Supreme Court: SCN must specify fraud or concealment aspects to invoke Section 74

The case concerns whether a Show Cause Notice (SCN) issued by the Madhya Pradesh tax department for the assessment year 2018-19 can be sustained under Section 74 of the CGST Act, which allows extended limitation periods for cases involving fraud or concealment, or if it is time-barred under Section 73.

Who it concerns: Appellant: M/s G.R. Infra Projects Limited Ratlam; Respondents: The State of Madhya Pradesh & Ors.; Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran.

What the court decided

• The Court held that a notice under Section 74 must specifically state the aspects of fraud or concealment within the notice itself, rather than relying on a counter-affidavit filed in court.
• The Court determined that the SCN dated 13.06.2025 was time-barred under Section 73, as the extended limitation period (accounting for the pandemic exclusion) expired on 28.02.2025.
• The Court set aside the impugned order of the High Court and the SCN.
• The Court directed the respondent-State to desist from taking any further proceedings in pursuance of the challenged SCN.
• The Civil Appeal was allowed.

Also in the document

• The Court refused to consider the counter-affidavit filed by the State to justify the notice, adhering to the principle that validity requirements must be contained in the notice or order itself.
• The Court noted that the use of the word 'or' in the phrase 'fraud or concealment of facts' indicated the assessing officer was not sure of the specific ground, and that mechanical use of statutory words without listing specific aspects is insufficient.
• The limitation period calculation included an exclusion of 1 year and 2 months (from 15.03.2020 to 28.02.2022) as per a previous Supreme Court order regarding the pandemic.