Section 74 order set aside for non-supply of SIB survey; matter remanded.

Case: M/s India Steels Sales Thru. Proprietor Raish Bano v. State of U.P. & Others

Citation: Writ Tax No. 802 of 2025

Court/Bench: Allahabad High Court (Lucknow Bench)

Coram: Hon’ble Pankaj Bhatia, J.

Date of Decision: 27-08-2025

Whether orders under section 74 of the CGST/UPGST Act, based on an SIB survey report not supplied to the assessee, are sustainable; and whether the consequential order noting dismissal on limitation can survive.

• Proceedings under section 74 were initiated relying on an SIB survey dated 13-01-2021; the survey report was not furnished to the petitioner.
• An order under section 74 was passed on 16-01-2025; a subsequent order dated 25-07-2025 recorded dismissal as time-barred.
• The petitioner contended that section 74 could not be invoked absent material indicating fraud, wilful misstatement or suppression.

It was held that non-supply of the foundational SIB survey report vitiated the adjudication, offending principles of natural justice. Consequently, orders dated 16-01-2025 and 25-07-2025 were quashed. The matter was remanded to the assessing authority to supply the survey report, permit a reply, grant a hearing, and pass a fresh order in accordance with law.

Adjudication under section 74 based on undisclosed material is impermissible; all adverse material relied upon must be furnished to the assessee before decision.

Where notices or orders refer to surveys/inspection reports, demand complete copies and record objections if not supplied. File preliminary responses highlighting non-supply and seek inspection before the hearing. Maintain a documented trail of requests and reminders to mitigate the risk of orders based on undisclosed material.