"GST Department's Overuse of Section 74 Notices Raises Concerns"

The GST Department is issuing Notices under Section 74 in almost every case, which is concerning.

Not every instance of short payment or non-payment falls under Section 74.

The key difference between Sections 73 and 74 is the intention to evade tax and the suppression of facts.

1. Rajasthan State Electricity Board Jaipur - Supreme Court

AIR 2020 SC 1722

Income Tax: S. 143 (1-A) can be invoked only when the assessee intended to evade tax - Assessee claiming 100% depreciation in return due to bona fide mistake.

No material showing 25% of depreciation disallowed was with intention to evade tax - S. 143 (1-A) is not applicable.

2. L & T Komatsu Ltd. - Supreme Court

(2021) 376 ELT A105

An extended period is not invocable when Revenue fails to establish suppression or intention to evade duty by assessee.

3. BHARAT ELECTRONICS LIMITED - Supreme Court

(2004) 165 ELT 485

Mistake in approved classification list corrected as soon as brought to notice of assessee, a Central Government Undertaking - HELD : There was no intention to evade duty and extended period was not invocable.

4. CHAMUNDI DIE CAST (P) LTD. - Supreme Court

(2007) 215 ELT 169

Bona fide belief - Assessee acted on genuine belief that their goods (Aluminium castings) were covered by exemption notification, particularly when Department over the years approved the classification list filed?

by them under Heading 84.32 of Central Excise Tariff - Assessee also sold the castings to a State Public undertaking who recommended them to classify said goods under Heading 84.32 ibid - No intention to evade duty - Department not entitled to invoke extended period of limitation

5. Lubri Chem Industries Ltd

AIR 1994 SC 2604

Demand for excise duty beyond six months. Assessee not guilty of any fraud or collusion or willful misstatement or suppression of facts with intent to evade excise duty payment. Demand for excise duty beyond six months not sustainable

6. Bharat Electronics Ltd. - Supreme Court

AIRONLINE 2003 SC 226 :: (2005) 10 SCC 651

Extended limitation of five years under 1st Proviso would apply only when there is intention to evade duty - Hence, said extended limitation would not apply when merely a wrong classification?

list showing goods under incorrect Headings under Central Excise Tarriff was submitted; without any intention to evade duty - Consequently, recovery notice issued beyond period of six months was barred.

Hope you will find this useful

Raja Abhishek

NIRC Candidate 2024

9810638155