The Bombay High Court (Aurangabad Bench) has quashed both the show cause notice and the adjudication order in a case where the final demand of Rs. 2,06,46,142/- (including tax, interest and penalty) far exceeded the amount proposed in the show cause notice of Rs. 57,55,627/-. Justices Nitin B. Suryawanshi and Vaishali Patil-Jadhav, in Writ Petition No. 4163 of 2026 (Yash Innovative Solution LLP vs. Joint Commissioner, decided 20.04.2026), held that the adjudication order was contrary to the express mandate of Section 75(7) of the MGST Act.

The petitioner, a Limited Liability Partnership providing project management consultancy to government bodies including Maharashtra Jeevan Pradhikaran and MSRTC, was selected for scrutiny under Section 61 of the MGST Act. A notice dated 07.05.2024 was issued pointing to a difference between TDS turnover under GSTR-7 and turnover shown in GSTR-3B. After the petitioner's reply explaining the mismatch and demonstrating that its services were exempted, a show cause notice dated 18.06.2025 was issued proposing a demand of Rs. 57,55,627/-. The petitioner replied on 16.07.2025 explaining that the services provided to the Municipal Corporation were due to a misconception and gave details of GST already paid on taxable services.

The Court held that Section 75(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 grounds other than those specified in the notice. This provision was clearly violated. Additionally, the petitioner's contention that it was rendering services to Government Undertakings and Corporations exempted under Notification No. 12/2017 dated 28.06.2017 under Section 11(1) of the CGST Act was not even considered by the respondent while passing the impugned order. The matter was remanded for fresh consideration on merits after providing opportunity of hearing.

•  2026-juristway.com-1056-HC(Bombay)-GST  |  High Court of Bombay (Aurangabad Bench)  |  Writ Petition No. 4163 of 2026  |  20.04.2026