1. INTRODUCTION
1.1 The distinction between initiation of proceedings under Section 73 (where there is no allegation of fraud, wilful misstatement or suppression of facts) and Section 74 (where such elements are alleged) of the Central Goods and Services Tax Act, 2017 (“CGST Act”) has significant implications for taxpayers. These provisions are part of the tax recovery and demands adjudication process under the CGST Act. In many cases, revenue authorities initiate proceedings under Section 74, even where the ingredients of fraud, wilful misstatement or suppression of facts are ultimately not established such as in case of discrepancies in GST returns due to system limitation or bonafide mistakes of taxpayers, etc. This is because of the availability of an extended period of limitation under Section 74 and also, higher penalties in such cases.
