W.e.f. 15.10.2020 issuance of pre-SCN intimation is optional. Rule 142(1A) of the Central Goods and Services Tax, Rules, 2017 (CGST Rules, 2017) was substituted for ‘proper office shall’ vide notification No. 79 of 2020-Central Tax, dated 15.10.2020 w.e.f. 15.10.2020. Before the aforesaid amendment, the same was mandatory. The latest and updated Rule 142(1A) of the CGST Rules, 2017 is as under-
“(1A) The ‘proper officer may’, before service of notice to the person chargeable with tax, interest and penalty, under sub-section (1) of Section 73 or sub-section (1) Section 74, as the case may be, communicate the details of any tax, interest and penalty as ascertained by the said officer, in PART A of FORM GST DRC-01A.”
Now, it clear that w.e.f. 15.10.2020 issuance of pre-SCN intimation is optional and before the aforesaid amendment, it was mandatory. Thus, post amendment, the issuance of intimation under Rule 142(1A) is not mandatory, but discretionary on the part of the assessing authority
The Andhra Pradesh High Court (HC) in New Morning Star Travels Vs Deputy Commissioner (ST) (Andhra Pradesh High Court) [writ petition No. 12850/2022 date 12/10/2023] has held that intimation under GST Demand and Recovery Form (DRC) 01A should mandatorily be issued before issuing a SCN when the tax period pertinently covers the period during which it was a mandatory requirement. Initially, in terms of Rule 142(1A) of the CGST Rules, 2017, it was mandatory to communicate the details of the tax penalty as ascertained by the Proper Officer in GST DRC 01A. The requirement was made discretionary w.e.f. 15 October 2020 by amendment in the provision.
The Andhra Pradesh High Court (HC) further held that ‘it is a trite law that whenever any ambiguity arises with regard to any provision, the benefit must go to the tax payer. In the instant case, since admittedly the tax period related to 01.07.2017 to 31.03.2021 which covers the pre and post amended period of Rule 142(1A), in our considered view, the 1st respondent ought to have issued tax intimation to the petitioner under Rule 142 (1A). Since it was not done, as rightly argued by the learned counsel for the petitioner, the assessment order, dated 31.03.2022, fell foul of law and is liable to be set aside.’
Conclusion: The transition from mandatory to optional issuance of pre-SCN intimation in GST entails significant implications for taxpayers and authorities alike. While the amendment grants flexibility to the assessing authority, it also raises questions about compliance and legal obligations. The ruling of the Andhra Pradesh High Court serves as a reminder of the importance of clarity and adherence to procedural requirements. Understanding these nuances is crucial for navigating the evolving landscape of GST regulations effectively.
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