Nayan Jain (Jarak)

“Lex Non Cogit Ad impossibilia”:- Law does not compel the doing of impossibilities

In this article an attempt has been made to collate some of the best practices to examine Show Cause Notice. Illustrative list are as under:-

1. Show Cause Notice should be in writing (not oral).

2. Date of issue of Show Cause Notice should be clearly written in the SCN and kindly note the date of receiving the SCN, by which mode & whom received.

3. Check the whether the DIN is mentioned in the show cause notice or not?

4. Check the details of taxpayer to whom the Show Cause Notice is meant for.

Checklist to Examine Show Cause Notice

5. Check the provision of law (section) in which the SCN is issued is it permissible or not? Make a note of specific provisions of the Act, Rules, circulars, notifications and case laws referred to in the SCN

6. Check whether the SCN is issued under prescribed time limit as per the provisions of law and if invoking extended period of limitations then it should have adequate basis for invoking the extended period not on the their belief and the SCN should clearly provide the factors.

7. Check the permissible mode of service of Show Cause Notice whether it will be issued under permissible law or not?

8. Check whether the adjudicating authority who issued the SCN is deriving the powers of adjudication under the provisions of law. It should be important in the law that show cause notice should be issued by the person who got the powers and in case if it is based on delegation then the delegation should be checked whether the law permits the same or not?

9. Check the period of allegation relates which should be clearly specified in the SCN.

10. Check all relevant facts and circumstances ascertained in the show cause notice and the allegations mentioned in the notice.

11. Check whether the SCN should be clear on facts and legal provisions and the violation of the provisions of law should be clearly written in the Show Cause Notice

12. Check whether the Show Cause Notice should be specific and unambiguous.

13. Check whether the charges mentioned in the SCN should not be vague/or contradictory.

14. Check whether the case mentioned in the notice is already adjudicated by other authority or in process or parallel proceedings

15. Check whether the provisions for imposing penalty and reasons and conclusion for the same are clearly mentioned in the SCN or not?

16. Check whether the SCN is accompanied by all the relied documents or not? [Hon’ble Supreme Court in the case of Sahi Ram vs. Avtar Singh 1999 (4) SCC)]

17. Check the copies of all relied upon documents as per the references made in the Show Cause Notice. Check whether the duty amount is quantified or not in the SCN and how the same was arrived at. The duty demanded should be manifestly specified in the notice itself.

18. Check the time limit to reply the SCN and it should be adhered to.

19. Check the consequences of ignoring the Show cause Notice whether it is mentioned in the SCN or not?

20. Check whether the principal of natural justice i.e opportunity of being heard is given in the SCN or not?

21. Reply of the SCN should be answerable to the authority and postal address mentioned in the SCN and reply should be sent by RPAD.

22. Check whether the noticee(s) wishes to be heard in person, apart from filing a written representation, in the matter.

23. Check whether the assessee needs to be present in personal or can authorized representative can go with the power of attorney

24. When mis-statement or suppression of facts is alleged in the Show Cause Notice, these expressions must be preceded by the word ‘willful’. Likewise, when the allegation is that of contravention of the provisions of the Act or the rules, the same must be followed by the expression ‘with intent to evade payment of duty’.

25. Drafting of response to the Show Cause Notice should be specific with respect to the provision of law (contention made) and against the allegation made counter-wise.

26. Check the eligible mode of reply to the SCN, Online/Physical etc.

27. It would be more better if the reply to the SCN is supported by the judicial pronouncement

28. While replying the SCN it should be kept in mind that “CIRCULARS ARE BINDING ON THE DEPARTMENT NOT TAXPAYERS”

29. No demand should be issued under a simple letter. A regular Show Cause Notice, duly signed by the proper officer, should be issued for demand of duty. The Hon’ble Supreme Court in their Order dated 22.11.2002 in the case of Metal Forgings Vs Union of India reported in 2002 (146) E.L.T. 241(SC) (2 Judge bench) has held that the Show Cause Notice is a mandatory requirement for raising demand and communications, order, suggestions or advices from department not to be deemed to be a Show Cause Notice and a specific Show Cause Notice indicating the amount demanded and calling upon the assessee to show cause is necessary


With the deliberations made above, it is humbly submitted that there can be many other aspects which may have possibly been left out from the above. Hence, the readers should not restrict themselves to the contents deliberated above. They should definitely aim to further improve upon keeping this as a base content.


DISCLAIMER:- (Note: Information compiled above is based on my understanding and review. Any suggestions to improve above information are welcome with folded hands, with appreciation in advance. All readers are requested to form their considered views based on their own study before deciding conclusively in the matter. Team GSTCORNOR® & Author disclaim all liability in respect to actions taken or not taken based on any or all the contents of this article to the fullest extent permitted by law. Do not act or refrain from acting upon this information without seeking professional legal counsel.)

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November 2022