M/S Salsan Steel PVT LTD vs. The State Of Hp And Others
Held
The Court held that the show-cause notice (Annexure P-3) did not fulfill the criteria established by the Hon'ble Supreme Court in M/s Tata Steel Limited vs. Union of India. The notice was deemed cryptic and failed to establish that the alleged act of the petitioner was on account of fraud, willful-misrepresentation, or suppression of facts. There was no foundation laid down in the show-cause notice for these elements. Consequently, the Court quashed the show-cause notice. However, liberty was reserved for the assessing authority to proceed afresh against the petitioner on the same subject matter by issuing a fresh show-cause notice in accordance with Section 74 of the HPGST Act, if so advised. As agreed, if a fresh notice is issued within 60 days, it shall be deemed to be within limitation and the petitioner will respond on merits.
Facts
The petitioner, M/s Salsan Steel Pvt. Ltd., filed a writ petition before the Himachal Pradesh High Court challenging a show-cause notice (Annexure P-3) issued by the revenue authorities. The notice was issued under Section 74 of the HPGST Act, alleging non-payment or short payment of tax, or wrong availment/utilization of input tax credit. The petitioner contended that the show-cause notice was cryptic and did not establish the necessary preconditions for invoking Section 74, specifically fraud, willful-misstatement, or suppression of facts. The parties agreed to a consent order.
Key Issues
1. Whether the show-cause notice issued under Section 74 of the HPGST Act is valid when it fails to establish the foundational facts of fraud, willful-misstatement, or suppression of facts to evade tax, as required by the provision? Petitioner's contention: The petitioner argued that the show-cause notice was cryptic and did not fulfill the criteria laid down in Section 74 of the HPGST Act. They relied on the Supreme Court's judgment in M/s Tata Steel Limited vs. Union of India, which held that proceedings under Sections 73 and 74 can only be initiated upon the satisfaction of the assessing officer regarding fraud, willful-misstatement, or suppression, and that these foundational facts must be evident from the notice itself. Revenue's contention: The judgment does not record any specific arguments made by the respondents (State of H.P & Ors).
Sections Cited
Section 74, Section 73
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
CWP No.6129 of 2026 Decided on : 21.09.2026 M/s Salsan Steel Pvt. Ltd. …Petitioner Versus State of H.P & Ors
…Respondents Coram Hon’ble Mr. Justice Ajay Mohan Goel, Judge Hon’ble Mr. Justice Yogesh Jaswal, Judge Whether approved for reporting?1 For the petitioner : Mr. J.S. Bedi and Mr. Rajesh Kumar Parmar, Advocates For the respondents : Mr. Anup Rattan, Advocate General along with Mr. Sushant Keprate and Mr. Pushpinder Jaswal, Additional Advocates General, for respondents No.1 & 3 Mr. Prashant Manhas, Advocate vice Mr. Shiv Pal Manhas, Senior Penal Counsel, for respondent No.2 Ajay Mohan Goel, Judge
(Oral
)
Having heard learned counsel for the parties, these petitions are disposed of by passing the following consent order. 1Whether reporters of the local papers may be allowed to see the judgment?
2
Section 74 of the HPGST Act, inter alia, provides that where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax c
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