24/08/2026
Can GST Department invoke Section 74 merely by using the words “fraud” or “suppression of facts” in an SCN? ⚖️
The Supreme Court’s latest judgment in G.R. Infra Projects Ltd. v. State of Madhya Pradesh has an important message for every GST taxpayer, CA, Advocate and tax professional dealing with GST Section 74 SCNs.
In this case, the Department invoked Section 74 for FY 2018-19. The Supreme Court examined whether a mere reference to “fraud or concealment of facts” was sufficient to sustain the proceedings.
The Court made it clear that the SCN cannot mechanically use expressions like fraud, wilful misstatement or suppression of facts.
The specific allegations and the factual basis leading to such an inference must emanate from the SCN itself.
And importantly, deficiencies in the SCN cannot simply be supplemented later through a counter-affidavit before the Court.
The Supreme Court ultimately set aside the SCN and directed the Department to desist from taking further proceedings pursuant to it.
📌 What does this mean for GST professionals?
When reviewing a Section 74 GST SCN, don't just look for the words fraud / wilful misstatement / suppression of facts.
Look for the specific facts and allegations supporting those conclusions.
💬 Have you faced a GST SCN where Section 74 was invoked mechanically?
Share your experience with the GST Department in the comments. Your experience may help other taxpayers and professionals understand the practical side of GST litigation.
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Comment “ORDER” below and get the judgment summary along with the original copy.
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