Supreme Court Quashes ₹1000 Cr GST Notice to Tata Steel
By Business Desk
India’s Supreme Court overturns a ₹1,000 crore GST notice against Tata Steel, ruling insufficient evidence of tax evasion. A win for corporate tax litigation.
The Supreme Court of India has set aside a show cause-cum-demand notice issued by tax authorities to Tata Steel concerning alleged irregular availment of input tax credit.
The notice, which sought over ₹1,000 crore, was quashed by a bench comprising Justices JB Pardiwala and K Vinod Chandran.
- Amount in question: Over ₹1,000 crore
- Financial years involved: 2019 to 2023
Court’s Basis for Setting Aside the Notice
The court determined that the demand notice lacked sufficient factual evidence to establish a deliberate attempt by Tata Steel to evade tax or illegally avail excess input tax credit.
This ruling highlights the necessity for concrete proof rather than mere allegations in such tax proceedings.
Interpreting Section 74 of the CGST Act
The bench emphasized the specific requirements for proceedings initiated under Section 74 of the Central Goods and Services Tax Act.
This section specifically addresses GST demands that involve elements of fraud or suppression of facts, requiring a higher burden of proof.
For an extended period of limitation to apply under Section 74, there must be clear evidence of fraudulent intent or willful misstatement.
The court clarified that bland allegations are insufficient to justify such an extended period.
Furthermore, the assessing officer must be definitively satisfied that fraud or willful misstatement occurred before proceeding with the issuance of such a notice.
This decision underscores the legal principle that tax evasion claims must be substantiated with clear, factual evidence to ensure due process and prevent arbitrary demands.