Horizon Packs Pvt. Ltd. Vs Union Of India
Date: April 2, 2024
Subject Matter
Demand cannot surpass the amount in the SCN
Summary
The Uttarakhand High Court reviewed a petition filed by a company against an order requiring it to pay ₹91,95,708 in tax, interest, and penalty under Section 73(9) of the Uttarakhand Goods and Services Tax Act, 2017. The petitioner argued that this amount significantly exceeded the ₹27,06,340 indicated in the initial show cause notice (Form GST DRC-01). The petitioner’s counsel relied on Section 75(7) of the Act, which prohibits a final demand from surpassing the amount in the notice and limits grounds for confirmation of demand strictly to those stated in the notice. The State counsel acknowledged that the final demand indeed violated this provision. Consequently, the High Court found in favor of the petitioner, quashing the order dated November 6, 2023, due to non-compliance with statutory provisions. However, the court permitted the Proper Officer to initiate new proceedings on the matter, with the expectation that a final order would be issued within four months, adhering strictly to the prescribed procedures of the Act.
FULL TEXT OF THE JUDGMENT/ORDER OF UTTARAKHAND HIGH COURT
(1) Mr. Rohit Arora, learned counsel for the petitioner.
(1) Mr. Mohit Maulekhi, learned Brief Holder for the State of Uttarakhand.
2) Petitioner is a Company paying tax under State GST. Petitioner is challenging the order dated 06.11.2023 passed under Section 73(9) of Uttarakhand Goods and Services Tax Act, 2017, whereby he has been asked to deposit ₹91,95,708/-, as tax, interest& penalty.
(3) Petitioner has challenged the said order only on the ground that the amount mentioned in the show cause notice issued in Form GST DRC-01 is much less, therefore, more amount cannot be ordered to be paid by the petitioner. Attention of this Court is drawn to show cause notice issued in Form GST DRC-01 in which the amount mentioned is ₹27,06,340/- only.
(5) Learned counsel for the petitioner submits that the impugned order dated 06.11.2023 is unsustainable in view of provision contained in Sub-Section (7) of Section 75 of Uttarakhand Goods and Services Act, 2017, which reads as under: –
“75(7) The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.”
(6) Mr. Mohit Maulekh, learned Brief Holder for the State concedes that the impugned order is not as per the provision contained in Sub-Section (7) of Section 75 of the Uttarakhand Goods and Services Tax Act, 2017, as the demand raised by the impugned order is much more than the amount indicated in the show cause notice.
(7) In such view of the matter, the writ petition is liable to be allowed and is hereby allowed. Impugned order date 06.11.2023 is quashed. However, it shall be open to the Proper Officer to initiate proceedings de-novo. This Court hopes and expects that the final order will be passed by the Proper Officer within four months, but only after following the mandate prescribed in the Statute.