M/S Hari Motors vs. State Of U.P. And Another
Held
The Court held that the Adjudication Order dated 29.11.2021 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 reasoned that Section 75(7) is a mandatory provision that forbids the adjudicating authority from confirming any demand in excess of that proposed in the show cause notice. Therefore, confirming a demand significantly higher than proposed was without jurisdiction and constituted a fundamental illegality. The ratio decidendi is that an adjudicating authority cannot exceed the demand proposed in the show cause notice, as this is a mandatory statutory prohibition. The impugned Adjudication Order was set aside, and the matter was remitted to respondent no. 2 to pass a fresh order after providing the petitioner with due opportunity of hearing, preferably within three months.
Facts
The petitioner, M/S Hari Motors, filed a writ petition challenging an Adjudication Order dated 29.11.2021 passed by respondent no. 2. The show cause notice dated 06.02.2021 proposed a tax demand of Rs. 16,20,000/- and a penalty of Rs. 16,20,000/- for the Financial Year 2017-18. However, the Adjudication Order confirmed a higher tax demand of Rs. 25,28,400/- and a penalty of Rs. 25,28,400/-. The petitioner argued that this order was passed in gross violation of mandatory statutory provisions. The Court noted that the Adjudication Order confirmed a demand far in excess of that proposed in the show cause notice.
Key Issues
1. Whether the Adjudication Order dated 29.11.2021, which confirmed a tax demand and penalty exceeding the amount proposed in the show cause notice, is liable to be set aside for violating mandatory statutory provisions? (Question of law, turning on Section 75(7) of the UPGST Act, 2017 and Central GST Act, 2017). Petitioner's Contention: 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, rendering it without jurisdiction. Revenue's Contention: The judgment records no specific argument from the revenue or State authorities.
Sections Cited
Section 75(7), Section 74
AI-generated summary — verify with the full judgment below
HIGH COURT OF JUDICATURE AT ALLAHABAD WRIT TAX No. - 4156 of 2026 Court No. - 39 HON'BLE SAUMITRA DAYAL SINGH, J. HON'BLE SWARUPAMA CHATURVEDI, J.
Heard Sri Vishwjeet, learned counsel for the petitioner and Sri Ankur Agarwal, learned counsel for the UP GST authorities.
Upon hearing and perusal of the record, it cannot be disputed that the impugned Adjudication Order dated 29.11.2021 has been 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. Thus, the show cause notice dated 06.02.2021 proposed to confirm tax demand of Rs. 16,20,000/- and penalty of Rs. 16,20,000/-. Against that, vide Adjudication Order dated 29.11.2021 passed by the respondent no. 2 under Section 74 of the Act for the Financial Year 2017-18, tax demand of Rs. 25,28,400/- and penalty of Rs. 25,28,400/- has been confirmed.
In view of the fact that the provision of Section 75(7) of the Act is mandatory, clearly the Adjudication Order passed confirming the demand far in excess of the demand proposed, is without jurisdiction.
In view of the above, fundamental illegality is made out. In face of the r
The judgment continues below.
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