Case Details: Amit Agarwal Versus Assistant Commissioner, CGST & CX (2025) 33 Centax 76 (Cal.)
Judiciary and Counsel Details
- Raja Basu Chowdhury, J.
- S/Shri Vinay Shraff, Dev Agarwal and Ms. S. Poddar for the Petitioner
- S/Shri Vipul Kundalia, Sr. Adv., Tapan Bhanja and Anindya Kanan for the Respondent
Facts of the Case
The petitioner, registered under the CGST Act and the West Bengal GST Act, was subjected to scrutiny of returns under Section 61 for a specified period, which was dropped on the basis of the response furnished. Thereafter, proceedings were initiated under Section 74 for the same period. The petitioner challenged the Section 74 proceedings contending that, as the proper officer had not initiated any consequential proceedings after dropping the scrutiny under Section 61(3), no further notice under Section 74 could be issued for the same period. It was submitted that initiation of proceedings under Section 74 in such circumstances was impermissible under the statutory scheme. The matter was accordingly placed before the Calcutta High Court.
High Court Held
The Calcutta High Court held that Section 74 of the CGST Act and the West Bengal GST Act deals with cases of fraud, willful misstatement, or suppression, and that the proper officer may not be in a position during scrutiny under Section 61 to detect such conduct based solely on disclosures made in the return. It was observed that fraudulent activity may be detected subsequently, and the legislature has provided Section 74 to address such cases. The Court found that investigation in the present case had revealed fraudulent activities by the petitioner, making out a specific case of fraud, and that dropping proceedings under Section 61(3) was not an impediment to initiating proceedings under Section 74 for the same period, though it may be an impediment to proceedings under Section 73. The writ petition challenging the order-in-original under Section 74 was dismissed, reinforcing that post-scrutiny detection of fraud can validly trigger Section 74 proceedings.
List Of Case Cited
- CCE Meerut-II v. Prince Gutka Ltd. — 2015 (322) E.L.T. 165 (S.C.) — Referred [Para 7]
- Duncans Industries Ltd. v. CCE — 2006 (201) E.L.T. 517 (S.C.) — Referred [Para 7]
- J.S.B. Trading Co. v. State of Punjab — 2025 (92) G.S.T.L. 354/(2024) 25 Centax 15 (P&H.) — Referred [Para 6]
