Goods and Services Tax (GST) framework in India, established under the CGST Act, 2017, mandates specific procedures for taxpayers to appeal against demands raised under Section 74. This provision primarily deals with cases involving tax evasion, fraud, or suppression of facts. Filing an appeal under Section 74 requires meticulous attention to procedural compliance, including submitting necessary documents, presenting facts accurately, and addressing the grounds of dispute. In this context, the draft format for GST appeals provides a structured template for taxpayers to present their grievances effectively before the Commissioner of Goods and Services Tax. The format covers essential sections like the Statement of Facts, Grounds of Appeal, and Prayer, enabling taxpayers to highlight procedural lapses, jurisdictional errors, or substantive legal issues in the orders passed by tax authorities. This draft, specifically tailored for a case involving a disputed demand under Section 74, serves as a guide to ensure clarity, accuracy, and legal compliance in presenting appeals. It also underscores the importance of adhering to principles of natural justice and procedural fairness, critical for upholding the integrity of the GST appellate mechanism.
Draft Format of GST Appeal Under Section 74 of CGST Act 2017
BEFORE THE HON’BLE COMMISSIONER OF GOODS AND SERVICES TAX, DELHI
In the matter of :
ABC Petitioner
Vs
Assistant Commissioner Respondent
Delhi North,
Delhi Goods And Services Tax
Statement of Facts
1. The Petitioner has been engaged in business under the name and style of M/s ABC for several years, operating from the registered address at Office …………………….. , Delhi – 110001. The Petitioner is a compliant registered taxpayer dealing primarily in ………………………….
2. On 24.07.2024, the Petitioner received Form GST DRC–01 issued under Section 74 of the CGST/DGST Act, 2017 from the Delhi GST Office. The notice demanded CGST of ₹490,014/-, SGST of ₹490,014/-, and an equivalent amount of interest, totaling ₹19,43,438/-. The notice was unsigned and failed to specify the discrepancies noted by the Respondent.
3. The Show Cause Notice (SCN) and the subsequent order did not refer to any supporting documents, nor were such documents provided to the Petitioner at any stage.
4. The Petitioner duly filed a reply on 10.10.2024 through the GST portal. However, the Respondent disregarded the reply and proceeded to pass a final order on 07.02.2025—unsigned—demanding ₹980,028/- as tax, ₹980,028/- as interest, and a relevant penalty under CGST and SGST. The order was issued purely on assumptions without proper reasoning or application of mind.
5. The impugned order states: “PH dated 12.12.2024, 26.12.2024, and 10.01.2025 were granted to the notices as mentioned in the Table for providing them opportunities for personal hearing. ………………………………… Therefore, I am compelled to decide the case ex-parte for such unresponsive notices.”
In reality, the Petitioner had submitted all required documents on the said dates, which were ignored. This clearly indicates a mechanical approach by the Respondent without due consideration of facts.
6. The Form DRC-01 and DRC-07 reflected different amounts. The impugned order is vague, cryptic, and non-speaking, as it fails to clarify the basis for the tax, interest, and penalty imposed under the DGST Act, 2017. The Respondent has failed to substantiate how the revised liability of ₹23,40,609/- was determined.
7. The Petitioner was previously assessed on the same issue concerning a canceled dealer by the SGST department for FY 2017-18. The matter was adjudicated and ultimately dropped after due legal process. Despite this, the Respondent has reinitiated proceedings under Section 74 for the same issue, despite it having been adjudicated by another officer from the same GST department.
8. The following crucial details and documents were never provided to the Petitioner:
- Statement of Supplier 1, alleged to be non-existent.
- GSTI report declaring Supplier 1 as non-existent.
- Details of actions taken against Supplier 1, including recovery status, copies of notices issued, and any orders passed.
- Similar documents related to Supplier 2.
- Certified copies of relevant records, despite requests made.
- No opportunity for confrontation was granted to the Petitioner regarding the alleged transactions between Supplier 1 and the Petitioner.
- No evidence of fraud has been provided, even though the Petitioner possesses valid legal documents as per Section 16 of the CGST Act, 2017.
- Incorrect DIN Number on the order, which does not correspond to the Petitioner upon verification on the CBIC portal, rendering the order invalid.
9. That the order was issued on 07.02.2025 which was time barred on 05.02.2025 and the same was to be uploaded on the GST Portal by 05.02.2025 as per Rule 142 of the CGST Rules, 2017.
10. That the Certificate u/s 145 of the CGST Act, 2017 read with Section 65B of the Indian Evidence Act, 1872 which lays down the conditions for admitting the electronic evidence was not provided for the statement and other documents on which the respondent had relied upon.
Grounds of Appeal
1. The impugned order is void ab initio, having been passed on mere conjectures and assumptions without legal merit.
2. The demand of ₹490,014/- each under CGST and SGST was issued by the Assistant Commissioner, despite being below the ₹10 lakh threshold, which falls under the jurisdiction of the Superintendent as per Circular No. 31/05/2018-GST dated 09.02.2018. Hence, the order is without jurisdiction and legally unsustainable.
3. The order, issued on 07.02.2025, is time-barred, as the prescribed limitation expired on 05.02.2025. This violates Rule 142 of the CGST Rules, 2017, rendering the order liable to be quashed.
4. The Petitioner’s reply was not considered, demonstrating a failure to apply due diligence before passing the impugned order.
5. The order lacks specific reasoning for the tax, interest, and penalty imposed, making it arbitrary and legally unsustainable.
6. The SCN and order were unsigned, raising concerns about their validity, accuracy, and authenticity.
7. The Respondent failed to provide the relied-upon documents, violating the Principles of Natural Justice, making the entire proceeding unlawful.
8. The Respondent was uncertain whether the Petitioner availed the alleged Input Tax Credit (ITC) and lacked direct evidence of ITC availment.
9. The incorrect DIN number renders the order legally defective, violating Circular No. 128/47/2019-GST dated 23.12.2019, making it void.
10. That the Certificate in terms Section 145 of the CGST Act, 2017 read with Section 65B of Indian Evidence Act, 1872 has also not been annexed with the notice and order and therefore, the order and notice has no validity, integrity and accuracy in the eyes of law.
11. The order states the Petitioner’s firm is “non-existent” but fails to specify that it is non-functional, which does not justify fraud allegations.
12. The Personal Hearing (PH) was availed, and supporting documents were submitted, but they were not considered, making the order legally unsustainable.
13. The SCN and order included multiple noticees, making it impossible to determine the specific allegations against the Petitioner, violating fundamental legal principles.
14. The Respondent violated the Doctrine of Unjust Enrichment by penalizing Supplier-1, Supplier-2, and the Petitioner for the same transaction, resulting in multiple punishments for a single issue.
15. The Petitioner had already been assessed under Section 73 for the same matter, yet the CGST department reinitiated proceedings, violating Section 6(2)(B) of the CGST Act and the Principle of Res Judicata. This issue has already been decided in:
- Canon India Ltd. vs. Commissioner of Customs (2021 SCC Online SC 2000)
- RBL Bank vs. Commissioner of GST
- Kay Pan Fragrance Pvt. Ltd. vs. State of UP
16. The non-provision of certified copies, signed statements, and GSTI reports demonstrates that the Respondent lacked substantive evidence and acted mechanically.
17. The Petitioner reserves the right to amend, modify, or forego any ground of appeal at any stage.
Prayer
In light of the above facts and circumstances, the Petitioner respectfully prays that this Hon’ble Authority:
1. Set aside the impugned demand order dated 07.02.2025 and direct the Respondent to refund the pre-deposit of 10% of tax with interest, OR
2. Pass any other order as may be deemed fit and proper in the interest of justice.
Place: Delhi
Dated: 18.03.2025
(Petitioner)
Enclosures :-
1. Legal Sections, Rules Quoted
2. Notifications and Circulars
3. Complete Judgements
4. DRC-01 and DRC-07
5. APL-01
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