The Chhattisgarh High Court has quashed show cause notices issued under Section 74(9) of the CGST Act for failing to assign sufficient foundational facts for the allegation of fraud and suppression — applying the Supreme Court's recent ruling in Tata Steels Ltd. v. Union of India. Justice Rakesh Mohan Pandey, in WPT No. 11 of 2026 and connected matters (Shree Hanumant Steel Traders, decided 09.09.2026), held that the impugned notices, which alleged availment of ITC by issuing fake invoices without actual supply of goods, fell short of the threshold laid down by the Supreme Court.
The notices dated 16.10.2025 were issued under Section 74(9), invoking the extended limitation period on the ground that the petitioners had availed ITC on fake invoices without actual supply of goods. The petitioners contended that the notices lacked the foundational facts necessary to sustain a charge of fraud, wilful misrepresentation or suppression. The Revenue countered that the notices adequately depicted the foundational facts and that the petitioners had efficacious alternative remedy by way of appeal under Section 107.
The court, relying on the Supreme Court's ruling in Tata Steels (Para 14), held that the employment of statutory words — fraud, wilful misrepresentation, suppression — is not "mere lip service." The foundational facts which led to the inference of fraud or suppression must be evident from the notice itself. The mere mechanical recital of such words, without an application of mind, does not indicate the requisite satisfaction and cannot enable recovery outside the normal limitation period. Finding the impugned notices deficient on this standard, the court quashed them — while leaving the Revenue at liberty to issue fresh notices strictly in accordance with law.
— 2026-juristway.com-1222-HC(Chhattisgarh)-GST | High Court of Chhattisgarh | WPT No. 11 of 2026 with WPT No. 15 of 2026 and WPT No. 12 of 2026 | 09.09.2026