GST Adjudication Order Confirming Demand Beyond Show Cause Notice Amount Is Void And Remanded

By | September 12, 2026
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GST Adjudication Order Confirming Demand Beyond Show Cause Notice Amount Is Void And Remanded

GST Adjudication Order Confirming Demand Beyond Show Cause Notice Amount Is Void And Remanded
Issue
  • Whether an adjudication order confirming a tax demand significantly exceeding the amount proposed in the Show Cause Notice (SCN) without issuing a notice of enhancement is legally sustainable under Section 75(7) of the CGST/UPGST Act.
Facts
  • Proposed Demand: The Assessing Authority issued a Show Cause Notice proposing a tax demand of approximately ₹8.5 lakhs against the assessee.
  • Confirmed Demand: The final adjudication order confirmed a demand of approximately ₹2.63 crores, far exceeding the SCN amount.
  • Procedural Defect: No notice of enhancement or opportunity to contest the increased amount was provided to the assessee prior to passing the adjudication order.
  • Writ Petition: The assessee filed a writ petition invoking Section 75(7) of the CGST/UPGST Act, which explicitly prohibits confirming a demand beyond the amount proposed in the SCN.
  • Revenue’s Concession: The Standing Counsel for the Revenue fairly conceded during the hearing that a clear error had crept into the impugned order.
Decision
  • The High Court held that the impugned adjudication order directly contravened the statutory bar under Section 75(7) of the CGST/UPGST Act against confirming a demand beyond the SCN without put-on-notice enhancement.
  • In view of the Revenue’s concession, the writ petition was allowed and the impugned order was set aside in favor of the assessee.
  • The matter was remitted back to the Assessing Authority to proceed afresh strictly in accordance with law, either on the basis of the existing SCN or by issuing a fresh notice if permissible within limitation.
Key Takeaways
  • Statutory Ceiling under Section 75(7): An adjudication order under Section 75 cannot exceed the tax demand proposed in the original Show Cause Notice unless a proper notice for enhancement is issued.
  • Violation of Principles of Natural Justice: Taxpayers must be put on notice regarding the specific quantum of tax liability; confirming a higher demand without notice vitiates the entire proceeding.
  • Remand and Fresh Notice: Setting aside an order for exceeding the SCN amount allows the Revenue to re-adjudicate within the original SCN bounds or issue a fresh notice, provided statutory limitation periods have not expired.
HIGH COURT OF ALLAHABAD
Solvi Enterprises
v.
Deputy Commissioner State Tax
Saumitra Dayal Singh and INDRAJEET SHUKLA, JJ.
Writ Tax No. 1014 of 2026
FEBRUARY  11, 2026
Suyash Agarwal for the Petitioner. Arvind Kumar Mishra, Learned Standing Counsel for the Respondent.
ORDER
1. Heard Sri Suyash Agarwal, learned counsel for the petitioner-assessee and Sri Arvind Kumar Mishra, learned Standing Counsel for the revenue.
2. Submission is, demand confirmed by the impugned adjudication order dated 16.12.2025 at Rs. 2,63,35,254.80/- far exceeds the demand raised in the show-cause notice giving rise to the adjudication proceedings, there the demand proposed was Rs. 8,50,000/-.
3. Matter requires consideration as the impugned order appears to have been passed in violation of Section 75(7) of the Act. The petitioner was never put to notice with respect to the impugned demand.
4. At this stage, Sri Arvind Kumar Mishra, learned Standing Counsel fairly states that a clear error has crept in the impugned adjudication order. Without prejudice to the rights of the revenue to proceed strictly in accordance with law, the impugned order may be set aside and the matter remitted to the respondent no.1
5. In view of such fair statement, no useful purpose may be served in keeping the present petition pending or calling for a counter affidavit at this stage.
6. Accordingly, the present writ petition is allowed. The impugned adjudication order dated 16.12.2025 is set aside and the matter is remitted to the respondent no.1 to proceed strictly in accordance with law. In that he may either proceed on the strength of the show cause notice dated 30.09.2025 or may issue fresh notice, if limitation survives.