Facts of the Case:

In this case, a SCN was issued 11.11.2024 was issued under Section 74 of the CGST Act through GST DRC-01. It fixed 11.11.2024 as the date for filing a reply and proposed a demand of ₹2,34,626.52, covering tax, interest, and penalty. Since the SCN was uploaded under the “Additional Notices and Orders” tab, the petitioner claimed it was unaware of the notice and therefore could not respond. A reminder dated 27.01.2025 was also issued, but as no reply was filed, the adjudicating authority proceeded ex parte and passed the order dated 16.02.2025 confirming a significantly higher demand of ₹6,52,259.04. 

The petitioner contended that the demand imposed was in excess of the amount specified in the SCN, violating Section 75(7) of the CGST Act. The SCN and reminder mentioned dates only for filing reply, but the column for personal hearing mentioned “NA,” amounting to violation of principles of natural justice.

The State argued that despite issuance of the SCN and reminder, the petitioner failed to respond, thus no violation of natural justice could be pleaded. Interest and penalty being statutory, they can be levied even if not separately reflected in the SCN.

Issue:

Whether the adjudicating authority violated Section 75(7) of the CGST Act by raising a demand exceeding the amount specified in the show-cause notice. Whether failure to specify a date for personal hearing vitiated the proceedings.

Held that:

The Court examined Section 75(7), which mandates that the tax, interest, and penalty demanded in the final order shall not exceed the amount specified in the SCN, and no demand shall be confirmed on grounds other than those specified in the SCN. The SCN quantified the proposed demand at ₹2,34,626.52. However, the final order demanded ₹6,52,259.04, nearly three times higher. This was ex facie contrary to Section 75(7). Thus, the adjudication order was held unsustainable in law.

Since the petitioner claimed it was unaware of the SCN itself, the Court held that the absence of a personal-hearing date in the SCN did not independently vitiate the notice. The primary defect was the excess demand, not the procedural deficiency regarding hearing.

Due to clear violation of Section 75(7), the Court quashed adjudication order and appellate order. The matter was remanded back and provided the petitioner an opportunity to file reply to the original SCN, grant a personal hearing, and pass a fresh order in accordance with law.

Case Name: M/s Kisan Brick Field, Para Saray Itiyathok Gonda Thru. Proprietor Shaban Mohammad Versus State Of U.P. Thru. Prin. Secy. Tax And Registration Lko. And 3 Others dated 12.11.2025

To read the complete judgement 2025 Taxo.online 2936