Extended limitation under Section 74 must be examined first by the adjudicating authority before further proceedings on the notice.

The Kerala High Court held that whether the extended period of limitation under Section 74 can be invoked is a factual question to be examined first by the competent adjudicating authority, not by the court at the stage of the show cause notice. The petitioner may raise the objection in reply, and the authority must decide that objection as a preliminary issue before proceeding further with adjudication. The ruling treats the existence of material for invoking Section 74 as an issue for initial determination by the authority handling the notice.

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Issues: Whether the objection to invocation of the extended period of limitation under Section 74 was required to be decided as a preliminary issue by the adjudicating authority before proceeding further with the show cause notice.

Analysis: The writ petition challenged a show cause notice on the ground that it did not disclose any material or allegation justifying invocation of the extended period under Section 74. The Court held that the existence of material for initiating proceedings under Section 74 is essentially a factual question to be determined in the first instance by the competent authority. At the same time, the petitioner was permitted to raise the objection in reply to the notice, and the authority was directed to decide that objection before continuing with adjudication.

Conclusion: The objection to invocation of the extended period of limitation must be decided by the adjudicating authority as a preliminary issue before further proceedings on the notice.

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