Facts of the Case

BPL-KPL (JV), a joint venture entity, challenged a scrutiny notice in Form GST ASMT-10 dated 23.09.2024 issued under Section 61 of the CGST/JGST Act, 2017, and the consequent show-cause notice along with summary in Form GST DRC-01 dated 17.05.2025, issued under Section 74 for FY 2020-21 alleging suppression of facts. The petitioner's grievance was that the Section 74 notice for the given issue could not have been issued when, for FY 2021-22, a notice on the same issue had been issued under Section 73 rather than Section 74.

Issues Involved

  1. Whether a Section 61 scrutiny notice, and the consequent Section 74 show-cause notice alleging suppression, can be quashed at the threshold where an identical issue for a different financial year was proceeded with under Section 73 instead.

Petitioner's Arguments

  • The Section 61 ASMT-10 notice was issued beyond the scope of that provision, and the Section 74 show-cause notice alleging suppression of facts was untenable given that an identical issue for FY 2021-22 had been proceeded with under Section 73, not Section 74.

Respondent's Arguments

  • Learned AAG-II for the State submitted that an identical issue had already been disposed of by this Court's own order dated 5th September, 2024 in W.P.(T) No. 4882 of 2024, a copy of which was placed before the Court and supplied to the petitioner's counsel.

Court Order / Findings

  • On perusing the earlier order in W.P.(T) No. 4882 of 2024, the Court found that a similar factual background had been considered by giving the petitioner there liberty to explain the reasons sought in the notice, with the authority directed to consider that explanation and take follow-up action in accordance with law.
  • This position was not disputed by the petitioner's counsel in the present matter.
  • Accordingly, the writ petition was disposed of, giving the petitioner liberty to explain the reasons sought in the impugned notice within two weeks, with the authority directed to consider the explanation and take follow-up action in accordance with the mandate of Section 61 of the JGST Act.

Important Clarification

  • Where a Section 61 scrutiny notice (and a resultant Section 74 show-cause notice) is challenged at the threshold, and an identical fact pattern has already been addressed by the Court in an earlier order granting liberty to explain the notice's reasons within a fixed period, courts will follow the same template rather than deciding the substantive suppression allegation themselves — leaving the scrutiny process under Section 61 to run its statutory course.

Sections Involved

  • Section 61, CGST/JGST Act, 2017 – scrutiny of returns filed by a registered person, culminating in Form GST ASMT-10.
  • Section 74, CGST/JGST Act, 2017 – determination of tax not paid by reason of fraud, wilful misstatement or suppression of facts.

Decision – In Favour of

Disposed of with directions; in part in favour of the Assessee, with liberty to explain the notice within two weeks and the scrutiny/adjudication process to continue thereafter as per law.

Case Details

  • Court: High Court of Jharkhand at Ranchi; Neutral Citation 2025:JHHC:20128-DB
  • Case No.: W.P. (S) No. 3369 of 2025
  • Coram: Hon'ble the Acting Chief Justice Sujit Narayan Prasad and Hon'ble Mr. Justice Rajesh Kumar
  • Date of Order: 22 July 2025

Link to Download the Order

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