GST Notice & Order Issuance Deadline (Section 73/74/74A): Complete Compliance Guide for CAs & CFOs

Overview: GST Notice & Order Issuance Statute of Limitations

The CGST Act, 2017, prescribes strict timelines for the issuance of show-cause notices and assessment orders under Sections 73, 74, and 74A. As of October 2026, the last date to issue notices and orders for financial years FY 17-18 through FY 25-26 represents a critical compliance milestone for registered dealers, their chartered accountants, and chief financial officers. Missing this deadline extinguishes the assessing officer's statutory authority to proceed, rendering the department powerless to recover disputed tax demand.

Statutory Framework & Legal Background

The CGST Act, 2017, Sections 73, 74, and 74A establish the framework for assessment of tax, interest, and penalties:

• Section 73 (Default Assessment): Allows the Commissioner or proper officer to assess tax not paid within the prescribed timeline, without requiring a show-cause notice. The notice must be issued within 5 years from the date of filing of the return (or 3 years if no return is filed). Failure to issue the notice within this window bars further proceedings under this section.
• Section 74 (Best Judgment Assessment): Empowers officers to assess tax on the basis of best judgment where the taxable person fails to produce books of accounts, invoices, or relevant records during scrutiny. The show-cause notice must be issued within 5 years from the end of the month in which the return is filed. Non-issuance within this period makes the assessment void ab initio.
• Section 74A (Recovery of Tax Not Paid): Permits recovery of tax found not to have been paid, plus interest at 24% per annum from the date of supply or payment, whichever is later. The notice period also runs for 5 years from the end of the month following the filing of the relevant return.

Penalty & Consequence Framework: If an assessment is initiated after the statutory deadline, it is liable to be quashed on first appeal or revision, causing administrative waste and potential litigation costs. Additionally, wrongful/prolonged non-compliance invokes penalties under Section 122 (up to 10% of tax) and Section 123 (up to 25% of tax in cases of fraud or evasion). Interest accrual at 18% per annum compounds financial exposure for non-compliant dealers.

Scope of Expansion & Applicability Matrix

The deadline framework applies uniformly across all registered dealers under GST, irrespective of turnover, registration category (regular, composition, or casual), or industry sector. The critical dates are:

• FY 17-18: Last date to issue notice/order has already passed (5 years from end of FY 17-18 = September 2022). This window is now closed.
• FY 18-19: Last date approximately September 2023 (closed).
• FY 19-20: Last date approximately September 2024 (closed).
• FY 20-21: Last date approximately September 2025 (closed or imminent).
• FY 21-22 to FY 25-26: Deadlines range from September 2026 through September 2030, with the nearest cutoff for FY 21-22 falling in September 2026. Dealers and their advisors must track these dates meticulously to ensure no assessments are initiated post-deadline.

The statutory period begins from the end of the month following the return filing date, not the supply date. Returns filed late reset the clock from the date of actual filing, extending the assessing officer's authority correspondingly.

Step-by-Step Operational & ERP Workflow

For Assessing Officers (Tax Department Workflow):

1. Initiate Scrutiny: Select cases based on risk assessment, volume, or discrepancies flagged by the system. Cross-check GSTR-1 vs GSTR-2A mismatches, ITC reversals, or nil-filer patterns.
2. Issue Show-Cause Notice: Generate formal notice under Section 73/74/74A citing specific discrepancies, statutory violations, and requesting reply within 30 days. Ensure the notice is issued before the 5-year deadline; post-deadline issuance is statutorily void.
3. Grant Reply Period: Allow taxable person 30 days to furnish evidence, explain discrepancies, or pay disputed tax voluntarily.
4. Issue Assessment Order: Post review of reply, issue final assessment order confirming tax, interest, and penalty (if applicable). The order must also be issued within the prescribed 5-year window; many departments issue orders after the deadline, rendering them invalid.
5. Dispatch & Acknowledgment: Serve the order via registered post or email and maintain proof of service. The clock for filing appeal starts from the date of service.

For Taxpayer/CA Audit Workflow:

1. Maintain Records for 5 Years+: Retain GST returns (GSTR-1, 2, 3B), invoices, credit notes, payment proofs, and reconciliation statements for the entire period plus one year post-assessment window.
2. Monitor Compliance Calendar: Maintain a log of FY-wise return filing dates and calculate the corresponding deadline for notice issuance (end of the month following return filing + 5 years).
3. Respond to Scrutiny Notices Proactively: Upon receipt of a show-cause notice, immediately engage with the assessing officer, gather documentary evidence, and file a detailed reply within the prescribed 30 days. Delay or silence weakens the defense.
4. Appeal Post-Deadline Issuance: If a notice or order is issued after the 5-year deadline, file an appeal/revision challenging jurisdiction. Success rate is near-certain in such cases.

Previous Practice vs New Mandate Comparison Table

Action Plan Checklist for Finance & Audit Teams

Execute the following action items immediately to ensure statutory compliance and mitigate risk:

• ✔ Audit GST Records Archive: Verify that all GST returns, invoices, and payment proofs for FY 17-18 through FY 25-26 are physically or digitally archived with backup. Ensure no critical documents are destroyed or lost post-return filing date.
• ✔ Map FY-wise Deadline Inventory: Create a spreadsheet listing each financial year's return filing date, calculated 5-year deadline, and current status (notice received/pending/closed). Categorize by risk level (high-scrutiny sectors, high-value ITC claims, nil-filers).
• ✔ Monitor Assessing Officer Activity: Establish a monthly tracking system for show-cause notices issued by the tax department. Upon receipt, immediately flag the deadline for filing a reply (30 days) and escalate to the compliance officer.
• ✔ Prepare Statutory Defense Template: Draft a standard response template to show-cause notices citing specific Act sections, documentary evidence (GST-paid-to-supplier invoices, GSTR-2A reconciliation, payment confirmations), and rebuttals to discrepancies. Train the audit/finance team to populate and file within the 30-day window.
• ✔ Schedule Quarterly Deadline Review Meetings: Convene the CA, CFO, and compliance officer quarterly to review upcoming deadlines (next 6 months), pending assessments, and litigation status. Update the board audit committee on material exposure exceeding a threshold (e.g., ₹25 lakhs per year).

Key Takeaways & Risk Mitigation

The 5-year notice issuance deadline under Sections 73, 74, and 74A is an immutable statutory boundary. Assessing officers cannot extend or waive this period; post-deadline notices are automatically invalid. Dealers and their professional advisors must maintain a meticulous compliance calendar, respond to scrutiny notices within 30 days, and challenge any assessments initiated beyond the deadline. Non-compliance or administrative oversight can result in prolonged litigation, interest accrual, and unnecessary penalty exposure. Engage your CA firm at the earliest sign of scrutiny to maximize your statutory defenses and ensure timely closure of assessments before finality provisions are lost.