Lakshmi Narayan Shah Vs State of West Bengal & ors. (Calcutta High Court)
The writ petition challenged an appellate order dated December 19, 2024 passed under Section 107 of the West Bengal GST Act/CGST Act, 2017, which modified an earlier adjudication order issued under Section 73. The dispute originated from a show cause notice dated May 17, 2023 alleging discrepancies in GST returns for the period July 2017 to March 2018. The petitioner did not respond to the notice, stating that it was uploaded only under the “Additional Notices and Orders” tab on the GST portal and was therefore not within his knowledge. The notice itself was non-speaking, though prior intimation notices indicated three issues: short payment of tax on outward supplies, short payment under reverse charge mechanism on inward supplies, and reversal of input tax credit.
An adjudication order was passed raising demand on all three counts. On appeal, the petitioner admitted liability on the first two grounds, while the appellate authority annulled the demand relating to ITC reversal. However, the appellate authority went further and enhanced the tax liability by holding that the petitioner had claimed excess zero-rated supplies and consequently increased the taxable turnover, imposing additional CGST and SGST at 18%. This issue of excess zero-rated supply and enhancement of turnover was not part of the original show cause notice or the adjudication order.
