Svas Lifesciences Private Limited Vs State of U.P. and Another (Allahabad High Court)
Summary: The Allahabad High Court considered a challenge to an adjudication order dated 13.02.2025 passed under Section 73 of the UPGST Act, 2017 and the Central GST Act, 2017 for Financial Year 2020-21.
The show cause notice dated 08.11.2024 proposed confirmation of a tax demand of Rs. 39,557.159/-. However, the subsequent adjudication order confirmed tax demand of Rs. 39,557.159/- together with penalty of Rs. 40,000/-. The petitioner challenged the adjudication order on the ground that the demand confirmed exceeded the demand proposed in the show cause notice.
The Court found that the impugned adjudication order had been passed in gross violation of the mandatory statutory provisions contained in Section 75(7) of the UPGST Act, 2017 and the Central GST Act, 2017. Section 75(7) provides a statutory restriction on the amount that may be demanded through the adjudication order. The provision requires that the amount of tax, interest and penalty demanded in the order shall not exceed the amount specified in the notice and that no demand shall be confirmed on grounds other than those specified in the notice.
The High Court held that, since Section 75(7) is mandatory, an adjudication order confirming a demand far in excess of the demand proposed in the show cause notice is without jurisdiction. The Court further observed that once the legislature has prohibited the adjudicating authority from confirming any demand in excess of that proposed, the authority cannot assume jurisdiction to confirm such excess demand.
