Legal update
Published
13 Sept 2026
Source date
1 Sept 2026
Section 74 CGST Act Cannot Be Invoked Without Foundational Facts of Fraud or Misstatement: Supreme Court
Why it matters
The Supreme Court has ruled that Section 74 of the Central Goods and Services Tax Act cannot be invoked mechanically in the absence of foundational facts establishing fraud, wilful misstatement, or suppression of facts. On this ground, the Court set aside the impugned show cause notice and consequential order.
Key points
- The Supreme Court held that Section 74 of the CGST Act cannot be invoked mechanically.
- Invocation of Section 74 requires foundational facts establishing fraud, wilful misstatement, or suppression of facts.
- The impugned show cause notice and consequential order were set aside by the Court.
What changed
Clarified that proceedings under Section 74 of the CGST Act cannot be sustained without foundational facts showing fraud, wilful misstatement, or suppression of facts.
Who it affects
Taxpayers subjected to proceedings under Section 74 of the CGST Act and GST authorities issuing show cause notices.
Jurisdiction
India
Sources and original links
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