2026-VIL-1049-CHG
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SGST High Court Cases

GST - Validity of show cause notice under Section 74(9), Requirement to disclose foundational facts establishing fraud or wilful misrepresentation - Petitioners challenged show cause notices alleging availment of input tax credit by issuing fake invoices without actual supply of goods - Whether show cause notices issued under Section 74(9) of GST Act for invoking extended period of limitation can be sustained when they mechanically employ words indicating fraud or wilful misrepresentation without disclosing foundational facts and specific evidence supporting such allegations - HELD - The extended limitation period provided under Section 74(9) for recovery of excess benefit availed, short payment or excess refund is made available only when foundational facts establishing fraud, wilful misrepresentation or suppression are evident from the notice itself - The words fraud, wilful misrepresentation and suppression are not to be mechanically recited in the notice merely as lip service to the statutory provisions. Mere employment of such terminologies without assignment of sufficient reasons and without disclosure of foundational facts underlying the allegations does not indicate any application of mind by the authority and does not constitute the satisfaction required under the statute for invoking the extended period - The requirement to disclose foundational facts is mandatory and cannot be circumvented through mechanical recitation of allegations without supporting evidence or reasoning – The SCNs issued under Section 74(9) of CGST Act, 2017 are quashed for failure to disclose foundational facts establishing fraud, wilful misrepresentation or suppression. Respondent authority is at liberty to issue fresh notices strictly in accordance with law and with proper disclosure of foundational facts if so advised – The writ petitions are allowed
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GST & Customs updates: Sep'26
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