Conversion of Section 74 Order to Section 73

[Narayan Pujar]

Hello,

Section 75(2) quotes as,

'(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73'

Supposedly, an order u/s 74 has been issued for FY 2017-18 merely because it was time barred u/s 73. By virtue of the above provision if at the appellate forums this order is converted to Section 73, then would that mean -

1. Order will be treated as void ab initio because time limit under section 73 has already lapsed, thereby dropping demand for FY 2017-18? or

2. Will it be sustained through deeming fiction created by 75(2) and tax will continue to be recovered with penalty amount reduced to 10%?

Thank you in advance!

[Narayan Pujar]

I found the answer to my query in Circular No. 185/17/2022-GST. 

[Sadanand Bulbule]

Section 75[2] speaks only about notice issued under Section 74(1) and not an order.

AI Summary

Debate on Validity of Converting Section 74 Order to Section 73 under GST for FY 2017-18 with Reduced Penalty A discussion on a forum addressed the conversion of a Section 74 order to Section 73 under the Goods and Services Tax (GST) framework. The query raised concerns about whether an order issued under Section 74 for the fiscal year 2017-18, due to being time-barred under Section 73, would be void if converted to Section 73, or if it would remain valid with a reduced penalty. One participant found guidance in Circular No. 185/17/2022-GST, while another noted that Section 75(2) pertains to notices under Section 74(1), not orders.