The Calcutta High Court ruled that a final GST demand cannot surpass the amount specified in the original show cause notice. The decision preserves procedural fairness and protects taxpayers from post-notice escalation.
Final GST Demand Must Align With SCN: Calcutta HC
The Calcutta High Court quashed a GST assessment order where the final tax demand exceeded the amount specified in the original show cause notice (SCN). The Court held that enhancing liability beyond the SCN violates principles of natural justice and Section 73(1) of the CGST Act, 2017.
The Court remanded the matter to the adjudicating authority for fresh determination within the SCN’s outer limit, subject to a 10% deposit of the contested tax amount. It emphasized that any upward revision requires a fresh SCN, ensuring taxpayers can respond meaningfully.
The demand in the assessment order cannot trespass the boundaries of the notice which invited challenge.
This decision reinforces procedural due process in assessment proceedings. Taxpayers should monitor SCN parameters closely and object promptly if outcomes exceed initial disclosures. Authorities may no longer silently inflate demands post-reply.
Citations
- CGST Act, 2017, Section 73(1)
