GST S. 74A applies from FY 2024-25’: Madras HC directs to Treat wrongly Issued S. 73 Order as Notice to S. 74A [Read Order]

The Madurai bench of Madras High Court said that proceedings against short payment of tax or tax not paid on the intention of fraud shall be initiated under Section 74A from Financial Year 2024-25. The court directed the petitioner to treat the S. 73 order as notice to S. 74A.

Justice Krishnan Ramasamy said that “the provisions of Sections 73 & 74 of the GST Act stood omitted with effect from 01.04.2024 and only the provisions of Section 74A of the GST Act will apply from the financial years 2024-2025 onwards.”

M. Gnanaraj challenged the GST assessment order issued under Section 73 of GST Act on two grounds. One ground was that the notices/orders were uploaded only in the GST portal which led to unawareness of the same. The second ground, which is the important ground, was that the order passed was without jurisdiction.

Both of the grounds were considered by the court. With regard to the orders serving only through the portal, when there is no response from the tax payer to the, the Officer who is issuing notices should explore the possibilities of sending notices through some other mode as prescribed in Section 169(1) of the Act, preferably by way of RPAD.

The State, through the Additional Government Pleader, admitted that no opportunity of personal hearing was provided and sought remand of the matter.

The court accepted submissions of the petitioner, observing that Section 73 and Section 74 ceased from FY 2024-25, the bench said that the department wrongly invoked the provision.

The high court observed that the department issued the order without jurisdiction. However, it directed the petitioner to treat the order as notice to Section 74A and asked to file a reply within 4 weeks.

The petition was disposed of accordingly.

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