adjudicating authority can confirm a demand exceeding the amount proposed in the show cause notice and whether the impugned order confirming a higher demand should be set aside and remitted for fresh adjudication.

Analysis: The impugned order confirmed a demand substantially larger than the amount proposed in the Show Cause Notice in Form GST DRC-01. The matter was examined with reference to the limits of the original notice and the consequences of confirming an amount beyond that proposal. The petitioner is given an opportunity to file a proper reply treating the impugned order as an addendum to the Show Cause Notice, and the respondent is directed to pass a fresh order on merits after giving due notice and considering the petitioner's reply.

Conclusion: The impugned order confirming demand beyond the amount proposed in the show cause notice is set aside and the matter is remitted for fresh adjudication; the petitioner is granted relief.

Ratio Decidendi: An adjudicating authority cannot confirm a demand exceeding the amount proposed in the show cause notice; an order so confirming must be set aside and remitted for fresh consideration after giving the affected party an opportunity to reply.

---