Goods and services tax regime brings alot of seamless flow in indirect tax regime. However, due to current developments and technology advancement it is very important to built a computerized network. hence, to bring the drastic change CBIC has developed GSTN (Goods and services tax network) to enhance durability and efficiency in indirect taxation.

Due to GSTN whole process from initial i.e Registration till end i.e Assessment got faceless.

But still lucuna lies due number of rules and number of forms in goods and services tax act 2017. It is very typical for department as well as taxpayer to go thorughly and read which form we have to submit.


The one of benefit of GST is to provide buoyancy in the governement revenue where GST council makes every possible efforts to increase number of registration and duly compliance of GST return filing.

Under GST Act 2017, Section 46 provides notice to return defaulters where a registered person fails a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within 15 days in such form and manner as may be prescribed.

However, in case non compliance of section 46: Adjudicating officer have duely comply with section 62 of GST act 2017 ” Assessment in case non-filters of return” where adjudicating officer have to pass order as per section 62 read with rule 100 where order shall be communicated in the form GST ASMT-13 along with DRC-07 electronically. However, after issue of order in GST ASMT-13 if taxpayer has filed all pending returns within 30 days then order for non-filters of return is cancelled by proper officer read with  circular No. 129/2019.

Confusion for taxpayers

Now, taxpayers who get notice under section 46 ” Notice to return defaulters” but due various reason unable to file all pending returns within 15 days one another option available to file such return within 30 days from the service of the assessment order under section i.e Form GST ASMT-13.

Most of taxpayers facing problems relating to service of assessment order because there is no section defining “service” or “receipt” of the assessment order and adjudicating officer starts demand and recovery proceedings under section  73(9) and (11) read with rule 142(5) and 79(3) read with rule 145 by issuing GST DRC-13 for recovery of tax under GST.

Now, It is very important to make anaysis and interpretation of section 73.

 Overview of Section 73 –  Determination of tax not paid /short paid/ erroneously refund/ITC wrongly availed/utilised. 

As we know that ” Demand order and Recovery Proceedings” under Goods and Services Act 2017 covers from section 73 to section 84.

However, section 73 & 74 specifically related to determination of tax  not paid /short paid/ erroneously refund/ITC wrongly availed/utilised by reason other than fraud and for fraud purpose.

As per section 73(1) ” Issue of show cause notice”, in a case, where the

  • non-payment
  • short payment
  • erroneous refund
  • wrong availment
  • utilisation of ITC is on account of reasons other than
  • fraud
  • wilful misstatement or
  • suppression of facts by the person chargeable with tax, the proper officer shall issue a notice, on the person chargeable such tax, requiring him to show cause as to why should not pay the amount specified in the notice. sasasada

From the above section, it is clearly seen that adjudication officer shall issue show cause notice before starting demand and recovery proceedings under GST Act 2017 read with rule 142 of CGST rules 2017 and adjudicating officer shall issue a summary thereof electronically in FORM GST DRC-01 and  statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in FORM GST DRC-02, specifying therein the details of the amount payable.

Confusion for taxpayers

With the reference to above Section 73 and 74 play a very important role for passsing “Demand Order and Recovery proceedings” but the wordings of section 62 “Assessment in case of non-filters of return” start with Nothwithstanding anything contained in section 73 and 74 that means anything written in section 73 and 74 section 62 will prevail.

Now rule 100 of sub section 1 of section 62 provides  Assessment in certain cases.- (1) The order of assessment made under sub-section (1) of section 62 shall be issued in FORM GST ASMT-13 and a summary thereof shall be uploaded electronically in FORM GST DRC-07 and rule 142(5) of section 73 provides (5) A summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and penalty payable by the person chargeable with tax.

So, there is confusion that IF SECTION 62 of CGST ACT 2017 will prevail then WHY RULES OF SECTION 73 department is using?

Confusion for taxpayers

If Section 62 will prevail and adjudication officer issue GST DRC -07 for payment of tax, cess, interest and penalty than Mandatory penalty under section 73(9) and (11) i.e 10% of tax or 10000 whicever is higher shall not applicable because adjudication officer pass order under section 62 of GST Act 2017. However, the penalty shall be laviable when adjuducation officer pass demand order/adjudication order  under section 73 or 74.

Confusion where  Form GST DRC 07 is basis for determination of penalty under GST Act 2017 or Adjudication order ?

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May 2021