The Hon’ble Madras High Court in Fastenex Private Limited & Ors. v. State Tax Officer & Ors. [W.P. Nos. 35967, 35970, 35974 and 35976 of 2024 & Ors. dated June 08, 2026], while deciding a batch of nearly 250 writ petitions challenging proceedings initiated under Section 74 of the Central Goods and Services Tax Act, 2017 (“the CGST Act”)/ Tamil Nadu Goods and Services Tax Act, 2017 (“the TNGST Act”), upheld the jurisdiction of the Proper Officer to invoke Section 74 at the show cause notice stage and held that the expression “where it appears” prescribes only a prima facie jurisdictional threshold and does not require a conclusive determination of fraud, wilful misstatement or suppression of facts before issuance of the notice. Further, held that where the allegation of fraud ultimately fails during adjudication, the proceedings do not become invalid ab initio and can be converted into proceedings under Section 73 of the CGST Act by virtue of Section 75(2) of the CGST Act.
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