Jay Dee Enterprises Vs Deputy Commissioner State Tax SGST And Another (Allahabad High Court)
Penalty Imposed in Excess of the Amount Proposed in the SCN is a Jurisdictional Error Under Section 75(7) of the GST Act: Allahabad High Court
Summary: The Allahabad High Court in M/S Jay Dee Enterprises v. Deputy Commissioner State Tax SGST and Another considered a challenge to an order dated 21 December 2023 passed under Section 73 of the Uttar Pradesh Goods and Services Tax Act, 2017 for the tax period 2017-18. The petitioner contended that the adjudication order suffered from a jurisdictional defect because the show cause notice had proposed a penalty of Rs. 4,60,542, whereas the impugned order imposed a penalty of Rs. 9,21,084.
The Court examined the statutory restriction contained in Section 75(7) of the UPGST Act, 2017, which prohibits an adjudicating authority from confirming tax or penalty liability in excess of the amount specified in the show cause notice. The Court noted that the statutory prohibition extended to the quantum of liability and that confirmation of a liability exceeding the amount proposed in the notice constituted a jurisdictional error.
When queried by the Court, the learned Standing Counsel for the State could not dispute the factual and legal position. Consequently, the High Court set aside the impugned order and remitted the matter to the adjudicating authority for passing a fresh order after providing due opportunity of personal hearing to the petitioner and considering its objections, if any. The Court directed that the fresh proceedings be completed as expeditiously as possible, preferably within three months from the date of the order.
