Search-based GST investigations need not be preceded by scrutiny under Section 61.

M/S HD Associates, a partnership firm carrying on business as “Detailing Bull,” challenged a demand-cum-show-cause notice dated 14.08.2025 issued by the Assistant Director, DGGI, Guwahati, concerning financial years 2021–22 to 2024–25.

The petitioner also challenged the search and seizure proceedings conducted on 01.02.2024 under Section 67 of the Central Goods and Services Tax Act, 2017 (“CGST Act”), including FORM GST INS-01, INS-02 and the consequential panchnama.

The notice alleged suppression and misdeclaration of taxable supplies valued at ₹3,42,61,665, involving GST of ₹61,67,100, and proposed liability under Section 74 for 2021–22 to 2023–24 and Section 74A for 2024–25, along with interest and penalties under Section 122.

The department relied on the “Garage Plug” software, slip pads, business records, statements recorded during investigation and information obtained from third parties.

1. Whether the search and seizure proceedings under Section 67 were invalid for want of proper authorisation or contemporaneous “reasons to believe”.

2. Whether the search authorisation was invalid because it allegedly lacked a DIN or was not duly regularised under the applicable CBIC circulars.

3. Whether proceedings under Section 74/74A could be initiated without first undertaking scrutiny under Section 61 and issuing FORM GST ASMT-10.

4. Whether a consolidated show-cause notice covering multiple financial years was without jurisdiction.

5. Whether the simultaneous invocation of Sections 74/74A and 122 violated the bar against double penalty under Section 75(13).

6. Whether the show-cause notice was liable to be quashed for failing to establish suppression, fraud or wilful misstatement and for allegedly incorrect quantification of liability.

Section 67 of the CGST Act requires the competent officer to possess reasons to believe before authorising a search, while Rule 139(1) prescribes FORM GST INS-01 for the written authorisation.

The existence of INS-01 does not conclusively establish that the statutory precondition was satisfied, but non-supply of the reasons to the taxable person does not, by itself, invalidate the search; the adjudicating authority must examine the contemporaneous record to determine whether the requisite belief existed before authorisation.

CBIC Circulars No. 122/41/2019-GST dated 05.11.2019 and No. 128/47/2019-GST dated 23.12.2019 govern DIN requirements, permissible exceptions and subsequent regularisation.

Section 61 is not a mandatory preliminary stage for every investigation; it is required where the demand is founded on discrepancies detected through return scrutiny, but not where the demand arises from a Section 67 search and the ensuing investigation.

A consolidated show-cause notice covering multiple financial years is not per se without jurisdiction, as held in *M/s Tata Projects Ltd. v. Union of India*, 2026 SCC OnLine Gau 3798.

Section 75(13) prohibits imposition of more than one penalty on the same person for the same act or omission, but does not prevent the department from referring to Sections 74/74A and 122 in the same show-cause notice.

Challenges involving suppression, fraud, wilful misstatement and tax quantification ordinarily require statutory adjudication and are not generally determined in writ proceedings against a show-cause notice.

The Court rejected the challenge based on absence of authorisation because the petitioner’s own pleadings acknowledged FORM GST INS-01 dated 01.02.2024.

However, it held that the adjudicating authority must examine the original INS-01 and contemporaneous departmental records to determine whether the competent officer had formed the requisite reasons to believe before authorising the search; the later validity of the proceedings would abide by that determination.

The alleged DIN defect involved factual questions concerning the applicability of exceptions and regularisation and therefore did not justify quashing the entire notice at the writ stage.

Since the notice was founded on the search, seized materials, statements and subsequent investigation—not merely discrepancies identified through scrutiny of returns—prior proceedings under Section 61 were unnecessary.

The consolidated notice was permissible, subject to separate determination of liability, limitation and the applicable statutory provision for each financial year.

Likewise, reference to Sections 74/74A and 122 in one notice was not invalid, although the authority must ensure that Section 75(13) prevents double penalty for the same act or omission.

Questions concerning whether the materials established suppression or wilful misstatement, and whether the tax demand was correctly quantified, were factual matters for adjudication rather than writ review.

The writ petition was accordingly dismissed.

Nevertheless, in the interests of justice, the petitioner was granted 45 days from the date of judgment to submit its reply to the notice, with liberty to raise all factual and legal objections before the adjudicating authority.

The authority was directed to adjudicate the matter in accordance with law, including the validity of the reasons to believe, DIN compliance, year-wise liability and limitation, the applicability of Sections 74 and 74A, and the prohibition against double penalty under Section 75(13).

The Court clarified that its observations were confined to the question of interference with the notice and did not constitute findings on the merits.

Parties were directed to bear their own costs.