2026-VIL-730-CHG
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SGST High Court Cases

GST – Notice absent reason - Issue of Notice under Section 74 for determination of tax on account of wrongful availment of Input Tax Credit with subsequent order of recovery and order of attachment of bank account - Notice alleged that petitioner purchased goods from non-existing dealers and claimed bogus ITC from bogus dealers - Petitioner approached Department for relevant documents but those documents were not provided - Whether notice under Section 74 was issued in accordance with provisions - HELD - Bare perusal of Section 74 makes it clear that authority concerned has to specify reasons in accordance with Section 74 of CGST Act, 2017, but in impugned notice authority merely reproduced provision of Section 74 without specifying any independent reasons - It is settled legal proposition that if order is bad in its inception, it does not get sanctified at later stage as subsequent action cannot validate action which was not lawful at inception for reason that illegality strikes at root of order - As notice under Section 74 was not issued strictly in accordance with law and documents were not supplied to petitioner to defend his case, subsequent order of recovery and attachment of bank account cannot be held valid - The impugned notices and attachment order are quashed and matter is remitted back to authorities concerned to issue fresh notice under Section 74 with specific reason and thereafter competent authorities would be at liberty to take proper decision if so advised – The petition is allowed
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