Facts of the Case:

In this case, the petitioners challenged a demand-cum-show cause notice issued by the Directorate General of GST Intelligence (DGGI), Guwahati Zonal Unit, under the provisions relating to fraud, wilful misstatement, or suppression of facts under the CGST Act, 2017. The primary grievance of the petitioners was that the proceedings ought to have been initiated under the normal demand provisions rather than under the fraud-related provisions. The petitioners further assailed the validity of the notice on the ground that it was issued as a consolidated show cause notice covering four financial years. Invoking Article 226 of the Constitution, the petitioners sought judicial intervention before adjudication of the notice.

Issue:

Whether the High Court, in exercise of its writ jurisdiction under Article 226 of the Constitution, can determine at the show cause notice stage whether proceedings ought to be initiated under the normal demand provisions (Section 73) or under the fraud-related provisions (Section 74) of the CGST Act, 2017, and whether issuance of a consolidated show cause notice covering multiple financial years is legally sustainable.

Held that:

The Gauhati High Court declined to interfere with the impugned show cause notice and held that the question as to whether a case falls within the ambit of Section 73 or Section 74 of the CGST Act necessarily involves adjudication of disputed facts. The Court observed that determination of fraud, wilful misstatement, or suppression of facts with intent to evade tax requires factual examination and appreciation of evidence, which falls within the domain of the proper officer during adjudication proceedings and cannot be conclusively determined in writ jurisdiction.

The Court further rejected the challenge to the consolidated show cause notice, relying upon its earlier decision in Tata Projects Limited v. Union of India, wherein it was held that there is no statutory prohibition against issuance of a common show cause notice or passing a consolidated adjudication order for multiple financial years.

Holding that an effective statutory mechanism exists under the CGST Act, including adjudication, first appeal, and appeal before the GST Appellate Tribunal, the Court relegated the petitioners to the statutory remedy. However, considering the pendency of the writ petition, the Court granted the petitioners thirty days’ time to submit their reply to the show cause notice and directed exclusion of the period from 18 April 2024 till the date of judgment while computing the limitation period for completion of adjudication proceedings.

Case name: Gias Uddin Ahmed & Anr. v. Union of India & Ors. dated 29.07.2026

Citation No. 2026 Taxo.online 2185