Tata Steel Limited Vs Union of India (Supreme Court of India)
Section 74 GST SCN Cannot Merely Recite Suppression; Supreme Court Quashes GST SCN and Order, Permits Fresh Section 74 Action; Section 74 Extended Limitation Requires Foundational Facts in GST Notice; Supreme Court Rejects Protective GST Demand, Allows Fresh Section 74 Proceedings.
Summary: The Supreme Court allowed Tata Steel Limited’s appeal concerning a Show Cause Notice issued under Sections 73/74 of the CGST Act, 2017 for FYs 2018-19, 2019-20 and 2020-21 following objections raised in an audit by the office of the Comptroller and Auditor General of India. The assessee contended that the notice contained no allegation supported by foundational facts establishing fraud, wilful misstatement or suppression of facts, without which the extended five-year period under Section 74 could not be invoked instead of the normal limitation applicable under Section 73. It was also contended that the Department itself was not convinced about the audit objection, had transferred the matter to the “call book”, and subsequently revived the notice by proposing a protective demand because limitation was approaching.
The Court examined the limitation scheme under Sections 73 and 74 with reference to Section 44 and Rule 80 of the CGST Rules, 2017. After considering the extensions for furnishing annual returns and the exclusion of limitation granted by the Supreme Court during the COVID-19 pandemic in IN RE Cognizance for Extension of Limitation, it held that the limitation for the three subject financial years stood at 28.02.2025. The SCN dated 13.06.2025 was therefore beyond the limitation applicable under Section 73.
