GST Order unsustainable when demand under adjudication order exceeds the amount Specified in show cause notice
Issue Raised:
The central issue in this case was the validity of the impugned order dated October 10, 2023, which confirmed a substantial tax demand. The petitioner contended that the order lacked reasoning and exceeded the tax demand specified in the show cause notice.
Facts:
The petitioner received a notice on June 22, 2023, regarding discrepancies in their filed returns.
The petitioner responded to the notice on April 11, 2023.
Subsequently, a show cause notice was issued, leading to the impugned order.
The tax demand under the show cause notice was ₹5,570/-, while the confirmed tax proposal in the impugned order was ₹1,07,410/-.
Court Judgment
The court examined the impugned order and found it devoid of any specified reasons. Given the significant discrepancy in the tax demand, the court held that the order could not be sustained.
Key Takeaways::
Reasoned Orders: The court emphasized the importance of providing reasoned orders, especially in tax matters.
Excessive Tax Demand: An order exceeding the tax demand specified in the show cause notice is unsustainable.
Remand for Fresh Proceedings: The court set aside the impugned order, allowing the respondent to initiate fresh proceedings in accordance with the law.
In summary, the Madras High Court ruled that a GST order cannot stand if the tax demand exceeds what was specified in the show cause notice.
Madras HC – Nanjappan Senthilkumar (Prop: Bhavani Agro Services) Vs Deputy Commercial Tax
The Copy Of the Order as Under:
