TaxTMI 
TaxTMI 
Sir, if one taxpayer has reconciled his turnover with balance sheet PL ACCOUNT and GSTR-9/9C and declared the Short-payment made by the taxpayer in the GSTR-9, but not paid the GST along with interest and penalty, can on a later date proceedings under section 74 of CGST Act'17 be initiated against them on such Short-payment of tax?
Proceedings under section 74 of CGST Act'17
04 Jun 2025 
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Fraudulent tax evasion: disclosure without payment does not prevent initiation of penal proceedings for unpaid tax.
Section 74 targets unpaid or short-paid tax resulting from fraud, willful misstatement, or suppression of facts; a taxpayer's disclosure in the annual return does not bar initiation of penal proceedings if tax, interest, and penalty remain unpaid and the department can establish the requisite culpable elements. Mitigation of penalty under the provision depends on actual payment before issuance of a show cause notice, and absence of payment forfeits that benefit. If short payment arises from bona fide error, non-penal recovery under the general provisions rather than penal proceedings is appropriate, subject to the department's burden to prove intent and to applicable time limits for issuing notices. (AI Summary)
Section 74 targets unpaid or short-paid tax resulting from fraud, willful misstatement, or suppression of facts; a taxpayer's disclosure in the annual return does not bar initiation of penal proceedings if tax, interest, and penalty remain unpaid and the department can establish the requisite culpable elements. Mitigation of penalty under the provision depends on actual payment before issuance of a show cause notice, and absence of payment forfeits that benefit. If short payment arises from bona fide error, non-penal recovery under the general provisions rather than penal proceedings is appropriate, subject to the department's burden to prove intent and to applicable time limits for issuing notices. (AI Summary)