R.T.S. Electricals And Civil India Private Limited Vs State of U.P (Allahabad High Court)
The writ petition was filed challenging the order dated 09.04.2024 issued by respondent no. 2 for the tax period April 2018 to March 2019, through which a demand of Rs. 3,04,55,800 was raised against the petitioner. The petitioner had earlier been issued a show-cause notice dated 26.09.2023 under Section 74 of the Goods and Services Tax Act, 2017 in GST DRC-01. The notice proposed imposition of tax, penalty, and interest amounting to Rs. 2,10,04,200. Following the notice, the impugned order was passed, raising a higher demand than what had been proposed in the show-cause notice.
The petitioner argued that the respondents acted contrary to law by raising a demand exceeding the amount specified in the show-cause notice. It was submitted that the demand now included penalty of Rs. 1,05,02,000 and interest of Rs. 94,51,800, which was beyond the scope of the notice. The petitioner contended that this was in clear violation of Section 75(7) of the GST Act, which restricts the authority from confirming a demand for tax, interest, or penalty in excess of what has been stated in the show-cause notice.
In response, the Standing Counsel for the State opposed the petitioner’s submissions. It was argued that the charging of interest and penalty is statutory in nature, and therefore, even if interest and penalty were not explicitly mentioned in the show-cause notice, the authority retains the power to levy them according to law. On this basis, the Standing Counsel submitted that the petition should be dismissed.
