Multi-Year SCN Valid; Section 74 Fails Where Returns Disclosed the Credit: GSTAT Chandigarh

GSTAT Chandigarh upheld a combined notice covering several years and the Section 74 demand on undeclared rent seen in Form 26AS, but set aside extended-period demands on freight and credit reported in returns.

GSTAT Chandigarh has held that a single show cause notice (SCN) and order covering several financial years is valid, and that Section 74 cannot be invoked for amounts the taxpayer had declared in its returns, though non-declaration of rental income in GST returns is suppression. [Bharat Packaging Industries v. Sunil N Ranote, Additional Commissioner Appeals, Chandigarh & Ors., 2026-juristway.com-3161-GSTAT(Chandigarh)-GST]

The Bench of Jatinder Pal Singh, Member (Judicial), and Pradeep Kumar Goel, Member (Technical), decided four appeals by a BOPP film manufacturer for 2017-18 to 2021-22, arising from an audit-based SCN dated 29 Jul 2024.

On the combined SCN, the Bench followed its order in RLCR 7 Super Market Vs. Sunil N Ranote, Additional Commissioner (Appeals), Chandigarh & Ors. (2026 (10) TMI 1223), rejecting reliance on Milroc Good Earth Developers Vs. Union of India (2026 (104) G.S.T. 45 (Bom.)).

On rent of ₹7,25,436 from property in Punjab, the Bench held that a place of supply in Punjab only makes the supply inter-State; jurisdiction follows the supplier’s registered place of business in Chandigarh. As the rent was detected from Form 26AS and not declared in GST returns, Explanation 2 to Section 74 applied, and tax of ₹1,30,578 with equal penalty was upheld.

For tax of ₹30,156 on freight under reverse charge, excess credit of ₹2,18,590 and blocked credit of ₹5,966, the SCN alleged no fraud or suppression and the amounts were in returns. Citing M/s Tata Steel Limited Versus Union of India (2026 (8) TMI 1587), the Bench held Section 74 unavailable, noting that the adjudicating authority had itself called the excess credit revenue neutral. These amounts are to be redetermined under Section 75(2) as if under Section 73.

The credit of ₹2,18,590 is to be re-examined under Section 16 regardless of whether the invoices appeared in GSTR‑2A, and the blocked credit on one invoice is to be considered if the invoice is produced. Late fee of ₹250 and interest were upheld.

2026-juristway.com-3161-GSTAT(Chandigarh)-GST