The Allahabad High Court addressed a case involving M/s Kisan Brick Field and the State of U.P., where a GST-related dispute arose from a show-cause notice issued under Section 74. The notice, dated November 11, 2024, was uploaded under the "Additional Notices" tab, and the petitioner did not respond. Subsequently, an adjudicating authority issued a demand order on February 16, 2025, requiring the petitioner to pay ₹6,52,259, which significantly exceeded the ₹2,34,626 proposed in the original notice. This discrepancy violated Section 75(7) of the CGST Act, leading to the dismissal of the appeal as time-barred on October 8, 2025.
The petitioner contended that the demand exceeded the scope of the show-cause notice and claimed they were denied a fair opportunity for a hearing. The central issue revolved around whether a demand order could impose tax, interest, and penalties exceeding the amounts proposed in the show-cause notice, contrary to the provisions of Section 75(7).
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The High Court ruled that Section 75(7) explicitly prohibits confirming liabilities beyond what is stated in the show-cause notice. As the final demand surpassed the proposed amount, the court deemed the order illegal and beyond jurisdiction. Consequently, both the demand order and the appellate order were quashed. The court remanded the matter for fresh adjudication, ensuring the petitioner receives a proper opportunity to present their case, thereby allowing the writ petition.
Parties: M/s Kisan Brick Field v. State of U.P. & Ors.
Order Date: 12 November 2025
Facts
- A Section 74 show-cause notice dated 11.11.2024 was uploaded only under the “Additional Notices” tab, and the petitioner did not file any reply.
- The adjudicating authority passed an order dated 16.02.2025 demanding ₹6,52,259, though the SCN proposed only ₹2,34,626, creating a clear violation of Section 75(7).
- The appeal was dismissed on 08.10.2025 as time-barred.
- The petitioner argued that the demand exceeded the scope of the SCN, and that they were denied effective opportunity of hearing.
Issue
- Whether a demand order under GST can impose tax, interest and penalty in excess of the amount proposed in the show-cause notice, contrary to Section 75(7) of the CGST Act?
Order
- The Court held that Section 75(7) expressly prohibits confirming liability beyond what is stated in the SCN.
- Since the final demand far exceeded the amount proposed, the order was held to be illegal and without jurisdiction.
- The appellate order could not stand once the foundational assessment was invalid.
- Both orders dated 16.02.2025 and 08.10.2025 were quashed, and the matter remanded for fresh adjudication after due opportunity.
- Writ petition allowed.
