Plea In Gujarat HC Challenges Validity Of S.75(2) Of CGST Act, Says It Gives Show Cause Notice 'Another Life' Even If Fraud Is Not Proved U/S 74(1)

The Gujarat High Court recently issued notice on a plea challenging the validity of Section 75 CGST Act wherein if the concerned court or authority concludes that show cause notice issued under Section 74 to a person for tax evasion is unsustainable as the charges of fraud, wilful misstatement or suppression of facts aren't established, then the department shall determine the tax payable. The Gujarat High Court recently issued notice on a plea challenging the validity of Section 75 CGST Act wherein if the concerned court or authority concludes that show cause notice issued under Section 74 to a person for tax evasion is unsustainable as the charges of fraud, wilful misstatement or suppression of facts aren't established, then the department shall determine the tax payable as if the notice was issued under Section 73. For context, Section 73 states that where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for "any reason, other than the reason of fraud or any wilful-misstatement or suppression of facts to evade tax", he shall serve notice on the person chargeable with such a tax, requiring him to show cause as to why he should not pay the amount specified in the notice along with interest payable thereon under section 50 and a penalty leviable under the provisions of this Act or the rules made thereunder. This, the petitioners claim, is because of Section 75 where when Appellate Authority/Court concludes that the Show Cause Notice issued under Section 74 is not sustainable because suppression of facts etc., has not been established then the proper officer shall determine the tax deeming the said Show Cause Notice was issued under Section 73.