Kanha Handloom, a registered supplier located in Madhya Pradesh, has duly filed his monthly GST returns for the financial year 2024–25. During the…
CA Final · Indirect Tax Laws · MTP · January 2026
Kanha Handloom, a registered supplier located in Madhya Pradesh, has duly filed his monthly GST returns for the financial year 2024–25. During the scrutiny of its returns for the said financial year in August 2025, the proper officer noticed an inadvertent short payment of CGST and SGST totaling - 4,60,000 in the month of October 2024, on account of a bonafide error. Before issuance of the show cause notice by the proper officer, Kanha Handloom paid the tax of 1,00,000 (₹ 50,000 CGST and - 50,000 SGST) on the basis of its own ascertainment along with applicable interest and with penalty, if any, on 15th September 2025 and informed the proper officer in writing of such payment. Ascertain the last date by which show cause notice can be issued by the proper officer for the amount of tax short paid by Kanha Handloom.
Suggested Answer and Working Notes:
5. (a) The proper officer can issue a show cause notice within 42 months from the due date of furnishing the annual return for relevant financial year to which short payment relates to [Section 74A (2) of the CGST Act, 2017]. For the financial year 2024-25, the due date for furnishing the annual return is 31st December, 2025. Therefore, the last date by which show cause notice can be issued by the proper officer for the amount of tax short paid by Kanha Handloom is 30th June 2029. Further, section 74A stipulates the same limitation period for issuance of show cause notice whether the short payment is on account of fraud or on account of a bonafide error. Thus, answer will remain same if the short payment of tax is on account of fraud.
Topics: Demands and Recovery
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