1. Introduction
Under the GST regime, issuance of notices no longer exhibits the early unpredictability of the initial years. With data-driven compliance mechanisms, notices have become more precise — but the stakes remain high.
The way a notice is examined and replied to often determines whether proceedings culminate in closure or escalate into protracted adjudication and litigation. In the amended regime, Sections 74A and 75 have significantly reshaped the landscape of assessment and adjudication proceedings.
A reply to a GST notice is therefore not a routine reply — it must be a well-reasoned legal document backed by statutory support, reconciliations, and procedural discipline.
2. Verification of the Notice and Addressee
The first task of a practitioner is to verify whether the notice is addressed to the correct taxable person. This involves meticulous cross-checking of the GSTIN, legal name, trade style, and address.
Notices issued against an incorrect GSTIN, or erroneous taxpayer reference have no legal effect and can be challenged at the threshold. The absence of correct identification vitiates the notice ab initio, depriving the authority of jurisdiction over the intended respondent. 1
3. Jurisdiction of the Issuing Authority
3.1 Proper Officer and Conferral of Authority
The amended GST law retains the concept of the “proper officer,” defined under Section 2(91) of the CGST Act, 2017, as an officer assigned functions by the Commissioner or Central Board of Indirect Taxes and Customs (CBIC). The authority issuing the notice must fall within the territorial and functional jurisdiction of the proper officer.
3.2 Absence of Jurisdiction
A notice issued by an officer lacking jurisdiction is void. Jurisdiction cannot be assumed; it must be conferred by statute or administrative order. Courts have repeatedly affirmed that proceedings initiated without jurisdiction are a nullity. 2
4. Limitation and Time Bars in the Amended Regime
Sections 73 and 74 of the CGST Act prescribe specific limitation periods for issuance of notices relating to non-payment, short payment, or erroneous refund.
A notice issued beyond the prescribed time limit is unenforceable unless the statute expressly permits extension and such extension is supported by factual and legal justification. Proceedings initiated beyond limitation violate the principles of certainty and finality embedded in tax jurisprudence.
In the aftermath of recent amendments, Sections 73 and 74 of the CGST Act have been replaced with Section 74A, which now governs the initiation of proceedings for non-payment, short payment, and erroneous refunds in a harmonised manner.
4.1 Section 74A — Time Limit for Initiation of Proceedings
Section 74A prescribes that a notice for initiation of proceedings must be issued within three years from the due date of furnishing the relevant return, except where fraud, wilful misstatement or suppression of facts is found, in which case the period extends to five years. 3 This is a vital change introduced to ensure finality and predictability.
4.2 Understanding the Tax Period
It is essential to note the exact tax period mentioned in the notice and to verify that the initiation falls within the statutory cut-off.
5. Validity of the Notice: Form and Authentication
A valid notice under GST must specify the statutory section under which it is issued, be dated and include an authentic signature of the proper officer. The absence of any of these elements reflects non-application of mind and can be challenged. Notices must comply with Rule-wise and form-wise mandates under the GST Rules to withstand judicial scrutiny.
6. Prior Proceedings and Overlapping Notices
Before drafting a reply, it is necessary to assess whether any earlier notice has been issued for the same period or issue, or whether any adjudication has already been finalised. Issuance of multiple notices for identical cause of action violates principles of natural justice and is contrary to settled legal precedent. 4
7. Understanding the Allegations and Statutory Basis
The notice must clearly articulate the statutory provision invoked and the factual basis of the allegation. Each issue must be examined independently. A notice is not a catch-all instrument to raise allegations beyond the scope of the provision under which it is issued.
8. Reconciliation of Records, Returns and Departmental Data
8.1 Comparison with Filed Returns
GST notices often arise from mismatch between GSTR-1, GSTR-3B, and auto-populated data. These mismatches, in themselves, do not establish tax liability. The assessee must prepare comprehensive reconciliations juxtaposing departmental data with returns, books of accounts, and supporting documents.
8.2 Verification of Departmental Computation
Departmental figures are not infallible. They must be independently verified for accuracy of data, rate application, and correct interpretation of returns.
9. Admission of Liability Where Appropriate
Where tax liability is prima facie clear, voluntary admission of tax and interest remains a pragmatic strategy. In the amended law, acceptance of liability at the earliest stage often mitigates downstream controversies and penal exposure.
10. Contesting the Tax Demand: Legal and Factual Grounds
Where the demand is baseless or unsustainable in law, the reply must not merely deny it; it must state the applicable statutory provision, highlight the correct legal position, and bring out relevant documentary evidence. References to judicial decisions may be made, but detailed legal reasoning is more effective during adjudication submissions or appellate pleadings.
11. Enclosure of Supporting Documents
A GST reply unsupported by reconciliations and documents seldom finds acceptance. Enclosures should be systematically indexed and clearly referenced in the text of the reply.
12. Right to Personal Hearing
12.1 Statutory Recognition under Section 75
Section 75 of the CGST Act recognises the right to a personal hearing where an adverse order is proposed. Unlike earlier practice where hearings were occasional, the amended regime emphasises hearings as a substantive right. A specific request for hearing must be made in the reply to ensure the statutory safeguard is preserved.
12.2 Consequences of Without Hearing
An order passed without granting a statutory opportunity of hearing can be successfully challenged as violating principles of natural justice. 5
13. Timeliness and Procedural Discipline
A late reply weakens the assessee’ s position and often invites interim orders. Replies must be filed well within statutory timelines, accompanied by proper explanations for any delay.
14. Language, Tone and Professional Conduct
While the legal position must be robust, the language of a GST reply should be courteous, restrained and devoid of emotion. Professional humility combined with legal firmness reflects well on the assessee and earns respect from adjudicating officers.
Conclusion
A GST notice marks the beginning of an adjudicatory process rooted in statutory provisions that emphasise jurisdiction, limitation, and procedural fairness. A well-structured, timely, and legally informed reply, supported by reconciliations and statutory backing, often resolves disputes before they escalate. By aligning the reply with current law — particularly Sections 74A and 75 — practitioners can effectively safeguard their clients’ rights and interests.
Footnotes
1. CCE v. Brindavan Beverages (P) Ltd. (2007) 213 ELT 487 (SC)
2. Calcutta Discount Co. Ltd. v. ITO AIR 1961 SC 372
3. Section 74A, CGST Act, 2017 (as amended) – Time limit for initiation of proceedings.
4. State of Punjab v. Bhatinda District Coop. Milk P. Union Ltd. (2007) 11 SCC 363
5. Section 75(4), CGST Act, 2017; Dharampal Satyapal Ltd. v. CCE (2015) 8 SCC 519
Model Format: Reply to GST Notice
To
The Proper Officer
[Designation]
[Office Address]
Subject: Reply to Notice issued under Section of the CGST Act, 2017
DIN: __________
GSTIN: __________
Tax Period / Return Period: __________
Respected Sir / Madam,
This reply is filed in response to the notice indicated above, issued under Section ___ of the CGST Act, 2017, for the tax period . The assessee respectfully submits that the contents of the notice have been examined in detail and the following submissions are made without prejudice to one another.
The allegations made in the notice appear to arise from data mismatches and/or an incorrect interpretation of the returns filed under Section 39 of the CGST Act. A detailed reconciliation of departmental data with the returns filed is enclosed herewith for your perusal and record.
Without prejudice, it is submitted that the computations adopted in the notice are not in accordance with the statutory provisions of the CGST Act and Rules, and therefore the demand raised is unsustainable. The factual and legal position is explained in paragraphs [•] to [•] below, supported by relevant documents.
In the event the authority finds any tax liability, the assessee is prepared to settle the tax and interest as per law and is making the requisite payments in the interim.
The assessee respectfully requests an opportunity for personal hearing as provided under Section 75 of the CGST Act, 2017, to clarify the submissions, reconciliations, and documentary evidence in greater detail.
The assessee also respectfully requests that no adverse order be passed without granting the statutory opportunity of hearing.
Thanking you.
yours faithfully,
for __________
Authorised Signatory
****
Author: Dr. S. Sankar Ganesh, LLB (Hons), LLM (Tax) | Advocate, High Court of Madras
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