Section 74 option under GST must be accepted as a whole, including interest and prescribed penalty, the court held.

An assessee who uses the Section 74 mechanism to avoid a show cause notice by paying the tax demanded must accept the statutory package as a whole, including the accompanying interest and prescribed penalty. The Kerala High Court noted that the intimation under Section 74(5) read with Rule 142(1A) gives a conditional choice: either comply with the full terms and avoid the notice, or dispute the demand through the notice process. Selective acceptance of only the tax component is impermissible, and authorities cited on a different issue were irrelevant. The writ petition was dismissed.

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Issues: Whether an assessee who opts to pay tax to avoid a show cause notice under Section 74 of the Kerala State Goods and Services Tax Act, 2017 can insist on exemption from the accompanying interest and penalty prescribed by the statutory scheme.

Analysis: The intimation under Section 74(5) read with Rule 142(1A) was issued as part of the statutory mechanism that permits an assessee to avoid a show cause notice by paying the tax demanded together with interest and the prescribed penalty. The option under Section 74 is an integrated statutory choice: the assessee may either accept the liability and comply with the stated terms, or dispute the demand and contest the show cause notice. The assessee cannot accept the benefit of the option while declining the statutory incidents attached to it. The authorities relied on did not assist because they dealt with a different question.

Conclusion: The assessee is not entitled to avail the option under Section 74 without paying interest and the prescribed penalty. The writ petition fails and is dismissed.

Final Conclusion: The statutory mechanism for avoiding a show cause notice must be accepted as a whole, and the assessee cannot selectively enforce only the tax component while resisting the accompanying interest and penalty.

Ratio Decidendi: Where the statute offers a conditional option to avoid a show cause notice by paying tax along with interest and a prescribed penalty, the assessee must comply with the entire statutory package and cannot claim partial compliance or selective exemption.

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