The Karnataka High Court comprising Justice S.R.Krishna Kumar has permitted the GST department to convert the proceedings from Section 74 of the KGST Act into proceedings under Section 73 of the KGST Act.
Section 74 of the GST Act is the legal provision and guidelines provided to GST officers to deal with willful misstatement or fraudulent practices by GSTIN holders in filing GST data and related short payment, non-payment, erroneous refund or input tax credit availed.
Section 73 of the GST Act covers the procedure for the determination of GST demand in general cases where any ulterior motive (involves fraud, wilful misstatement, or suppression of facts) is not involved, if: Tax is not paid duly. Tax paid is short of the actual liability.
Form GST DRC-01A, Intimation of Tax ascertained as being payable under Section 74(5) of the KGST Act, 2017 issued by Commercial Tax Officer (Audit), Bangalore for period April 2018 to March 2019.
Form GST-DRC-01A intimation of tax ascertained as being payable under Section 74(5) for period April 2018 to March 19. A Show cause notice issued under Section 74(1) of the KGST Act, 2017 read with Section 74(9) and Section 50 of the Act and read with Rule 142 of the KGST Rules, 2017 and concurrent provisions of the CGST /IGST Act, 2017 and GST (compensation to states) Act, 2017 for the tax period 2018-19 dated 6/3/2025 issued by the Commercial Tax Officer (Audit).
The petitioner contended that the proceedings initiated by the department are illegal, arbitrary and without jurisdiction or authority of law and the same deserve to be quashed especially when the provisions of Section 74 are not applicable.
The department contended that though the respondents purported to invoke Section 74 of KGST Act, 2007, the present petition may be disposed of permitting the respondents to convert the proceedings from Section 74 of the KGST Act into proceedings under Section 73 of the KGST Act and by reserving liberty in favour of the petitioner to make a request to avail the benefit of the Amnesty Scheme pursuant to Section 128A of the KGST Act and the present petition may be disposed of accordingly.
The court disposed of the Petition and held that the proceedings initiated by the respondents under Section 74 of the KGST Act are treated as proceedings under Section 73 of the KGST Act. Liberty is reserved in favour of the petitioners to submit reply documents etc to the notices and the department was directed to consider the same and proceed further after providing sufficient and reasonable opportunity.
Case Details
Case Title: Mr. Rafeek Versus The Commercial Tax Officer (Aduti)
Case No.: Writ Petition No. 9286 Of 2025 (T-Res)
Date: 01/04/2025
Counsel For Petitioner: Sanmathi E.I
Counsel For Respondent: Jyothi M. Maradi
