The Supreme Court held that a Show Cause Notice under Section 74 of the CGST Act cannot invoke the extended five-year limitation period merely by using generic phrases like 'fraud' or 'suppression.' The SCN must specify the foundational facts constituting the alleged fraud or wilful misstatement. Without such particulars, the extended limitation is unavailable and the department is restricted to the standard three-year period under Section 73 of the CGST Act.

Under the CGST Act, two sections govern demand of tax not paid or short-paid. Section 73 applies to cases not involving fraud, wilful misstatement, or suppression of facts — the limitation here is three years from the due date of filing the annual return. Section 74 applies where fraud, wilful misstatement, or suppression of facts to evade tax is alleged — here the limitation extends to five years.

The Supreme Court's ruling addresses a common departmental practice: inserting boilerplate language about 'fraud' or 'suppression' in SCNs to gain the benefit of the longer five-year window under Section 74, without actually setting out the specific acts that constitute such fraud. The Court rejected this practice decisively.

The principle established is that the invocation of Section 74 is not a mere formality — it carries serious penal consequences including a mandatory penalty of 100% of the tax demand. Given this severity, the foundational facts that justify invoking Section 74 must be specifically pleaded in the SCN itself, not inferred or supplied later. This is rooted in the principles of natural justice: a noticee cannot respond to allegations it cannot identify.

For CLAT PG purposes, this ruling sits at the intersection of GST law and administrative law — it restates the principle that statutory exceptions to limitation must be strictly construed, and that SCNs derive their validity from the specificity of their allegations, not from the label applied to them.