Case Details: Prestige Nottinghill Investments vs. Union of India (2025) 36 Centax 290 (Kar.)
Judiciary and Counsel Details
- S.R.Krishna Kumar, J.
- S/Shri Bharat Bhagwan Raichandani & J R Raaghul Piraanesh, Advs., for the Petitioner.
- Shri Madanan Pillai, CGC & Smt Jyoti M Maradi, HCGP, for the Respondent.
Facts of the Case
The Petitioner-assessee received a show-cause notice proposing a demand, to which it submitted a reply. The jurisdictional authority thereafter issued an Order-in-Original confirming a higher demand, and the rectification application filed by the assessee was rejected. The assessee contended that the authority could not confirm any demand exceeding the amount proposed in the show-cause notice and could not rely on grounds not specified therein, and that the impugned order violated section 75(7) of the CGST Act and the corresponding provision of the Karnataka GST Act. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that section 75(7) of the CGST Act mandates that the amount of tax, interest, and penalty demanded in the order shall not exceed the amount specified in the show-cause notice and that no demand can be confirmed on grounds other than those set out therein. It found that the confirmed demand went beyond what had been proposed and that such deviation constituted a violation of statutory requirements and principles of natural justice. The Court observed that the adjudicating authority is bound by the scope of the show-cause notice and cannot enlarge the basis of demand at the stage of adjudication. The High Court accordingly set aside the impugned order and remanded the matter for reconsideration in accordance with law.
