Introduction: Ensuring the validity of served Show Cause Notices and Orders is imperative in the realm of tax compliance. This article delves into the significance of scrutinizing these documents, shedding light on crucial aspects of the CGST Act, 2017:
Why need to check validity of the served Show Cause Notice, Order:
1. Improper service of any notice, order or communication should be questioned at very first stage of adjudication to prove invalidity of Assessment proceedings.
2. Assessment proceedings shall not be considered as invalid if:
- Assesssee has already been acted on the said notice, order or communication, or
- Service has not been called in question at or in the earlier proceedings commenced, continued or finalized in respect of said notice, order or communication.
3. Legal Provision: Section 160(2) of CGST Act,2017.
Main Body:
A. Time limit within which Show Cause Notice is required to be issued: –
For Matters related to Section 73: Matters related to other than fraud or any willful misstatement or suppression of facts.
1. Show Cause Notice under section 73 shall be issued at least three months prior to the time limit specified for issuance of order.
2. That proper office shall require to issue order under section 73 within three years from the due date of furnishing annual return for the said related financial year or within three years from the date of erroneous refund.
3. That while for the Financial Year 2018-19 and 2019-20, time limit for issue an order with respect to show cause notice under section 73 has been fixed as undermentioned vide Notification No. 56/2023- Central Tax dated 28-12-2023.
| Financial Year | Time Limit to issue Order | Time Limit to issue Show Cause Notice |
| 2018-19 | 30.04.2024 | 31.01.2024 |
| 2019-20 | 31.08.2024 | 31.05.2024 |
4. Legal Provision:
- Section 73(2)
- Section 73(10)
For Matters related to Section 74: Matters related to fraud or any willful misstatement or suppression of facts
1. Show Cause Notice under section 74 shall be issued at least six months prior to the time limit specified for issuance of order.
2. That proper office shall require to issue order under section 74 within five years from the due date of furnishing annual return for the said related financial year or within three years from the date of erroneous refund.
3. Legal Provision:
- Section 74(2)
- Section 74(10)
B. Authenticity of issued notices, order or certificates: –
1. As per Rule 26(3), all notices, certificates and order shall be issued electronically through:
- Digital signature certificate, or
- Through e-signature as specified under the provision of the Information Technology Act,2000 (21 of 2000), or
- Any other mode of signature or verification as notified by the Board.
2. Case Laws Reference:
C. Show Cause Notice and Order should be issued along with Summary thereof in Form DRC-01 and DRC-07 respectively:
1. As per Rule 142(1)(a), it is mandatory for the proper officer to serve summary of notice electronically in Form GST DRC-01 along with Notice.
2. As per Rule 142(5), summary of order shall be uploaded electronically in FORM GST DRC-07 specified therein the amount of tax, interest and penalty.
3. Case Law Reference:
- M/s Shyam Baba Edible Oil vs Chief Commissioner in W.P. No. 16131 of 2020 dated 19/11/2020.
- Shri Tyres vs State Tax Officer (Madras High Court) in W.P. No. 19756 of 2021 dated 21/09/2021.
D. Generation and Mentioning of Document Identification Number (DIN):
1. The board vide Circular No. 122/41/2019-GST directs that no search authorization, summons, arrest memo, inspection notices and letters issued in the course of any enquiry shall be issued by any officer under the Board to a taxpayer or any other person, on or after the 8th day of November, 2019 without a computer-generated Document Identification Number (DIN) being duly quoted prominently in the body of such communication.
2. Therefore, it is mandatory for officials to quote DIN No. in each communication.
E. Order should be aligned with Show Cause Notice: –
As per Section75(7) of CGST Act, 2017:
- 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 ground other than ground specified in the notice.
F. Opportunity of being heard:
As per Section75(4) of CGST Act, 2017, opportunity of hearing shall be granted as mentioned:
- Where the request is received in writing from the person chargeable with tax or penalty, or
- Where any adverse decision is contemplated against such person.
G. Non- Speaking Order:
1. As per Section75(6) of CGST Act, 2017, order issued by the proper officer shall set out the relevant facts and basis of his decision.
2. That order issued should be speaking order which contains the ground to levy Tax, Interest and Penalty.
Conclusion:
Validating Show Cause Notices and Orders is a critical step in the compliance journey under the CGST Act, 2017. From time limits and legal provisions to authenticity and alignment, understanding these nuances ensures a robust approach to tax-related proceedings. This comprehensive analysis serves as a guide for businesses and professionals navigating the intricate landscape of taxation, promoting transparency and adherence to statutory norms.
Author Bio
There is a typographical error under Point A,
In case of – “For Matters related to Section 74: Matters related to fraud or any willful misstatement or suppression of facts” .
Errored Part:
2. That proper office shall require to issue order under section 74 within five years from the due date of furnishing annual return for the said related financial year or within three years from the date of erroneous refund.
Rectified Part:
2. That proper office shall require to issue order under section 74 within five years from the due date of furnishing annual return for the said related financial year or within five years from the date of erroneous refund.
Thank You for nice article