No Extended Limitation on a Bare Allegation of Suppression: Supreme Court Quashes GST Notice Against Tata Steel

On a CAG audit objection about mismatched input tax credit for 2018-19 to 2020-21 and short payment of tax for 2019-20, the Department began proceedings on 27.05.2024 and issued a show cause notice under Section 74 of the CGST Act on 13.06.2025 (paras 2, 9). On 27.06.2025 the Additional Commissioner put the notice in the 'call book', meaning kept in abeyance, saying the Department had contested the audit objection before the Public Accounts Committee (para 9). A fresh notice of 01.07.2025 revived it as a 'protective demand', a measure the GST law does not provide (para 10). An Order-in-Original followed on 26.12.2025 (para 15).

Section 73(10) fixes a three-year limit from the due date of the annual return for the order, not the notice, which must issue at least three months earlier; so the plea that proceedings began within time failed (paras 5, 12). The due dates, extended by notifications under Section 44(1), were 31.12.2020, 31.03.2021 and 28.02.2022 (para 6). Excluding 15.03.2020 to 28.02.2022 under the Court's suo motu Covid limitation order, the limit expired on 28.02.2025 for all three years, so the notice of 13.06.2025 was late (paras 7, 15). Proceedings under Section 74 need the Assessing Officer's own satisfaction that fraud, wilful misrepresentation or suppression led to the mismatch or short payment (para 11). Explanation 2 to Section 74 could not help, having been omitted from 01.11.2024 (para 12). Taking the objection to the Public Accounts Committee showed the Department was not satisfied, and the notice had only a bland statement of suppression (para 13). The facts behind such an inference must be evident from the notice itself; the words cannot be recited mechanically to recover outside the normal limitation (para 14).