Section 75 sets the ground rules for every demand under sections 73, 74 and 74A: how time limits are computed, what happens when a fraud allegation fails, the right to be heard, the limits of the order, and when proceedings lapse.
Key points
- Under section 75(1) of the CGST Act, 2017 any period during which a court or the Tribunal stays the notice or order is excluded from the time limits.
- If an appellate authority or court finds that fraud or suppression is not established, the tax is redetermined as if under section 73 (section 75(2)); under section 74A only the lower penalty survives (section 75(2A)).
- An opportunity of hearing must be granted where the person asks for it in writing or where an adverse decision is contemplated (section 75(4)); the Allahabad High Court has repeatedly held that a personal hearing is mandatory in the second case even without a request.
- No more than three adjournments may be granted (section 75(5)); the order must set out the facts and basis (section 75(6)) and cannot exceed the amount or go beyond the grounds in the notice (section 75(7)).
- If the order is not issued within the time limit, the proceedings are deemed concluded (section 75(10)).
- Self-assessed tax shown in a return, or in GSTR-1, but not paid is recovered directly under section 79 without a notice (section 75(12)).
The provisions
75(1)–(3)Stay; failed fraud charge; remand orders
Statutory text
(1) Where the service of notice or issuance of order is stayed by an order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74 2[or sub-sections (2) and (7) of section 74A], as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73.
2[(2A) Where any Appellate Authority or Appellate Tribunal or court concludes that the penalty under clause (ii) of sub-section (5) of section 74A is not sustainable for the reason that the charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the penalty shall be payable by such person, under clause (i) of sub-section (5) of section 74A.]
(3) Where any order is required to be issued in pursuance of the direction of the Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two years from the date of communication of the said direction.
*Enforced w.e.f. 1st July, 2017.
2. Inserted by section 139 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024.
75(4)–(9)Hearing, adjournments, reasons, limits of the order
Statutory text
(4) An opportunity of hearing shall be granted where a request is received in writing from the person chargeable with tax or penalty, or where any adverse decision is contemplated against such person.
(5) The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant time to the said person and adjourn the hearing for reasons to be recorded in writing:
Provided that no such adjournment shall be granted for more than three times to a person during the proceedings.
(6) The proper officer, in his order, shall set out the relevant facts and the basis of his decision.
(7) The amount of tax, interest and penalty demanded in the order shall not be in excess of the amount specified in the notice and no demand shall be confirmed on the grounds other than the grounds specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court modifies the amount of tax determined by the proper officer, the amount of interest and penalty shall stand modified accordingly, taking into account the amount of tax so modified.
(9) The interest on the tax short paid or not paid shall be payable whether or not specified in the order determining the tax liability.
What it means
The hearing requirement is disjunctive: a written request, or a contemplated adverse decision, each triggers it. The Allahabad High Court has quashed orders passed without a personal hearing even where the taxpayer had not asked for one (Bharat Mint and Allied Chemicals, 2022; K.J. Enterprises, 01.02.2024; Eveready Industries, 31.05.2024).
The order cannot confirm a demand larger than, or on grounds different from, the notice (sub-section (7)). Interest follows the tax whether or not the order mentions it (sub-section (9)), and an appellate change in tax changes interest and penalty with it (sub-section (8)).
75(10)–(13)Deemed conclusion; self-assessed tax; one penalty
Statutory text
3[(10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued within the period specified in sub-section (10) of section 73 or in sub-section (10) of section 74 or in sub-section (7) of section 74A.]
(11) An issue on which the Appellate Authority or the Appellate Tribunal or the High Court has given its decision which is prejudicial to the interest of revenue in some other proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme Court against such decision of the Appellate Authority or the Appellate Tribunal or the High Court is pending, the period spent between the date of the decision of the Appellate Authority and that of the Appellate Tribunal or the date of decision of the Appellate Tribunal and that of the High Court or the date of the decision of the High Court and that of the Supreme Court shall be excluded in computing the period referred to in subsection (10) of section 73 or sub-section (10) of section 74 2[or sub-sections (2) and (7) of section 74A] where proceedings are initiated by way of issue of a show cause notice under the said sections.
(12) Notwithstanding anything contained in section 73 or section 74 2[or section 74A], where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.
1[Explanation.-For the purposes of this sub-section, the expression "self-assessed tax" shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.]
(13) Where any penalty is imposed under section 73 or section 742[or section 74A], no penalty for the same act or omission shall be imposed on the same person under any other provision of this Act.
3. Substituted by section 139 of The Finance Act (No. 2) Act, 2024 No. 15 of 2024 dated 16.08.2024 for "The adjudication proceedings shall be deemed to be concluded, if the order is not issued within three years as provided for in sub-section (10) of section 73 or within five years as provided for in sub-section (10) of section 74."
1. Inserted (w.e.f. 1st January, 2022 vide Notification No. 39/2021-C.T., dated 21st December, 2021) by s. 114 of The Finance Act, 2021 (No. 13 of 2021) dated 28th March, 2021.
What it means
Sub-section (10), as substituted from 01.11.2024, ends proceedings if the order is not issued within the time in section 73(10), 74(10) or 74A(7). Time spent while the same issue is pending in a higher forum in another case is excluded (sub-section (11)).
Sub-section (12) allows direct recovery under section 79 of self-assessed tax that is unpaid — from 01.01.2022 including tax shown in GSTR-1 but not in GSTR-3B (Explanation). The amount is intimated in Form DRC-01D (Rule 142B). A difference between GSTR-1 and GSTR-3B is first communicated under Rule 88C for explanation. Once penalty is imposed under section 73, 74 or 74A, no other penalty may be imposed for the same act (sub-section (13)).
Statutory text as published on the CBIC tax information portal, as on 03.10.2026; the numbered notes record each amendment. Official source
Common questions
- Is a personal hearing mandatory before a GST demand order?
- Yes, where the taxpayer requests it in writing or an adverse decision is contemplated (section 75(4) CGST). High Courts have set aside orders passed without a hearing even where none was requested.
- What happens if a GST demand order is not passed in time?
- The proceedings are deemed concluded under section 75(10) of the CGST Act.
Commentary and case notes checked against the judgments and CBIC sources on 04.10.2026.
What it means
Where a section 74 notice fails because fraud is not established, the tax is redetermined under section 73 — so the section 73 time limit and lower penalty apply to the part within that limit. Section 75(2A), from 01.11.2024, does the same for section 74A by limiting the penalty to 10% (or Rs. 10,000). An order to be passed on remand must issue within two years of the direction (sub-section (3)).