2026-VIL-630-MAD
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SGST High Court Cases

GST - Invocation of extended period of limitation under Section 74 of CGST Act, 2017; requirement of "reasons to believe" versus "where it appears"; procedural compliance in assessment proceedings - Tax liability for discrepancies between GSTR-3B versus GSTR-2A, GSTR-7 versus GSTR-3B, and GSTR-9 versus Form 26AS - Whether the authorities can invoke the machinery under Section 74 of the Act by using the expression "where it appears" without furnishing explicit reasons to believe in fraud, wilful misstatement, or suppression of facts - HELD - Since the records before the authorities revealed short-payments of tax as compared to the amounts mentioned in Form 26AS and GSTR-7, the authorities are entitled to invoke the machinery under Section 74 of the CGST Act as the expression used therein is "where it appears" and not "reasons to believe". The SCNs clearly referred to Section 74 and the expression "willful suppression of facts" was used in both notices - The statutory language "where it appears" provides a broader scope for invocation compared to the stricter "reasons to believe" standard applicable under the Income Tax Act. However, the revenue abstract to the notice for the tax period 2020-2021 erroneously recorded the exempted turnover as the tax liability instead of the actual tax liability, and the impugned order inadvertently recorded the exempted turnover from an incorrect tax period, resulting in an erroneous calculation of total tax liability. Additionally, the petitioner's reply to the show cause notice was insufficient and did not effectively address the allegations raised - The matters are remanded back to the respondents to pass fresh orders on merits after affording opportunity of personal hearing to the petitioner, who shall file detailed replies and necessary documents to defend their case – The petitions are disposed of
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GSTAT Filing Near: Closing Resolutions...
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