The petitioner challenged a show cause notice issued under Section 74 contending that the notice itself recorded findings of guilt and proposed penalty and interest, thereby showing a predetermined mind. The factual background showed that the notice assumed factual supply and tax evasion without adjudication.
The Court held that a show cause notice must be tentative in nature and cannot pre-judge issues or record conclusions. Since the impugned notice reflected a closed and prejudiced mind, it was held to be unsustainable. The show cause notice was quashed.