Notices related to Assessments under GST

1. Introduction: Notice in general means “fact of observing or becoming aware of”. The act of paying attention to something warning of something, especially to allow preparations to be made. This is essentially the dictionary meaning. In legal terminology notice means information, usually in writing in all legal proceedings, of all documents filed, decisions, requests, motions, petitions, and upcoming dates. Notice is a vital principle of fairness and due process in legal procedure and must be given to both parties, to all those affected by a lawsuit or legal proceeding, to the opposing attorney and to the court. In short, neither a party nor the court can operate in secret, make private overtures or conceal actions. (quoted from legal dictionary). Under GST, notice to any person from the department means the recipient is expected to submit his reply and compliance. He may deny the allegations if any, made against him, he may seek further time to furnish reply, he may appear in person or through authorised representative as permitted under the law.

2. Show Cause Notice:

This is a popular term used under erstwhile central excise regime now travelled in to GST. There is no definition of either notice or show cause notice under section 2. The term show cause attached to notice only amplify its meaning and intent. Even simple notice intends to achieve the similar objective under GST. Notices are an important administrative tool in collection of taxes and to record the process in that direction. Issue of notice before proceeding against a person is the well-known procedure relied and time tested under law. No person can be held responsible unless he is given opportunity of being heard. Notices under GST are required to be issued by authorised officers as per authority laid down under jurisdictional powers. Certain forms are prescribed to standardise the procedure in the digital governance era. The replies in most of the cases are also to be in standard formats. Important notices related to assessments are discussed here.

♦ Notice to return defaulters under section 46

♦ Notice for provisional assessment under Section 60

♦ Notice of scrutiny of returns under section 61

♦ Notice of best judgement assessment under section 62.

♦ Notice of assessment of unregistered people’s section 63

♦ Notice of summary assessment under section 64

♦ Notices of assessment under section 73 and 74.

3. Notice to return defaulters under section 46 (rule 68):- 

GSTR-3A

Notice to defaulters under section

(No format)

Reply to notice/ file returns

♦  Notice to registered person

♦  For failure to file returns under S.39, S.44, S.45,

♦ 15 days’ time to file return

♦ To file returns and pay tax applicable

♦ If not complied with proceedings to continue under s. 62

4. Notice for provisional assessment under Section 60 (RULE 98) 

ASMT-01	Application for provisional assessment
ASMT-02	Notice seeking additional information for provisional assessment
ASMT-03	Reply Notice
ASMT-04	Order of provisional assessment.
ASMT-05	Furnishing of Security, bond for provisional assessment
ASMT-06	Clarification/ information regarding documents for final assessment.
ASMT-07	Final assessment order
ASMT-08	Application for withdrawal of security.
ASMT-09	Order for release of security of rejection of application.

♦  Payment of tax on a provisional basis as per in accordance with the provisions of sub section (1) of Section 60.

♦ Bond should be executed and security should be furnished, and the value of security should not be less than 25% of the amount covered in the Bond.

♦ The registered person will have to furnish additional information or documents in support of the request, as instructed by the proper officer.

♦ Final assessment will be part of proceedings.

5. Notice of scrutiny of returns under section 61: (RULE 99)

ASMT-10

Scrutiny notice regarding discrepancies in GST return

ASMT-11

Reply to notice

ASMT-12

Order of acceptance of reply

♦ Proper officer may scrutinise the returns filed.

♦ To inform any discrepancies to tax payer.

♦ In case the explanation from tax payer is found acceptable, no further action.

♦ In case no satisfactory explanation is furnished within a period of thirty days or extended period, proper officer may proceed under section 65 or section 66 (audit by authorities) or section 67 (inspection, search, seizure and arrest),or proceed to determine the tax and other dues under section 73 or section 74

6. Notice of Best Judgement assessment under section 62 (rule 100):

ASMT-13

Assessment for non-filing of return even after sending notice GSTR 3A

DRC-07

Summary to be uploaded.

♦ Assessment of registered persons for not filing of returns

♦ Time limit up to 5 years linked to annual return u/s 44.

♦ Action under 73 or 74 notwithstanding

♦ Filing of valid return (with tax, interest) bring closure of proceedings.

7. Notice of Assessment of unregistered persons’ section 63: (RULE 100) 

ASMT-14	Failing to obtain registration even though liable to do so, and directing to do so within 15 days.	ASMT-15	Assessment notice due to non-compliance of instructions in ASMT-14
DRC 01, DRC -01A* for reply	Summary of show cause notice, and communication of payment	DRC-04	Acknowledgement of payment.

*form DRC-01A has been introduced through notification 49/2019 dated 09.10.2019 

♦ where a taxable person fails to obtain registration.

♦ Time limit up to 5 years linked to annual return u/s 44.

♦ Action under 73 or 74 notwithstanding.

8. Notice of Summary assessment under section 64 (rule 100): 

ASMT-16	Assessment order under Section 64	ASMT-17	Application for withdrawal of assessment Order
DRC—07	Summary of Order	ASMT-18	Acceptance or rejection of application

♦  Summary assessment in certain special cases with permission from higher authorities

♦ to protect the interest of revenue and issue an assessment order,

♦ sufficient grounds to believe that any delay in doing so may adversely affect the interest of revenue

♦ Taxable person may respond in 30 days and may get the order withdrawn for sufficient reasons.

♦ follow the procedure laid down in section 73 or section 74

9. Notices under section 73 and 74: (RULE 100/142) 

DRC-01

Summary of notice

♦  Notice to be issued – separate Form number not specified under rule 142 only summary in DRC-01

♦ Time limit 3 years under 73 and 5 years under 74 linked to annual return u/s 44.

♦ Option to pay tax and concessions in penalty linked to time of compliance.

♦ Further adjudication may be opted by person liable.

10. General rules for service of notices and proceedings:

♦ Time limit specified in relevant provisions are mandatory.

♦ Short period is not valid

♦ Principles of natural justice to be guiding in procedures unless specified otherwise.

♦ Adjournments are to be permitted within the specified outer tile limit.

♦ Objective should be result oriented than rule oriented.

♦ A notice can be called by different names like show cause notice (SCN), scrutiny notice or the demand notices, depending upon each case.

♦ A taxpayer must promptly act or reply to notices within the time limit specified in such notice.

♦ Rule 142 of CGST Rules specify certain situations wherein notice and order for demand of amounts payable under the Act to be served in specified manner.

♦ Case laws under Central Excise and VAT on similar proceedings will be guiding factors on contentious issues. Cases under GST are yet to reach appellate forms and higher judiciary.

11. Mode of service of notice:

1) SECTION 169 OF THE CGST ACT, 2017–Notice or other communication under this Act or the rules made thereunder shall be served by any one of the following methods, namely:

MODE-1:- PHYSICAL DELIVERY:

By giving or tendering it directly or by a messenger including a courier-

 To the addressee or

 The taxable person or

 To his manager or

 Authorised representative or

An advocate or a tax practitioner holding authority to appear in the     proceedings on behalf of the taxable person or

To a person regularly employed by him in connection with the business, or

To any adult member of family residing with the taxable   person;

MODE-2:- DISPATCH DELIVERY:

By registered post or speed post or courier with acknowledgement due,

To the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or

MODE-3:- ELECTRONIC:

By sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or

By making it available on the common portal; or

MODE-4:- PRINT MEDIA:

By publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or

MODE-5:- AFFIXING/OTHER METHOD:

If none of the modes aforesaid is practicable-

By affixing it in some conspicuous place at his last known place of business or residence and If such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice.

2) Every notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided in sub-section (1).

3) When any notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved.

12. Authorities empowered under GST:

Notices may be issued only by proper officers. The jurisdiction and functions are allocated by notification empowered under section3 to section 6 of CGST. Similarly state GST/UTGST also empower issue of notification for jurisdiction. IGST section 3 and 4 specified that where in for administration of central/ state GST authorised officers are specified they are equally empowered to conduct proceedings. The hierarchy under CGST and state GST/UTGST may differ at some levels and ranks. However the notifications will specify and empower proper officers to carry out the duties under the Acts. Proper officer is defined under section 2(91) of CGST as “proper officer” in relation to any function to be performed underthis Act, means the Commissioner or the officer of the Central tax who is assigned that function by the Commissioner in the Board.

13. Section 3 : Officers under CGST Act, 2017

Section 3 of CGST Act, provides that the Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely: –

(a) Principal Chief Commissioners of Central Tax or Principal Directors General of Central Tax,

(b) Chief Commissioners of Central Tax or Directors General of Central Tax,

(c) Principal Commissioners of Central Tax or Principal Additional Directors General of Central Tax,

(d) Commissioners of Central Tax or Additional Directors General of Central Tax,

(e) Additional Commissioners of Central Tax or Additional Directors of Central Tax,

(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,

(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,

(h) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax, and

(i) any other class of officers as it may deem fit:

Provided that the officers appointed under the Central Excise Act, 1944 shall be deemed to be the officers appointed under the provisions of this Act.

14. Appointment of officers, section 4 of CGST Act,2017

Section 4 of CGST provides that in addition to officers specified under section 3, the Board may appoint such other persons as it may think fit to be the officers under the Act. Normally superintends and inspectors come under this category. Section 5 provides that Board may impose certain conditions and limitations in powers of officers. 5(3) provides that commissioner may subject to such conditions and limitations delegate his powers to other officers. Section 6(1) provides that the officers appointed under SGST/UTGST can be authorised to be proper officer under CGST. This will be subject to such terms and conditions. The authorisation are essential to ensure that taxes are assessed by one person and there should not be multiple assessments on same person.

15. State GST Act – Section 3 – Specified Officers under State GST Act

The state GST Act under section 3 specified following Officers under this Act.- The Government shall, by notification, appoint the following classes of officers for the purposes of this Act, namely:––

(a) Commissioner of State tax,

(b) Additional Commissioners of State tax,

(c) Joint Commissioners of State tax,

(d) Deputy Commissioners of State tax,

(e) Assistant Commissioners of State tax, and

 (f) any other class of officers as it may deem fit:

Provided that, the officers appointed under the  Value Added Tax Act,  shall be deemed to be the officers appointed under the provisions of this Act.

Notification 2/2017 dated 19-06-2017 was issued specifying the appointment and jurisdiction. Circular No.1/1/2017 dated 26-06-2017 laydown as to who are proper officers for specified functions under CGST. Circular No. 3/3/2017 – GST dated 05-07-2017 is another circular specifying the proper officer functions.

16. Who can appear before proper officer and other authorities:

a. Personal appearance in tax proceedings are generally not required unless so specified. Under CGST section 116 provide for appearance by authorised representative. Under section 116 (1) Any person who is entitled or required to appear before an officer appointed under this Act, or the Appellate Authority or the Appellate Tribunal in connection with any proceedings under this Act, may, otherwise than when required under this Act to appear personally for examination on oath or affirmation, subject to the other provisions of this section, appear by an authorised representative.

b. For the purposes of this Act, the expression “authorised representative”shall mean a person authorised by the person referred to in sub-section (1) to appear on his behalf, being—

(a) his relative or regular employee;

(b) an advocate

 (c) any chartered accountant, a cost accountant or a company secretary

(d) a retired officer of the Commercial Tax Department of any State Government or Union territory

(e) any person who has been authorised to act as a goods and services tax practitioner on behalf of the concerned registered person.

c. There are certain eligibility criteria for the professionals as set out     in the Act and rules. They relate to good conduct and of worthy nature to uphold the dignity of profession and conduct of civilised persons in general.

17. Conclusion: Issue of notice is essential part of assessment proceedings. Businessmen may be otherwise engaged in their growth pursuits. In large organisations there may be dedicated staff or department to attend GST matters. In small and medium units though the head of the organisation is legally responsible for compliance certain functionaries may do necessary compliance under GST, Notice serves the purpose of providing detailed information for fair assessment under GST.