Case Summary:
The recent decision by the Uttarakhand High Court in a case involving a company (petitioner) challenging an excessive demand order issued by the State GST department.
Case Details:
- The petitioner contested an order dated November 6, 2023, issued under Section 73(9) of the UGST Act. This order demanded a hefty sum of ?91,95,708/- from the petitioner in taxes, interest, and penalties.
- The crux of the petitioner's argument lay in the discrepancy between the demand order and the show cause notice issued in Form GST DRC-01. The show cause notice mentioned a significantly lower amount of ?27,06,340/-.
Legal Grounds:
- Mr. Arora, the petitioner's counsel, emphasized Sub-Section (7) of Section 75 of the UGST Act. This provision clearly states that the tax, interest, and penalty demanded in an order cannot exceed the amount specified in the show cause notice.
Court's Decision:
- Mr. Maulekhi, representing the State, conceded that the demand order indeed violated the aforementioned statutory provision.
- In light of this concession, the High Court allowed the writ petition and quashed the impugned order dated November 6, 2023.
Important Caveat:
- While the excessive demand order was quashed, the Court clarified that the tax authorities are entitled to initiate fresh proceedings following the due process outlined in the UGST Act.
- The Court also expressed its expectation that the proper officer will issue a final order within four months, adhering to the legal framework.
Topic- Horizon Packs (P.) Ltd. v. Union of India (2024 TAXONATION 868 (UTTARAKHAND))
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