Applicability of Sec 73 or Sec 74

[Krishna Murthy]

Sir,

In one situation, the proper officer has issued show cause notice to a case where GSTR 3B has been filed belatedly paying applicable taxes well before issue of show cause notice. However, interest on the same has not been paid. Does this situation give rise to application of Sec 73 or Sec 74. In my view there cannot be a application of Sec 73 or Sec 74 since, as per 73(1) or 74(1) there should be tax due (non payment, short payment or excess refund or excess ITC) to the department to attract the said sections.

So it is very clear that if there is no tax due on the date of show cause notice there cannot be a situation to issue the same under Sec 73 or Sec 74. Is this view correct? Please comment.

Of course, in the above situation, there can be recovery of interest u/s 79 read with Sec 75(12). But application of Sec 73 or 74 does not arise.

AI Summary

Debate on GST Act Sections 73 & 74: Can Show Cause Notices Be Issued for Unpaid Interest After Tax Payment? A discussion on the applicability of Sections 73 and 74 of the GST Act centers around whether a show cause notice can be issued when taxes are paid but interest is unpaid. The consensus among participants is that if no tax is due at the time of the notice, Sections 73 or 74 should not apply. However, interest recovery can proceed under Section 79 with Section 75(12). Debate arises over whether unpaid interest constitutes a shortfall, potentially justifying a notice. Some argue that interest is integral to tax, while others maintain it should not trigger a show cause notice independently. The discussion references legal interpretations and case law to support various viewpoints.