Order Passed In Fraud Proceedings Cannot Be Reclassified To Avail Amnesty Scheme: Gujarat High Court

The Gujarat High Court held that an order passed under Section 74 of the CGST Act, 2017 involving allegations of fraud, misstatement or suppression of facts cannot be converted into a non-fraud order under Section 73 merely to enable the taxpayer to claim relief under the GST Amnesty Scheme, in the absence of documentary evidence disproving such allegations.

A Bench comprising Justice A.S. Supehia and Justice Pranav Trivedi, by its order dated 13 February 2026, rejected the plea of R.B. Pandey and Sons, the taxpayer, who sought conversion of a GST demand of Rs. 79,34,968 from Section 74 to Section 73 of the CGST Act, and upheld the demand after finding that the taxpayer had failed to produce invoices, returns or other supporting records. The judges held:

“In the absence of any documentary evidence to demonstrate that the order-in-original passed under Section 74 of the CGST Act deserves to be converted, no direction can be issued by this Court to convert the same into an order under Section 73 of the CGST Act..."

The petitioner had challenged the demand order pertaining to the initial years of GST implementation and sought a direction to treat the demand raised under Section 74 as one under Section 73, which applies to cases not involving fraud, suppression or wilful misstatement, so as to avail the benefit of waiver of interest and penalty under the GST Amnesty Scheme.

Earlier, while leaving the question of maintainability open, the Court had observed that “prima facie, we are of the considered opinion that if the petitioner is able to carve out a case for conversion of the order from Section 74 of the CGST Act to Section 73 CGST Act…”, indicating that such conversion would depend on the petitioner substantiating its case with material on record.

However, upon examining the findings of the adjudicating authority and the material placed on record, the Court found that the petitioner had failed to produce any documentary evidence demonstrating that the order passed under Section 74 was invalid or that the essential ingredients of fraud, wilful misstatement or suppression were absent.

The adjudicating authority had specifically recorded that the taxpayer failed to produce documents prescribed under Rule 36 of the CGST Rules, 2017 for availing Input Tax Credit, including tax invoices issued under Section 31(3)(f) of the CGST Act, debit notes, bills of entry and input service distributor invoices.

Emphasising the importance of such documentation, the Court observed:

“In view of these specific and categorical findings, we are of the opinion that the order passed by the adjudicating authority under Section 74 of the CGST Act, does not warrant conversion into an order under Section 73 of the CGST Act.”

Accordingly, the Court upheld the demand and dismissed the petition.

For Petitioner: Advocate Hardik V. Vora