Case Of: Neeyamo Enterprise Solutions Pvt Ltd
Issued By: Madras High Court
Order No: W.P.(MD)Nos. 30453 to 30458 of 2024
Date: 11th Nov 2025
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Neeyamo Enterprise Solutions faced six show cause notices dated 10.05.2024 following a Section 67 inspection in September 2023, where nine defects were
recorded. The notices covered FY 2018-19 to 2023-24 (up to August 2023).
Each notice was issued under Sec 74 of the TNGST Act, proposing tax, interest, and penalty based on the “determined” liability mentioned in the notices.
The assessee did not submit replies, and the authority passed orders on 11.06.2024 and 18.06.2024 confirming tax, interest, and penalty under Sec 74.
Neeyamo filed writ petitions challenging the orders, contending that the SCNs contained no allegation of fraud, wilful misstatement, or suppression of factsconditions mandatory for invoking Section 74.
The Court held that Section 74 can be invoked only where non-payment or short-payment arises by reason of fraud, wilful misstatement, or suppression of facts; the SCNs and orders contained no such allegation or supporting material.
Use of the word “determined” instead of “specified” indicated pre-determination, undermining the validity of the SCNs and violating natural justice.
The Court relied on precedents and CBIC Circular dated 13.12.2023, which clarified that Section 74 cannot be invoked mechanically and requires material evidence of intent to evade tax.
As the jurisdictional facts were absent, all SCNs and orders under Section 74 were quashed without remand. The Department was given liberty to proceed, if necessary, under Section 73.