How to interpret the sub section 10 of section 74 of the CGST Act, 2017.

Section 74 (10) reads as “10) The proper officer shall issue the order under sub-section (9) within a period of five years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within five years from the date of erroneous refund”.

This is the most crucial sub section of section 74 amongst all the sub sections due to the fact that the deadlines are mandatory and not directory. The legislature has with careful thought used the words as “from the due date for furnishing of annual return for the financial year” and has not used the words or the extended due date, as the case may be. This very clearly establishes the fact that the due date for filing the respective annual return may be extended by the Government for administrative conveniences by way of issuance of notifications but it does not automatically mean that the due date for issuing SCN or passing the adjudication order also get extended by that notification.

This is a hyper technical matter but for the sake of easy understanding, it may be stated that so far as the financial year 2017-18 is concerned, the last date for issuing SCN under section 74 was only 30/06/2023 only (as against the previous understanding of 05/08/2024)and last date for passing order is only 31/12/2023 (as against the earlier understanding of 05/02/2025) and not beyond that. This may look as a new development but it is true. Let us go in depth on this issue. The Act is Supreme which has to cross three stages of passing by Lok Sabha, passing by Rajya Sabha and also to  obtain the ascent from the President of India to become effective as well as operational. The Act gives powers to frame rules as well as issue notifications only for the sake of smooth administration of the law and not to change the basics which are contained in the Act.

Let us move further in a more specific way. The last date for filing the annual return for the first nine months of GST law from 01/07/2017 till 31/03/2018 originally stood as 31/12/2018. Now, for administrative conveniences only, the due dates were extended. If at all the Government had any intention to extend the dates for issuing SCN or passing the OIO, the same should have also appeared in the respective extension notifications, but there are no such mentions. The Section 74 (10) only refers to the due date for filing the annual return and the words or the extended date as may be are conspicuously absent. Accordingly, this is the most appropriate time to revisit all such cases where the first appeal is live or OIA has been passed already as we have only two weeks to prefer the second appeal before the GSTAT now.

The above arguments may look strange, but when the same line of argument comes before the GSTAT, it is most probable that this view may be upheld by the benches of the GSTAT, based on the case law decided on 30/06/2026 as below.

Sri Shekhar Chandra Podder, Prop. of M/s. Shekhar Chandra Podder Versus The Union of India, The Director, Government of India, Ministry of Finance (Department of Revenue), Central Board of Indirect Taxes and Customs, The Chief Commissioner of State Tax, Government of Tripura, The Joint Commissioner of State Tax, Government of Tripura, The Joint Commissioner, Ministry of Finance, Revenue Department, Government of India, Central Goods and Services Tax, Tripura, The Assistant Commissioner (Anti-Evasion), Tripura, The Superintendent of State Tax, Government of Tripura, The Superintendent (Enforcement), Central Goods and Services Tax, Tripura, The Superintendent (Anti-Evasion), Tripura. - 2026 (7) TMI 223 - TRIPURA HIGH COURT

The paras which triggers me to write as above are furnished below for the benefit of all the readers.

13. A reading of the notification No.06/2020 dt.03.02.2020 [Annexure-7] indicates that the Central Government had issued the said notification on the recommendation of the GST Council and in the said notification, the time limit for furnishing of the annual return for the period 2017-18 was extended up to 07.02.2020 for the State of Tripura.

14. In our opinion, this notification is intended for the benefit of assesses, if they had not already filed their annual return for 2017-18 financial year by 31.12.2018.

15. This notification is not intended to benefit the respondent CGST department, and extend for their benefit the time limit prescribed in Section 74(10) of the Act of 2017 to initiate proceedings beyond the period of 5 years from the date of filing of the annual return for 2017-18 i.e., beyond 31.12.2023”.

In order to strengthen my above arguments, operative portion of the High Court order dated 30/06/2026 is furnished below.

“34. For the aforesaid reasons, and since the show cause notice dt.22.07.2024 and the impugned order in original dt. 3.2.2025 passed by the respondent No. 5 cover the financial years 2017-18, 2018-19, 2019-20 and 2020-21, and since we have held supra that in respect of some financial years on some aspects, the respondent No. 5 had no jurisdiction, we set aside the show cause notice dt. 22.07.2024 to that extent and the Order-in-Original dt. 03.02.2025 passed by the respondent No. 5 in its entirety, and remit the matter back to the respondent No. 5 to pass a fresh order within 3 months only on the aspects which he is entitled to do as per this Order after hearing the petitioner afresh. All consequential actions/orders of respondents are also set aside. The petitioner is granted liberty to contend before respondent No. 5 that the conditions precedent for invoking Section 74 do not exist by filing additional reply to the show cause notice within 6 weeks from today”.

It is concluded by stating that the order was passed by the division bench headed by the Chief Justice of the High Court and let us hope to get more orders on similar lines by other high courts as well.