The Himachal Pradesh High Court has quashed a show cause notice issued under Section 74 of the HP GST Act proposing denial of ITC on purchases from suppliers whose registrations were retrospectively cancelled, holding that the notice merely makes a bald assertion that the taxpayer ‘has wrongly availed input tax credit or utilized by reason of fraud, or any wilful misstatement, or suppression of facts to evade tax’ without correlating the factual allegations to any specific ingredient of Section 74. The ruling by Justice Ajay Mohan Goel and Justice Yogesh Jaswal in CWP No. 3962/2026 (M/s Aditya Industries, decided 29.09.2026) directly applies the Supreme Court’s recent judgments in Tata Steel Ltd. v. Union of India (2026 INSC 920) and G.R. Infra Projects Ltd. v. State of Madhya Pradesh.
The court observed that the authority itself was not clear whether the act amounted to fraud or wilful misstatement or suppression of facts — all three were mentioned in the alternative using ‘or’. The Supreme Court in Tata Steel held that the foundational facts leading to the inference of fraud, wilful misrepresentation or suppression should be evident from the notice itself, and in G.R. Infra held that mechanical use of the words without listing the aspects that persuade the assessing officer to conclude that such surreptitious devices were employed is impermissible. Liberty was granted to issue a fresh notice within 60 days without limitation objection. The constitutional validity challenge to Sections 16(2)(c), 16(2)(d) proviso and 16(4) was kept open.
- 2026-juristway.com-2757-HC(Himachal Pradesh)-GST | High Court of Himachal Pradesh | CWP No. 3962/2026 | 29.09.2026
