2026-VIL-298-GSTAT-ERN
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SGST Tribunal

GST - Confirmation of demand based on provisions not in statute during relevant period – Violation of Section 75(7) of CGST Act, 2017 - The SCN proposed to deny Input Tax Credit availed on invoices of suppliers who had not filed their GSTR-3B returns, alleging violation of Section 16(2)(aa). That provision came into effect only from 01.01.2022, whereas the demand pertained to financial year 2018-19 - The adjudicating authority confirmed the demand for contravention of Section 16(2)(c) on the ground that the underlying tax was not paid by the supplier. The FAA upheld it, holding that a wrong reference to the statutory provision does not invalidate the demand - Whether the demand can be confirmed for contravention of Section 16(2)(c) when the SCN was issued only for contravention of Section 16(2)(aa) - HELD - The SCN was issued only on the ground of non-compliance with Section 16(2)(aa), and the Appellant was nowhere put to notice regarding any infraction of Section 16(2)(c). The adjudication order did not deal with the contention on the effective date of Section 16(2)(aa). It converted the charge of availing credit on invoices of suppliers who had not filed returns into a charge of non-payment of tax by the suppliers. This finding required detailed verification of the supplier's records, and those facts were never put to the Appellant - There was no indication that the new charge was even broached at the personal hearing, and the Appellant was caught unawares on a charge which was not put to it at any stage. The present case is one of wrong reference to a provision, and not of omission to mention a sub-clause in an otherwise clear notice - An SCN which extracts the provisions without showing how a particular provision was contravened cannot be the basis of an order finding contravention of a different provision. The grounds of the SCN and the grounds on which the demand was confirmed are far different from one another - Section 75(7) provides that no demand shall be confirmed on grounds other than the grounds specified in the notice. An SCN delineates the scope of the proceedings, and any ground which does not figure in it cannot be permitted to adversely affect the noticee. The proceedings are vitiated by a breach of Section 75(7) - Once the demand of tax is not sustainable, the interest and penalty associated with it are also not sustainable - The portions of the order in appeal confirming the demand, interest and penalty are set aside. The appeal is allowed
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