Duakem Pharma Pvt. Ltd. & Anr. Vs Deputy Commissioner of Revenue & Ors. (Calcutta High Court)
In Duakem Pharma Pvt. Ltd. & Anr. v. Deputy Commissioner of Revenue & Ors., the Calcutta High Court set aside an adjudication order passed under Section 74 of the CGST/WBGST Act on the ground that it travelled beyond the show cause notice, thereby violating Section 75(7) of the CGST Act. The show cause notice dated November 11, 2024 alleged that input tax credit (ITC) was reversible in proportion to exempt supply. However, in the adjudication order dated February 24, 2025, the Proper Officer held that Dicalcium Phosphate (DCP) supplied by the petitioner did not qualify as exempt goods and imposed tax liability on that basis. The Court observed that classification of the product as exempt or taxable was never put to the petitioner in the notice and hence could not be adjudicated upon. Holding that adjudication cannot proceed on grounds not specified in the notice, the Court quashed the order while granting liberty to initiate fresh proceedings, excluding the intervening period for limitation purposes.
Facts:
Duakem Pharma Pvt. Ltd. & Anr. (“the Petitioner”) was issued a notice dated November 11, 2024 under Section 73(1) of the CGST/WBGST Act, 2017, alleging that input tax credit was reversible in proportion to exempt supply and proposing reversal of ITC.
