Case Details: Amit Agarwal vs. Assistant Commissioner, CGST & CX - [2025] 176 taxmann.com 942 (Calcutta)
Judiciary and Counsel Details
- Raja Basu Chowdhury, J.
- Vinay Shraff, Dev Agarwal and Ms. S. Poddar for the Petitioner.
- Vipul Kundalia, Sr. Adv., Tapan Bhanja and Anindya Kanan for the Respondent.
Fact of the Case
The petitioner, a registered person under the CGST Act, was subjected to scrutiny of returns under Section 61 of the CGST Act, which culminated in the proceedings being dropped by the jurisdictional officer based on the petitioner’s written response. Thereafter, proceedings were initiated under Section 74 of the CGST Act for the same period, on the ground that fraudulent availment of ITC had been detected. The petitioner challenged the validity of the notice under Section 74, contending that the dropping of proceedings under Section 61(3) without consequential action precluded any fresh proceedings for the same period. It was argued that the officer, having failed to proceed under Section 61, was barred from invoking Section 74 in the absence of new material. The matter was accordingly placed before the High Court of Calcutta.
HC Held
The Calcutta High Court held that Section 74 deals specifically with cases involving fraud, willful misstatement, or suppression, and that its invocation is not contingent upon the outcome of proceedings under Section 61. The Court observed that the proper officer may not be in a position to identify fraudulent conduct at the stage of scrutiny, and such detection may occur only upon further investigation. It was held that the legislature, in its wisdom, incorporated Section 74 precisely for this purpose. A specific case of fraud having been made out in the show cause notice based on investigation findings, the Court ruled that initiation of proceedings under Section 74 was justified. It was further clarified that while closure of scrutiny under Section 61(3) may be a bar for action under Section 73, it is not an impediment to proceedings under Section 74. Accordingly, the writ petition was dismissed.
List Of Cases Reviewed
- J.S.B. Trading Co. v. State of Punjab [2024] 169 taxmann.com 9/107 GST 363/92 GSTL 354 (Punjab & Haryana) (para 11),
- CCE Meerut-II v. Prince Gutka Ltd. 2015 (322) E.L.T. 165 (S.C.) (para 11) and
- Duncans Industries Ltd. v. CCE 2006 taxmann.com 1489/2006 201 ELT 517 (SC) (para 11), followed.
List Of Cases Referred To
- J.S.B. Trading Co. v. State of Punjab [2024] 169 taxmann.com 9/107 GST 363/92 GSTL 354 (Punjab & Haryana) (para 6),
- CCE Meerut-II v. Prince Gutka Ltd. 2015 (322) E.L.T. 165 (S.C.) (para 7) and
- Duncans Industries Ltd. v. CCE 2006 taxmann.com 1489/2006 201 ELT 517 (SC) (para 7).
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