Section 74 penalties require proven fraud, wilful misstatement or suppression, not mere return non-disclosure or audit payment.

Section 74 penalties require proven fraud, wilful misstatement or suppression, not mere return non-disclosure or audit payment.
Case-Laws
GST
Section 74(1) penalties for reverse-charge tax and input tax credit defaults require fraud, wilful misstatement, or suppression of facts causing the tax or credit lapse. Non-disclosure of supplies in returns, payment after audit verification, and accounting entries do not, without more, establish or disprove those conditions. Proper-officer satisfaction must rest on foundational facts rather than mechanical reliance on return discrepancies. Explanations for delayed reverse-charge payments and input tax credit not reversed on written-off vendor liabilities remain material to whether there was an intention to evade tax.
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