2024 (5) TMI 267 - HC - GST

Scope of SCN - adjudicating authority has traveled beyond the scope of adjudication notice inasmuch as against show cause notice issued proposing to create demand of GST - Violation of essential requirements of rules of natural justice - HELD THAT - No useful purpose may be served either in keeping the present petition or calling for a counter affidavit or relegating the petitioner to the forum of appeal. Once the Act requires by way of a mandatory provision that the demand arising under an adjudication order may not exceed the demand for which show cause notice may have been issued, there is no room to entertain any doubt as to that. Also, rules of natural justice are far too well established to allow any exception to be made in that regard. Unless, the petitioner had been put to notice with respect to the demand proposed to be created by the adjudication order and unless he had been given adequate opportunity to present his case, the order that may arise may remain procedurally defective. The writ petition is disposed off.

Summary

Issues involved: Challenge to adjudication order u/s 73(9) of the U.P. G.S.T Act, 2017 - Exceeding scope of show cause notice and violation of rules of natural justice.

Adjudication Order Challenge:
The petitioner challenged the adjudication order dated 28.12.2023 passed u/s 73(9) of the U.P. G.S.T Act, 2017, raising two key objections. Firstly, it was contended that the adjudicating authority exceeded the scope of the show cause notice by creating a demand of Rs. 16,50,391.95/-, surpassing the proposed demand of GST Rs. 14,45,845.98/-, which was a violation of Section 75(7) of the Act. Secondly, it was argued that the petitioner was not afforded a reasonable opportunity of personal hearing as the date set for the hearing coincided with the deadline for filing a reply. Reference was made to the case of Mahaveer Trading Company Vs. Deputy Commissioner State Tax and Another regarding the violation of rules of natural justice.

Court's Decision:
The court acknowledged the undisputed facts and emphasized the importance of adhering to procedural requirements. It was noted that the Act mandates that the demand in an adjudication order should not exceed the amount specified in the show cause notice. Furthermore, the court highlighted the well-established principles of natural justice, stressing the necessity of providing the petitioner with proper notice and an opportunity to present their case. In light of these considerations, the court disposed of the writ petition with specific directions.

Court's Directions:
1. The order dated 28.12.2023 was set aside.
2. The petitioner was instructed to treat the impugned order as the final notice.
3. The petitioner was granted three weeks to submit a further reply, raising any jurisdictional and merit issues.
4. The adjudicating authority was directed to schedule a personal hearing with at least 15 days notice for the petitioner to prepare adequately.
5. The petitioner committed to appearing before the adjudicating authority on the designated dates, following which an appropriate reasoned order would be issued.

By ensuring compliance with these directives, the court aimed to rectify the procedural defects in the adjudication process and uphold the principles of natural justice.