#Section 74

The Delhi High Court held that forfeiture of earnest money under an Agreement to Sell is not automatic; the party retaining the deposit must prove actual legal injury and quantifiable loss under Section 74 of the Indian Contract Act. The court distinguished the K.R. Suresh precedent, ruling it inapplicable to simple recovery suits, thereby strengthening a vendee's right to recover earnest money absent proven damages.

The Gauhati High Court has upheld the legality of issuing consolidated GST show cause notices spanning multiple financial years, as long as the statutory limitation period for each year’s tax liability remains intact. This ruling strengthens administrative efficiency for tax authorities while safeguarding taxpayer rights against time-barred demands, setting a critical precedent for GST compliance and audit practices across Northeast India.

The Karnataka High Court has ruled that even if a taxpayer fails to file a written reply to a show-cause notice under Section 74 of the CGST Act, the tax authority must still afford a meaningful opportunity of hearing before passing an adjudication order. This reinforces natural justice in tax proceedings and invalidates mechanical adjudications based solely on non-response, protecting businesses from arbitrary recovery actions.

The Gauhati High Court has ruled that a show cause notice under Section 74 of the NGST Act cannot be issued solely for non-payment of tax; it must explicitly allege fraud or suppression of facts to trigger penal liability. This reinforces procedural fairness and prevents arbitrary tax enforcement, protecting businesses from punitive action without statutory grounds.

Bombay HC Nagpur Bench rules that GST show cause notices under Section 74 must address each financial year separately, invalidating consolidated notices spanning multiple years. The judgment reinforces statutory interpretation of tax periods, impacting GST assessment procedures and limiting authorities' discretion in issuing composite notices.

Kerala High Court holds that certified copies of public documents under Section 74 Evidence Act are admissible as secondary evidence even without production of originals.

Bombay High Court holds that Section 74 CGST Act prohibits consolidation of tax periods across financial years; each year must be addressed separately in show cause notices.