Shree Hanumant Steel Traders Vs Assistant Commissioner (Chhattisgarh High Court)
Summary: The High Court of Chhattisgarh at Bilaspur considered a batch of three writ petitions filed by Shree Hanumant Steel Traders and Shri Kamal Kishor Agrawal, challenging respective notices issued by the respondent under Section 74(9) of the GST Act, 2017 dated 16.10.2025. The first matter in source order was WPT No. 11 of 2026; the connected matters were WPT Nos. 15 and 12 of 2026.
The petitioners contended that the issue was no longer res integra in view of the Supreme Court’s decision in Tata Steel Ltd. Versus Union of India. Their case was that the foundational facts leading to an inference of fraud, wilful misrepresentation or suppression had to be evident from the notice itself. According to the petitioners, the impugned notices did not contain those foundational facts and therefore deserved to be quashed.
The State opposed the petitions. It submitted that the notices described the amounts as input tax credit availed by issuing fake invoices without actual supply of goods. The State further contended that the authority had appropriately depicted the foundational facts and that the petitioners had an efficacious alternative remedy of appeal under Section 107 of the GST Act.
After hearing the parties and perusing the material on record, the Court examined the impugned notices and found that the authority had failed to assign sufficient reasons while issuing the notices under Section 74(9). The Court relied upon the Supreme Court’s discussion in Tata Steel Ltd. Versus Union of India, which emphasised that, where the extended limitation provision is invoked on allegations of fraud, wilful misrepresentation or suppression, the foundational facts leading to that inference must be evident from the notice itself. Mere mechanical employment of those statutory expressions does not demonstrate the required application of mind.
On that basis, the Court held that the respective notices issued under Section 74(9) of the GST Act, 2017 dated 16.10.2025 could not be sustained. The notices were consequently quashed. The Court nevertheless left the respondent authority at liberty to issue fresh notices strictly in accordance with law, if so advised. The writ petitions were accordingly allowed.
The decision therefore turns on the sufficiency of the reasons and foundational facts stated in the Section 74 notices. The Court did not decide the underlying tax liability on merits; the relief was directed against the notices themselves, while preserving the authority’s stated liberty to issue fresh notices in accordance with law.
Cases Discussed
- Tata Steel Limited Vs Union of India (Supreme Court of India) — [2026] 189 taxmann.com 520 (SC).
FULL TEXT OF THE JUDGMENT/ORDER OF HIGH COURT OF CHHATTISGARH
1) In this batch of writ petitions, petitioners have challenged the respective notices issued by the respondent under Section 74(9) of GST Act, 2017 dated 16.10.2025.
2) Mr. Palash Soni, learned counsel appearing for the petitioners submits that the issue involved in the present cases is no more res integra and the Hon’ble Supreme Court in the matter of Tata Steels Ltd. Versus Union of India1 held that the foundational facts which led to the inference arrived at of fraud/ wilful misrepresentation/ suppression should be evident from the notice itself. He further submits that the impugned notices lack such foundational facts therefore the same deserve to be quashed. He prays to allow these writ petitions.
3) On the other hand, Ms. Anuradha Jain, learned State counsel submits that the respondent authority has issued the respective notices describing the amounts as the petitioner availed input tax credit by issuing fake invoices without actual supply of goods. She further submits that the authority concerned has appropriately depicted the foundational facts and petitioners have efficacious alternative remedy available in their favor to prefer respective appeals u/s 107 of GST Act.
4) I have heard learned counsel for the parties and perused the material available on record.
5) A careful perusal of the impugned notices would reveal that the authority concerned failed to assign sufficient reasons while issuing the respective notices under Section 74(9) of GST Act, 2017. Hon’ble Supreme Court while dealing with the similar issue in Tata Steels Ltd. (supra) held as under :-
14. It is not mere lip service to the provisions that is intended when an extended limitation period is provided for recovering an excess benefit availed, short payment or excess refund, from the assessee, especially when the allegation is of fraud/ wilful misrepresentation/ suppression. The foundational facts which led to the inference arrived at of fraud/ wilful misrepresentation/ suppression should be evident from the notice itself. The mere employment of such words will not indicate an application of mind, upon which alone the satisfaction can be arrived at. The words are not to be mechanically recited in the notice to enable recovery outside the normal limitation provided under the statute.
6) In view of the aforesaid discussion and the established legal position, respective notices issued by the respondent under Section 74(9) of GST Act, 2017 dated 16.10.2025 are hereby quashed.
7) Accordingly, these writ petitions are allowed. However, respondent authority would be at liberty to issue fresh notices strictly in accordance with law, if so advised.
Note:
1 [2026] 189 taxmann.com 520 (SC)
