Decided 29 September 2026. The Kolkata Bench of GSTAT has held that section 74 cannot be invoked against a hotelier merely because it paid tax and filed GSTR-3B late for 2017-18, when the tax and interest had been paid before the notice. Relying on the Supreme Court's 2026 judgment in Tata Steel, the Tribunal held the notice lacked the foundational facts of fraud or suppression.
Case at a glance
| Case | Revenue (CGST & CX, Kolkata North) v. Summit Hotels & Resorts Pvt. Ltd. |
| Forum | GSTAT, Kolkata Bench, Court No. 1 (S.G. Chattopadhyay, Judicial Member and Bijoy Kumar Kar, Technical Member) |
| Appeal No. | APL/24/KLK/2026 |
| Date of order | 29 September 2026 |
| Tax in notice | Rs 34,09,397 paid beyond due dates (FY 2017-18) |
| Result | Revenue appeal dismissed |
Facts of the case
A section 74 notice dated 05.08.2024 treated tax of Rs 34,09,397 paid after the due dates for 2017-18 as a demand, sought interest of Rs 4,764 (already paid via DRC-03 on 12.07.2022) and proposed penalty.
The adjudicating authority confirmed and appropriated the amounts and imposed penalty equal to tax with the reduced-penalty option. The first appellate authority set aside the order on 24.07.2025 for want of fraud or suppression. The department appealed, arguing that late payment amounts to fraud.
Issue before the Tribunal
Can section 74 be invoked for belated payment of tax and late filing of returns where all facts were disclosed?
What the Tribunal held
- Suppression means non-declaration of information required in returns (Explanation 2 to section 74A). The taxpayer had filed its returns; there was no non-declaration.
- CBIC Instruction 05/2023-GST dated 13.12.2023 states that section 74 cannot be invoked merely for non-payment of GST without specific evidence of fraud, wilful misstatement or suppression, which must form part of the notice.
- Following Anand Nishikawa, suppression must be deliberate; and the Supreme Court in Tata Steel v. Union of India (25.08.2026) held that foundational facts must appear in the notice itself, not mere recitals.
- The notice lacked such facts, so the first appellate authority was right. The department's appeal was dismissed.
Practical takeaways for taxpayers
- Section 74 notices for late payment or late returns, where everything was disclosed, can be challenged on the Tata Steel test.
- Check whether the notice states specific facts showing intent to evade, not just the words of the section.
- Pay shortfalls and interest promptly, and keep DRC-03 records to show bona fides.
Frequently asked questions
Can late payment of GST alone justify section 74?
No. GSTAT Kolkata held that without proof of fraud or suppression, section 74 cannot be invoked.
What did the Supreme Court say in Tata Steel?
That foundational facts leading to an inference of fraud or suppression must be evident from the notice itself.
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This summary is based on the order of the GST Appellate Tribunal, Kolkata Bench (Court No. 1) in Appeal No. APL/24/KLK/2026. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.