Assessment Notice Under Omitted Section 74 For FY 2024-25 Is Defective and Requires Fresh Notice Under Section 74A

By | August 11, 2026
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Assessment Notice Under Omitted Section 74 For FY 2024-25 Is Defective and Requires Fresh Notice Under Section 74A

Issue

Whether an assessment notice issued under Section 74 for FY 2024-25 is legally unsustainable due to the omission of Sections 73/74 and mandatory applicability of Section 74A, and whether such defect constitutes a total lack of jurisdiction or a procedural error of invoking the wrong provision.

Facts

  • Period of Dispute: The matter pertains to Assessment Year/Financial Year 2024-25.
  • Issuance of SCN: The Revenue issued a Show Cause Notice (SCN) invoking Section 74 of the CGST/TNGST Act, 2017 to make an assessment against the assessee.
  • Statutory Amendment: For FY 2024-25 onwards, Sections 73 and 74 were omitted from the Act and replaced by the single, unified provision of Section 74A.
  • Single Judge Ruling: The assessee challenged the assessment via a writ petition. The Single Judge held that Sections 73 and 74 had been omitted, ruled that the notice under Section 74 was without jurisdiction, and directed the Revenue to issue a fresh notice under Section 74A.
  • Writ Appeal by Revenue: The Revenue filed a writ appeal challenging the Single Judge’s observation regarding “want of jurisdiction.”

Decision

  • Applicability of Section 74A Confirmed: The Division Bench affirmed that Sections 73 and 74 were wiped out for FY 2024-25, leaving Section 74A as the sole applicable provision.
  • Clarification on Jurisdiction: The Court held that the Single Judge’s observation of “want of jurisdiction” was incorrect, as the assessing authority possessed statutory power, but committed a defect by invoking an incorrect/omitted statutory provision.
  • Direction for Fresh Proceedings: The direction to initiate fresh proceedings under Section 74A following due process was sustained, and the writ appeal was disposed of with instructions to issue a fresh notice under Section 74A.

Key Takeaways

  • Exclusivity of Section 74A for FY 2024-25 Onwards: Tax authorities must issue show cause notices exclusively under Section 74A for disputes pertaining to FY 2024-25 and subsequent periods.
  • Distinction Between Lack of Jurisdiction and Defective Notice: Invoking an omitted or wrong section does not automatically denote a complete lack of inherent jurisdiction; rather, it constitutes a curable procedural/statutory defect requiring fresh issuance under the correct provision.
  • Mandatory Fresh Notice: An assessment founded on an SCN issued under an omitted provision cannot be sustained and must be re-initiated via a fresh notice under the prevailing legal framework.
HIGH COURT OF MADRAS
Assistant Commissioner of CGST and Central Excise
v.
Baskar Selvakumar
C.V. Karthikeyan and A.R. Sakthivel, JJ.
WA(MD) No. 622 of 2026
JULY  7, 2026
R. Gowrishankar for the Petitioner. S. Renganathan for the Respondent.
ORDER
C.V. Karthikeyan J.- The Writ Appeal had been filed by the Revenue Officials /respondents in Baskar Selvakumar v. Assistant Commissioner of CGST and Central Excise [W.P.(MD) No.2625 of 2026, dated 03.02.2026] aggrieved by the order of the learned Single Judge, dated 03.02.2026.
2 .The said writ petition had been filed by the assessee challenging an order dated 24.11.2025 relating to the financial year 2024 -25 /assessment year 2025-26 for which the revenue had issued a show cause notice under Section 74 of the Goods and Service Tax Act. Thereafter, the impugned assessment order had also been passed.
3 .The main grievance raised in the writ petition was that provisions under Sections 73 & 74 of the GST Act stood repealed on and from the financial year 2024-25 and section 74 -A had been introduced, therefore it had been contented that any notice should have been issued only under Section 74 -A and not under the redundant provision, Section 74.
4 .As a fact, Sections 73 and 74 have been wiped out away from the statute book on and from the financial year 2024 – 25 and only Section 74-A had been introduced. The learned Single Judge on that ground has therefore directed that fresh notice to be issued under Section 74-A and the procedure thereof to be followed. However, he had opined that the notice issued under Section 74 had been issued “without any jurisdiction”. In our constrained opinion, this may not be the proper position. The notice had been issued under a wrong provision of law which has to be corrected. We have not examined the jurisdiction aspect of the Officer who issued the notice.
5 .With that clarification, this writ appeal stands disposed of by directing the appellant /Revenue Officials to follow the procedure as enunciated under Section 74-A of the GST Act and issue fresh notice following due procedure for the financial year 2024 – 2025. Consequently, connected miscellaneous petition is closed. There shall be no order as to costs.