2026-VIL-1073-GAU
  1. Home
  2. 2026-VIL-1073-GAU

SGST High Court Cases

GST – Failure to pay GST on a bonafide belief, Invocation of Section 74(1) of CGST Act, 2017; conditions precedent for invocation - Disclosure in audited balance sheet, income tax return and GST annual return – DGGI notice under Section 74(1) demanding GST on an allegation that Petitioner, a government contractor engaged in construction of national highways, had failed to pay GST on price adjustments received for the period 2022-23 - Petitioner had executed highway construction works under agreement which contained quoted price including 5% VAT. Price adjustments were made during 2022-23. Petitioner had disclosed the receipt of price adjustments in audited balance sheet filed with Income Tax Authorities and also in annual GST return - Petitioner sought to quash the show cause notice contending that essential pre-conditions for invoking Section 74(1) were not established – HELD - For invoking powers under Section 74(1), the proper officer must come to a clear conclusion that tax has not been paid by reason of fraud or there has been willful misstatement or suppression of facts to evade payment of tax. Suppression of facts means non-declaration of facts or information which a taxable person is required to declare in returns or documents furnished - In the present case, the Petitioner had disclosed the receipt of price adjustments in audited balance sheet filed with Income Tax Authorities on 29.09.2023, in annual GST return on 28.12.2023, and had affirmed and declared before GST Authorities per Rule 66 on 12.12.2022. Where facts are known to both parties, omission by one party to do what he might have done and not what he must have done does not render it suppression - Mere failure to pay GST on a bonafide belief that price adjustments were exempt from GST does not amount to willful suppression, especially where neither the government department nor the ministry had included GST charges in the bills for price adjustments. The Revenue invoked Section 74(1) merely to overcome the period of limitation without establishing any of the statutory pre-conditions. This constituted an exercise of jurisdiction not conferred by statute and was arbitrary and unjust – The show cause notice is quashed; all penalties, interest and surcharge are set aside – The writ petition is allowed - Maintainability of writ petition despite availability of alternative remedy under statute – HELD - In the present case, revenue authorities had wrongly assumed jurisdiction under Section 74(1) beyond what was conferred by statute by invoking extended limitation period without satisfying mandatory pre-conditions. This assumption of jurisdiction without authority and arbitrary exercise of power violated Article 14 of Constitution. Such jurisdictional error at threshold stage of show cause notice itself justified interference by writ court even before exhaustion of alternative remedies. When authorities act beyond their jurisdiction, it is permissible for High Court to intervene at initial stage to prevent abuse of authority – The Writ petition held maintainable; show cause notice quashed.
Download File
show more Judgements  

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Weekly Summary

VIL Video

GST & Customs updates: Sep'26
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?