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of <h1>Revenue can invoke Section 74 CGST/SGST Acts for extended limitation when show cause notice demonstrates suppression of facts requiring statutory remedy adjudication.</h1> <h3>AYYAPPAN PILLAI Versus THE STATE TAX OFFICER, MOBILE SQUAD NO. 5, KOLLAM, O/O. DEPUTY COMMISSIONER (INTELLIGENCE), SGST DEPARTMENT, THE DEPUTY COMMISSIONER, TAX PAYER SERVICE DIVISION, KOLLAM, THE COMMISSIONER OF STATE GOODS AND SERVICE TAX DEPARTMENT, STATE OF KERALA, THE CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, UNION OF INDIA</h3> The Kerala HC dismissed a writ petition challenging invocation of Section 74 of CGST/SGST Acts for extended limitation period. The Court held that the ... Finalization of proposals/demand against the petitioner - just cause or reason to invoke the provisions of Section 74 of the CGST / SGST Acts or not - intent to evade tax or not - HELD THAT:- The petitioner has not made out any case for grant of the relief sought for in the writ petition. A perusal of the show cause notice would indicate that there are several instances of suppression which have been pointed out in the show cause notice as a justification for invoking Section 74 of the CGST / SGST Acts. While the petitioner may have raised several contentions to show that the allegations are not correct to reach a conclusion the adjudication of disputed questions of fact will be necessary. It is for the petitioner to get his claim adjudicated by the statutory authorities under the CGST / SGST Acts. The procedure under Article 226 of the Constitution of India cannot be invoked to determine disputed questions of fact especially on account of the procedure adopted in this Court in respect of writ petitions under Article 226 of the Constitution of India. The petitioner has no case that the alternate remedy available to the petitioner is not effective including for adjudicating the question as to whether there was just cause or reason for invoking the extended period of limitation (under Section 74) in the facts and circumstances of this case. A reading of the Ext.P10 order indicates that though not within the scope of rectification, the Officer had called for further details from the petitioner and the petitioner failed to produce any further details for the purpose of considering the contentions taken in the application for rectification. For all these reasons, the writ petition fails and will stand dismissed. Considering the fact that Ext.P5 order was issued on 10.12.2023 and the petitioner had filed Ext.P6 application for rectification on 22.01.2024 and the fact that the rectification application was rejected only on 08.05.2024 and this writ petition was filed in the month of August 2024, the period from the date of filing of the rectification application till today can be excluded for the purpose of determining any period of limitation within which the petitioner had to file an appeal against Ext.P5 order. Petition disposed off. Issues:1. Challenge to orders under Section 74 of CGST/SGST Acts2. Justification for invoking Section 743. Allegations of suppression and misstatement4. Application for rectification under Section 161 of CGST Act5. Adjudication of disputed questions of fact6. Availability of alternate remedy7. Invocation of extended period of limitation under Section 74Analysis:The petitioner, a registered person under the CGST/SGST Acts, challenged the orders issued under Section 74. The petitioner contended that there was no just cause to invoke Section 74 unless suppression or misstatement was willful and with the intention of evading tax. The petitioner argued that the show cause notice contained factually incorrect statements and that the orders were issued without verifying the stock or considering explanations. The petitioner's rectification application was rejected, leading to the challenge of the orders on various grounds.The Government Pleader opposed relief to the petitioner, citing justifications for invoking Section 74, including discrepancies in stock and unaccounted sales. It was argued that the petitioner did not object to the invocation of Section 74 during the proceedings. The Officer requested details from the petitioner for rectification, which the petitioner failed to provide, resulting in the rejection of the rectification application.The Court held that the petitioner failed to establish a case for relief in the writ petition. While the petitioner raised contentions against the allegations of suppression, adjudication of disputed facts was deemed necessary. The Court stated that Article 226 cannot be used to determine disputed questions of fact and that the statutory authorities under the CGST/SGST Acts should adjudicate such claims. The Court emphasized the effectiveness of the alternate remedy available to the petitioner for challenging the invocation of the extended period of limitation under Section 74.The Court dismissed the writ petition but excluded the period from the rectification application to the filing of the petition for determining any period of limitation for filing an appeal against the orders. The petitioner was allowed to raise contentions before the Appellate Authority regarding the invocation of Section 74.
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