By S&S Co. Advocates & Solicitors · Published 22 July 2026 · Informational content, not legal advice
About this article: A general explainer prepared by S&S Co. Advocates & Solicitors on a recurring type of dispute. It does not report a specific judgment or order, names no parties and gives no case citation, so it should not be cited as authority. Law and practice change; please verify against the current statute and primary sources before relying on it.
For periods up to 2023-24, demands for tax not paid or short paid are made under Section 73 of the Central Goods and Services Tax Act, 2017 where there is no fraud, wilful misstatement or suppression of facts, and under Section 74 where there is. The consequences differ sharply. Section 74 carries a longer limitation period and a penalty that can be as high as 100 per cent of the tax, while Section 73 has a shorter period and a lower penalty. From 2024-25, Section 74A replaces both.
A frequent argument in classification and interpretation disputes is that a position openly taken in returns, and consistent with a departmental clarification in force at the time, is a good-faith view and not suppression, even if the department's view later changes. Tribunals and courts have generally required concrete indications of concealment, such as non-disclosure or false documents, before the extended provisions can apply.
This argument concerns penalty and limitation. It does not decide whether the tax itself is payable. The classification may still be held incorrect, with tax and interest due, while the penalty is reduced and the longer limitation period is held not to apply.