GST Authorities can't raise new grounds or arguments that are not part of the SCN

Last updated: 08 February 2024

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The Allahabad High Court has ruled that GST authorities are strictly bound by the grounds stated in the original Show Cause Notice (SCN). They cannot introduce new arguments or grounds during proceedings that were not included in the initial SCN. This decision upholds principles of natural justice and procedural fairness, ensuring individuals have a clear understanding of allegations and a proper opportunity to respond.

Court :
Allahabad High Court

Brief :
The Hon'ble Allahabad High Court in the case of M/s. Associated Switch Gears and Projects Ltd. v. State of Uttar Pradesh [Writ Tax No. 276 of 2020 dated January 25, 2024 held that no other ground can be raised apart from the grounds mentioned in the Show Cause Notice ("SCN"). The Authorities must adhere to the grounds mentioned in the SCN. It is not merely a procedural formality, but a mandatory requirement, beyond the scope of which no action can be taken. The Court also emphasized the fundamental safeguard against arbitrary exercise of power, ensuring that Authorities remains bound to the principles of justice and the rule of law. Hence, the Court directed the Respondents to refund the penalty paid by the Petitioner and further, the writ petition was allowed.

Citation :
Writ Tax No. 276 of 2020 dated January 25, 2024

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1999

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3499

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4999

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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