Ways and Significance of Verifying validity of SCNs and Orders Issued under GST
Verifying Validity of SCNs & Orders: Maintaining tax compliance in the realm of Goods and Services Tax (GST) is crucial, and businesses must prioritize the verification of Show Cause Notices (SCN) and Orders. This article explores the significance of meticulous scrutiny, shedding light on key aspects of the CGST Act, 2017. By emphasizing the importance of thorough verification, businesses can safeguard themselves from discrepancies and legal complications, ensuring a streamlined and compliant approach to tax matters.
Why Verify SCN and Orders?
Verifying the validity of SCN and Orders is essential for taxpayers on three grounds:
(i) Challenging Ineffective Service:
- Challenge the ineffective service of any notice, order, or communication during the initial stages of adjudication.
- Establish the invalidity of assessment proceedings.
(ii) Acting Upon Notices:
- Assessment proceedings won’t be deemed invalid if the taxpayer has acted upon the notice, order, or communication.
- Non-contested service in previous proceedings does not invalidate assessment proceedings.
(iii) Compliance with Legal Provisions:
- Adherence to legal provisions, especially Section 160(2) of the CGST Act, 2017.
- Ensure the validity of SCN/Order before acting upon them to stay legally sound.
Note: Provisions u/s.160(2) of CGST Act: “The service of any notice, order or communication shall not be called in question, if the notice, order or communication, as the case may be, has already been acted upon by the person to whom it is issued or where such service has not been called in question at or in the earlier proceedings commenced, continued or finalised pursuant to such notice, order or communication.”
Provisions under CGST Act
(i) Deadline for Issuing SCN Under GST:
For Section 73 cases, SCN must be issued at least three months before the order issuance deadline.
Order under Section 73 within three years from the due date or erroneous refund, whichever is later.
(ii) Proof of Authenticity:
Orders, notices, and certificates must be issued electronically using Digital Signature Certificate or e-signatures.
A notable case law example is Railsys Engineers Pvt Ltd. vs. Addl. Commissioner of CGST (Appeals-II) 2022.
(iii) SCN & Order Summary in Forms DRC-01 and DRC-07:
Electronically serve SCN summary using Form GST DRC-01 along with the notice.
Mandatory upload of order summary in FORM GST DRC-07, specifying tax, interest, and penalty amounts.
(iv) Document Identification Number (DIN):
Circular No. 122/41/2019-GST mandates quoting a computer-generated DIN in all communications.
Crucial for transparency and authenticity in GST-related matters.
(v) Order Alignment with SCN:
Order must align with details specified in the SCN.
Amounts for Tax, Interest, and Penalty in the order should not exceed those in the notice.
(vi) Opportunity of Being Heard:
Individuals subject to tax or penalty entitled to an opportunity of being heard upon their request for a hearing or when an adverse decision is possible.
(vii) Non-Speaking Order:
Orders must be speaking orders, explicitly outlining relevant facts and basis for the decision.
Conclusion
In conclusion, a meticulous review of SCN and Orders is paramount for maintaining compliance with the CGST Act, 2017. This comprehensive examination fosters transparency, ensures adherence to statutory regulations, and forms a solid foundation for a proactive and compliant approach to tax-related processes. Stay informed and leverage this knowledge to streamline your tax compliance efforts effectively.
To Access the GSTN Advisory No. 622 CLICK HERE
To Access the related GST Circular No. 122/41/2019 CLICK HERE
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