Facts of the Case:

In this case, the petitioner approached the High Court challenging an adjudication order issued in Form GST DRC-07 for the tax period 2018–19. The impugned order confirmed a tax demand against the petitioner. The grievance of the petitioner was that the demand confirmed in the final order exceeded the proposal contained in the Show Cause Notice issued earlier in Form GST DRC-01 dated 26.06.2025. The show cause notice had proposed a tax demand limited to ₹1,37,54,141, whereas the adjudication order determined a substantially higher liability.

The petitioner contended that such enhancement of demand beyond the scope of the show cause notice violated statutory safeguards and principles of natural justice, as no opportunity was granted to respond to the enhanced demand.

Issue:

Whether an adjudication order under GST can confirm a tax demand exceeding the amount proposed in the show cause notice.

Held that:

The Court held that the impugned order was contrary to Section 75(7) of the GST enactments, which restricts adjudication strictly to the grounds and amounts specified in the show cause notice.

Since the confirmed demand exceeded the proposal made in the show cause notice, the adjudication order was legally unsustainable and liable to be set aside.

Accordingly, the impugned order was quashed and the matter was remitted to the adjudicating authority for fresh consideration on merits in accordance with law. The Court directed the petitioner shall file a detailed reply to the show cause notice dated 26.06.2025 within 30 days, along with supporting documents. The impugned order shall be treated as an addendum to the show cause notice for enabling a complete response.

If the petitioner fails to comply, the department may proceed to recover dues as per law.

Case name: Ms Tirumala Milk Products Private Limited Versus The State Tax Officer Group I, Chennai dated 05.03.2026