Tax Consultant

 GSTAT Remands Case as Section 74 Not Sustainable Due to Absence of Fraud The Gujarat State Tax Appellate Tribunal (GSTAT), in a landmark ruling, has remanded a GST case back to the proper officer because proceedings under Section 74 of the CGST Act were deemed unsustainable without evidence of fraud, willful misstatement, or suppression of facts. This decision in the case of M/s Sterling & Wilson Pvt. Ltd. emphasizes strict interpretation of penal provisions and protects honest taxpayers from harsh penalties. Case Background Sterling & Wilson Pvt. Ltd., an EPC contractor under GST, faced a demand for FY 2018-19 due to a mismatch between GSTR-1 (output tax ₹31.36 crore) and GSTR-3B (₹31.09 crore), leading to an alleged short payment of ₹27.06 lakh plus interest and penalty. The department invoked Section 74, alleging suppression and intent to evade tax, despite transactions being recorded in books via debit/credit notes. ​ The Proper Officer confirmed the demand ex parte. O...

Section 73 of CGST Act, 2017 – Determination of Tax Not Paid or Short Paid (Non-Fraud Cases) Updated on: February 2026 (as applicable till date) Prepared by: Yours Tax Consultant 1. Objective of Section 73 Section 73 provides the procedure for determination and recovery of GST where tax has not been paid, short paid, erroneously refunded, or input tax credit has been wrongly availed or utilised without any fraud, wilful misstatement or suppression of facts . This section applies to bona fide errors and genuine mistakes . 2. When Section 73 Applies Section 73 applies in cases involving: Clerical or calculation errors Wrong classification or valuation Interpretational disputes Inadvertent ITC mistakes Fraud cases are covered under Section 74, not Section 73. 3. Statutory Provision – Section 73 (Overview) Where it appears to the proper officer that any tax has not been paid or short paid, or ITC has been wrongly availed or utilised, for re...

  Introduction Under the GST law, demand proceedings must strictly follow the principles of natural justice . However, many taxpayers are facing situations where GST DRC-07 is issued directly without serving a proper Show Cause Notice (SCN) . Such actions are illegal and unsustainable in law. This article explains: Whether GST DRC-07 can be issued without SCN Relevant legal provisions under GST Important High Court case laws Remedies available to taxpayers Practical appeal grounds & formats What is GST DRC-07? GST DRC-07 is a summary of demand issued under Rule 142(5) of CGST Rules, 2017 . It is issued only after passing a valid adjudication order under: Section 73 (non-fraud cases), or Section 74 (fraud / suppression cases) 📌 DRC-07 is not a substitute for SCN. It is only a consequence of a valid adjudication order. Is Show Cause Notice Mandatory Before DRC-07? Yes. Issuance of SCN is mandatory . Statutory Provisions Section 73(1...

Section 73 of CGST Act, 2017 – Demand of Tax (Cases Not Involving Fraud) Updated on: February 2026 Prepared by: Yours Tax Consultant 1. Bare Act Text – Section 73 (Summary) Section 73 of the CGST Act deals with determination of tax not paid, short paid, erroneously refunded, or input tax credit wrongly availed or utilised, for reasons other than fraud, wilful misstatement or suppression of facts . The proper officer shall issue a show cause notice (SCN) and pass an order after giving the taxpayer an opportunity of being heard. 2. What does Section 73 mean? (Simple Explanation) Section 73 applies when a GST default happens due to: Genuine mistake Clerical or accounting error Wrong interpretation of law System or compliance lapse No intention to evade tax is involved. Therefore, penalty provisions are comparatively lenient. 3. When is Section 73 Applicable? Section 73 is applicable in the following cases: Tax not paid or short paid Erro...