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Notice U/S 74(1)

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Kunal Pansari & Co.

23 Points Posted on 29 February 2024

We have been issued a notice U/s 74(1) for violation of Section 16(4) for the FY 2018-2019.
The due date of availing ITC for the FY 2018-2019 was 20-10-2019 but our March 2019 GSTR-3B was filed on 22-10-2019
The department has imposed a Tax of Rs. 414816.33 and also the additional penalty of Rs. 414816.33 which makes it total of Rs. 829633.
Now we have 2 questions :
1. Can notice be issued U/s 74(1) for merely violation of Section 16(4) because in my opinion it is not a willful evade of taxes.
2. Can Notification No. 18/2022 dated 28-09-2022 which increase the time limit to avail ITC to 30th of November used to avail ITC of FY 2018-2019

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Quick Summary

This discussion addresses a notice issued under Section 74(1) for a violation of Section 16(4) concerning the FY 2018-2019, resulting in significant tax and penalty demands. The core questions revolve around the validity of issuing a Section 74(1) notice for a procedural lapse rather than willful tax evasion, and whether a subsequent notification can be applied retrospectively to avail the Input Tax Credit (ITC). The consensus suggests that a Section 74(1) notice might be inappropriate without evidence of fraudulent intent, and a later notification likely doesn't apply to the specified financial year.