CGST Section 74 Jurisdiction Invalid Without Allegations of Suppression: Allahabad HC

Chandrashekhar Yadav Vs State of U.P. (Allahabad High Court)

For invoking Section 74 of the Act, the allegations pertaining to suppression etc. are sine qua non in absence thereof, the jurisdiction under Section 74 of the Act itself cannot be invoked by the authorities: Allahabad High Court

The Allahabad High Court, in Chandrashekhar Yadav vs. State of U.P., ruled that the invocation of Section 74 of the State Goods and Services Tax Act, 2017 (SGST Act) was unwarranted. The petitioner had been served with a notice for non-payment of tax, followed by a demand order seeking interest and penalty. However, the court observed that the essential conditions for invoking Section 74, such as fraud, wilful misstatement, or suppression of facts, were absent.

The case pertained to a demand order dated March 16, 2024, which sought Rs. 25,08,494 from the petitioner for the financial year 2017-18. The petitioner had initially received a show cause notice on October 12, 2022, stating that a tax liability of Rs. 13,55,943 had been declared but remained unpaid. Subsequently, the petitioner deposited the tax amount but was still issued the impugned order demanding interest and penalty. The petitioner challenged this on the grounds that the notice lacked allegations of fraud or suppression, making the demand legally untenable.