No Allegation of Suppression or Fraud in GST S. 74 SCN: Madras HC directs to Treat S.74 Notice as S. 73 notice Enabling to Avail Amnesty Scheme [Read Order]

The Madras High Court held that where no specific allegation of suppression, wilful misstatement, or fraud is made in a show cause notice issued under Section 74 of the GST ( Goods and Services Tax ) Act, such a notice cannot be sustained under that provision.

Justice Krishnan Ramasamy directed that the notices and subsequent assessment orders issued under Section 74 shall be treated as having been issued under Section 73 of the Act, thereby enabling the taxpayer to avail the benefit of the Amnesty Scheme provided under Section 128A of the CGST/TNGST Act.

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The petitioner, a real estate developer and registered GST assessee, challenged assessment orders dated 29.01.2025 for the financial years 2017-2018, 2018-2019, and 2019-2020. The petitioner contended that while show cause notices were issued under Section 74 following an inspection under Section 67, they did not allege any suppression of facts or fraudulent intent. The petitioner further pointed out that the entire tax had already been paid and reported in GSTR-9/9C, and thus, the invocation of Section 74 was unwarranted.

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The petitioner had responded to the notices requesting that the proceedings be rectified and treated under Section 73, which deals with cases not involving fraud or wilful misstatement.

However, the department proceeded with final orders under Section 74, thereby disqualifying the petitioner from claiming relief under the Amnesty Scheme, which allows waiver of interest and penalty for eligible cases where taxes have been fully paid.

The bench  observed that the show cause notices lacked any specific mention of fraud, suppression, or misstatement, key elements required to invoke Section 74 of the GST Act.

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The bench noted that “The main grievance of the petitioner is that since the impugned orders were passed under Section 74 of the Act, it deprives the petitioner's right in availing the benefit under the Amnesty Scheme. Therefore, as suggested by the learned Special Government Pleader, it would be proper to say that the notice issued under Section 74 of the Act shall be deemed as notice under Section 73 of the Act so as to enable the petitioner to avail the benefits under the Amnesty Scheme. Accordingly, the notices and the impugned orders passed under Section 74 of the Act shall be deemed as the notices and orders passed under Section 73 of the Act.”

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The court recognized the government counsel's submission that the case could be reconsidered and held it proper to order that the challenged notices and orders should be treated as those issued under Section 73, thus upholding the petitioner's right to avail amnesty benefits. Accordingly the petition was disposed of.

To Read the full text of the Order CLICK HERE

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