# Show cause notice u/s 74 (fraud alleged): how to reply

Audit/scrutiny findings, FY ≤ 2023-24, fraud/wilful misstatement/suppression alleged

## Section and form names

- Sections: 74
- Forms: DRC-01

## Time limit to reply

As specified in the notice. Paying tax, interest and 25% penalty within 30 days of issue concludes the notice (s.74(8)). Set by the statute or rules; counted from service.

Unverified: this time limit is to be confirmed against the notified text.

Adjournment is for the officer (s.75(5)); not computed here.

Order time limits for FY 2017-18 to FY 2023-24 were extended by notifications under s.168A and by the Finance (No. 2) Act 2024; those dates are not encoded here.

Order within 5 years from the due date of the annual return for the financial year (s.74(10)); the notice must issue at least 6 months before that date (s.74(2)).
- Not confirmed: Extended limitation dates for FY 2017-18 to FY 2023-24 (notifications under s.168A and the Finance (No. 2) Act 2024). No date is computed for FY 2019-20 and earlier; for FY 2020-21 to FY 2023-24 only the unextended statutory date is shown.
- Not confirmed: Annual return due dates other than the 31 December default of s.44(1) are not encoded; supply the due date if it was extended.
- Source: [CGST Act 2017, s.74](https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/acts/2017_CGST_act/active/chapter15/section74_v1.00.html)
- Source: [CGST Rules 2017, rule 142](https://taxinformation.cbic.gov.in/content/html/tax_repository/gst/rules/cgst_rules/active/chapter18/rule142_v1.00.html)
- Source: [CGST Act 2017, s.44 (annual return due 31 December)](https://cbic-gst.gov.in/pdf/CGST-Act-Updated-01082021.pdf)

## Reply form

[FORM GST DRC-06: Reply to show cause notice](https://charterai.in/notice/form/gst-drc06), filed through GST portal: Services > User Services > View Notices & Orders.

The field list is to be confirmed against the notified text.

## What the reply must include

- direct rebuttal of the fraud/wilful-suppression allegation on the intent-to-evade standard
- demand for the specific material evidencing intent to evade tax
- Instruction 05/2023 point on mechanical invocation of s.74 without a fraud finding
- without-prejudice submissions on quantum even while denying fraud

## Reply outline

Everything under the s.73 template applies, plus the fraud allegation must be rebutted head-on: the department must establish wilful suppression or misstatement with intent to evade tax, mere non-payment or a bona fide interpretational dispute is not fraud. Demand the specific evidence of intent the SCN relies on; a s.74 SCN issued mechanically without any such finding is itself a ground for challenge per Instruction 05/2023. Argue quantum in the alternative even while contesting fraud, and verify any Supreme Court citation on the intent standard against a supplied source before naming it.

- Preliminary objections: Limitation, DIN/RFN validity, vague SCN, and (for s.74/74A) absence of fraud per Instruction 05/2023.
- Facts: Registration, tax period, and the audit/scrutiny findings the SCN is founded on.
- Issue-wise submissions: One sub-heading per demand item with reconciliation and supporting documents.
- Quantification: Tax/interest/penalty computation contested or accepted, split CGST/SGST/IGST/cess.
- Prayer: Request the demand be dropped, or reduced to the amount accepted.
- Hearing request: Personal hearing is mandatory under s.75(4), request a date.

## Related law

- [Section 74, CGST Act, 2017](https://charterai.in/law/cgst-act-2017/74)

## FAQ

### What is a Show cause notice u/s 74 (fraud alleged)?

Audit/scrutiny findings, FY ≤ 2023-24, fraud/wilful misstatement/suppression alleged

### What is the time limit to reply to a Show cause notice u/s 74 (fraud alleged)?

As specified in the notice. Paying tax, interest and 25% penalty within 30 days of issue concludes the notice (s.74(8)). To be confirmed against the notified text. Set by the statute or rules; counted from service.

### How is the reply to a Show cause notice u/s 74 (fraud alleged) filed?

On FORM GST DRC-06: Reply to show cause notice, through GST portal: Services > User Services > View Notices & Orders.

### What should the reply include?

Direct rebuttal of the fraud/wilful-suppression allegation on the intent-to-evade standard; Demand for the specific material evidencing intent to evade tax; Instruction 05/2023 point on mechanical invocation of s.74 without a fraud finding; Without-prejudice submissions on quantum even while denying fraud.

Draft this reply: https://charterai.in/sign-up

Canonical: https://charterai.in/notice/gst-show-cause-notice-section-74-fraud-alleged