GST dept can Issue Two Separate Notices u/s 73 and 74 for Selfsame Period when Basis are Different: Calcutta HC [Read Order]
The High Court quashed only the portion of the Section 73 notice that overlapped with issues already adjudicated under Section 74 and upheld the rest.
![GST dept can Issue Two Separate Notices u/s 73 and 74 for Selfsame Period when Basis are Different: Calcutta HC [Read Order]](https://images.taxscan.in/h-upload/2025/07/28/2069972-calcutta-hc-taxscan.webp "GST dept can Issue Two Separate Notices u/s 73 and 74 for Selfsame Period when Basis are Different: Calcutta HC [Read Order]")
In an important ruling, the Calcutta High Court has held that the GST ( Goods and Services Tax ) authorities are permitted to issue separate notices under Sections 73 and 74 of the CGST/WBGST Act for the same tax period, provided the basis of each notice is distinct, however, it quashed the notice which raised the issued which already dealt in S. 74. A writ petition filed by...
In an important ruling, the Calcutta High Court has held that the GST ( Goods and Services Tax ) authorities are permitted to issue separate notices under Sections 73 and 74 of the CGST/WBGST Act for the same tax period, provided the basis of each notice is distinct, however, it quashed the notice which raised the issued which already dealt in S. 74.
A writ petition filed by Sayan Biswas, a registered dealer in ferrous scrap, challenging the validity of a Section 73 notice issued after proceedings under Section 74 had already culminated in an order and appellate rejection.
JusticeRaja Basu Chowdhury, after noting Section 73 and 74, stated that “I am of the view that the respondents cannot be faulted for having issued two separate notices in respect of the selfsame period, since, the basis for issuance of notices are different.”
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The petitioner contended that the second notice covering the same tax period amounted to double jeopardy and was therefore impermissible.
Justice Raja Basu Chowdhury, however, rejected this argument and clarified that while both sections deal with tax shortfalls, the legal foundations of the two are materially different.
The court noted that the Section 73 addresses discrepancies arising from reasons other than fraud or suppression, whereas Section 74 applies when there is alleged fraud, wilful misstatement, or suppression of facts to evade tax. Thus, a notice under Section 73 can validly coexist with a prior Section 74 proceeding, provided the grounds differ.
The petitioner had also questioned the Section 73 show-cause notice on the ground that it was vague, especially concerning the reverse charge mechanism and ITC-related disclosures. The Court rejected the vagueness plea, holding that the notice was issued in Form DRC-01 in compliance with the GST Rules and contained specific references to GSTR-1 tables, including details about HSN codes and reverse charge liabilities.
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However, the Court partially accepted the petitioner’s argument regarding the inclusion of certain issues already adjudicated under the earlier Section 74 proceedings particularly those relating to ITC availed on inward B2B supply recorded in Table 4(A)(5) of GSTR-3B.
The Court was also unconvinced by the petitioner’s claim that the challenge to the appellate order under Section 107 could not be mounted due to the non-constitution of the Appellate Tribunal. It observed that the petitioner, having voluntarily invoked writ jurisdiction without pursuing available statutory remedies, could not now take advantage of that omission.
As a result, the High Court quashed only the portion of the Section 73 notice that overlapped with issues already adjudicated under Section 74 and upheld the rest. The demand raised in Form DRC-07 dated 19th July 2024 was accordingly set aside, with directions to the authorities to issue a revised demand reflecting the Court’s order.
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