M/S Shiv Brick Field vs. State Of Uttar Pradesh And Another

This petition is directed against the order dated 31.08.2024 passed by respondent no. 2 for the period April 2019 to March 2020 (F.Y. 2019-20) whereby a demand to the tune of Rs.5,75,291/- has been raised against the petitioner.

The petitioner was issued a show-cause notice dated 25.05.2024 under Section 73 of Goods and Services Tax Act, 2017 (hereinafter referred to as 'the Act') in GST DRC-01. The notice, inter alia, called upon the petitioner as to why tax, penalty and interest to the tune of Rs.27,629/- be not imposed.

Learned counsel for the petitioner made submissions that action of the respondents in raising demand to the tune of Rs.5,75,291/- which includes penalty to the tune of Rs.27,790/- is contrary to the show-cause notice issued to the petitioner and in violation of Section 75(7) of the Act inasmuch the same is beyond the show-cause notice wherein a demand to the tune of Rs.27,629/- against tax, interest and penalty was sought to be recovered.

Learned Standing Counsel opposed the submissions made. Submissions were made that charging interest and penalty is statutory and, therefore, irrespective of the fact that the same has not been indicated in the show- cause notice, would not take away the power of the authority in demanding the interest and penalty in accordance with law and on that count, the petition deserves dismissal. Versus Counsel for Petitioner(s) : Pranjal Shukla Counsel for Respondent(s) : C.S.C. M/S Shiv Brick Field .....Petitioner(s) State Of Uttar Pradesh And Another .....Respondent(s)

We have considered the submissions made by counsel for the parties and have perused the material available on record.

Provisions of Section 75(7), inter alia, read as under: "(7) The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice."

A perusal of the above would reveal that Section 75 deals with general provisions relating to determination of tax and sub-section (7) specifically stipulates that the amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.

Admittedly, in the present case, the show-cause notice merely indicates the amount of Rs.27,629/- as representing the tax, interest and penalty and the demand qua the three components has been raised at Rs.5,75,291/-, which is ex facie contrary to the provisions of Section 75(7) of the Act.

In view of the above discussion, on account of violation of provisions of Section 75(7) of the Act, the order impugned cannot be sustained.

Consequently, the writ petition is allowed. Order dated 31.08.2024 (Annexure-5) is quashed and set aside and the matter is remanded back to the respondent no. 2 to provide an opportunity to the petitioner to file response to the show-cause notice and after providing opportunity of hearing, pass a fresh order in accordance with law. September 23, 2025 DKS WTAX No. 4822 of 2025 2 (Praveen Kumar Giri,J.) (Shekhar B. Saraf,J.) DEEPAK KUMAR SRIVASTWA High Court of Judicature at Allahabad