Concluding Part-3: The Science Behind Drafting a Reply To Show Cause Notice in GST
Thoughts, Insight and Research by: Abhishek Raja Ram, 9810638155
7. Check the time limitation period to issue SCN and Order
7.1 The time limit for FY 2017-18, 2018-19 and 2019-20 was extended through various circulars. [Circular No. 13/2022, 09/2023, 56/2023]
7.2 This extension was challenged before Honourable Gauhati High Court and it was held that Notifications extending time limit under Section 73 of CGST Act challenged; recovery of assessed amount stayed, considering similar interim reliefs granted in other jurisdictions.
Gauhati High Court in Jahar Sarma vs Union of India [(2024) 20 CENTAX 444]
8. Attachment of Bank Account before issue of SCN is not permissible.
8.1 Section 83 deals with the attachment and that has to be only after the Commissioner has formed an opinion that it is necessary to do to safeguard the interest of revenue.
8.2 Provisional attachment under Section 83(1) of CGST/DGST Act valid if issued after initiation of proceedings under Chapter XII, XIV or XV to protect government revenue, regardless of specific proceeding mentioned in attachment order.
Delhi High Court in MJ Bizcrafts LLP vs CGST, Delhi South Commissionerate (2024) 23 CENTAX 304
8.3 Objections against provisional attachment under GST law must be decided within reasonable time, not exceeding three months from submission date.
Rajasthan High Court in Adabala Naryana Rao vs Union of India (2024) 23 CENTAX 35
8.4 When without issuing a notice or granting opportunity of hearing, Competent Authority had attached #demat accounts of petitioner in a proceeding against company, wherein petitioner was a director, such attachment orders were to be set aside. Bombay High Court in Gaurav Modwel vs Deputy Commissioner of State Tax (2024) 22 CENTAX 368
9. GSTR-1 outward tax exceeds GSTR-9/3B and E-Way Bill
9.1 Sec. 155 fastens the liability on the person claiming ITC to prove that such ITC is correct but there is no burden of proof regarding the supply made by the taxpayer or Credit Notes issued in relation to such supplies.
9.2 As the Revenue makes the allegations, it is their duty to present compelling evidence to support any claims or allegations against the taxpayer.
9.3 Where assessee contended that input tax credit was wrongly reversed based on alleged credit notes from supplier with whom assessee/petitioner had no transactions, High Court quashed impugned assessment order and remanded matter back to allow assessee/petitioner for reconsideration.
Madras High Court in Shree Shyama Traders vs Assistant Commissioner (ST), Chennai (2024) 19 CENTAX 515
9.4 Where there exists clerical or typographical error in documents such as e-way bill, initial burden of proof lies on Revenue department to demonstrate intention to evade tax; penalties should be imposed only in cases of intentional tax evasion, not on inadvertent errors.
Allahabad High Court in Indeutsch Industries Pvt. Ltd. vs State of Uttar Pradesh (2024) 16 CENTAX 491
9.5 Person who alleges should establish fact. Tribunal Delhi in MEENESH CONSTRUCTION CO. vs Commissioner of Central Excise, Jaipur (2018) 12 GSTL 97
I hope you will find this series useful.
Thanks and Regards
Abhishek Raja Ram
9810638155