#Section 74 CGST Act

The Andhra Pradesh High Court has ruled that where ineligible Input Tax Credit was availed but not utilized, the tax authorities cannot impose interest under Section 50(3) or penalty under Section 74 of the CGST Act. This clarifies that mere availing of ineligible ITC, without actual benefit or misuse, does not trigger punitive liability - a critical safeguard for businesses facing retrospective tax demands.

Bombay High Court rules that GST authorities cannot initiate proceedings under Section 74 CGST Act against a company that ceased to exist post-amalgamation. The judgment clarifies that Section 87 CGST Act does not empower tax authorities to pursue demands against successor entities, quashing a Rs. 42.65 crore demand and reinforcing corporate legal continuity principles.