Revenue department cannot go beyond the scope of SCN to create new ground at the stage of adjudication

Last updated: 23 February 2023

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The Jharkhand High Court has ruled that tax authorities cannot introduce new allegations or grounds during the adjudication process that were not included in the original Show Cause Notice (SCN). In this case, the court quashed an SCN and subsequent orders because the adjudication went beyond the scope of the initial notice and violated the principles of natural justice by not providing a proper hearing. The court emphasised that if grounds are not raised in the SCN, they cannot be used later to create new arguments.

Court :
Jharkhand High Court

Brief :
The Hon'ble Jharkhand High Court in M/s. CJ Darcl Logistics Limited v. Union of India [W.P.(T) No. 215 of 2022 dated February 9, 2023] has quashed and set aside the Show Cause Notice ("SCN") and the consequent orders demanding reversal of excess Input Tax Credit ("ITC"), on the ground that, the same were passed without providing the opportunity of personal hearing to the assessee. Hence, violative of principles of natural justice. Held that, the SCN was vague and cryptic in nature and the orders passed were beyond the scope of the SCN.

Citation :
W.P.(T) No. 215 of 2022 dated February 9, 2023]

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