CBI clarifies: Original adjudicating officer to re-determine GST demand under Section 75(2)

CBI clarifies: Original adjudicating officer to re-determine GST demand under Section 75(2)

A long-standing confusion in GST disputes has finally been cleared. The government has made it clear who should handle cases when a tax demand raised under Section 74 (fraud, suppression, or misstatement) is later converted into a Section 73 case (normal cases without fraud) after an order from a higher court or appellate authority.

This clarification brings relief to taxpayers and ensures smooth handling of such cases without delays or jurisdictional issues.

The key clarification

The Central Board of Indirect Taxes and Customs (CBIC), through Circular No. 254/11/2025-GST dated October 27, 2025, has confirmed that the same officer who originally decided the case under Section 74 will also be the Proper Officer to re-decide it under Section 73.

For example, if a Joint Commissioner passed the original order under Section 74, then that same officer (or the officer currently holding that post) will handle the case again under Section 73.

Why was this needed?

Earlier, there was confusion about whether the case should go to a lower-level officer since Section 73 usually involves smaller penalties, or stay with the officer who handled the original Section 74 case. This led to transfers, delays, and uncertainty for taxpayers.

With this clarification, the jurisdiction stays fixed with the original adjudicating officer, making the process simpler and more predictable.

Why this is a game-changer

• No more confusion: Taxpayers and officers know exactly who will handle the case.
• Consistency maintained: The officer who first dealt with the case continues, even if the penalty reduces under Section 73.
• Faster compliance: When courts or tribunals send cases back, they go straight to the same officer, helping meet the strict two-year deadline under Section 75(3).

What taxpayers should keep in mind

• Challenge Section 74 notices: If there is no proof of fraud or intent to evade tax, contest the use of Section 74. Winning this point can shift your case to Section 73.
• Lower penalties under Section 73: Once converted, the penalty is 10% of tax or ₹10,000 (whichever is higher), compared to 100% under Section 74.
• Watch the timeline: Re-determination under Section 73 must be completed within two years from the date the appellate order is communicated.

Final takeaway

This move by the CBIC simplifies GST procedures. It ensures taxpayers do not face jurisdictional confusion and that cases are handled quickly and fairly. It strengthens administrative clarity and builds confidence in the GST framework.

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