Sun Roadways Vs State of Uttar Pradesh and another (Allahabad High Court)
The Allahabad High Court examined the validity of a GST demand order dated 23.04.2024 for FY 2018–19, by which a demand of ₹63,51,001 was raised against the petitioner. The proceedings originated from a show-cause notice dated 14.12.2023 issued under Section 73 of the CGST Act, 2017, proposing recovery of tax, interest, and penalty aggregating to ₹13,36,793. The petitioner did not file a reply to the notice, and despite a reminder fixing a hearing date, no appearance was made, leading to the impugned order.
The petitioner challenged the order on the ground that the confirmed demand substantially exceeded the amount specified in the show-cause notice, in violation of Section 75(7) of the CGST Act. It was also contended that fixing the same date for filing reply and personal hearing violated principles of natural justice. The State opposed the petition, arguing that statutory interest and penalty could be levied irrespective of their mention in the notice and that the petitioner’s non-response justified the order.
The Court held that Section 75(7) expressly bars confirmation of any demand exceeding the amount specified in the show-cause notice. Since the notice quantified liability at ₹13,36,793, confirmation of ₹63,51,001 was ex facie contrary to law. On the issue of hearing, the Court observed that, given the petitioner’s claim of unawareness of notices, the coinciding dates for reply and hearing did not independently vitiate the notice. However, the statutory violation under Section 75(7) was sufficient to invalidate the order. Accordingly, the demand order was quashed and the matter remanded for fresh adjudication after granting an opportunity to respond and be heard.
