A Section 74 GST notice must plead foundational facts establishing fraud, wilful misstatement, or suppression.

The petitioner challenged notices dated 2 and 3 July 2024, including a show-cause notice under Section 74 of the Himachal Pradesh Goods and Services Tax Act, 2017, concerning allegedly wrongly availed input tax credit (ITC).

The notice referred to the cancellation of inward suppliers’ registrations and alleged that the petitioner had wrongly availed or utilised ITC by reason of “fraud, or any wilful-misstatement or suppression of facts to evade tax”

The petitioner also challenged the constitutional validity of specified provisions of Section 16 of the CGST Act and contended, among other things, that the notice was time-barred.

The Court disposed of the petition on the adequacy of the Section 74 notice.

Whether the show-cause notice satisfied Section 74’s requirements by disclosing the basis for alleging fraud, wilful misstatement, or suppression of facts to evade tax

Whether the petitioner’s constitutional challenge to specified provisions of Section 16 of the CGST Act should be decided in this proceeding

Section 74 of the HP GST Act applies where tax has not been paid or has been short-paid, or ITC has been wrongly availed or utilised, by reason of fraud, wilful misstatement, or suppression of facts to evade tax; the notice must connect the alleged conduct to the asserted ground for invoking the provision

Relying on M/s Tata Steel Limited v. Union of India, SLP(C) No. 16859/2026, and M/s G.R. Infra Projects Limited, Ratlam v. State of Madhya Pradesh, SLP(C) No. 33594/2025, the Court stated that a bare or mechanical recital of the statutory terms is insufficient: the foundational facts supporting the inference of fraud, wilful misrepresentation, or suppression must appear in the notice itself

Although the notice referred to the cancellation of suppliers’ registrations and alleged wrongful ITC, it then stated, in the alternative, that the credit had been wrongly availed by reason of “fraud, or” wilful misstatement, or suppression of facts, without clearly identifying which ground applied or explaining how the petitioner’s conduct established it

The Court held that this lack of a clear, factually supported connection between the allegations and a specific Section 74 ground did not meet the statutory requirement; a recital of the statutory language was not enough

If a fresh notice is issued within 60 days from the date of judgment, limitation will not prevent its issuance.

The challenge to the specified provisions of Section 16 of the CGST Act was expressly left open and was not decided.