Make a very big as well as final full stop for Section 74 of the CGST Act.

One section which has so far been often wrongly invoked is none other than section 74. It is a simple task for the tax official to wrongly invoke this section and the tax officer is just not bothered as to whether this order stands strong at next levels or set aside or even quashed. He is happy for the time being on quantum of huge demand including equal penalty. The beauty of the issue is that only during August 2026 the Supreme Court has held in two orders that 74 has to be in line with CBIC guidelines dated 13/12/2023 which reads as "3.3 From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis- statement or suppression of facts to evade tax on the part of the said taxpayer. Section 74(1) cannot be invoked merely on account of non-payment of GST, without specific element of fraud or wilful mis-statement or suppression of facts to evade tax. Therefore, only in the cases where the investigation indicates that there is material evidence of fraud or wilful mis-statement or suppression of fact to evade tax on the part of the taxpayer, provisions of section 74(1) of CGST Act may be invoked for issuance of show cause notice, and such evidence should also be made a part of the show cause notice.

4. The above aspects may be kept in consideration while investigating such cases and issuing show cause notices".

As none of the tax officials were serious on above guidelines, CBIC found a solution by making a full stop for section 74 with effect from 31/03/2024. Even the intention of the CBIC was not properly understood by the field officers who still continue to invoke section 74 with the old mindset which is not getting changed based on clarifications as well as amendment. Thanks to the age of Artificial Intelligence, which spreads the message on section 74 to all who raise a question in the most appropriate manner. There is no need for any magazine or data base. The references to two cases M/s. Tata Steel Limited Versus Union of India through the Secretary Ministry of Finance and Ors. - 2026 (8) TMI 1587 - Supreme Court  as well as M/s G.R. Infra Projects Limited Ratlam Versus The State of Madhya Pradesh & Ors. - 2026 (8) TMI 1497 - SC Order are easily traceable with the help of AI.

It is for the taxpayers as well as tax professionals to be fully aware of all the recent developments in GSTAT on 74. The Supreme Court has made the work of GSTAT easier by passing the above two orders at the most appropriate time when cases are coming up for hearing before the benches of GSTAT. One such decision referring to Tata Steels case was rendered by the Kolkata Bench of GSTAT on 29/09/2026 on section 74.

In fact, it is a very simple case. SCN was issued invoking section 74. OIO was passed confirming full demand with equal penalty. The core issue before the first appellate authority was on invocation of section 74. The First Appellate Authority has rightly held that none of the essential ingredients for invoking 74 as 1) fraud 2) wilful mis-statement 3) Suppression of facts were present and accordingly relief was granted appropriately.

The second appeal was preferred by the revenue. The core argument on invocation of 74 was that there was a delay in payment of GST by the taxpayer and accordingly 74 is applicable. The answer of GSTAT is [13]. We have also examined the present appeal in the light of the Hon'ble Apex Court's Judgment in the case of M/s Tata Steel Limited (supra). The SCN in the case in hand is also lacking such foundational facts. Consequently, we are of the considered view that the first appellate authority was correct in holding that this is not a fit case for invocation of Section 74(1), CGST Act, 2017. Thus, we find no reason to interfere with the order of the first appellate authority and, therefore, the instant appeal of the revenue stands dismissed.

Case Reference: IN THE GOODS AND SERVICES TAX APPELLATE TRIBUNAL KOLKATA BENCH COURT NO.1 Appeal No. APL/24/KLK/2026 Anil Kumar Singh For the Commissioner CGST & CX, Kolkata North Commissionerate GST Bhawan, 180, Shantipally, Rajdanga Main Road, Kolkata-700107 ...... Appellant VERSUS Director Summit Hotels & Resorts Private Limited 00, Sevoke Road, Siliguri, WBDAR-734001

Conclusion: Let the tax officials continue to live in their own illusory world. Let all the orders passed by them by wrong invocation be quashed for which they are not bothered. We, the taxpayer as well as the tax professionals live in the real world. There are changes taking place around us in a rapid way. GSTAT is rendering excellent services to the stakeholders by way of passing unbiased taxpayer friendly orders. All orders are constantly updated in the respective portals. A total number of 226 final orders have been passed till 29/09/2026 on core GST issues. In case the tax officer who passes unreasoned orders start to live in real world, things will improve by way of reduction in litigation. In case the tax officer feels that he is interested only to pass the order and in case it happens to be quashed latter, let it be quashed and it is not his concern, tax professionals shall have cases for the next three decades.

Before parting: October 2026 is the one and only month available for taxpayers who have a strong case before GSTAT on OIA passed during June and July 2026, as it is possible to seek condonation of delay on proper justifications. Any OIA, on which second appeal is preferred after 3 months need proper justification for condonation and on completion of sixth month from the date of OIA, the OIA attains finality.