Order Date – 07 May 2025

Parties: M/s Vibhuti Tyres Vs State of U.P. and Another

Facts –

• The Petitioner, M/s Vibhuti Tyres, was issued a show-cause notice dated 29.09.2023 imposing tax, penalty and interest. However the petitioner fails to response to the said show-cause notice. As no appearance was made, the same led to passing of the order dated 18.11.2023 raising the demand.
• The petitioner submitted that raising demand is contrary to the show-cause notice issued to the petitioner and in violation of Section 75(7) of the Act.

Issue –

• Whether the final order passed under Section 73 can demand an amount higher than what was specified in the SCN?

Order –

• The Divisional Bench of Hon’ble High Court observed that Section 75 deals with general provisions relating to determination of tax and sub-section (7) specifically stipulates that 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.
• Admittedly, in the present case, the show-cause notice merely indicates the amount of Rs. 8,81,080/- as representing the tax, interest and penalty and the demand qua the three components has been raised at Rs. 32,97,336/-, which is ex facie contrary to the provisions of Section 75(7) of the Act.
• In view of the above discussion, on account of violation of provisions of Section 75(7) of the Act, the order impugned cannot be sustained. Consequently, the writ petition is allowed.