2026-VIL-86-SC
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SGST Supreme Court Cases

GST - Section 74 of the CGST Act, 2017 - Fraud and Suppression of Facts - Allegation must be in Notice – Show Cause Notice under Section 74 alleging fraud or concealment of facts but SCN contains only bland statement without specifying how fraud was inferred or how concealment was detected – While the extended period of limitation fell on 28.02.2025, SCN issued on 13.06.2025 - Whether Show Cause Notice issued under Section 74 alleging fraud or suppression of facts without detailed specifications in notice itself is valid when notice is barred by limitation under Section 73, and whether allegations of fraud and concealment must be contained in notice or can be supplemented by counter affidavit - HELD - When authority issues notice or order, requirements to make notice or order valid should be contained in such notice or order and cannot be supplanted by counter affidavit in Court where notice or order is alleged to be invalid for reason of non-application of mind. SCN is beyond the time of three years provided under Section 73 for determination of tax short paid for any reason other than fraud, willful misstatement or suppression of facts - Notice can only be issued under Section 74 when there is fraud or willful misstatement or suppression of facts alleged and allegation has to come out from notice itself. Bare reading of notice indicates that but for bland statement of fraud or concealment of facts, nothing is stated as to how fraud was inferred or concealment of facts was detected - What is required for extended time to be applied are allegations which lead to inference of fraud or concealment as attempted by assessee resulting in suppression of facts, should emanate from notice itself. It cannot be mechanical use of words fraud, willful misstatement or suppression of facts without listing out aspects which persuades assessing officer to conclude that there has been employed either of these surreptitious devices by assessee - Extended period of limitation under Section 74 cannot be initiated without specific, detailed and clear allegations of fraud or suppression of facts in notice itself – The Show Cause Notice and the impugned order of High Court is set aside. Respondent-State is directed to desist from taking any further proceedings in pursuance of SCN. No further proceedings can be initiated as SCN is barred by limitation under Section 73 and the requirements to invoke Section 74 are not satisfied – The appeal is allowed
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