2026-VIL-876-ALH
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SGST High Court Cases

GST - Show Cause Notice - Jurisdiction and Limitation – The earlier Show Cause Notice was quashed by writ court which granted liberty to issue fresh Show Cause Notice under Section 74 if jurisdictional ingredients of fraud or wilful misstatement or suppression of facts to evade tax exist - Petitioner challenged fresh Show Cause Notice on ground that it was issued beyond limitation period - Whether fresh Show Cause Notice under Section 74 can be issued by revenue authorities beyond normal limitation period on basis of writ court's direction and whether the Revenue lost jurisdiction due to withdrawal of earlier notice under Section 73 - HELD - The writ court's order dated 27.09.2024 quashing earlier SCN and granting specific liberty to revenue to initiate fresh proceedings under Section 74 has attained finality as neither party challenged the same before Supreme Court. The writ court's order is not shown to have reached any finding that jurisdiction to initiate proceeding under Section 74 did not exist but by making direction conditional on existence of jurisdictional ingredients of fraud or willful misstatement or suppression of facts, positive direction was issued allowing fresh adjudication - Section 75(3) of the Act provides that where any order is issued in pursuance of direction of Court, such order shall be issued within two years from communication of that direction. Though Section 75(3) contemplates remand after adjudication order, by virtue of specific writ court direction, limitation to pass fresh order existed upto two years from communication of order dated 27.09.2024. Applying this principle the impugned notice dated 22.07.2026 is issued within prescribed limitation. The fact that earlier notice under Section 73 was withdrawn does not deprive revenue of jurisdiction to issue notice under Section 74 as both sections operate in different fields – While Section 73 covers wrongly availed ITC for reasons other than fraud or wilful misstatement, Section 74 covers cases involving fraud or wilful misstatement or suppression of facts. These are distinct jurisdictional bases and proceedings under one section do not preclude proceedings under the other section - However, impugned notice is set aside due to element of prejudice discernible from observations made by adjudicating authority. Matter remitted for issuance of fresh notice if jurisdictional facts exist by different officer and proceedings to be concluded expeditiously – The Writ petition is disposed of
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