Facts
The petitioner, a GST assessee, challenged proceedings under Section 74 of the Central Goods and Services Tax Act, 2017, including orders dated 10.06.2024 and 10.09.2024 and consequential proceedings.
Source reference: p.1–2The Superintendent of State Taxes had issued a DRC-01A alleging non-payment of tax on outward supplies for which e-way bills were generated between June 2023 and August 2024, and failure to file returns.
Source reference: p.1–2A consequential order dated 06.12.2024 and a summary in Form GST DRC-07 followed.
Source reference: p.1–2The petitioner argued that the notice did not state foundational facts supporting fraud, wilful misrepresentation or suppression, and did not use those terms.
Source reference: p.2The respondents did not dispute the relevant facts.
Source reference: p.2Issues
Whether proceedings under Section 74 could be sustained where the notice did not state foundational facts supporting fraud, wilful misrepresentation or suppression
Source reference: p.2–4Whether the orders and consequential proceedings founded on that notice were liable to be set aside
Source reference: p.4Law Applied
Section 74 of the CGST Act requires the proper officer to be satisfied not only that tax was unpaid or short-paid, but also that this resulted from fraud, wilful misrepresentation or suppression.
Source reference: p.2–4Under M/s Tata Steel Limited v. Union of India, 2026 SCC OnLine SC 1702, the notice must disclose the foundational facts supporting that inference; merely reciting statutory terms or making a bare allegation of suppression does not demonstrate the required application of mind or justify invoking Section 74.
Source reference: p.2–4Reasoning
The Court applied the rule in Tata Steel to the notice in this case.
Source reference: p.2–4It found that the notice did not state foundational facts indicating fraud, wilful misrepresentation or suppression and, as the Court noted, did not use those terms at all.
Source reference: p.2–4The statutory basis for invoking Section 74 was therefore absent, rendering the notice invalid and proceedings based on it illegal, arbitrary and without jurisdiction.
Source reference: p.2–4Holding
The Court allowed the writ petition and set aside the impugned orders dated 10.06.2024 and 10.09.2024, the show-cause notice dated 23.10.2024, and the consequential order dated 06.12.2024.
No costs were awarded; pending applications, if any, were disposed of.
Source reference: p.4Acts & Sections Cited
2 provisions across 1 statute referred to in this judgment. Each provision opens on LawLens.
Central Goods and Services Tax Act, 20172
Original Court PDF
Mr. Basir AlivsThe State of Tripura and Ors.
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in
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