M/S Mectronics Marketing Services vs. State Of U.P. And Another

Held

The Court held that the Adjudication Order dated December 30, 2023, was passed in gross violation of the mandatory statutory provisions of Section 75(7) of the UPGST Act, 2017, and the Central GST Act, 2017. The Court found that the provision of Section 75(7) is mandatory, and therefore, the Adjudication Order confirming a demand far in excess of that proposed in the show cause notice was without jurisdiction. The Court reasoned that once the legislature forbids the adjudicating authority from confirming a demand exceeding the proposed amount, it is impermissible for the authority to do so. Consequently, the impugned Adjudication Order was set aside. The matter was remitted to Respondent No. 2 to pass a fresh order after providing the petitioner with a due opportunity of hearing, to be completed expeditiously, preferably within three months. The petitioner undertook not to seek undue or long adjournments.

Facts

The petitioner, M/S Mectronics Marketing Services, filed a writ petition challenging an Adjudication Order dated December 30, 2023, passed by Respondent No. 2. The order, issued under Section 73 of the UPGST Act, 2017, confirmed a tax demand of Rs. 3,41,603/-, interest of Rs. 2,07,037/-, and penalty of Rs. 44,302/- for the Financial Year 2017-18. This was significantly higher than the Rs. 1,99,539/- tax demand, plus interest and penalty of Rs. 32,649/-, proposed in the show cause notice dated September 20, 2023. The petitioner contended that the Adjudication Order was passed in gross violation of mandatory statutory provisions.

Key Issues

1. Whether the Adjudication Order dated 30.12.2023, which confirmed a tax demand, interest, and penalty significantly exceeding the amount proposed in the show cause notice dated 20.09.2023, is valid in light of Section 75(7) of the UPGST Act, 2017 and the Central GST Act, 2017? Petitioner's Argument: The petitioner argued that the Adjudication Order was passed in gross violation of the mandatory statutory provisions contained under Section 75(7) of the UPGST Act, 2017 and the Central GST Act, 2017. They contended that since the legislature has forbidden the adjudicating authority from confirming any demand in excess of that proposed, the Adjudication Order confirming a higher demand is without jurisdiction. Revenue's Argument: The judgment does not record any specific arguments made by the revenue or State authorities.