Supreme Court of India Quashes GST Notices Against Tata Steel

The Supreme Court of India quashed multiple goods and services tax (GST) show-cause notices issued to Tata Steel Nederland B.V. across two separate rulings. The court determined that tax authorities cannot invoke extended five-year limitation periods under Section 74 of the Central Goods and Services Tax (CGST) Act by simply using terms such as fraud, wilful misrepresentation, or suppression of facts.

In the first instance, the court set aside a notice dated June 13, 2025, covering the financial years 2018-19 through 2020-21. The case stemmed from audit objections regarding alleged short payment of tax and input tax credit mismatches. A bench comprising Justice J B Pardiwala and Justice K Vinod Chandran ruled that the tax department's plea was mechanical and failed to demonstrate the foundational facts necessary to substantiate allegations of suppression.

In a subsequent ruling, the court set aside a show cause-cum-demand notice involving alleged irregular input tax credit totaling more than Rs 1,000 crore for the financial years 2019 through 2023. The Central Goods and Services Tax Department had sought the recovery of Rs 1,007.55 crore. The court held that a mere tax shortfall or credit mismatch is insufficient to sustain proceedings under the extended limitation period unless an assessing officer independently records satisfaction of fraudulent intent.