Demand order under section 73 invalid for FY 2024-25 as statutory reach of provision does not extend to said period { C M Hydro Systems (P.) Ltd. vs. Assistant Commissioner of State Tax [2026] 191 taxmann.com 797 (Telangana)}
Facts:
The State Tax authorities issued a Show Cause Notice and passed a demand order against the petitioner under Section 73 of the CGST/TGST Act for FY 2024-25. The petitioner challenged the proceedings on the ground that Section 73 was not applicable to FY 2024-25, as the applicable statutory provision for the said period was Section 74A.
Issue:
Whether the authorities could initiate and conclude demand proceedings under Section 73 of the CGST/TGST Act for FY 2024-25, when the said provision was not applicable to that financial year.
Held:
The Telangana High Court held that Section 73 did not extend to FY 2024-25 and therefore, the initiation and conclusion of proceedings under the said provision were legally unsustainable. Accordingly, the demand order was set aside, with liberty to the authorities to initiate fresh proceedings in accordance with the applicable law.
