Practical discussion on SCN

under GST Laws 73 & 74

CA. Abhishek Raja Ram

9810638155
[email protected]

Private Presentation Only not Professional

Advice
 National Litigation Policy

Pending cases
SC – 70k+
are very high

Dist. &
HC – 40L+ Subordinate
Court – 2.75Cr+
Private Presentation Only not Professional Advice
 National Litigation Policy

46%+ cases
Govt. biggest
are linked to
contributor
Govt.

State
Revised NLP?? Litigation
Policies
Private Presentation Only not Professional Advice
National Litigation Policy – Stages of Litigation

Pre- Post
Litigation Litigation

Litigation
Emphasis on exploring alternative means of dispute resolution

Private Presentation Only not Professional Advice

 Stages of Litigation - IDT

Pre Notice
Consultation Appeal

SCN

Private Presentation Only not Professional Advice

 Best Practices of CBIC as per NLP

• Threshold Limit Defined for Filing of Appeals (exception a challenge

made on the constitutional validity of any legislative provision or
against any circular/notification of the Department)
• Pre SCN (Show Cause Notice) Consultation
• Authority of Advanced Ruling: Anyone an approach the authority for
seeking ruling in their dispute/cases. Such rulings are applicable to
concerned party and commissioner of appeal.
• A limit of 70 cases has to been decided by the Department for
disposal by the commissioner of appeal per month.

Private Presentation Only not Professional Advice

Circular No. 1079/03/2021-CX dated November 11, 2021

• Pre-Show Cause Notice Consultation not Mandatory for Recovery of Duties

• short levied or
• short paid or
• erroneously refunded,
• by reason of
• fraud or
• collusion or
• wilful mis-statement or
• suppression of facts or
• contravention of any of the provision
• clarifies CBIC
Private Presentation Only not Professional Advice
Action taken on 101st report of the committee on Demands
for grants (2020-21) - Rajya Sabha (11.09.2020)
The Committee observes that there is a 260% approx. increase in payment of fees to the legal
counsels/advisers by the Ministry in the last 11 years and around 4,32,000 cases relating to government
are pending.

Further, the National Litigation Policy is yet to be finalised by the Government and there is no concrete
roadmap from the Department to check pendency of cases and increasing expenditure.

The National Litigation Policy was drafted in 2010 and the Department during the Demand for Grants
(2018-19) had submitted that it is under active consideration of the Government.

The Committee, accordingly recommends the Department to expedite the formulation of National
Litigation Policy.

Private Presentation Only not Professional Advice

 Few States Litigation Policy

Bihar State Litigation Policy'2011

Punjab State Litigation Policy, 2011

Karnataka State Dispute Resolution Policy, 2021

Puducherry Litigation Policy, 2021

Private Presentation Only not Professional Advice
 GST was introduced to reduced Litigations!!

Arbitrary Tax avoidance (if

Vague and poorly
interpretation by not, tax evasion)
drafted tax
the Revenue tendency of the
legislations
Officers taxpayer - 2A/2B

Confusing
Frequent /
Pressure of clarifications &/or
Retrospective
‘Revenue targets’ judicial
amendments
pronouncements
Private Presentation Only not Professional Advice
 Why disputes are rising in GST?

Wide scope for

Poor drafted Law Excessive delegation arbitrary
interpretation

State GST authorities’

Wide scale ‘Tax
unfamiliarity with the Ill-conceived design
Frauds’ leading to
finer nuances of and structure
stringent action
litigation

Private Presentation Only not Professional Advice

 ‘‘Tax Litigation Process” under GST

Show Cause Adjudication

Assessment
Notice & Revision

Compounding
Prosecution Appeals
of offences

Private Presentation Only not Professional Advice

 Stages of Enforcing taxation statutes

• A Little difference in facts or additional facts may make a lot of

difference in the precedential value of the decision. (2003 2 SCC 111)

Levy Assessment Collection

• Collection of tax without assessment and assessment of tax without

levy are illegal.

Private Presentation Only not Professional Advice

 Components of Tax

Clear Indication on
Taxable Event Whom Levy
attracting the Levy imposed & who is
obliged to pay

Measure or Value
Rate of Tax to which rate will
be applied

Private Presentation Only not Professional Advice

 Assessment Issues

Return not filed

Return is Incorrect or Incomplete

Detail Scrutiny is required

Private Presentation Only not Professional Advice
 Fundamental Right vs Procedural Benefits

• ITC is a Fundamental Right and any deviation should be strictly

interpreted.
• Issues with ITC are:
• Inverted Duty Structure – VKC Footwear
• GSTR-2A issue – Bharti Airtel Ltd.

Private Presentation Only not Professional Advice

 VKC Footwear - SC

• The Observations in Para 104 to 111 are few anomalies noted by the
Honourable Supreme Court and has observed that GST Council shall
consider them in accordance with the law.
• The formula creates a distinction between suppliers having a higher
component of input goods than those having a higher component of
input services, and must be read down accordingly, must be rejected.
The formula is not perfect. matter would be considered by the GST
Council and anomalies as pointed out by the Supreme Court would be
removed.

Private Presentation Only not Professional Advice

 Bharti Airtel Ltd - SC

• The law permits rectification of errors and omissions only at the initial
stages of Forms GSTR1 and GSTR3, but in the specified manner.
• Airtel had contended that, due to non-operability of Form GSTR2A at
the relevant time (July to September 2017), it had been denied of
access to the Credit Ledger.
• SC held that...despite an express mechanism provided by Section
39(9) read with Rule 61, it was not open to the HC to proceed on the
assumption that the only remedy that can enable the assessee to
enjoy the benefit of the seamless utilisation of the input tax credit
was by way of rectification of its return submitted in Form GSTR3B for
the relevant period in which the error had occurred.

Private Presentation Only not Professional Advice

 Varun Beverages Ltd. – P&H HC

• Promissory Estoppel on not allowing Credit on Inputs relating to

Goods transferred outside state as Stock Transfer
• Framework suggested as per White Paper not acceptable
• 4-May2018, 27th GST Council Meeting

Private Presentation Only not Professional Advice

Para (iv) of Press Release of 27th GST Council Meeting,
dated 4th May'2018

• No automatic reversal of credit: There shall not be any automatic

reversal of input tax credit from buyer on non-payment of tax by the
seller. In case of default in payment of tax by the seller, recovery shall
be made from the seller however reversal of credit from buyer shall
also be an option available with the revenue authorities to address
exceptional situations like missing dealer, closure of business by
supplier or supplier not having adequate assets etc.

Private Presentation Only not Professional Advice

 GSTR-3B is a Return – AAP & Co.

• Initial Glitches in filing Returns.

• Therefore, in order to ease the burden of the taxpayer for some time,
it was decided in the 18th GST Council meeting to allow filing of a
shorter return in Form GSTR-3B for initial period.
• It was not introduced as a return in lieu of return required to be filed
in Form GSTR-3.
• The return in Form GSTR-3B is only a temporary stop gap
arrangement till due date of filing the return in Form GSTR-3 is
notified. – HC
• SC stayed it in Dec’19 and CBIC brought retrospective amendments

Private Presentation Only not Professional Advice

Offences and Penalties & Demand and Recovery 36

Wrt Section 73,74, & 76

Abhishek Raja “Ram”

+91-9810638155
[email protected]
 Recovery of service tax not levied or paid or short-levied or short-paid or
erroneously refunded. Section - 73, Finance Act, 1994
Where any service tax has not been levied or paid or has been short-levied or short-paid or
erroneously refunded, the Central Excise Officer may, within thirty months from the relevant date,
serve notice on the person chargeable with the service tax which has not been levied or paid or
which has been short-levied or short-paid or the person to whom such tax refund has erroneously
been made, requiring him to show cause why he should not pay the amount specified in the notice
:
Provided that where any service tax has not been levied or paid or has been short-levied or short-
paid or erroneously refunded by reason of—
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with
intent to evade payment of service tax,
by the person chargeable with the service tax or his agent, the provisions of this sub-section shall
have effect, as if, for the words thirty months the words "five years" had been substituted.

Private Presentation Only not Professional Advice 37

Time Duration U/s 73 of S.Tax
• 1994 to 2012: 12 months
• 2012 to 2016: 18 months
• 14-05-2016 onwards: 30 months

Private Presentation Only not Professional Advice 38

S. Tax vs GST

Section - 73 Section 74
(a) fraud; or • fraud, or
(b) collusion; or • any wilful-misstatement or
(c) wilful mis-statement; or • suppression of facts
(d) suppression of facts; or • to evade tax

(e) contravention of any of the

provisions

Private Presentation Only not Professional Advice 39

 Demands and Recovery
Section Rules Form No.
Section 73- Determination of tax Rule 142 Notice and GST DRC-01
not paid or short paid or order for demand of GST DRC-02
erroneously refunded or input tax amounts payable under GST DRC-03
credit wrongly availed or utilised the act. GST DRC-04
for any reason other than fraud or GST DRC-05
any wilful misstatement or GST DRC-06
suppression of facts. GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 40

 Demands and Recovery
Section Rules Form No.
Section 74- Determination of tax Rule 142 Notice and order for GST DRC-01
not paid or short paid or demand of amounts payable under GST DRC-02
erroneously refunded or input tax the act. GST DRC-03
credit wrongly availed or utilised by GST DRC-04
reason of fraud or any wilful GST DRC-05
misstatement or suppression of GST DRC-06
facts. GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 41

 Demands and Recovery
Section Rules Form No.
Section 75- General provisions Rule 142 Notice and order for GST DRC-01
relating to determination of tax demand of amounts payable under GST DRC-02
the act. GST DRC-03
GST DRC-04
GST DRC-05
GST DRC-06
GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 42

 Demands and Recovery
Section Rules Form No.
Section 76- Tax collected but not Rule 142 Notice and order for GST DRC-01
paid to Government. demand of amounts payable under GST DRC-06
the act. GST DRC-07
GST DRC-08

Section 77- Tax wrongfully

collected and paid to Central
Government or State Government.

Private Presentation Only not Professional Advice 43

 Demands and Recovery
Section Rules Form No.
Section Rule 143 Recovery by deduction from any money owed. GST DRC-09
79- Rule 144 Recovery by sale of goods under the control of proper officer. GST DRC-10
Recovery GST DRC-11
of tax Rule 145 Recovery from a third person GST DRC-12
Rule 146 Recovery through execution of a decree, etc. GST DRC-13
Rule 147 Recovery by sale of movable or immovable property. GST DRC-14
GST DRC-15
Rule 148 Prohibition against bidding or purchase by officer. GST DRC-16
Rule 149 Prohibition against sale on holidays. GST DRC-17
GST DRC-18
Rule 150 Assistance by police
GST DRC-19
Rule 151 Attachment of debts and shares etc. GST DRC-20
Rule 152 Attachment of property in custody of courts or Public Officers GST DRC-21
GST DRC-22
Rule 153 Attachment of interest in partnership
GST DRC-23
Rule 154 Disposal of proceeds of sale of goods and movable or immovable
Private Presentation Only not Professional Advice 44
property.
 Demands and Recovery
Section Rules Form No.
Section81- Transfer of property to be void in
certain cases
Section 122- Penalty for Certain Offences.
Section 123- Penalty for Failure to furnish
information return.
Section 124- Fine for failure to furnish statistics.
Section 125- General Penalties.
Section 126 - General Disciplines related to
penalty.
Section 127- Power to impose penalty in certain
cases.
Section 128- Power to waive penalty or fee or
both.
Section 129- Detention, seizure and release of
goods and conveyances in transit. Private Presentation Only not Professional Advice 45
 Demands and Recovery

Section 130- Confiscation of

goods or conveyances and levy
of penalty.
Section 131- Confiscation or
penalty not to interfere with
other punishments.
Section 132- Punishment for
certain offences.

Private Presentation Only not Professional Advice 46

 Demands and Recovery
Section Rules Form No.
Section 130- Confiscation of goods
or conveyances and levy of penalty.
Section 131- Confiscation or
penalty not to interfere with other
punishments.
Section 132- Punishment for
certain offences.

Private Presentation Only not Professional Advice 47

 Section-73

(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded, or where input tax credit has been wrongly availed or
utilised for any reason, other than the reason of fraud or any wilful-misstatement or
suppression of facts to evade tax, he shall serve notice on the person chargeable with
tax which has not been so paid or which has been so short paid or to whom the
refund has erroneously been made, or who has wrongly availed or utilised input tax
credit, requiring him to show cause as to why he should not pay the amount
specified in the notice along with interest payable thereon under section 50 and a
penalty leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three
months prior to the time limit specified in sub-section (10) for issuance of order.

Private Presentation Only not Professional Advice 48

 Section 73

(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.

(4) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.

Private Presentation Only not Professional Advice 49

 Time limits u/s 73

For the purpose of Time limit

Foe SCN issued u/s 73(1) At least 3 months prior to issue of order u/s 73(9) i.e.
2 years and 9 months from the due date of filing
annual return for the F.Y to which the demand pertains
or from date of erroneous refund as per u/s 73(2)
For adjudication order passed u/s 73(9) Within 3 year from the due date of filing annual return
for the year F.Y to which the demand pertains or
within 3 years from date of erroneous refund as per u/s
73(10)

Private Presentation Only not Professional Advice 50

 Amount of penalty

S.No. Action by Tax payer Amount of penalty

1 Tax and Interest paid before issuance of SCN No penalty and No SCN
2 Tax and interest paid within 30 days of No penalty & all processing deemed to be concluded
issuance of SCN
3 Tax and interest paid within 30 days of 10% of Tax amount, OR Rs. 10,000
communication of adjudication order Which ever is higher
4 Tax and interest paid after 30 days of 10% of Tax amount, OR Rs. 10,000
communication of adjudication order
Which ever is higher
NOTE:-1 Penalty shall also be not chargeable in case where the self-assessed tax or any amount collected as tax
is paid (with interest) within 30 days from the due date of payment.
NOTE:-2 Where any penalty imposed u/s 73, no penalty for the same act or omission shall be imposed on the
same person under any other provision of Act.
NOTE:-3 Payment of interest is mandatory even if not specified in adjudicating order as per u/s 73(9).

Private Presentation Only not Professional Advice 51

 Section 74

(1) Where it appears to the proper officer that any tax has not been paid or short paid or
erroneously refunded or where input tax credit has been wrongly availed or utilised by
reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he
shall serve notice on the person chargeable with tax which has not been so paid or
which has been so short paid or to whom the refund has erroneously been made, or
who has wrongly availed or utilised input tax credit, requiring him to show cause as to
why he should not pay the amount specified in the notice along with interest payable
thereon under section 50 and a penalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six months
prior to the time limit specified in sub-section (10) for issuance of order

Private Presentation Only not Professional Advice 52

 Time limits u/s 74

For the purpose of Time limit

Foe SCN issued u/s 74(1) At least 6 months prior to issue of order u/s 74(9)
i.e. 4 years and 6 months from the due date of
filing annual return for the F.Y to which the
demand pertains or from date of erroneous refund
as per u/s 74(2)
For adjudication order passed u/s 74(9) Within 5 year from the due date of filing annual
return for the year F.Y to which the demand
pertains or within 5 years from date of erroneous
refund as per u/s 74(10)

Private Presentation Only not Professional Advice 53

 Amount of penalty

S.No Action by Tax payer Amount of penalty

.
1 Tax and Interest paid before issuance of SCN 15% Tax but No SCN

2 Tax and interest paid within 30 days of issuance of Penalty equal to 25% of Tax & all processing
SCN deemed to be concluded
3 Tax and interest paid within 30 days of Penalty equal to 50% of Tax & all processing
communication of adjudication order deemed to be concluded
4 Tax and interest paid after 30 days of 100% of Tax
communication of adjudication order

NOTE:-1 Penalty shall also be not chargeable in case where the self-assessed tax or any amount collected as tax
is paid (with interest) within 30 days from the due date of payment.
NOTE:-2 Where Payment of interest is mandatory even if not specified in adjudicating order as per u/s 74(9).
NOTE:-3 any penalty imposed u/s 74, no penalty for the same act or omission shall be imposed on the same
person under any other provision of Act.
Private Presentation Only not Professional Advice 54
 Penalty under Demand & Recovery
Show cause notice Order
Section 73 Bonafied Within 2 year & 9 months Within 3 years from due Section 73 Bonafied
of services from due date date of annual GST return
annual return filing.
Section 74 Malafied Within 4 years & 6 Within 5 years from due Section 74 Malafied
months from the due date of annual GST return
date of annual GST Return
Any amount of tax No Time Limit Within 1 year from date Any amount of tax
collected but not paid of issue of notice collected but not paid

Private Presentation Only not Professional Advice 55

Time limit of show cause notice & order
S.No. Action by Tax Payer Section 73 Bonafied Case Section 74 Malafied case
1 Tax & interest paid before show No penalty 15% of tax
cause notice
2 Tax & interest within 30 days of No penalty 25% of tax
show cause notice
3 Tax & interest paid within 30 Higher of 10% of tax “or” 50% of tax
days of order Rs. 10,000
4 Tax & interest paid after 30 days Higher of 10% of tax “or” 100%
of order Rs. 10,000

Private Presentation Only not Professional Advice 56

DRC-01: Summary of Show Cause Notice
DRC-02: Summary of Statement

DRC-03: Intimation of Payment made Voluntarily or

made against the Show Cause Notice or Statement

DRC-04: Acknowledgement of
Acceptance of Payment made Voluntarily
DRC-05: Intimation of Conclusion of Proceedings

Private Presentation Only not Professional Advice 57

DRC-06: Reply to the Show Cause Notice

DRC-07: Summary of the order

DRC-08: Rectification of Order

Private Presentation Only not Professional Advice 58

DRC-09: Orders for Recovery through specified officer U/S 79

DRC-10: Notice for Auction of

Goods U/S 79(1)(b) of the ACT

Private Presentation Only not Professional Advice 59

DRC-11: Notice to Successful Bidder
DRC-12: Sale of Certificate

Private Presentation Only not Professional Advice 60

DRC-13: Notice to third person U/S 79(1)(c)

DRC-14: Certificate of Payment to a

third Person

Private Presentation Only not Professional Advice 61

DRC-15: Application before the Civil Court requesting
Execution of a Decree

Private Presentation Only not Professional Advice 62

DRC-16: Notice for attachment and sale of
Immovable/Movable goods/shares u/s 79
DRC-17: Notice for Auction of Immovable/Movable
Property u/s 79

Private Presentation Only not Professional Advice 63

 DRC-18: Certificate to the Collector or Deputy
Commissioner of the district or any other officer
authorized to recover from the person concerned

DRC-19: An application before the appropriate

Magistrate in accordance with the provisions of clause
(f)of sub-section (1) of section 79

Private Presentation Only not Professional Advice 64

DRC-20: Application for Deferred Payment/Payment in
Instalments

DRC-21: Order for acceptance/rejection of application

for Deferred Payment/Payment in Instalments

Private Presentation Only not Professional Advice 65

DRC-22: Provisional attachment of Property U/S 83

DRC-23: Restoration of Provisionally attached

Property / Bank Account U/S 83

Private Presentation Only not Professional Advice 66

DRC-24: Intimation to liquidator for recovery of Amount

Private Presentation Only not Professional Advice 67

DRC-25: Continuation of Recovery Proceedings

Private Presentation Only not Professional Advice 68

Show Cause Notice
Point to remember while addressing them
Reasons for issuance of SCN’s
Shortfall Detections by • Procedural Lapse
Tax Authorities • Contravention of law is deducted

• Now Notice is drafted by Audit Team

Audit Objection • Executed by Executive Officer
• In case of Multiple Officer – Highest or Principal

Preventive / Anti- • Here Litigation arises as Assessee doesn’t agree to be evader

Evasion • Normally Matter is closed with Tax, Interest & Penalty

• Even if Executive Officer doesn’t agree with demand, he will raise SCN
CAG Para • Try to convince CAG that demand is not justified
Cross Empowerment
• CBIC Letter DOF No. CBEC/20/43/01/2017-GST(FT) dated 5-Oct-2018
• Both Central & State tax administrations shall have power to take
intelligence based enforcement action in respect of entire value
chain.
• Thus for intelligence based inputs both are cross empowered.
CBIC have prescribed the monetary limits within for issuance of Show Cause Notices as per
Circular No. 31/05/2018-GST, dated 09-Feb-2018 which is as follows

Particulars Superintendent AC/DC ADC/JC

Amount of CGST (including Demand <= Rs. 10 Rs. 10 Lakhs < Demand <= Demand > Rs. 1
Cess) involved in a case Lakhs Rs. 1 Crore Crore

Amount of ICGST (including Demand <= Rs. 20 Rs. 20 Lakhs < Demand <= Demand > Rs. 2
Cess) involved in a case Lakhs Rs. 2 Crore Crore

Amount of ICGST and CGST Demand <= Rs. 20 Rs. 20 Lakhs < Demand <= Demand > Rs. 2
(including Cess) involved in Lakhs Rs. 2 Crore Crore
a case
GENERAL DISCIPLINES RELATING TO
DETERMINATION OF TAX

1. Opportunity of personal hearing shall be given to the taxpayer.

2. Adjournment maximum 3 times to each party.

3. Amount demanded in order must not exceed the amount mentioned in SCN

4. Interest is payable whether or not determined in the Order.

5. Officer issuing Order must be different from him who issued SCN.
GENERAL DISCIPLINES RELATING TO
DETERMINATION OF TAX
6. Adjudication proceedings deemed to be concluded if not decided within stipulated time
period.

7. Where the service of notice is stayed by an order of a Court or Appellate Tribunal, the
period of such stay shall be excluded.

8. Order passed by the Proper Officer shall be a Speaking Order.

9. The Interest shall create automatic charge whether or not specified in the order
determining the tax liability.

10. Direct recovery proceedings U/s 79 shall be initiated for any pending self-assessed tax
liability along with interest in accordance with the returns furnished either GSTR-1 or GSTR-3B.
EXTENDED PERIOD
Where Notice does not allege suppression, etc with intent to
evade, extended period (U/s 74) cannot be invoked. – Jagron
Machine Tools vs CCE, [1993 (65) ELT 300 (CEGAT – New Delhi)]

Extended period of Limitation would not apply, if assessee had

bona fide belief. – Mitul Engineering Services vs CCE, [ (2011) STT
289 (CESTAT – New Delhi)] and Sunil Metal Corpn. Vs CCE, [
(2010) STT 473 (CESTAT – Ahmedabad Branch)]
PERSONAL HEARING

The Supreme Court observed that personal hearing enables the concerned
authority to watch the demeanour of the witness etc and also clear up his
doubts during the course of the arguments. – Automative Tyre Manufacturers
Asson. Vs Designated Authority, [ (2011) 263 ELT 481 (Supreme Court)]

A Personal Hearing is not required in an application for a stay. – Union of India

vs Jesus Sales Corporation, [ (1996) 83 ELT 486 (Supreme Court)]
 Letters issued in the form of suggestion
or advice cannot be regarded as SCN. –
Metal Forgings vs UOI, [ (2002) 146 ELT
241 (Supreme Court)]
LETTERS ARE
NOT NOTICE Notice must be in Writing. In case of
absence of a Notice in Writing the
Principles of Natural Justice had not been
applied. – Voltas Ltd. Vs CCE, [ (2000) 121
ELT 802 (CEGAT – Bangalore)]
NO NOTICE • Demand will not sustain without
= NO issuance of Show Cause Notice. –
Prabhat Forgings
DEMAND

NO NOTICE • Assessee can’t be forced to pay penalty

if show cause notice is not issued. – D.
= NO Rama Kotiah & Co. vs State of Andhara
Pradesh, [ (2019) 111 taxmann.com 536
PENALTY (High Court – Telangana)]
Issuance of Notice vs Service
of Notice
Manner of Service of Notice [Sec. 169]
• Any decision, order, summons or other communication should be
served in any of these matter:
• By direct delivery or messenger through courier
• By Registered Post or Speed Post with Acknowledgement Due
• By sending communication to email
• By Common Portal
• By publication in Newspaper
• By Affixing it in known place of business or residence
Every Non-
Payment is not
Supression
 Sec. 2 (2b)
Contempt of
Court Act’1971
Non-Application
of Mind
Quoting of Document Identification
Number (DIN) Cir. No. 122/41/2019-
GST & 128/47/2019
 DIN on email??

Exceptions to Issuance of DIN

DIN • Technical difficulty

• Inquiry, Investigation etc but
authorised officer is outside the
office
• Reasons to be recorded
Guideline by Gujarat High Court for Recovery –
Bhumi Associates v UOI [2021-TIOL-397-HC-AHM]
No recovery or adjustment of ITC during
search/inspection

Even if Assessee comes forward to make payment DRC-03

not to take same day. Ask for next day.

Facility of grievance
Validity of Show Cause Notice issued by an officer in
excess of monetary limit not acceptable

▪ Pahawa Chemicals (P) Ltd. vs. CCE – 2005 (181) ELT 339 (SC).
▪ Palak Designer Diamond Jewellery Vs. UOI – 2021 – TIOL – 424
– CESTAT - AHM
▪ Aeon Construction Products Ltd. vs. CCE – 2005 (184) ELT 120
(SC)
▪ Palak Designer Diamond Jewellery vs. UOI – 2019-TIOL-1756-
HC-AHM-CX

87
Show Cause Notice – a ‘condition precedent’ to a
demand
▪ Gokak Patel Volkart Pvt. Ltd. vs. CCE -1987 (28) ELT 53 (SC)
▪ Madhumilan Syntex Pvt. Ltd. vs. UOI -1981 (35) ELT 349 (SC)
▪ Metal Forgings vs. UOI-2002 (146) ELT 241 (SC)

88
Mere letter or communication asking for payment is
not a ‘show cause notice’
▪ Metal Forgings vs. UOI (supra)
▪ CC vs. Merchant Impex – 2012 (276) ELT 458 (Kar.)
▪ Steel Ingots vs. UOI – 1988 (36) ELT 529 (MP)
▪ Sidwell Refrigeration vs. CCE – 2002 (145) ELT 682 (Tri-Del)

89
 Show Cause Notice must be in writing?

• Voltas Ltd. vs. CCE – 2000 (121) ELT 802 (Tri-Mum.)

90
 Notice must contain all essential details

▪ CCE vs. Brindavan Beverages (P) Ltd.-2007 (213) ELT 487

(SC)
▪ Mehta Pharmaceuticals vs. CCE -2003 (157) ELT 105 (Tri-
Mum)
▪ CCE vs. Bhikhalal Dwarkadas-1998 (99) ELT 438 (Tribunal).

91
Show Cause Notice shall not be based on
assumptions and presumptions
▪ Oudh Sugar Mills Ltd. vs. UOI -1978 (2) ELT (J172) (SC)

92
Show Cause Notice shall not be based on
assumptions and presumptions
▪ Bihari Silk & Rayon Processing Mills (P) Ltd. vs. CCE-2000
(121) ELT 617 [Trib- LB(3/2)]
▪ Hindustan Aluminium Corp. Ltd. vs. Supdt. of C.Ex. - 1981 (8)
ELT 642 (Del.)
▪ JBA Printing Inks Ltd. vs. UOI -1980 (6) ELT 121
(Mad)
▪ Gwalior Rayon (Wgt.) Ltd.vs. UOI -1982 (10) ELT 844
(MP).

93
CCE vs. Siddhartha Tubes – 2004 (170) ELT 33
(Tribunal)

• A second show cause notice for same period on different grounds

cannot be issued after the matter has been adjudicated and matter is in
appeal.
• Same view in Paro Food Products vs. CCE – 2005 (184) ELT 50
(Tribunal) where it was observed that this was barred on principle of
‘res judicata’.

94
Validity of the amount recovered during investigation
and consequential refund thereof

• Shri Nandhi Dhall Mills India Pvt. Ltd. vs. SIO -2021-TIOL-828-
HC-MAD-GST
• Dabur India Ltd. vs. State of UP – 2002-TIOL-2781-SC-CX-LB
• Vodafone Essar South India Ltd. vs. UOI -2009-TIOL-117-HC-
MUM-CUS.
• Cleartrip Pvt. Ltd. vs. UOI – 2016-TIOL-863-HC-MUM-ST

95
Structure of SCN : A SCN should ideally comprise of the
following parts, though it may vary from case to case :

• Introduction of the case

• Legal framework
• Factual statement and appreciation of evidences
• Discussion, facts and legal frame work,
• Discussion on Limitation
• Calculation of duty and other amounts due
• Statement of charges
• Authority to adjudicate.
• (Master Circular on Show Cause Notice, Adjudication and Recovery:
1053/2/2017- CX. dated 10-Mar-2017 issued by CBEC)
96
 S.73(2) –Time limit prescribed

• Normal period of limitation

• Notice under sub-section (1) of S.73 to be issued at least 3 months
prior to the time limit specified in sub-section (10) for issuance or
order [S. 73(2) refers]

97
Status of limitation period for F.Y.2017-18 to 2019-20:
SR.NO. Relevant F.Y. to which Due date for Last date for Remarks
the demand relates furnishing the AR in issuance of the show
FORM GSTR-9 cause notice as per
S.73(2) r/w.
S.73(10)

1 2017-18 05.02.2020¹ 05.11.2022

07.02.2020 07.11.2022

2 2018-19 31.12.2020² 30.09.2023

3 2019-20 31.03.202 21.12.2023

¹ROD Order No.10/2019 – CT dt. 26.12.2019 r/w Not No. 06/2020-CT dt.03.02.2020 refers
²Not. No. 80/2020-CT dt. 28.10.2020 refers
³Not. No. 04/2021-CT dt. 28.02.2021 refers.

98
 S.74(10) – Computation of time limit

▪ Proper officer to issue the Order under sub-section (9) i.e. the
adjudication order within a period of 5 years from the due date for
furnishing of annual return for the financial year to which the
demand or erroneous refund relates.

99
 Status of limitation period for F.Y.2017-18 to 2019-20 [S.74(2) r/w. S.74(10) refers].

SR.NO. Relevant F.Y. to Due date for Last date for Remarks
which the demand furnishing the AR issuance of the
relates in FORM GSTR- 9 show cause notice
as per S.74(2) r/w.
S.74(10)

1. 2017-18 05.02.2020 05.08.2024

07.02.2020 07.08.2024

2. 2018-19 31.12.2020 30.06.2025

3. 2019-20 31.03.2021 30.09.2025

Note: Refer slide 44 for further details

100
Invocation of extended period u/s.74 only if the ingredient of-

▪ Fraud; or
▪ wilful misstatement of facts; or
▪ wilful suppression of facts exists

• Use of these expressions u/s. 11A of CEA and S.73 of FA

• However, the expressions ‘wilful mis-declaration’ and ‘collusion’ are
conspicuous by their absence!

101
 Fraud vs Negligence

• As distinguished from negligence, fraud is always positive, intentional

• ‘Tax Fraud’ – ‘Federal offence of wilfully attempting to evade or
defeat the payment of taxes due and owing.’ I.R.C. § 7201.

[Source: Black’s Law Dictionary – Sixth Edition]

Private Presentation Only not Professional Advice

 “Wilful misstatement” or “Suppression of facts”

▪ Cosmic Dye Chemical vs. CCE (supra)

▪ Tamilnadu Housing Board vs. CCE -1991 (74) ELT 9 (SC)
▪ CCE vs. Chemphar Drugs & Liniments – 1989 (40) ELT 276 (SC)
▪ Padmini Products vs. CCE – 1989 (43) ELT 195 (SC).
▪ Pushpam Pharmaceuticals Company vs. CCE 1995 (78) ELT 401
(SC)
▪ Continental Foundation Jt. Venture vs. CCE -2007 (216) ELT 177
(SC)
▪ Stone & Webster International Inc. vs. CCE -2011 (22) STR 467
(Tri-Ahmd).
103
“S.74–Extended period of limitation provided in the specified
circumstances

❖ Is mere inaction or failure a suppression of fact?

▪ Padmini Products vs. CCE (supra)

▪ Jaiprakash Industries vs CCE -2002 (146) ELT 481 (SC)

104
“Will non-supply of information not mandated under the statute
amount to suppression of facts?

▪ Smt. Shrushti Dhawan vs. Shaw Brothers – AIR 1992 SC 1555

▪ Apex Electricals (P) Ltd. vs. UOI – 1992 (61) ELT 413 (Guj.)

▪ Explanation 2 to S.74.

105
Can mere claiming wrong classification or wrong exemption be
considered a suppression or misstatement of facts?

▪ Denson Pultretaknik vs. CCE – 2003 (155) ELT 211 (SC)

▪ Virlon Textiles Ltd vs. CE – 2003 (158) ELT 469 (SC)

▪ Northern Plastics Ltd. vs. CC [1998] 101 ELT 549 (SC)

▪ Biomax Life Sciences Ltd. vs. CCE – 2021 (375) ELT 263
(Tribunal)

106
 Is ignorance of law an excuse?

•Peter & Millere Packers vs. CCE – 2008 (232) ELT 695 (Tribunal)
•D. Cawasji & Co. vs. State of Mysore – 1978 (2) ELT J154 (SC)

107
REPRESENTATION AGAINST SHOW CAUSE
NOTICE & ADJUDICATION PROCEEDINGS

10
8
 Study and Analysis of the SCN

• How to read the show cause notice?

▪ Date of issue of SCN
▪ Date of receipt of SCN
▪ List of Relied upon documents (RUD)
▪ Return of the non-relied upon documents
▪ Statements and Free translation
▪ Authority issuing the SCN.

109
 Study and Analysis of the SCN

• Facts of the case

• Basis of SCN/Demand
▪ Scrutiny of Returns
▪ Audit
▪ Anti-evasion or Preventive action
▪ DGGI action

110
 Study and Analysis of the SCN
• Allegation/charges in the SCN
▪ Nature of allegations
▪ Basis of allegations
▪ Evidence
▪ Interpretation of the statutory provisions
▪ Judgements
▪ AAR/AAAR Ruling
▪ Technical Report
▪ Third Party statements
▪ Discrepancies in Records
▪ CBIC’s Circular
▪ Recurring demand
▪ Revenue’s pending appeal 111
 Study and Analysis of the SCN

• Computation of demand
▪ Classification
▪ Valuation
▪ Exemption notification
▪ Rate of tax
▪ Cum-tax principle

• Statutory provisions invoked in the SCN

▪ Summary of the provisions invoked
▪ Applicability/Relevance of the provisions
▪ Action proposed under the provisions

112
 Study and Analysis of the SCN

• Time limit for filing the reply to SCN

▪ 30 days time limit – Statutory or administrative?
▪ Reply and Hearing- Are they substitute of each other?
▪ Acknowledgement of the SCN before expiry of 30 days
▪ Extension of time for filing the Reply
▪ Filing of additional submissions.

113
 Study and Analysis of the SCN

• Cross-examination
▪ Need for cross-examination
▪ Can cross-examination be sought as a vested right?
▪ Persons whose cross-examination can be sought
▪ Admissibility of the statement in case the person does not appear for the
cross-examination
▪ Written submissions on conclusion of the cross-examination
▪ Refusal to grant cross-examination – Consequence and course of action
▪ Law relating to cross-examination.
114
 Drafting of Reply to SCN

• Preparation of the defence reply to SCN

▪ Background or Statement of facts
a. Brief background of the Assessee
b. Narration of the relevant facts
c. Chronology of the events/facts

▪ Relevant facts leading to the issue of SCN

▪ Exhibits
▪ Amount of tax, etc. demanded and other action proposed – statutory provisions invoked
▪ Gist of the allegations

115
 Drafting of Reply to SCN

• Grounds of Defence
▪ Merits of the case
▪ Limitation
▪ Computation
▪ Challenge to the penal action and other action proposed

116
 Drafting of Reply to SCN

▪ Importance of the Reply to the SCN

▪ Furnishing of evidence in support of each contention
▪ Judgements’ compilation – Relevant para

117
 Drafting of Reply to SCN

• Procedural requirements

▪ Summary of SCN – Form GST DRC-01

▪ Statement of Demand u/s. 73(3)/74(3) – Form GST DRC-02

▪ Payment of tax, etc. u/s. 73(5)/74(5) or in terms of other provisions - Form GST DRC-03

▪ Acknowledgement – Form GST DRC-04

▪ Payment of tax, etc. u/s. 73(8)/74 (8) or S.129 (1) – Form GST DRC-03

118
 Drafting of Reply to SCN

• Procedural requirements

▪ Acknowledgement – Form GST DRC-05

▪ Representation/Reply to SCN – Form GST DRC-06

▪ Summary of the Order – Form GST DRC-07

▪ Rectification of Order (S.161) or withdrawal of Order – Form GST DRC-08.

119
 Adjudication proceedings:

• Competent Authority to adjudicate the SCN

• S.2 (4) – ‘Adjudicating Authority’ defined.
• Whether adjudicating authority acts as a ‘quasi-judicial authority’?

▪ Orient Paper Mills Ltd. vs. UOI – 1978 (2) ELT J345 (SC)
▪ Orient Paper Mills Ltd. vs. UOI – 1978 (2) ELT J382 (SC)
▪ CCE vs. National Tobacco Co. of India Ltd -1978 (2) ELT J 416 (SC)

120
 Adjudication proceedings:

• Opportunity of Personal hearing.

▪ Principles of natural justice
▪ ‘Reasonable opportunity of being heard’
Fedco (P) Ltd. vs. S. N. Bilgrami – 1999 (110) ELT 92 (SC)

121
 Adjudication proceedings:

• Change of Adjudicating Authority–Whether a fresh hearing required?

▪ Gullapalli Nageshwara Rao vs. APSRTC -= AIR 1958 SC 308.

▪ Bhagirathi Iron & Steel (P) Ltd. vs. CCE -1999 (113) ELT 678 (Trib)
• Grant of personal hearing – S. 75(4)
• Grant of adjournment – S. 75 (5)
• Cap on number of adjournments – maximum 3 (three) adjournments – Proviso to S. 75(5)

• Fixing multiple dates of hearing by a single intimation- Is it valid?

▪ Bindal Sponge Ltd. vs. UOI – 2015 (122) ELT 657 (Tribunal)
▪ Afloat Textiles (P) Ltd. vs. CCE – 2007 (215) ELT 198 (Tri-Ahd.)

122
 Adjudication proceedings:
• Fair and reasonable hearing
▪ Havacrumb Rubber (P) Ltd. vs. Supdt. of C. Ex.-1983 (14) ELT 1685 (Kerala)
▪ Aluminium Corporation of India Ltd. vs. UOI - 1978 (2) ELT J 320 (SC)

• Reasoned and speaking Order is must:

▪ Siemens Engineering and Manufacturing Co. of India Ltd. vs. UOI-AIR 1976 SC 1785
▪ S. 75 (6)
• Order cannot go beyond or be contrary to the SCN:
▪ Saci Allied Products Ltd. vs. CCE – 2005 (183) ELT 225 (SC)
▪ Hindustan Polymers Ltd. Vs. CCE – 1999 (106) ELT 12 (SC)
• Can an officer review his own order?
▪ Dwarka Das vs. State of M. P.- AIR 1999 SC 1031

123
Representation before the Adjudicating Authority:

• Appearance and Representation

▪ Appearance by the Authorised Representative
• S.2 (15) r/w. S. 116
▪ Preparation of Synopsis
▪ Filing of additional submissions
▪ Records of personal hearing

124
 Some Do’s & Don’ts

• A few Do’s
• Show Cause Notice:
• Do make a note of the date of issue of the SCN
• Do make a note of the date of receipt of the SCN
• Do place acknowledgement of the receipt of the SCN by way of letter, etc.
• Do check that all RUDs are available with the SCN
• Do ask for the return of non-relied upon documents, if any
• Do ask for the free translation in in English of the statement/s, if recorded in a language other than
English.

125
 Reply to SCN

• Do address each allegation levelled in the SCN.

• Do provide evidence in support of each contention/ground raised.
• Do check the latest status of the judgement being relied upon.
• Do provide copies of judgements relied upon with the relevant para
duly highlighted.
• Do provide index and do page numbering of the reply.
• Do provide legible (or typed) copy of each document relied upon.

126
 Adjudication Proceedings

• Do ensure that the Authorisation /Vakalatnama is on records, wherever

required.
• Do maintain Dress Protocol.
• Do carry short notes/synopsis with you which would facilitate the oral
submissions.
• Do address each question put forth by the adjudicating authority.
• Do speak slowly, softy and clearly.
• Do maintain decorum of the proceedings.

127
 A few Don’ts

• Don’t address any correspondence by name of the officer.

• Don’t seek adjournment on flimsy ground.
• Don’t use harsh or abusive language in any correspondence/ communication
and reply.
• Don’t go by ‘headnotes’ of a judgement while relying upon it.
• Don’t shout or be hysteric during the hearing.
• Don’t make irrelevant submissions or state irrelevant facts.

Don’t try to impress your client while arguing a case.

Don’t ‘copy and paste’ pleadings.
128
Summons under
CGST/SGST Act
For Information purpose not to be considered as 129
 Power to summon persons to give evidence
and produce documents. (Sec. 70)
(1) The proper officer under this Act shall have power to summon any
person whose attendance he considers necessary either to give
evidence or to produce a document or any other thing in any inquiry in
the same manner, as provided in the case of a civil court under the
provisions of the Code of Civil Procedure, 1908.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to

be a “judicial proceedings” within the meaning of section 193 and
Section 228 of the Indian Penal Code.

For Information purpose not to be considered as Professional

130
Advice from us.
 Sec. 70: Summons

Vital or Empowers PO
Only 2 sub-
Very Brief Indispensable to Summon
sections
Role Any Person

For Information purpose not to be considered as Professional

131
Advice from us.
 Power of “Inquiry” is not restricted
• Word “Inquiry” cannot be given the restrictive meaning only to cover
post enquiry post issue of notice as the inquiry is “for the purposes of
Act” (Excise) – National Building Construction Co. Ltd. vs UOI (HC –
Delhi), [2018] 100 taxmann.com 307
• “for the Purposes of the Act” are not mentioned in GST Laws ,
However as per my understanding, the scope of “Inquiry” would be
as wide since the “Proper Officer” under the act is empowered to
undertake inquiry to carry out functions assigned to him under the
Act.
• Therefore, the inquiry shall not be limited to only issues raised in the
SCN.
For Information purpose not to be considered as Professional
132
Advice from us.
 P.V. Ramana Reddy vs UoI (HC-Tel.)
[2019] 104 taxmann.com 407 (Telengana)
• Enquiry before PO is by its nature, Criminal Proceeding, it is
nevertheless a Judicial Proceedings and hence, the person summoned
is obliged not to give false evidence nor to fabricate evidence.
• He is also obliged not to insult and not to cause any interruption to
the Proper Officer in the course of such proceedings.

For Information purpose not to be considered as Professional

133
Advice from us.
 Consequence of Failure to attend as per
Summons
• Court have the Powers to issue a warrant of arrest with or without
bail and may also issue an order for attachment of his property and
also impose fine (exception – Lawful Excuse for non-attendance)
• Penalty of Rs. 25,000/- U/s 122(3)(d) of CGST Act’2017 could also be
imposed.

For Information purpose not to be considered as Professional

134
Advice from us.
 Details available with Department –
Summons not to be issued
• A.S. Corporation vs UoI, [2008] 223 ELT 26 (HC-Gujarat)
• Dharampal Satyapal vs UoI, [2018] 360 ELT 718 (HC-Guwahati)

For Information purpose not to be considered as Professional

135
Advice from us.
 No Provisions in Law to Order the Assessee to
Create Document not in his position
• A Truck of 123 cartons of documents were taken for submission to
DGCEI office but the officer insisted on providing information in
particular format.
• Delhi High Court rejected such demand by the Officer in eBiz.com vs
UoI, [2016] 338 ELT 562 (HC-Delhi)

For Information purpose not to be considered as Professional

136
Advice from us.
 Presence of Advocate, though not in hearing
range, is permissble
• Poolpandi vs Supritendent of Central Excise, [1992] 60 ELT 24 (SC)
• Agarwal Foundries Pvt. Ltd. vs UoI, [2020] 121 taxmann.com 134 (HC
– AP & Telengana)

For Information purpose not to be considered as Professional

137
Advice from us.
 Detention of Assessee for Long Hours
• Custom Officers does not have the powers to detain assessee for long
hours. There is no Fundamental Right (Article 21 of Constitution)
which guarantee Presence of Lawyer during interrogation process.
Anil G Merchant vs Director of Revenue, [1985] 20 ELT 292 (HC-
Madras)
• FAQ of CBIC, 3rd Edition dated 15-Dec-2018, has instructed its Officers
that statements should be recorded during office hours generally and
no person should be made to wait for long hours.

For Information purpose not to be considered as Professional

138
Advice from us.
 Confessional Statements of co-accussed
• The confessional Statements of a co-accused cannot be used as
evidence unless it is corroborated by the other independent material.
– Debu Saha vs Collector of Customs, [1990] 48 ELT 302 (Tribunal –
Kolkata)
• Principles of Natural Justice – Power of Cross Examinations

For Information purpose not to be considered as Professional

139
Advice from us.
 Employee of Accussed
• Where the person giving statement was the employee of the
accused/person proceeded against, he cannot be called a third party
witness and it was held that even where cross-examination could not
be conducted, the statement has evidentiary value. – Shalini Steels
Ltd. vs Commissioner of C. Ex. Hyderabad, [2010] 258 ELT 545
(Tribunal – Bangalore)

For Information purpose not to be considered as Professional

140
Advice from us.
Offences and Penalties & Demand and Recovery 141

Wrt Section 73,74, & 76

Abhishek Raja “Ram”

+91-9810638155
[email protected]
 Recovery of service tax not levied or paid or short-levied or short-paid or
erroneously refunded. Section - 73, Finance Act, 1994
Where any service tax has not been levied or paid or has been short-levied or short-paid or
erroneously refunded, the Central Excise Officer may, within thirty months from the relevant date,
serve notice on the person chargeable with the service tax which has not been levied or paid or
which has been short-levied or short-paid or the person to whom such tax refund has erroneously
been made, requiring him to show cause why he should not pay the amount specified in the notice
:
Provided that where any service tax has not been levied or paid or has been short-levied or short-
paid or erroneously refunded by reason of—
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with
intent to evade payment of service tax,
by the person chargeable with the service tax or his agent, the provisions of this sub-section shall
have effect, as if, for the words thirty months the words "five years" had been substituted.

Private Presentation Only not Professional Advice 142

Time Duration U/s 73 of S.Tax
• 1994 to 2012: 12 months
• 2012 to 2016: 18 months
• 14-05-2016 onwards: 30 months

Private Presentation Only not Professional Advice 143

S. Tax vs GST

Section - 73 Section 74
(a) fraud; or • fraud, or
(b) collusion; or • any wilful-misstatement or
(c) wilful mis-statement; or • suppression of facts
(d) suppression of facts; or • to evade tax

(e) contravention of any of the

provisions

Private Presentation Only not Professional Advice 144

 Demands and Recovery
Section Rules Form No.
Section 73- Determination of tax Rule 142 Notice and GST DRC-01
not paid or short paid or order for demand of GST DRC-02
erroneously refunded or input tax amounts payable under GST DRC-03
credit wrongly availed or utilised the act. GST DRC-04
for any reason other than fraud or GST DRC-05
any wilful misstatement or GST DRC-06
suppression of facts. GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 145

 Demands and Recovery
Section Rules Form No.
Section 74- Determination of tax Rule 142 Notice and order for GST DRC-01
not paid or short paid or demand of amounts payable under GST DRC-02
erroneously refunded or input tax the act. GST DRC-03
credit wrongly availed or utilised by GST DRC-04
reason of fraud or any wilful GST DRC-05
misstatement or suppression of GST DRC-06
facts. GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 146

 Demands and Recovery
Section Rules Form No.
Section 75- General provisions Rule 142 Notice and order for GST DRC-01
relating to determination of tax demand of amounts payable under GST DRC-02
the act. GST DRC-03
GST DRC-04
GST DRC-05
GST DRC-06
GST DRC-07
GST DRC-08

Private Presentation Only not Professional Advice 147

 Demands and Recovery
Section Rules Form No.
Section 76- Tax collected but not Rule 142 Notice and order for GST DRC-01
paid to Government. demand of amounts payable under GST DRC-06
the act. GST DRC-07
GST DRC-08

Section 77- Tax wrongfully

collected and paid to Central
Government or State Government.

Private Presentation Only not Professional Advice 148

 Demands and Recovery
Section Rules Form No.
Section Rule 143 Recovery by deduction from any money owed. GST DRC-09
79- Rule 144 Recovery by sale of goods under the control of proper officer. GST DRC-10
Recovery GST DRC-11
of tax Rule 145 Recovery from a third person GST DRC-12
Rule 146 Recovery through execution of a decree, etc. GST DRC-13
Rule 147 Recovery by sale of movable or immovable property. GST DRC-14
GST DRC-15
Rule 148 Prohibition against bidding or purchase by officer. GST DRC-16
Rule 149 Prohibition against sale on holidays. GST DRC-17
GST DRC-18
Rule 150 Assistance by police
GST DRC-19
Rule 151 Attachment of debts and shares etc. GST DRC-20
Rule 152 Attachment of property in custody of courts or Public Officers GST DRC-21
GST DRC-22
Rule 153 Attachment of interest in partnership
GST DRC-23
Rule 154 Disposal of proceeds of sale of goods and movable or immovable
Private Presentation Only not Professional Advice 149
property.
 Demands and Recovery
Section Rules Form No.
Section81- Transfer of property to be void in
certain cases
Section 122- Penalty for Certain Offences.
Section 123- Penalty for Failure to furnish
information return.
Section 124- Fine for failure to furnish statistics.
Section 125- General Penalties.
Section 126 - General Disciplines related to
penalty.
Section 127- Power to impose penalty in certain
cases.
Section 128- Power to waive penalty or fee or
both.
Section 129- Detention, seizure and release of
goods and conveyances in transit. Private Presentation Only not Professional Advice 150
 Demands and Recovery

Section 130- Confiscation of

goods or conveyances and levy
of penalty.
Section 131- Confiscation or
penalty not to interfere with
other punishments.
Section 132- Punishment for
certain offences.

Private Presentation Only not Professional Advice 151

 Demands and Recovery
Section Rules Form No.
Section 130- Confiscation of goods
or conveyances and levy of penalty.
Section 131- Confiscation or
penalty not to interfere with other
punishments.
Section 132- Punishment for
certain offences.

Private Presentation Only not Professional Advice 152

 Section-73

(1) Where it appears to the proper officer that any tax has not been paid or short paid
or erroneously refunded, or where input tax credit has been wrongly availed or
utilised for any reason, other than the reason of fraud or any wilful-misstatement or
suppression of facts to evade tax, he shall serve notice on the person chargeable with
tax which has not been so paid or which has been so short paid or to whom the
refund has erroneously been made, or who has wrongly availed or utilised input tax
credit, requiring him to show cause as to why he should not pay the amount
specified in the notice along with interest payable thereon under section 50 and a
penalty leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three
months prior to the time limit specified in sub-section (10) for issuance of order.

Private Presentation Only not Professional Advice 153

 Section 73

(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.

(4) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or
erroneously refunded or input tax credit wrongly availed or utilised for such periods
other than those covered under sub-section (1), on the person chargeable with tax.

Private Presentation Only not Professional Advice 154

 Time limits u/s 73

For the purpose of Time limit

Foe SCN issued u/s 73(1) At least 3 months prior to issue of order u/s 73(9) i.e.
2 years and 9 months from the due date of filing
annual return for the F.Y to which the demand pertains
or from date of erroneous refund as per u/s 73(2)
For adjudication order passed u/s 73(9) Within 3 year from the due date of filing annual return
for the year F.Y to which the demand pertains or
within 3 years from date of erroneous refund as per u/s
73(10)

Private Presentation Only not Professional Advice 155

 Amount of penalty

S.No. Action by Tax payer Amount of penalty

1 Tax and Interest paid before issuance of SCN No penalty and No SCN
2 Tax and interest paid within 30 days of No penalty & all processing deemed to be concluded
issuance of SCN
3 Tax and interest paid within 30 days of 10% of Tax amount, OR Rs. 10,000
communication of adjudication order Which ever is higher
4 Tax and interest paid after 30 days of 10% of Tax amount, OR Rs. 10,000
communication of adjudication order
Which ever is higher
NOTE:-1 Penalty shall also be not chargeable in case where the self-assessed tax or any amount collected as tax
is paid (with interest) within 30 days from the due date of payment.
NOTE:-2 Where any penalty imposed u/s 73, no penalty for the same act or omission shall be imposed on the
same person under any other provision of Act.
NOTE:-3 Payment of interest is mandatory even if not specified in adjudicating order as per u/s 73(9).

Private Presentation Only not Professional Advice 156

 Section 74

(1) Where it appears to the proper officer that any tax has not been paid or short paid or
erroneously refunded or where input tax credit has been wrongly availed or utilised by
reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he
shall serve notice on the person chargeable with tax which has not been so paid or
which has been so short paid or to whom the refund has erroneously been made, or
who has wrongly availed or utilised input tax credit, requiring him to show cause as to
why he should not pay the amount specified in the notice along with interest payable
thereon under section 50 and a penalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six months
prior to the time limit specified in sub-section (10) for issuance of order

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 Time limits u/s 74

For the purpose of Time limit

Foe SCN issued u/s 74(1) At least 6 months prior to issue of order u/s 74(9)
i.e. 4 years and 6 months from the due date of
filing annual return for the F.Y to which the
demand pertains or from date of erroneous refund
as per u/s 74(2)
For adjudication order passed u/s 74(9) Within 5 year from the due date of filing annual
return for the year F.Y to which the demand
pertains or within 5 years from date of erroneous
refund as per u/s 74(10)

Private Presentation Only not Professional Advice 158

 Amount of penalty

S.No Action by Tax payer Amount of penalty

.
1 Tax and Interest paid before issuance of SCN 15% Tax but No SCN

2 Tax and interest paid within 30 days of issuance of Penalty equal to 25% of Tax & all processing
SCN deemed to be concluded
3 Tax and interest paid within 30 days of Penalty equal to 50% of Tax & all processing
communication of adjudication order deemed to be concluded
4 Tax and interest paid after 30 days of 100% of Tax
communication of adjudication order

NOTE:-1 Penalty shall also be not chargeable in case where the self-assessed tax or any amount collected as tax
is paid (with interest) within 30 days from the due date of payment.
NOTE:-2 Where Payment of interest is mandatory even if not specified in adjudicating order as per u/s 74(9).
NOTE:-3 any penalty imposed u/s 74, no penalty for the same act or omission shall be imposed on the same
person under any other provision of Act.
Private Presentation Only not Professional Advice 159
 Penalty under Demand & Recovery
Show cause notice Order
Section 73 Bonafied Within 2 year & 9 months Within 3 years from due Section 73 Bonafied
of services from due date date of annual GST return
annual return filing.
Section 74 Malafied Within 4 years & 6 Within 5 years from due Section 74 Malafied
months from the due date of annual GST return
date of annual GST Return
Any amount of tax No Time Limit Within 1 year from date Any amount of tax
collected but not paid of issue of notice collected but not paid

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Time limit of show cause notice & order
S.No. Action by Tax Payer Section 73 Bonafied Case Section 74 Malafied case
1 Tax & interest paid before show No penalty 15% of tax
cause notice
2 Tax & interest within 30 days of No penalty 25% of tax
show cause notice
3 Tax & interest paid within 30 Higher of 10% of tax “or” 50% of tax
days of order Rs. 10,000
4 Tax & interest paid after 30 days Higher of 10% of tax “or” 100%
of order Rs. 10,000

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DRC-01: Summary of Show Cause Notice
DRC-02: Summary of Statement

DRC-03: Intimation of Payment made Voluntarily or

made against the Show Cause Notice or Statement

DRC-04: Acknowledgement of
Acceptance of Payment made Voluntarily
DRC-05: Intimation of Conclusion of Proceedings

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DRC-06: Reply to the Show Cause Notice

DRC-07: Summary of the order

DRC-08: Rectification of Order

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DRC-09: Orders for Recovery through specified officer U/S 79

DRC-10: Notice for Auction of

Goods U/S 79(1)(b) of the ACT

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DRC-11: Notice to Successful Bidder
DRC-12: Sale of Certificate

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DRC-13: Notice to third person U/S 79(1)(c)

DRC-14: Certificate of Payment to a

third Person

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DRC-15: Application before the Civil Court requesting
Execution of a Decree

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DRC-16: Notice for attachment and sale of
Immovable/Movable goods/shares u/s 79
DRC-17: Notice for Auction of Immovable/Movable
Property u/s 79

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 DRC-18: Certificate to the Collector or Deputy
Commissioner of the district or any other officer
authorized to recover from the person concerned

DRC-19: An application before the appropriate

Magistrate in accordance with the provisions of clause
(f)of sub-section (1) of section 79

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DRC-20: Application for Deferred Payment/Payment in
Instalments

DRC-21: Order for acceptance/rejection of application

for Deferred Payment/Payment in Instalments

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DRC-22: Provisional attachment of Property U/S 83

DRC-23: Restoration of Provisionally attached

Property / Bank Account U/S 83

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DRC-24: Intimation to liquidator for recovery of Amount

Private Presentation Only not Professional Advice 172

DRC-25: Continuation of Recovery Proceedings

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 Whether subsequent notice for the same
period acceptable?
No
Remark Flour Mills Pvt Ltd vs State of Gujarat (2018) (HC-Gujarat)

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 Whether PSC under coercion during raid
permissible?
No
Remark Flour Mills Pvt Ltd vs State of Gujarat (2018) (HC-Gujarat)

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 Whether provisional attachment of Bank
Account permissible?
• Demand Order Rs. 16.24 Crores
• Petitioner reversed ITC Rs. 13.28 Crores
• Therefore, Provisional Attachment no longer justified
• H.M. Industrial Pvt Ltd vs Comm. CGST (2019) (HC-Gujarat)

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 Whether CC be attached?

• The mandate of Section 83 is to attach amount lying in an account in

the form of FDR or saving and it cannot be intention or purport of
section 83 to attach an account having debit balance

• Bindal Smelting (P.) Ltd, HIGH COURT OF PUNJAB AND HARYANA,

[2020] 116 taxmann.com 28 (Punjab & Haryana)

• M/s.Petitioner Logisticts Ltd., HIGH COURT OF MADRAS,

WP.No.32285/2019

Private Presentation Only not Professional Advice 177

 Serve Notice
Sec-73(1) Sec-74(1)

Where it appears to the proper officer Where it appears to the proper officer
that any tax has not been paid or short that any tax has not been paid or short
paid or erroneously refunded, or where paid or erroneously refunded or where
input tax credit has been wrongly availed input tax credit has been wrongly availed
or utilised for any reason, other than the or utilised by reason of fraud, or any
reason of fraud or any wilful- wilful-misstatement or suppression of
misstatement or suppression of facts to facts to evade tax,
evade tax,

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 Serve Notice
Sec-73(1) Sec-74(1)

he shall serve notice on the person chargeable he shall serve notice on the person chargeable with
with tax which has not been so paid or which tax which has not been so paid or which has been
has been so short paid or to whom the refund so short paid or to whom the refund has
has erroneously been made, or who has erroneously been made, or who has wrongly
wrongly availed or utilised input tax credit, availed or utilised input tax credit, requiring him to
requiring him to show cause as to why he show cause as to why he should not pay the
should not pay the amount specified in the amount specified in the notice along with interest
notice along with interest payable thereon under payable thereon under section 50 and a penalty
section 50 and a penalty leviable under the equivalent to the tax specified in the notice.
provisions of this Act or the rules made
thereunder.

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 Time Limit For Issue Of Notice
Sec-73(2) Sec-74(2)

Issue of notice u/s/73(1) shall be at least 3 Issue of notice u/s 74(1) shall be at
months prior to the time limits specified in least 6 months prior to the time limit
sub.sec.10 for issuance of orders. specified in sub.sec.10 for issuance of
orders.

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 Time Limit For Issue Of Notice
Sec-73 Sec-74

When the service of the notice is stayed When the service of the notice is stayed
by an order of a court or Appellate by an order of a court or Appellate
Tribunal, the period of stay shall be Tribunal, the period of stay shall be
excluded in computing the period** (vide excluded in computing the period** (vide
sec.75(1) sec.75(1)

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 Issue Of Statement For Matters Covered Other Than Sec
73(1)/74(1)
Sec-73(3) Sec-74(3)

A statement showing the details of tax A statement showing the details of tax
not paid or short paid erroneously not paid or short paid erroneously
refunded or ITC wrongly availed or refunded or ITC wrongly availed or
utilized has also to be served. utilized has also to be served.

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 Deemed Notice
Sec-73(4) Sec-74(4)

If the grounds are the same as are mentioned in If the grounds are the same as are mentioned in
the earlier notice then the service of statement the earlier notice then the service of statement
deemed to be service of the notice. deemed to be service of the notice.

Private Presentation Only not Professional Advice 183

 Suo Motu Payment Of Tax
Sec-73(5) Sec-74(5)

There is option to pay the tax with interest

before issuance of notice and to inform such There is option to pay the tax with interest and
payment in writing to the proper officer. also penalty equivalent to 15% of the tax on the
basis of his own ascertainment or as ascertained
by the proper officer. and to inform such payment
to the proper officer in writing.

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 No Notice If Tax Paid As Above
Sec-73(6) Sec-74(6)

On receipt of such information, the proper On receipt of such information, the proper officer
officer need not serve any notice u/s 73(1) or need not serve any notice u/s 74(1) or statement
statement u/s 73(1) in respect of the tax so paid u/s 74(1) in respect of the tax so paid or any
or any penalty payable under the provisions of penalty payable under the provisions of this act or
this act or the rules made thereunder. the rules made thereunder.

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 Notice By Office In Case Of Short Amount
Paid
Sec-73(7) Sec-74(7)

If the payment so made is noticed with any If the payment so made is noticed with any short
short fall, the proper officer may proceed to fall, the proper officer may proceed to issue notice.
issue notice.

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No Penalty If Amount Paid Within 30 Days Of Issue Of
SCN
Sec-73(8) Sec-74(8)

If person chargeable with tax paid such tax along If person chargeable with tax paid such tax
with interest payable u/s 50 within 30 days of along with interest and penalty equivalent to
issue of show cause notice. 25% of such tax within 30 days of issue of
No penalty is payable. The notice shall deemed to notice, all proceedings deemed to be concluded.
be concluded

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 Determination Of Interest And Penalty
Sec-73(9) Sec-74(9)

If the notice is rebutted, the proper officer If the notice is rebutted, the proper officer after
after considering the representation may considering the representation determine the amount
determine the tax, interest and penalty of tax, interest and penalty due from such person and
equivalent to10% of tax or 10,000/= issue an order.
whichever is higher

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 Time Limit For Issue Of Order
Sec-73(10) Sec-74(10)

• Orders shall be issued within 3 years from • Orders shall be issued within 5 years from the
the due date for filing of annual return for due date for filing of annual return for the
the financial year and within**3 years in financial year and within **5 years in the case of
the case of erroneous refund. erroneous refund.
• If the order is not issued within the above time
• If the order is not issued within the above limit, it shall be deemed to be concluded
time limit, it shall be deemed to be
concluded

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 Time Limit For Issue Of Order
Sec-73(10) Sec-74(10)

• When the issuance of the order is stayed by an order of a • When the service of the issuance of
court or Appellate Tribunal, the period of stay shall be order is stayed by an order of a
excluded in computing the period (vide sec.75(1) court or Appellate Tribunal, the
period of stay shall be excluded in
computing the period (vide
sec.75(1)

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 PENALTY
Sec-73(11) Sec-74(11)
Where any person served with an order issued
In the case of self assessed tax or any amount u/s 74(9)
collected as tax has not been paid within 30 days • Pays the tax along with interest payable
from the due date of payment of such tax, penalty thereon u/s 50 and
u/s 73(9) shall be payable ie., @10% or 10000/= • A penalty equivalent to 15% of such tax
whichever is higher within 30 days of communication of the
order,All proceedings in respect of the said
notice shall be deemed to be concluded.

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 Section 75

(1) Where the service of notice or issuance of order is stayed by an order of a court
or Appellate Tribunal, the period of such stay shall be excluded in computing the
period specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and
(10) of section 74, as the case may be.

(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the
notice issued under sub-section (1) of section 74 is not sustainable for the reason
that the charges of fraud or any wilful-misstatement or suppression of facts to evade
tax has not been established against the person to whom the notice was issued, the
proper officer shall determine the tax payable by such person, deeming as if the
notice was issued under sub-section (1) of section 73.

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 Section 132

Explanation-
For the purposes of this section, the term “tax” shall include the amount of
tax evaded or the amount of input tax credit wrongly availed or utilised or
refund wrongly taken under the provisions of this Act, the State Goods and
Services Tax Act, the Integrated Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act and cess levied under the Goods and
Services Tax (Compensation to States) Act.

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 Section 76 – Tax collected but not paid to the
Government

This provision deals with payment of any amount collected as tax but not
remitted to the Central/State Government or Union Territory. This section
requires him to make the payment forthwith regardless of whether the
related supplies are taxable or not.

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 Section 76 – Tax collected but not paid to
the Government
(1) Notwithstanding anything to the contrary contained in any order or direction of any
Appellate Authority or Appellate Tribunal or court or in any other provisions of this Act or
the rules made thereunder or any other law for the time being in force, every person who
has collected from any other person any amount as representing the tax under this Act, and
has not paid the said amount to the Government, shall forthwith pay the said amount to the
Government, irrespective of whether the supplies in respect of which such amount was
collected are taxable or not.

(2) Where any amount is required to be paid to the Government under sub-section (1), and
which has not been so paid, the proper officer may serve on the person liable to pay such
amount a notice requiring him to show cause as to why the said amount as specified in the
notice, should not be paid by him to the Government and why a penalty equivalent to the
amount specified in the notice should not be imposed on him under the provisions of this
Act.

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 Section 76 – Tax collected but not paid to
the Government
(3) The proper officer shall, after considering the representation, if any,
made by the person on whom the notice is served under sub-section (2),
determine the amount due from such person and thereupon such person
shall pay the amount so determined.
(4) The person referred to in sub-section (1) shall in addition to paying
the amount referred to in sub-section (1) or sub-section (3) also be liable
to pay interest thereon at the rate specified under section 50 from the
date such amount was collected by him to the date such amount is paid
by him to the Government.

Private Presentation Only not Professional Advice 196

 Section 76 – Tax collected but not paid to
the Government
(5) An opportunity of hearing shall be granted where a request is
received in writing from the person to whom the notice was issued to
show cause.
(6) The proper officer shall issue an order within one year from the date
of issue of the notice.
(7) Where the issuance of order is stayed by an order of the court or
Appellate Tribunal, the period of such stay shall be excluded in
computing the period of one year.

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 Section 76 – Tax collected but not paid to
the Government

(8) The proper officer, in his order, shall set out the relevant facts and
the basis of his decision.
(9) The amount paid to the Government under sub-section (1) or sub-
section (3) shall be adjusted against the tax payable, if any, by the
person in relation to the supplies referred to in sub-section (1).

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 Section 76 – Tax collected but not paid to
the Government
(10) Where any surplus is left after the adjustment under sub-section
(9), the amount of such surplus shall either be credited to the Fund or
refunded to the person who has borne the incidence of such amount.
(11) The person who has borne the incidence of the amount, may apply
for the refund of the same in accordance with the provisions of section
54.

Private Presentation Only not Professional Advice 199

 Section 76 – Tax collected but not paid to
the Government
Important points related to Section 76-
This section makes it obligatory on every person who has collected from any other person
any amount representing “tax under this Act”, to pay the said amount to the credit of the
Central or State Government regardless of whether the supplies in respect of which the
amount was collected are taxable or not.
There is NO TIME LIMIT also called ‘period of limitation’ for issue of notice under this
section unlike under section 73 or 74.
Before effecting recovery the Proper Officer has to serve a notice along with a summary
in FORM GST DRC-01, on to any person who has collected any amount representing as
tax requiring to show cause as to why –
– the said amount should not be paid by him to the Government;
– penalty equivalent to such amount specified in the notice should not be imposed on him.

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 Section 76 – Tax collected but not paid to
the Government
The person is permitted to make representation in FORM GST DRC-06, against
the notice served on to him. The person ought to be given an opportunity of being
heard where a request is made by such person in writing.
After considering such representation made by the person, the Proper Officer shall
determine the amount due from the person and pass an order within one year from
the date of issue of notice. Where the service of notice is stayed by order of the
Court or Tribunal, the period covered by the stay shall stand excluded for the
purpose of computing the time limit.
The Proper Officer must pass a speaking order.
Upon such determination, the Person has to pay such amount determined.
Interest at the rate specified under section 50 shall be paid on the amount collected
as representing tax (either paid voluntarily or on determination by the Proper
Officer).

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 Section 76 – Tax collected but not paid to
the Government
Interest shall be calculated from the date of collection of amount till the date
of deposit of amount.
The amount paid by such person to the credit of the Central Government or a
State Government shall be adjusted against the tax payable by the person.
If any surplus is left after adjustment against the tax liability, it will be
– Credited to consumer welfare fund; or
– Refunded to the person who has borne the incidence of such amount.
The person claiming such refund shall follow the conditions and procedure
contained in section 54 of CGST Act.

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 Section 77- Tax wrongfully collected and paid to
Central or State Government

(1) A registered person who has paid the Central tax and State tax or, as the case
may be, the Central tax and the Union territory tax on a transaction considered by
him to be an intra-State supply, but which is subsequently held to be an inter-State
supply, shall be refunded the amount of taxes so paid in such manner and subject to
such conditions as may be prescribed.
(2) A registered person who has paid integrated tax on a transaction considered by
him to be an inter-State supply, but which is subsequently held to be an intra-
State supply, shall not be required to pay any interest on the amount of central tax
and State tax or, as the case may be, the Central tax and the Union territory tax
payable.

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 Section 77- Tax wrongfully collected and paid
to Central or State Government
Analysis-
This provision deals with a situation where a taxable person wrongly pays CGST/SGST or
CGST/UTGST on the transaction treating it as intra-state supply, but which is subsequently
held to be inter-state supply. Upon payment of IGST on such transaction, the CGST/SGST
or CGST/UTGST will to be refunded in such manner and subject to prescribed conditions.
If a taxable person wrongly pays IGST by treating a supply as inter-state supply, which is
subsequently held to be intra-state supply, interest is not required to be paid on the
CGST/SGST or CGST/UTGST payable. The law in such situations does not require any
further payment of tax which implies that the Government will make suitable tax
settlements at their end.
Jurisdiction to demand for CGST (and SGST) is contained in section 77(1) whereas
jurisdiction to demand IGST is contained in section 19(1) of IGST Act. And relief from
payment of interest on CGST-SGST is allowed under section 77(2) whereas relief from
payment of interest on IGST is allowed under section 19(2) of IGST Act.

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 Rule 142 – Notice and order of demand of amount payable under the ACT.

SUMMARY OF NOTICE/
STATEMENT FURNISHED E-UPLOADING OF SUMMARY OF
ELECTRONICALLY ADJUDICATION ORDER
REPLY TO SHOW
PO serve – mentioning amount CAUSE NOTICE In Form GST DRC – 07 Summary of Rectification of summary
payable specifying adjudication order
In Form GST DRC – 06
order
a) Notice in Sec 73(1), 74(1), 75(2), In Sec 73(9), 74(9), 1. Tax In accordance with sec 161
Summary in Form GST DRC-01 76(3) Treated as notice in Form GST DRC - 08
2. Interest of recovery
b) Notice in Sec 73(3), 74(3), 3. Penalty
Summary in Form GST DRC-02 U/s 73(9), 74(9) , 76(3)

If paid within 30 days of Notice

If paid before Notice or statement Payment voluntary made
Payment voluntary made i) Other than Fraud – Sec 73(8) – Tax and interest
i) Other than Fraud – Sec 73(5) – Pay Tax and interest ii) Fraud – Sec 74(8) – Tax, int. & 25% penalty
ii) Fraud – Sec 74(5) – Pay Tax, int. & 15% penalty INFORM PAYMENT IN FORM GST DRC – 03
INFORM PAYMENT IN FORM GST DRC – 03 Proper office issue acknowledgment in FROM GST DRC –
Proper office issue acknowledgment in FROM GST DRC - 04 04
Concluding the proceeding in respect of said notice
Private Presentation Only not Professional Advice 205
 Rule 142 – Notice and order of demand of amount payable under
the ACT.

1) The proper officer shall serve, along with the

(a) notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section
123 or section 124 or section 125 or section 127 or section 129 or section 130, a summary thereof
electronically in FORM GST DRC-01,
(b) statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof
electronically in FORM GST DRC-02, specifying therein the details of the amount payable.
1 (1A) The proper officer shall1 "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) of
Section 74, as the case may be, shall communicate2 "communicate" the details of any tax, interest
and penalty as ascertained by the said officer, in Part A of FORM GST DRC-01A.

Private Presentation Only not Professional Advice 206

 Rule 142 – Notice and order of demand of amount payable under
the ACT.

(2) Where, before the service of notice or statement, the person chargeable with tax makes payment of the tax
and interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax,
interest and penalty in accordance with the provisions of sub-section (5) of section 74, or where any person
makes payment of tax, interest, penalty or any other amount due in accordance with the provisions of the Act 2
whether on his own ascertainment or, as communicated by the proper officer under sub-rule (1A), he shall
inform the proper officer of such payment in FORM GST DRC-03 and the proper officer shall issue an
acknowledgement, accepting the payment made by the said person in FORM GST DRC– 04.

3(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount communicated to
him or desires to file any submissions against the proposed liability, he may make such submission in Part B of
FORM GST DRC-01A.

Private Presentation Only not Professional Advice 207

Rule 142 – Notice and order of demand of amount payable
under the ACT.

(3) Where the person chargeable with tax makes payment of tax and interest under
subsection (8) of section 73 or, as the case may be, tax, interest and penalty under sub-
section (8) of section 74 within thirty days of the service of a notice under sub-rule (1), or
where the person concerned makes payment of the amount referred to in sub-section (1) of
section 129 within fourteen days of detention or seizure of the goods and conveyance, he
shall intimate the proper officer of such payment in FORM GST DRC-03 and the proper
officer shall issue an order in FORM GST DRC-05 concluding the proceedings in respect of
the said notice.
(4) The representation referred to in sub-section (9) of section 73 or sub-section (9) of
section 74 or sub-section (3) of section 76 or the reply to any notice issued under any
section whose summary has been uploaded electronically in FORM GST DRC-01 under
sub-rule (1) shall be furnished in FORM GST DRC-06.

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Rule 142 – Notice and order of demand of amount payable
under the ACT.

(5) A summary of the order issued under section 52 or section 62 or section 63 or section 64
or section 73 or section 74 or section 75 or section 76 or section 122 or section 123 or
section 124 or section 125 or section 127 or section 129 or section 130 shall be uploaded
electronically in FORM GST DRC-07, specifying therein the amount of tax, interest and
penalty payable by the person chargeable with tax.
(6) The order referred to in sub-rule (5) shall be treated as the notice for recovery.
(7) Where a rectification of the order has been passed in accordance with the provisions of
section 161 or where an order uploaded on the system has been withdrawn, a summary of
the rectification order or of the withdrawal order shall be uploaded electronically by the
proper officer in FORM GST DRC-08.”

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Amendment under Section 73 & 74 of CGST Act

Superintend of Central Tax made proper officers for the purpose of issuing SCN and
passing orders under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of
Section 74. (Cases involving fraud/suppression etc where extended period is
invoked)

Superintend of Central Tax were already proper officers for the purpose of issue of
SCN and orders u/s 73 (where there is no fraud/suppression etc) vide Circular
No. 3/3/2017 - GST dated 5th July, 2017

Monetary limits for the purpose of Adjudication u/s 73 & 74 laid down

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Amendment under Section 73 & 74 of CGST Act

Cases involving multiple Commissionerate

• to be adjudicated by proper officers of Commissionerate where
maximum demand involved.
• A show cause notice issued by DGGSTI in which the principal places of
business of the notices fall in multiple Commissionerate and where the central
tax and/or integrated tax (including cess) involved is more than Rs. 5 crores

• shall be adjudicated by an officer of the rank of Additional Director/Additional

Commissioner (as assigned by the Board), who shall not be on the strength of
DGGSTI and working there at the time of adjudication. Cases of similar
nature may also be assigned to such an officer.

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Amendment under Section 73 & 74 of CGST Act

• In case show cause notices have been issued on similar issues to a

noticee(s) and made answerable to different levels of adjudicating
authorities within a Commissionerate,
• such show cause notices should be adjudicated by the adjudicating
authority competent to decide the case involving the highest amount of
central tax and/or integrated tax (including cess).

Private Presentation Only not Professional Advice 212

 Case Laws on Section 73

Godavari Commodities Ltd. vs The Union Of India on 3 December, 2019

Issue :- the petitioner submits that the impugned action of the respondent authority is absolutely
illegal and is in teeth of the Section 73(1) of CGST Act, show-cause notice to be given to the
petitioner before issuing any such letter.
Sec-73 . Determination of tax not paid or short paid or erroneously refunded or input tax credit
wrongly availed or utilised for any reason other than fraud or any willful misstatement or suppression
of facts.-
if any penal action is taken against the petitioner, irrespective of the fact whether there is
provision under the Act or not, the minimum requirement is that the principles of natural
justice must be followed. In the present case admittedly, prior to the issuance of letter dated
6.2.2019, no show-cause notice or an opportunity of being heard was given to the petitioner
and no adjudication order was passed.
Private Presentation Only not Professional Advice 213
Godavari Commodities Ltd. vs The Union Of India

In case, upon adjudication, it is found that the petitioner was not

liable to make the payment of interest short paid, the said amount
shall be refunded to the petitioner with statutory interest thereon.

Conclusion :- show cause notice is necessary before any penal

action is taken

Private Presentation Only not Professional Advice 214

 M/S Magma Fincorp Limited vs State Of Telangana on 15
April, 2019

Bench: V Ramasubramanian, P.Keshava Rao

LAW POINT :- Matters requires reconsideration.

Judgement:-the writ petition is allowed and the impugned order is set aside and
the matter remanded back to the second respondent for a fresh consideration in the
light of the observations contained in this order.

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 M/S Magma Fincorp Limited vs State Of Telangana on 15 April, 2019

• Once it is admitted that credit was available to the petitioner on the date of switch over from VAT
regime to GST regime and once it is admitted that the petitioner may be entitled to make a claim for
this credit in other modes, we think that the second respondent ought to have given a purposive
interpretation to Section 140 of the Act read with Sections 16 to 21 of the Telangana GST Act 2017. As
he has failed to do the same, the matter requires reconsideration.

• engaged in the business of leasing and financing of vehicles and equipments.

• Challenging the rejection of transitional relief in terms of sections 73 and 74 of the Telagnana Goods
and Services Act, 2017 (for short 'the Act') read with Rule 121

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 M/S Magma Fincorp Limited vs State Of Telangana on 15 April, 2019

• they migrated to the State of Telangana after bifurcation and the amount of total ITC available to
their credit was shown in the Web Portal of the Department as Rs.1,77,65,101/-.

• petitioner claims to have filed all their returns up to 30.06.2017 under the Telangana VAT Act,
2005.

• the petitioner filed TRAN-1 on 07.10.2017 under the Telangana Goods and Services Tax Act,
2017 for the transfer of ITC of Rs.1,43,96,486/- available as on 30.06.2017 under the State VAT
Act.

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 M/S Magma Fincorp Limited vs State Of Telangana on 15 April, 2019

• But, according to the respondents, the State GST Act does not provide for utilization of the 28 NCCF as
transitional relief. Therefore, the second respondent concluded that the Assessing Authority has no such
power beyond what is prescribed by the Statute and that the Dealer is always at liberty to adjust the liabilities
in pending assessments under VAT and CST and thereafter claim refund.

• In the light of the admitted facts reflected even in the impugned order, it is clear that the petitioner is not
making an illusory or stale claim, but is making a claim for something that he is entitled, even according to
the respondents, though in a different form.

• it is not the case of the respondents that the petitioner is claiming something that they are not lawfully
entitled. All that is stated by the second respondent is that while the petitioner may be entitled either to adjust
the available credit against any liabilities under the VAT regime or to claim refund, they are not entitled to
seek transitional relief.
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 M/S Magma Fincorp Limited vs State Of Telangana on 15 April, 2019

• Conditions not availing transitional relief

➢ said amount of credit is not admissible as input tax credit under this Act; or
➢ where he has not furnished all the returns required under the existing law for the period of six months
immediately preceding the appointed date;
it appears that no assessment is pending either under the VAT Act or under the CST Act. Therefore, the
only way the petitioner can make use of this credit, even according to the second respondent, is to
make a claim for 11 VRS,J & PKR,J WP No.46792 of 2018 refund. But, we do not know what
difference it would make for the respondents, whether the petitioner seeks refund or seeks adjustment
of their liability under the GST regime.
Conclusion :- transitional benefit should be available to the petitioner. Hence writ petition is allowed
and the impugned order is set aside.

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 M/S SERAJUDDIN AND CO. VS. UNION OF INDIA (HIGH COURT OF ORRISA)
ON 09TH JANUARY 2020

Issue :- the petition granted where a request is received in writing from the person
submits that the impugned order had been passed without giving an opportunity of
being heard .
Sec-75(4). An opportunity of hearing shall be chargeable with tax or
penalty, or where any adverse decision is contemplated against such person.
Noticed had been issued to assessee under Section 73 for non-payment of
OGST/CGST for period June, 2018 to December, 2018 — However, without
responding to prayer of assessee for time and without giving them an
opportunity of personal hearing, impugned orders were passed, which were
under challenged here.
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 M/S SERAJUDDIN AND CO. VS. UNION OF INDIA (HIGH COURT
OF ORRISA) ON 09TH JANUARY 2020
Held, on perusal of Section 75(4) it was cleared that whenever an assessee, chargeable
with tax and penalty makes a request in writing for opportunity of hearing, such an
opportunity should be granted to him — Here, admittedly though a request was made
for personal hearing, however, without granting same impugned orders had been
passed — Hence, impugned order was quashed — Appeal Allowed.
Interpretation-
Here the Order was passed against the assessee however no Opportunity of Heard was
given to assessee and Interest under Section 73 was initiated. Assessee filed a writ
against the High Court and his appeal was allowed.

Conclusion :-
Notice or Order passed without giving an opportunity to assessee is null and void
under the principles of Audi Alteram Partem.

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 Section 79 Recovery of tax

(1) Where any amount payable by a person to the Government under any of the
provisions of this Act or the rules made thereunder is not paid, the proper officer
shall
proceed to recover the amount by one or more of the following modes, namely: ––
(a) the proper officer may deduct or may require any other specified officer to
deduct the amount so payable from any money owing to such person which may be
under the control of the proper officer or such other specified officer
(b) the proper officer may recover or may require any other specified officer to
recover the amount so payable by detaining and selling any goods belonging to such
person which are under the control of the proper officer or such other specified
officer.

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 Section 79 Recovery of tax

(c)(i) the proper officer may, by a notice in writing, require any other person from
whom money is due or may become due to such person or who holds or may
subsequently hold money for or on account of such person to pay to the Government
either forthwith upon the money becoming due or being held, or within the time
specified in the notice not being before the money becomes due or is held, so much
of the money as is sufficient to pay the amount due from such person or the whole
of the money when it is equal to or less than that amount;
(ii) every person to whom the notice is issued under sub-clause (i) shall be bound to
comply with such notice, and in particular, where any such notice is issued to a
post office, banking company or an insurer, it shall not be necessary to produce any
pass book, deposit receipt, policy or any other document for the purpose of any
entry, endorsement or the like being made before payment is made, notwithstanding
any rule, practice or requirement to the contrary;
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 Section 79 Recovery of tax

(iii) in case the person to whom a notice under sub-clause (i) has been issued,
fails to make the payment in pursuance thereof to the Government, he shall be
deemed to be a defaulter in respect of the amount specified in the notice and all the
consequences of this Act or the rules made thereunder shall follow;
(iv) the officer issuing a notice under sub-clause (i) may, at any time, amend or
revoke such notice or extend the time for making any payment in pursuance of the
notice;
(v) any person making any payment in compliance with a notice issued under sub-
clause (i) shall be deemed to have made the payment under the authority of the
person in default and such payment being credited to the Government shall
be deemed to constitute a good and sufficient discharge of the liability of such
person to the person in default to the extent of the amount specified in the receipt;

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 Section 79 Recovery of tax

(vi) any person discharging any liability to the person in default after service
on him of the notice issued under sub-clause (i) shall be personally liable to the
Government to the extent of the liability discharged or to the extent of the liability
of the person in default for tax, interest and penalty, whichever is less;
(vii) where a person on whom a notice is served under sub-clause (i) proves to
the satisfaction of the officer issuing the notice that the money demanded or any
part thereof was not due to the person in default or that he did not hold any money
for or on account of the person in default, at the time the notice was served on
him, nor is the money demanded or any part thereof, likely to become due to the
said person or be held for or on account of such person, nothing contained in this
section shall be deemed to require the person on whom the notice has been served to
pay to the Government any such money or part thereof;

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 Section 81

Where a person, after any amount has become due from him, creates a charge on or
parts with the property belonging to him or in his possession by way of sale,
mortgage, exchange, or any other mode of transfer whatsoever of any of his
properties in favour of any other person with the intention of defrauding the
Government revenue, such charge or transfer shall be void as against any claim in
respect of any tax or any other sum payable by the said person:
Provided that, such charge or transfer shall not be void if it is made for adequate
consideration, in good faith and without notice of the pendency of such proceedings
under this Act or without notice of such tax or other sum payable by the said person,
or with the previous permission of the proper officer.

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 Section 122

(1) Where a taxable person who

(i) supplies any goods or services or both without issue of any invoice or
issues an incorrect or false invoice with regard to any such supply;
(ii) issues any invoice or bill without supply of goods or services or both in
violation of the provisions of this Act or the rules made thereunder;
(iii) collects any amount as tax but fails to pay the same to the Government
beyond a period of three months from the date on which such payment
becomes due;

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 Section 122

(iv) collects any tax in contravention of the provisions of this Act but fails to
pay the same to the Government beyond a period of three months from the date
on which such payment becomes due;
(v) fails to deduct the tax in accordance with the provisions of sub-section (1)
of section 51, or deducts an amount which is less than the amount required
to be deducted under the said sub-section, or where he fails to pay to the
Government under sub-section (2) thereof, the amount deducted as tax;
(vi) fails to collect tax in accordance with the provisions of sub-section (1) of
section 52, or collects an amount which is less than the amount required to
be collected under the said sub-section or where he fails to pay to the
Government the amount collected as tax under sub-section (3) of section
52;

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 Section 122

(vii) takes or utilises input tax credit without actual receipt of goods or
services or both either fully or partially, in contravention of the
provisions of this Act or the rules made thereunder;
(viii) fraudulently obtains refund of tax under this Act;
(ix) takes or distributes input tax credit in contravention of section 20, or the
rules made thereunder;

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 Section 122

(x) falsifies or substitutes financial records or produces fake accounts or

documents or furnishes any false information or return with an intention
to evade payment of tax due under this Act;
(xi) is liable to be registered under this Act but fails to obtain registration;
(xii)furnishes any false information with regard to registration particulars,
either at the time of applying for registration, or subsequently;

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 Section 122

(xiii) obstructs or prevents any officer in discharge of his duties under this Act;
(xiv) transports any taxable goods without the cover of documents as may be
specified in this behalf;
(xv) suppresses his turnover leading to evasion of tax under this Act;

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 Section 122

(xvi) fails to keep, maintain or retain books of account and other documents in
accordance with the provisions of this Act or the rules made thereunder
(xvii)fails to furnish information or documents called for by an officer in
accordance with the provisions of this Act or the rules made thereunder or
furnishes false information or documents during any proceedings under
this Act;
(xviii)supplies, transports or stores any goods which he has reasons to believe
are liable to confiscation under this Act;

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 Section 122

(xix) issues any invoice or document by using the registration number of

another registered person;
(xx) tampers with, or destroys any material evidence or document;
(xxi) disposes off or tampers with any goods that have been detained, seized,
or attached under this Act,

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 Section 122

He shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to

the tax evaded or the tax not deducted under section 51 or short deducted or
deducted but not paid to the Government or tax not collected under section 52 or
short collected or collected but not paid to the Government or input tax credit
availed of or passed on or distributed irregularly, or the refund claimed fraudulently,
whichever is higher.

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 Section 122

• 2. Any registered person who supplies any goods or services or both on which
any tax has not been paid or short-paid or erroneously refunded, or where the
input tax credit has been wrongly availed or utilized,
(a) for any reason, other than the reason of fraud or any willful misstatement
or suppression of facts to evade tax, shall be liable to a penalty of ten
thousand rupees or ten per cent. of the tax due from such person, whichever
is higher;
(b) for reason of fraud or any willful misstatement or suppression of facts to
evade tax, shall be liable to a penalty equal to ten thousand rupees or the
tax due from such person, whichever is higher.

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 Section 122

• (3) Any person who

(a) aids or abets any of the offences specified in clauses (i) to (xxi) of subsection (1);

(b) acquires possession of, or in any way concerns himself in transporting, removing,
depositing, keeping, concealing, supplying, or purchasing or in any other manner deals with
any goods which he knows or has reasons to believe are liable to confiscation under this Act or
the rules made thereunder;

(c) receives or is in any way concerned with the supply of, or in any other manner deals with
any supply of services which he knows or has reasons to believe are in contravention of any
provisions of this Act or the rules made thereunder;

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 Section 122

(d) fails to appear before the officer of central tax, when issued with a
summon for appearance to give evidence or produce a document in an
inquiry;

(e) fails to issue invoice in accordance with the provisions of this Act or the
rules made thereunder or fails to account for an invoice in his books of
account,shall be liable to a penalty which may extend to twenty-five
thousand rupees.

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 Section 123

•If a person who is required to furnish an information return under section 150 fails
to do so within the period specified in the notice issued under sub-section (3)
thereof, the proper officer may direct that such person shall be liable to pay a
penalty of one hundred rupees for each day of the period during which the failure
to furnish such return continues:

•Provided that the penalty imposed under this section shall not exceed five
thousand rupees.

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 Section 124

•If any person required to furnish any information or return under section 151,

(a) without reasonable cause fails to furnish such information or return as may be required under
that section, or

(b) willfully furnishes or causes to furnish any information or return which he knows to be false,

• he shall be punishable with a fine which may extend to ten thousand rupees and in case of a
continuing offence to a further fine which may extend to one hundred rupees for each day after the
first day during which the offence continues subject to a maximum limit of twenty- five thousand
rupees.

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 Section 125

Any person, who contravenes any of the provisions of this Act or any
rules made thereunder for which no penalty is separately provided for in
this Act, shall be liable to a penalty which may extend to twenty-five
thousand rupees.

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 Section 126

1. No officer under this Act shall impose any penalty for minor breaches of tax
regulations or procedural requirements and in particular, any omission or
mistake in documentation which is easily rectifiable and made without
fraudulent intent or gross negligence.
Explanation:
(a) a breach shall be considered a ‘minor breach‘ if the amount of tax involved
is less than five thousand rupees;
(b) an omission or mistake in documentation shall be considered to be easily
rectifiable if the same is an error apparent on the face of record.

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 Section 126

2.The penalty imposed under this Act shall depend on the facts and circumstances
of each case and shall be commensurate with the degree and severity of the breach.
3.No penalty shall be imposed on any person without giving him an opportunity of
being heard.
4.The officer under this Act shall while imposing penalty in an order for a breach
of any law, regulation or procedural requirement, specify the nature of the breach
and the applicable law, regulation or procedure under which the amount of penalty
for the breach has been specified.

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 Section 126

5. When a person voluntarily discloses to an officer under this Act the circumstances of
a breach of the tax law, regulation or procedural requirement prior to the discovery
of the breach by the officer under this Act, the proper officer may consider this fact
as a mitigating factor when quantifying a penalty for that person.
6. The provisions of this section shall not apply in such cases where the penalty
specified under this Act is either a fixed sum or expressed as a fixed percentage.

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 Section 127

Where the proper officer is of the view that a person is liable to a

penalty and the same is not covered under any proceedings under
section 62 or section 63 or section 64 or section 73 or section 74 or
section 129 or section 130, he may issue an order levying such penalty
after giving a reasonable opportunity of being heard to such person

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 Section 128

The Government may, by notification, waive in part or full, any penalty

referred to in section 122 or section 123 or section 125 or any late fee
referred to in section 47 for such class of taxpayers and under such
mitigating circumstances as may be specified therein on the
recommendations of the Council.

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 Section 129

(1) Notwithstanding anything contained in this Act, where any person transports any
goods or stores any goods while they are in transit in contravention of the provisions
of this Act or the rules made thereunder, all such goods and conveyance used as a
means of transport for carrying the said goods and documents relating to such goods
and conveyance shall be liable to detention or seizure and after detention or seizure,
shall be released,
a) on payment of the applicable tax and penalty equal to one hundred per cent. of the
tax payable on such goods and, in case of exempted goods, on payment of an
amount equal to two per cent. of the value of goods or twenty-five thousand
rupees, whichever is less, where the owner of the goods comes forward for
payment of such tax and penalty;

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 Section 129

(b) on payment of the applicable tax and penalty equal to the fifty per cent. of the
value of the goods reduced by the tax amount paid thereon and, in case of
exempted goods, on payment of an amount equal to five per cent. of the value of
goods or twenty-five thousand rupees, whichever is less, where the owner of the
goods does not come forward for payment of such tax and penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a) or
clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without
serving an order of detention or seizure on the person transporting the goods.

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 Section 129

(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for
detention and seizure of goods and conveyances.
(3) The proper officer detaining or seizing goods or conveyances shall issue a notice
specifying the tax and penalty payable and thereafter, pass an order for payment of
tax and penalty under clause (a) or clause (b) or clause (c).
(4) No tax, interest or penalty shall be determined under sub-section (3) without
giving the person concerned an opportunity of being heard.

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 Section 129

(5) On payment of amount referred in sub-section (1), all proceedings in respect of the
notice specified in sub-section (3) shall be deemed to be concluded.
(6) Where the person transporting any goods or the owner of the goods fails to pay the
amount of tax and penalty as provided in sub-section (1) within seven days of such
detention or seizure, further proceedings shall be initiated in accordance with the
provisions of section 130:
Provided that where the detained or seized goods are perishable or hazardous in nature
or are likely to depreciate in value with passage of time, the said period of seven days
may be reduced by the proper officer.

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 Case laws on section 129

Case Law Name:- Ashwini jain Vs. State of UP (High Court of

Allahabad) on 6th December, 2019
Issue:- Assessee filed writ petition stating that he was merely a
registered owner of vehicle and had nothing to do with goods and as
such he was not liable to pay penalty in terms of section 129(3), Where
Competent Authority had detained a vehicle and goods contained
therein and imposed penalty upon assessee (owner of vehicle) for
purpose of release of vehicle and goods in terms of section 129(3).

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Ashwini jain Vs. State of UP (High Court of Allahabad)

Section :- Section 129 of the Central Goods and Services Tax Act, 2017/Section 129 of the
Uttar Pradesh Goods and Services Tax Act, 2017 - Detention, seizure and release of goods
and conveyances in transit - Competent Authority detained a vehicle under transport and
goods contained therein and imposed penalty upon assessee (owner of vehicle) for purpose
of release of vehicle and goods in terms of section 129 - Assessee filed writ petition stating
that he was merely a registered owner of vehicle and had nothing to do with goods and as
such he was not liable to pay penalty in terms of section 129(3) - Whether as heading of
section 129 is wide and clear enough to encompass within its fold vehicle in question along
with goods, assessee could not wriggle out of his liability to pay penalty as imposed in
terms of section 129(3) for purpose of release of vehicle
Conclusion:- Registered Owner of Vehicle is liable to pay Penalty in terms of Section
129(3).

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 Section 130

(1) Notwithstanding anything contained in this Act, if any person

(i) supplies or receives any goods in contravention of any of the provisions of
this Act or the rules made thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this
Act; or
(iii) supplies any goods liable to tax under this Act without having applied for
registration; or

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 Section 130

(iv) contravenes any of the provisions of this Act or the rules made thereunder
with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder unless
the owner of the conveyance proves that it was so used without the knowledge
or connivance of the owner himself, his agent, if any, and the person in charge
of the conveyance,then, all such goods or conveyances shall be liable to
confiscation and the person shall be liable to penalty under section 122.

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 Section 130

(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the
officer adjudging it shall give to the owner of the goods an option to pay in lieu of
confiscation, such fine as the said officer thinks fit:
• Provided that such fine leviable shall not exceed the market value of the goods
confiscated, less the tax chargeable thereon:
• Provided further that the aggregate of such fine and penalty leviable shall not be less
than the amount of penalty leviable under sub-section (1) of section 129:
• Provided also that where any such conveyance is used for the carriage of the goods or
passengers for hire, the owner of the conveyance shall be given an option to pay in
lieu of the confiscation of the conveyance a fine equal to the tax payable on the goods
being transported thereon.

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 Section 130

(3) Where any fine in lieu of confiscation of goods or conveyance is imposed under
sub-section (2), the owner of such goods or conveyance or the person referred to
in sub-section (1), shall, in addition, be liable to any tax, penalty and charges
payable in respect of such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of penalty
shall be issued without giving the person an opportunity of being heard.
(5) Where any goods or conveyance are confiscated under this Act, the title of such
goods or conveyance shall thereupon vest in the Government.

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 Section 130

(6) The proper officer adjudging confiscation shall take and hold possession of
the things confiscated and every officer of Police, on the requisition of such
proper officer, shall assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated goods
or conveyance are not required in any other proceedings under this Act and
after giving reasonable time not exceeding three months to pay fine in lieu
of confiscation, dispose of such goods or conveyance and deposit the sale
proceeds thereof with the Government.

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 Section 131

Without prejudice to the provisions contained in the Code of Criminal

Procedure, 1973, no confiscation made or penalty imposed under the
provisions of this Act or the rules made thereunder shall prevent the
infliction of any other punishment to which the person affected thereby
is liable under the provisions of this Act or under any other law for the
time being in force.

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 Section 132

(1) Whoever commits any of the following offences, namely:

(a) supplies any goods or services or both without issue of any invoice, in
violation of the provisions of this Act or the rules made thereunder, with the
intention to evade tax;
(b) issues any invoice or bill without supply of goods or services or both in
violation of the provisions of this Act, or the rules made thereunder leading to
wrongful availment or utilization of input tax credit or refund of tax;
(c) avails input tax credit using such invoice or bill referred to in clause (b);

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 Section 132

(d) collects any amount as tax but fails to pay the same to the Government
beyond a period of three months from the date on which such payment
becomes due;
(e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund
and where such offence is not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts or
documents or furnishes any false information with an intention to evade
payment of tax due under this Act;

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 Section 132

(g) obstructs or prevents any officer in the discharge of his duties under this Act;
(h) acquires possession of, or in any way concerns himself in transporting,
removing, depositing, keeping, concealing, supplying, or purchasing or in any
other manner deals with, any goods which he knows or has reasons to believe
are liable to confiscation under this Act or the rules made thereunder;
(i) receives or is in any way concerned with the supply of, or in any other manner
deals with any supply of services which he knows or has reasons to believe
are in contravention of any provisions of this Act or the rules made
thereunder;

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 Section 132

(j) tampers with or destroys any material evidence or documents;

(k) fails to supply any information which he is required to supply under this Act
or the rules made thereunder or (unless with a reasonable belief, the burden of
proving which shall be upon him, that the information supplied by him is true)
supplies false information; or
(l) attempts to commit, or abets the commission of any of the offences mentioned
in clauses (a) to (k) of this section,

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 Section 132

• Shall pe punishable-
(i) in cases where the amount of tax evaded or the amount of input tax credit wrongly
availed or utilized orthe amount of refund wrongly taken exceeds five hundred lakh
rupees, with imprisonment for a term which may extend to five years and with fine;
(ii) in cases where the amount of tax evaded or the amount of input tax credit wrongly
availed or utilised or the amount of refund wrongly taken exceeds two hundred lakh
rupees but does not exceed five hundred lakh rupees, with imprisonment for a term
which may extend to three years and with fine;
(iii) in the case of any other offence where the amount of tax evaded or the amount of
input tax credit wrongly availed or utilised or the amount of refund wrongly taken
exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees, with
imprisonment for a term which may extend to one year and with fine;

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 Section 132

in cases where he commits or abets the commission of an offence

specified in clause (f) or clause (g) or clause (j), he shall be punishable
with imprisonment for a term which may extend to six months or with
fine or with both.

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 Section 132

(2) Where any person convicted of an offence under this section is again
convicted of an offence under this section, then, he shall be punishable for the
second and for every subsequent offence with imprisonment for a term which
may extend to five years and with fine.
(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and
sub-section (2) shall, in the absence of special and adequate reasons to the
contrary to be recorded in the judgment of the Court, be for a term not less
than six months.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
all offences under this Act, except the offences referred to in sub-section (5)
shall be non- cognizable and bailable.

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 Section 132

(5) The offences specified in clause (a) or clause (b) or clause (c) or clause
(d) of sub-section (1) and punishable under clause (i) of that sub-section
shall be cognizable and non-bailable.
(6) A person shall not be prosecuted for any offence under this section
except with the previous sanction of the Commissioner.

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 Section 132

• Explanation-
For the purposes of this section, the term “tax” shall include the amount of
tax evaded or the amount of input tax credit wrongly availed or utilised or
refund wrongly taken under the provisions of this Act, the State Goods and
Services Tax Act, the Integrated Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act and cess levied under the Goods and
Services Tax (Compensation to States) Act.

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 Amount of Penalty

S.no. Action By Tax Payer Amount of Penalty

1. Supplying goods or services without issue of any invoice or 1. Rs 10,000/-
incorrect or false invoice. 2. An Amount equivalent to Tax
evaded
2. Issues any invoice without supplying any goods or services or both Whichever is higher.
in violation of this Act or rules.

3. Collects the tax but fails to deposit the same with Govt within 3
months of due date.

4. Collects the tax in violation of this Act but fails to deposit the same
with Govt within 3 months of due date

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 Amount of Penalty

S.no. Action By Tax Payer Amount of Penalty

5. Fails to deduct TDS & fails to deposit the TDS with Govt 1. Rs 10,000/-
2. An Amount equivalent to
⁃ Tax evaded
6. Fails to deduct TCS & fails to deposit the TCS with Govt. ⁃ TDS not deducted or short TDS
deducted or not deposited with
government
7. Takes or utilizes ITC without actual receipt of goods or services. ⁃ TCS not collected or short TCS
collected or not deposited with
government
8. Obtains refund of tax fraudulently. ⁃ Wrong ITC availed or utilized or
distributed irregularly
⁃ Wrong refund claimed
Whichever is higher.

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 Amount of Penalty

S.no. Action By Tax Payer Amount of Penalty

13. Obstructs or prevents any officer from discharge of his duties. 1. Rs 10,000/-
2. An Amount equivalent to
⁃ Tax evaded
14. Transport any taxable goods without proper documents. ⁃ TDS not deducted or short TDS
deducted or not deposited with
government
15. Suppresses turnover to evade tax. ⁃ TCS not collected or short TCS
collected or not deposited with
government
16. Fails to maintain proper accounts & documents. ⁃ Wrong ITC availed or utilized or
distributed irregularly
⁃ Wrong refund claimed
Whichever is higher.
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 Amount of Penalty

S.no. Action By Tax Payer Amount of Penalty

17. Fails to furnish information or documents in any 1. Rs 10,000/-
proceedings. 2. An Amount equivalent to
18. Supplies, transport, stores any goods which he knows are ⁃ Tax evaded
liable to confiscation under the Act. ⁃ TDS not deducted or short TDS
deducted or not deposited with
19. Issues any invoice or document using the registration government
number of another registered person. ⁃ TCS not collected or short TCS
20. Tampers with, destroys any material evidence or collected or not deposited with
document. government
21. Disposes off or tampering with any goods that have been ⁃ Wrong ITC availed or utilized or
detained, seized or attached under the Act. distributed irregularly
⁃ Wrong refund claimed
Whichever is higher.

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 Amount of Penalty
S.no. Action By Tax Payer Amount of Penalty

22. Any person who aids or abets any offences u/s 122(1). Up to Rs. 25,000/-

23. Any person who acquires possession of, or in any way

concerns himself in transporting, removing, depositing,
keeping, concealing, supplying or purchasing or in any
other manner deals with any goods which know or has
reasons to believe are liable to confiscation under this
Act.

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 Amount of Penalty
S.no. Action By Tax Payer Amount of Penalty

24. Any person who receives or is in any way connected with Up to Rs. 25,000/-
the supply or in any other manner deals with any goods
which know or has reasons to believe are liable to
confiscation under this Act.

25. Any person who fails to appear before the officer on being
summoned.
26. Any person who fails to issue invoice or account for an
invoice in his books of accounts as per the Act.

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 Amount of Penalty
S.no. Action By Tax Payer Amount of Penalty

27. Person covered u/s 150 for failure to furnish information Rs 100 per day per Act subject to
return or willfully furnishing false information return. maximum of Rs. 5000/-

28. Person covered u/s 151 for failure to furnish (statistics) – Rs. 10000/- and
information return or willfully furnishing false information – In case of continuing default, Rs.
return. 100/- per day subject to maximum
of Rs. 25,000/-
29. General Penalty on any person for contravention of any Up to Rs. 25,000/-
provision of this Act for which no separate penalty is
provided for.

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 Amount of Penalty
S.no. Action By Tax Payer Amount of Penalty
30. Any person transports any goods or stores any goods All such goods, such conveyance and documents pertaining to such goods
during they are in transit in contravention of this Act. and such conveyance shall be liable to detention or seizure and

At the time of release of such seized or detained goods or conveyance:

Where the owner of goods come Where the owner of goods does not
forward for payment of such tax and come forward for payment of such
penalty, then tax and penalty, then

100% of applicable tax + penalty 50% of value of goods.

equal to 100% of applicable tax. And
And In case of exempted goods, then:
In case of exempted goods, then: – 5% of value of goods or
– 2% of value of goods or – Rs. 25,000/-
– Rs. 25,000/- whichever is less.
whichever is less.

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FAQ on Section
73 & 74

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 Which are the applicable sections for the purpose of recovery of tax
short paid or not paid or amount erroneously refunded or input tax credit
wrongly availed or utilized?

• Section 73 deals with the cases where there is no invocation

of fraud/suppression/mis-statement etc.
• Section 74 deals with cases where the provisions related to
fraud/suppression/mis-statement etc. are invoked.

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 In what form and manner will the demand notice be
issued?

• Demand notices can be issued under Section 73 (cases not

involving fraud/suppression), Section 74 (cases involving
fraud/suppression) & Section 76 (Tax collected but not paid to the
Government). In all cases, along with the notices, a summary
thereof has to be served electronically to the noticee in FORM GST
DRC-01
• Where a statement of demand is issued in terms of Section 73(3)
or 74(3), along with the statement a summary thereof has to be
served electronically to the noticee in FORM GST DRC-02.
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 What if person chargeable with tax, pays the amount
along with interest before issue of show cause notice
under section 73?
• A person can make payment voluntarily either before issue of
notice or within 30 days of issue of notice and file an
intimation of such voluntary payment in form GST DRC-03.
• In such cases if paid before issue of notice, notice shall not
be issued by the proper officer {sec.73 (6)} and if paid after
issue of notice but within 30 days, all proceedings in respect
of such notice shall be deemed to be concluded. {sec.73 (8)}

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 What is the form and manner in which payment of
tax/interest/penalty before issue of notice under Section
73 or 74 will be communicated by the taxable person?
• In cases falling under Section 73, the taxable person has the option to
discharge tax and interest liability before issuance of notice under Section
73(1) or statement under Section 73(3).
• In cases falling under Section 74, the taxable person has the option to
discharge tax/interest/penalty equal to 15% of tax liability before issuance of
notice under Section 74(1) or statement under Section 74(3).
• If he opts to make such payment before issuance of notice, he shall make the
payment of tax and interest and thereafter inform the proper officer in FORM
GST DRC-03. The proper officer has to issue an acknowledgement in FORM
GST DRC–04.

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 What is the form and manner in which payment of
tax/interest/penalty after issue of notice under Section 73
or 74 will be communicated by the taxable person?
• In cases falling under Section 73, the taxable person has the option to
discharge tax and interest liability within 30 days of issuance of notice under
Section 73(1) or statement under Section 73(3).
• In cases falling under Section 74, the taxable person has the option to
discharge tax/interest/penalty equal to 25% of tax liability within 30 days of
issuance of notice under Section 74(1) or statement under Section 74(3).
• If he opts to make such payment within 30 days of issuance of notice, he shall
make the payment of tax and interest and thereafter inform the proper officer
in FORM GSTDRC-03. In such cases, the proper officer shall issue an order in
FORM GST DRC-05 concluding the proceedings in respect of the said notice.

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What is the course of action, if the assessee has not paid the tax or short paid
or erroneously refunded or input tax credit wrongly availed or utilised by
reason of fraud or any wilful mis-statement or suppression of facts?

• In such circumstances, the proper officer shall serve notice

on the person chargeable with tax which has not been so
paid or which has been so short paid or to whom the refund
has erroneously been made, or who has wrongly availed or
utilized input tax credit, requiring him to show cause as to
why he should not pay the amount specified in the notice
along with interest payable thereon under Section 50 and a
penalty equivalent to the tax specified in the notice.

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 What is the time limit for issuance of SCN if the assessee has not paid
the tax or short paid or erroneously refunded or input tax credit wrongly
availed or utilised by reason of fraud or any wilful mis-statement or
suppression of facts(i.e. u/s 74)?
• In such circumstances, the proper officer shall issue the notice at least
6 months prior to the time limit specified in section 74(10) for issuance
of the Order i.e. 4 ½ years from the due date of furnishing of annual
return for the financial year to which the tax not paid or short paid or
input tax credit wrongly availed or utilized relates to or from the date
of erroneous refund.
• Thereafter, the proper officer is required to issue the Order under
section 74(9) within a period 5 years from the due date of furnishing of
annual return for the financial year to which the tax not paid or short
paid or input tax credit wrongly availed or utilized relates to or from
the date of erroneous refund.
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How will the taxable person respond to the SCN issued
under Section 73 or Section 74?

• The taxable person shall respond to the notices issued under

Section 73 or Section 74 in FORM GST DRC-06.

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 What is the form and manner in which an order
determining tax liability will be issued under Section 73
or Section 74?
• The order will be a speaking order after following due
process of law. A summary of the order issued under section
73(9) or section 74(9) or section 76(3) shall be uploaded
electronically in FORM GST DRC-07, specifying therein the
amount of tax, interest and penalty payable by the person
chargeable with tax.

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 After issuance of order, is it necessary for the proper
officer to issue a recovery notice?

•No. The order itself will be treated as a recovery

notice.

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 Is there any time limit for adjudication the cases?

• In case of section 73(cases other than fraud/ suppression of

facts/willful-misstatement), the time limit for adjudication of cases
is 3 years from the due date for filing of annual return for the
financial year to which demand relates to or the date of erroneous
refund/ITC wrongly availed. {sec.73(10)}
• In case of section 74(cases of fraud/suppression of facts/willful-
misstatement), the time limit for adjudication is 5 years from the
due date for filing of annual return for the financial year to which
demand relates to or the date of erroneous refund/ITC wrongly
availed. {sec.74(10)}

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 If notice is issued under Section 74 and thereafter the
noticee makes payment, is there any need to adjudicate
the case?
• Where the person to whom a notice has been issued under
sub-section (1) of section 74, pays the tax along with interest
with penalty equal to 25% of such tax within 30 days of issue
of notice, all proceedings in respect of such notice shall be
deemed to be concluded. {Sec.74 (8)}

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 How will rectification of order be done by the proper
officer?

• As per Section 161, mistakes apparent on record can be rectified

and such rectification has to be done within 3 months of the date
of issue of order.
• However, no such rectification will be done after 6 months from
the date of the order. This period of 6 months will not be
applicable to rectification of mistakes of purely clerical or
arithmetic in nature arising from accidental slip or omission.
• Any rectification of the order, in accordance with the provisions of
section 161, shall be made by the proper officer in FORM GST
DRC-08.
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What are the remedies available to the assessee who have
been issued order under section 74 of the CGST Act?
• Any person served with an order issued under section 74(9) pays the tax along with interest payable thereon
under section 50 and a penalty equivalent to 50% of such tax within 30 days of communication of the order,
all proceedings in respect of the said notice shall be deemed to be concluded.
• Explanation 1-For the purposes of section 73 and this section:
• (i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section
132;
• (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some
other persons, and such proceedings against the main person have been concluded under section 73 or
section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130
are deemed to be concluded.
• Explanation 2- For the purposes of this Act, the expression “suppression” shall mean non-declaration of facts
or information which a taxable person is required to declare in the return, statement, report or any other
document furnished under this Act or the rules made thereunder, or failure to furnish any information on
being asked for, in writing, by the proper officer.

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 What is the time limit for initiation of recovery
proceedings under CGST Act, 2017?

• Any amount payable by a taxable person in pursuance of an order

passed under this Act shall be paid by such person within a period
of 3 months from the date of service of such order failing which
recovery proceedings shall be initiated.
• Provided that where the proper officer considers it expedient in
the interest of revenue he may, for reasons to be recorded in
writing, require the said taxable person to make such payment
within such period less than a period of 3 months as may be
specified.
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 What is the course of recovery in cases where the tax
demand confirmed is enhanced in appeal/ revision
proceedings?
• The notice of demand is required to be served only in respect
of the enhanced dues.
• In so far as the amount already confirmed prior to disposal of
appeal/revision, the recovery proceedings may be continued
from the stage at which such proceedings stood immediately
before such disposal of appeal/revision. (Sec.84(a))

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 What are the provisions for recovery of the erstwhile dues in
respect of default of C.Ex. duties and Service Tax in the GST
regime?
• As per Section (8) of Section 142 of the GST Act,
a. Where in pursuance of an assessment or adjudication proceedings instituted, whether, before, on or after the appointed day, under
the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered
under the existing law, be recovered as an arrear or tax under this Act the amount so recovered shall not be admissible as input tax
credit under this Act;
b. Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under
the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded
to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of
sub section (2) of Section 11B of the Central Excise Act,1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as
input tax credit under this Act.
• Detailed procedure for recovery of arrears under the existing law and reversal of inadmissible input tax credit has been outlined in the
CBIC circular no. 42/16/2018-GST dated 13th April, 2018. It may also be noted that recovery can now be made using FORM GST DRC-07.
• The CENVAT credit of central excise duty or service tax wrongly carried forward as transitional credit, and the arrears of central excise
duty, service tax or wrongly availed CENVAT credit thereof under the existing law shall be recovered as central tax liability to be paid
through the utilization of amounts available in the electronic credit ledger or electronic cash ledger of the registered person.
• The arrears of interest, penalty and late fee in relation to CENVAT credit wrongly carried forward, and in relation to arrears of central
excise duty, service tax or wrongly availed CENVAT credit thereof under the existing law shall be recovered as interest, penalty and late fee
of central tax to be paid through the utilization of the amount available in electronic cash ledger of the registered person.

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 What are the modes of recovery of tax available to the
proper officer?
• The proper officer may recover the dues in following manner:
a. Deduction of dues from the amount owned by the tax authorities payable to such person.
b. Recovery by way of detaining and selling any goods belonging to such person;
c. Recovery from other person, from whom money is due or may become due to such person or who holds or may
subsequently hold money for or on account of such person, to pay to the credit of the Central or a State
Government;
d. Distrain any movable or immovable property belonging to such person, until the amount payable is paid. If the
dues not paid within 30 days, the said property is to be sold and with the proceeds of such sale the amount
payable and cost of sale shall be recovered;
e. Through the Collector of the district in which such person owns any property or resides or carries on his business,
as if it was an arrear of land revenue;
f. By way of an application to the appropriate Magistrate who in turn shall proceed to recover the amount as if it
were a fine imposed by him;
g. Through enforcing the bond /instrument executed under this Act or any rules or regulations made thereunder;
h. CGST arrears can be recovered as an arrear of SGST and vice-versa.

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In what manner will the proper officer proceed to recover
dues from the amounts owed to the defaulter?
• Where any amount payable by a defaulter to the Government under any of
the provisions of the Act or the rules made thereunder is not paid, the proper
officer may require, in FORM GST DRC-09, a specified officer to deduct the
amount from any money owing to such defaulter in accordance with the
provisions of clause (a) of sub-section (1) of section 79.
• For the purposes of this rule, “specified officer” shall mean any officer of the
Central Government or a State Government or the Government of a Union
territory or a local authority, or of a Board or Corporation or a company owned
or controlled, wholly or partly, by the Central Government or a State
Government or the Government of a Union territory or a local authority.

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 What is the procedure for recovery of dues by sale of
goods belonging to the defaulter, which is in the control
of the proper officer?
• (1) Where any amount due from a defaulter is to be recovered by selling goods belonging to such person in accordance with the provisions of clause (b) of
sub-section (1) of section 79, the proper officer shall prepare an inventory and estimate the market value of such goods and proceed to sell only so much of
the goods as may be required for recovering the amount payable along with the administrative expenditure incurred on the recovery process.
• (2) The said goods shall be sold through a process of auction, including e-auction, for which a notice shall be issued in FORM GST DRC-10 clearly indicating
the goods to be sold and the purpose of sale.
• (3) The last day for submission of bid or the date of auction shall not be earlier than 15 days from the date of issue of the notice referred to in sub-rule (2)
• Provided that where the goods are of perishable or hazardous nature or where the expenses of keeping them in custody are likely to exceed their value, the
proper officer may sell them forthwith.
• (4) The proper officer may specify the amount of pre-bid deposit to be furnished in the manner specified by such officer, to make the bidders eligible to
participate in the auction, which may be returned to the unsuccessful bidders, forfeited in case the successful bidder fails to make the payment of the full
amount, as the case may be.
• (5) The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the payment within a period of 15 days from
the date of auction. On payment of the full bid amount, the proper officer shall transfer the possession of the said goods to the successful bidder and issue a
certificate in FORM GST DRC-12.
• (6) Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice under
sub-rule (2), the proper officer shall cancel the process of auction and release the goods.
• (7) The proper officer shall cancel the process and proceed for re-auction where no bid is received or the auction is considered to be non-competitive due to
lack of adequate participation or due to low bids.

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How will the dues owed by the defaulter be recovered by the
proper officer from a third person (a bank, post office, insurer
etc.) who holds money on behalf of the defaulter?

• (1) The proper officer may serve upon a person referred to in

clause (c) of sub-section (1) of section 79 (referred to in question
as “the third person”), a notice in FORM GST DRC-13 directing him
to deposit the amount specified in the notice.
• (2) Where the third person makes the payment of the amount
specified in the notice issued under sub-rule (1), the proper officer
shall issue a certificate in FORM GST DRC-14 to the third person
clearly indicating the details of the liability so discharged.
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 What will be the consequences, if the third person
referred to above, fails to make payment in pursuance of
notice issued in FORM GST DRC-13?
• In case the person to whom a notice under sub-clause (i) has been
issued, fails to make the payment in pursuance thereof to the
Government, he shall be deemed to be a defaulter in respect of
the amount specified in the notice and all the consequences of
this Act or the rules made thereunder shall follow.
• Further, any person discharging any liability to the person in
default after service on him of the notice issued under sub-clause
(i) shall be personally liable to the Government to the extent of the
liability discharged or to the extent of the liability of the person in
default for tax, interest and penalty, whichever is less.

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 How can the proper officer recover the dues from the
amount payable to the defaulter as a consequence of
execution of a decree of a civil court?
• Where any amount is payable to the defaulter in the
execution of a decree of a civil court for the payment of
money or for sale in the enforcement of a mortgage or
charge, the proper officer shall send a request in FORM GST
DRC- 15 to the said court and the court shall, subject to the
provisions of the Code of Civil Procedure, 1908 (5 of 1908),
execute the attached decree, and credit the net proceeds for
settlement of the amount recoverable.

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 What is the manner in which the proper officer will recover
dues from the defaulter by sale of movable or immovable
property belonging to the defaulter? (Rule 147)
• (1) The proper officer shall prepare a list of movable and immovable
property belonging to the defaulter, estimate their value as per the
prevalent market price and issue an order of attachment or distraint
and a notice for sale in FORM GST DRC- 16 prohibiting any transaction
with regard to such movable and immovable property as may be
required for the recovery of the amount due:
• Provided that the attachment of any property in a debt not secured by
a negotiable instrument, a share in a corporation, or other movable
property not in the possession of the defaulter except for property
deposited in, or in the custody of any Court, shall be attached in the
manner provided in rule 151.
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Continued…

• (2)The proper officer shall send a copy of the order of attachment or distraint
to the concerned Revenue Authority or Transport Authority or any such
Authority to place encumbrance on the said movable or immovable property,
which shall be removed only on the written instructions from the proper
officer to that effect.
• (3) Where the property subject to the attachment or distraint under sub-rule
(1) is-
a. an immovable property, the order of attachment or distraint shall be affixed on
the said property and shall remain affixed till the confirmation of sale;
b. a movable property, the proper officer shall seize the said property in accordance
with the provisions of chapter XIV of the Act and the custody of the said property
shall either be taken by the proper officer himself or an officer authorised by him.

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Continued…

• (4)The property attached or distrained shall be sold through auction, including e-auction, for
which a notice shall be issued in FORM GST DRC- 17 clearly indicating the property to be sold
and the purpose of sale.
• (5) Notwithstanding anything contained in the provision of this Chapter, where the property to
be sold is a negotiable instrument or a share in a corporation, the proper officer may, instead of
selling it by public auction, sell such instrument or a share through a broker and the said broker
shall deposit to the Government so much of the proceeds of such sale, reduced by his
commission, as may be required for the discharge of the amount under recovery and pay the
amount remaining, if any, to the owner of such instrument or a share.
• (6) The proper officer may specify the amount of pre-bid deposit to be furnished in the manner
specified by such officer, to make the bidders eligible to participate in the auction, which may
be returned to the unsuccessful bidders or, forfeited in case the successful bidder fails to make
the payment of the full amount, as the case may be.

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Continued…

• (7) The last day for the submission of the bid or the date of the auction shall not be
earlier than 15 days from the date of issue of the notice referred to in sub-rule (4):
• Provided that where the goods are of perishable or hazardous nature or where the expenses of
keeping them in custody are likely to exceed their value, the proper officer may sell them
forthwith.
• (8) Where any claim is preferred or any objection is raised with regard to the
attachment or distraint of any property on the ground that such property is not liable to
such attachment or distraint, the proper officer shall investigate the claim or objection
and may postpone the sale for such time as he may deem fit.
• (9) The person making the claim or objection must adduce evidence to show that on the
date of the order issued under sub-rule (1) he had some interest in, or was in possession
of, the property in question under attachment or distraint.

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Continued…

• (10) Where, upon investigation, the proper officer is satisfied that, for the reason stated in the claim or objection, such property
was not, on the said date, in the possession of the defaulter or of any other person on his behalf or that, being in the possession
of the defaulter on the said date, it was in his possession, not on his own account or as his own property, but on account of or in
trust for any other person, or partly on his own account and partly on account of some other person, the proper officer shall
make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or distraint.
• (11) Where the proper officer is satisfied that the property was, on the said date, in the possession of the defaulter as his own
property and not on account of any other person, or was in the possession of some other person in trust for him, or in the
occupancy of a tenant or other person paying rent to him, the proper officer shall reject the claim and proceed with the process
of sale through auction.
• (12) The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the payment
within a period of 15 days from the date of such notice and after the said payment is made, he shall issue a certificate in FORM
GST DRC-12 specifying the details of the property, date of transfer, the details of the bidder and the amount paid and upon
issuance of such certificate, the rights, title and interest in the property shall be deemed to be transferred to such bidder:
• Provided that where the highest bid is made by more than one person and one of Themis a co-owner of the property, he shall be deemed to be the
successful bidder.

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Continued…

• (13) Any amount, including stamp duty, tax or fee payable in respect of the transfer of the
property specified in sub-rule (12), shall be paid to the Government by the person to whom
the title in such property is transferred.
• (14) Where the defaulter pays the amount under recovery, including any expenses incurred
on the process of recovery, before the issue of the notice under sub-rule (4), the proper
officer shall cancel the process of auction and release the goods.
• (15) The proper officer shall cancel the process and proceed for re-auction where no bid is
received or the auction is considered to be non-competitive due to lack of adequate
participation or due to low bids.

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In what manner will a proper officer attach any property in a debt not
secured by a negotiable instrument, a share in a corporation, or other
movable property not in the possession of the defaulter? (Rule 151)
• (1) A debt not secured by a negotiable instrument, a share in a corporation, or other movable property not in
the possession of the defaulter except for property deposited in, or in the custody of any court shall be
attached by a written order in FORM GST DRC-16 prohibiting. -
a) in the case of a debt, the creditor from recovering the debt and the debtor from making payment
thereof until the receipt of a further order from the proper officer;
b) in the case of a share, the person in whose name the share may be standing from transferring the
same or receiving any dividend thereon;
c) in the case of any other movable property, the person in possession of the same from giving it to the
defaulter.
• (2) A copy of such order shall be affixed on some conspicuous part of the office of the proper officer, and
another copy shall be sent, in the case of debt, to the debtor, and in the case of shares, to the registered
address of the corporation and in the case of other movable property, to the person in possession of the
same.
• (3) A debtor, prohibited under clause (a) of sub-rule (1), may pay the amount of his debt to the proper officer,
and such payment shall be deemed as paid to the defaulter.

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 In what manner, will attachment of any property in the
custody of courts take place? (Rule 152)

• Where the property to be attached is in the custody of any

court or Public Officer, the proper officer shall send the order
of attachment to such court or officer, requesting that such
property, and any interest or dividend becoming payable
thereon, may be held till the recovery of the amount
payable.

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How will proper officer attach an interest in partnership
of the defaulter? (Rule 153)
• Where the property to be attached consists of an interest of the defaulter,
being a partner, in the partnership property, the proper officer may make an
order charging the share of such partner in the partnership property and
profits with payment of the amount due under the certificate, and may, by the
same or subsequent order, appoint a receiver of the share of such partner in
the profits, whether already declared or accruing, and of any other money
which may become due to him in respect of the partnership, and direct
accounts and enquiries and make an order for the sale of such interest or such
other order as the circumstances of the case may require.
• The other partners shall be at liberty at any time to redeem the interest
charged or, in the case of a sale being directed, to purchase the same.

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 How will the amounts recovered as proceeds of sale of
goods or movable or immovable property be
appropriated? (Rule 154)
• The amounts so realised from the sale of goods, movable or
immovable property, for the recovery of dues from a defaulter
shall, -
a. first, be appropriated against the administrative cost of the recovery
process;
b. next, be appropriated against the amount to be recovered;
c. next, be appropriated against any other amount due from the
defaulter under the Act or the IGST/UTGST/SGST Act(s), 2017 and
the rules made thereunder; and
d. any balance, be paid to the defaulter.

Private Presentation Only not Professional Advice 308

How will the proper officer make recovery of dues of the
defaulter through land revenue authority?

• Where an amount is to be recovered in accordance with the

provisions of clause (e) of sub-section (1) of section 79, the
proper officer shall send a certificate to the Collector or
Deputy Commissioner of the district or any other officer
authorised in this behalf in FORM GST DRC-18 to recover
from the person concerned, the amount specified in the
certificate as if it were an arrear of land revenue.

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How will the amount be recovered from the defaulter, if it
is to be recovered as a fine imposed under the Code of
Criminal Procedure, 1973?
• Where an amount is to be recovered as if it were a fine
imposed under the Code of Criminal Procedure, 1973, the
proper officer shall make an application before the
appropriate Magistrate in accordance with the provisions of
clause (f)of sub-section (1) of section 79 in FORM GST DRC-
19 to recover from the person concerned, the amount
specified thereunder as if it were a fine imposed by him.

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Can the amount due from the defaulter be recovered from
the surety?

• Yes. Where any person has become surety for the amount
due by the defaulter, he may be proceeded against under this
Chapter as if he were the defaulter. (Rule 157)

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 Whether the payment of tax dues can be made in
instalments?

• Yes, a person can request for payment of any amount due under
the Act, other than the amount due as per the liability self-
assessed in any return, in monthly instalments not exceeding 24,
subject to payment of interest under section 50 with such
limitations and conditions as may be prescribed.
• However, where there is default in payment of any one instalment
on its due date, the whole outstanding balance payable on such
date shall become payable and recovered without any further
notice. {sec.80 of CGST Act}
Private Presentation Only not Professional Advice 312
 In what manner, will the Commissioner deal with a
request for payment of tax and other amounts in
instalments? (Rule 158)
• (1) On an application filed electronically by a taxable person, in FORM GST DRC- 20, seeking extension of time
for the payment of taxes or any amount due under the Act or for allowing payment of such taxes or amount in
instalments in accordance with the provisions of section 80, the Commissioner shall call for a report from the
jurisdictional officer about the financial ability of the taxable person to pay the said amount.
• (2) Upon consideration of the request of the taxable person and the report of the jurisdictional officer, the
Commissioner may issue an order in FORM GST DRC- 21 allowing the taxable person further time to make
payment and/or to pay the amount in such monthly instalments, not exceeding 24, as he may deem fit.
• (3) The facility shall not be allowed where-
a. the taxable person has already defaulted on the payment of any amount under the Act or the IGST/UTGST/SGST
Act(s), 2017, for which the recovery process is on;
b. the taxable person has not been allowed to make payment in instalments in the preceding financial year under
the Act or the IGST/UTGST/SGST Act(s), 2017;
c. the amount for which instalment facility is sought is less than 25,000/- rupees.

Private Presentation Only not Professional Advice 313

 In what manner will provisional attachment of property
take place? (Rule 159)
• (1) Where the Commissioner decides to attach any property, including bank account in
accordance with the provisions of section 83, he shall pass an order in FORM GST DRC-
22 to that effect mentioning therein, the details of property which is attached.
• (2) The Commissioner shall send a copy of the order of attachment to the concerned
Revenue Authority or Transport Authority or any such Authority to place encumbrance
on the said movable or immovable property, which shall be removed only on the
written instructions from the Commissioner to that effect.
• (3) Where the property attached is of perishable or hazardous nature, and if the taxable
person pays an amount equivalent to the market price of such property or the amount
that is or may become payable by the taxable person, whichever is lower, then such
property shall be released forthwith, by an order in FORM GST DRC-23, on proof of
payment.

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Continued…

• (4) Where the taxable person fails to pay the amount referred to in sub-rule (3) in respect of
the said property of perishable or hazardous nature, the Commissioner may dispose of such
property and the amount realized thereby shall be adjusted against the tax, interest,
penalty, fee or any other amount payable by the taxable person.
• (5) Any person whose property is attached may, within 7 days of the attachment under sub-
rule (1), file an objection to the effect that the property attached was or is not liable to
attachment, and the Commissioner may, after affording an opportunity of being heard to
the person filing the objection, release the said property by an order in FORM GST DRC- 23.
• (6) The Commissioner may, upon being satisfied that the property was, or is no longer liable
for attachment, release such property by issuing an order in FORM GST DRC- 23.

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How will notice of tax dues be given to the liquidator in
terms of Section 88?

• Where the company is under liquidation as specified in

section 88, the Commissioner shall notify the liquidator for
the recovery of any amount representing tax, interest,
penalty or any other amount due under the Act in Form GST
DRC -24.

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How will the order for reduction or enhancement of any
demand in terms of Section 84 be given? (Rule 161)

• The order for the reduction or enhancement of any demand

under section 84 shall be issued in Form GST DRC- 25.

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Can recovery of arrears of a person registered in one State
be effected from a distinct person located in another
state?
• Yes, vide the CGST (Amendment) Act, 2018, an explanation
clause has been inserted in section 79 of the CGST Act, 2017
to the effect that person in section 79 includes “distinct
persons” as referred to in sub-section (4) or, as the case may
be, sub-section (5) of section 25.
• Thus, the tax dues are recoverable from all the persons
having the same PAN. (This provision is yet to be notified)

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Appeals & Revision
Abhishek Raja “Ram”
[email protected] ; 9810638155

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 Chapter-
XVIII
S.107 to S.121

Non-
Revision Appeal
Appealable
S.121 S.108 S.107-120

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TSIP – Sec. 121

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 Section 121 Non appealable decisions and orders

No appeals can be filed against following orders -

Where order/direction Where order has been

given by commissioner or given for seizure or In case order of In case of order
other authority to transfer retention of books of prosecution under this Act passed u/s 80 where
the proceedings from one accounts, register and (S.132(6)) amount paid in
officer to another officer other documents instalment (S.80)
(S.67(2))
 Appeals Revision

Assesee ✔️ ❌

Department ✔️ ✔️

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 SUMMARY OF APPELLATE PROVISIONS
Appeal by Appeal by Appellate
Aggrieved person aggrieved person Tribunal
National or
Regional
*MoC-GST APL- Bench
First Appellate
Order by 06
Authority
Adjudicating
(Sec.107)
Authority 45 days + 45
days

Appellate
Appeal by Tribunal State
Appeal by dept Commissioner or Area Bench

Order is Deposit
Deposit Time = 180 days + Extn. and
erroneous +
Prejudicial to (a) 100% of admitted (a) 100% of admitted question of Law
unit revenue (Tax + Int. + Fine + Fee + Penalty) (Tax Int. + Fine + Fee + Penalty)

(a) + 10% of tax in dispute (a) + 20% of tax in dispute

High Court
(Sec.117)

Question of Law

Revisional Supreme
Court
Authority
(Sec.118)
(Sec.108)

*Memorandum of Cross Objections

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 Appellate Hierarchy in GST
Stage Appeal to be Against order of Who can file appeal Section Rules Form
filed before
First Appellate Adjudicating Authority 1. Any aggrieved 107 108 To GST APL-01
Authority person 109,109A, &
2. Commissioner 112 GST APL- 03
Second Appellate 1. Appellate Authority 1. Any aggrieved 109 To 113 110 To 111 GST APL-05
Tribunal 2. Revisional Authority person GST APL-07
2. Commissioner
Third High court 1. State Bench or Area 1. Any aggrieved 117 114 GST APL-08
Bench of Appellate person
Tribunal
Fourth Supreme 1. National Bench or 1. Any aggrieved 118 - -
Court Regional Benches of person
Appellate Tribunal
2. High Court

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GST APL-01

• Appeal to Appellate Authority

GST APL-02

• Acknowledgement of submission of appeal

GST APL-03

• Application to the Appellate Authority under sub-section (2)

of Section 107

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GST APL-04

• Summary of the demand after issue of order by the Appellate

Authority, Tribunal or Court

GST APL-05

• Appeal to the Appellate Tribunal

GST APL-06

• Cross-objections before the Appellate Authority / Appellate Tribunal

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GST APL-07

• Application to the Appellate Tribunal under sub

section (3) of Section 112

GST APL-08

• Appeal to the High Court under section 117

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 Section 107 Appeals to Appellate Authority

Situation when appeal filed by aggrieved person

Person aggrieved File appeal in FORM GST APL-01

from order of Appellate Authority
Adjudicating officer Tax, interest, penalty, fine or fees paid which is admitted

Paid 10% of amount which is disputed subject to maximum of Rs.25 Crore Each

Certified copy of A.O order submitted within 7 days of filing Appeal

Appeal can be filed within 3 months

from the date of communication of
adjudication order
Extension 1 month if sufficient cause for
delay

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 Sec 107(1) Sec 107(2)

Commissioner to direct any

Appeal by Aggrieved person officer subordinate to him
against the order of to appeal to Appellate
Adjudicating Authority Authority

Condonation Condonation
Form 107(5) Time limit 107(4) Form 107(5) Time limit 107(4)
107(4) 107(4)

Within 3 months Within 6 months

from from
GST APL-01 1 month GST APL-03 1 month
communication of communication of
order order

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 First Appellate Authority
• u/s 107 of CGST Act
Upon Issuance of
Adjudication • Read with Rule 108,109 and 112
Order • Within 3+1 months from date of communication

Appeal to Tribunal
• u/s 112 of CGST Act.
• Read with Rule 110,111 and 112
• Within 3+3 months from date of communication
Appeal to High Court
• Read with Rule 114
• u/s 117 of CGST Act
• Within 180 days+ as may be allowed by high court
Appeal to Supreme Court
• u/s 118 of CGST Act
• Read with Rule115
• Within 60 days from date of communication
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 First Appeal against
Adjudication Order
• A person who is aggrieved by a decision or order passed
against him by an adjudicating authority, can file an appeal
to the Appellate Authority.

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1st Appeal: Time Limit
• The time limit for the party to file an appeal before
the AA is 3 months from the date of communication
Time Limit of the impugned order.

• But the AA may condone a delay of up to one

Condonation
month.

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1st Appeal: Forms

Any person
aggrieved Any authorised officer
FORM GST APL-01 on direction of the
Commissioner
FORM GST APL-03

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Whether entire amount of tax, interest, penalty, fine or
fee has to be remitted before preferring appeal?
Demands
• Entire amount of such demands (tax,
which are
interest and penalty) shall have to be
not
remitted.
contested
• A sum equal to 10% of the remaining
Demands
amount of tax in dispute arising from
which are
the said order shall have to be
contested
remitted.
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Pre-Deposit under
CGST
An appeal shall be filed only if the
appellant has paid → Full amount of
admitted tax dues → Pre-deposit of 10%
of disputed dues, subject to a maximum
of 25 crores.

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Sec 107(3)
Where, in pursuance of an order under sub-section (2), the authorised
officer makes an application to the Appellate Authority, such application
shall be dealt with by the Appellate Authority as if it were an appeal made
against the decision or order of the adjudicating authority and such
authorised officer were an appellant and the provisions of this Act relating
to appeals shall apply to such application.

Sec 107(4)
The Appellate Authority may, if he is satisfied that the appellant was
prevented by sufficient cause from presenting the appeal within the
aforesaid period of three months or six months, as the case may
be, allow it to be presented within a further period of one month.
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 Sec 107(5)
Every appeal under this section shall be in such form and shall be verified in such
manner as may be prescribed
Rule 108
Sec 107(6) Pre Deposit –Mandatory
& 109
No appeal shall be filed under sub-section (1), unless the appellant has paid—
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him; and
(b) a sum equal to ten percent of the remaining amount of tax in dispute arising
from the said order, [subject to a maximum of twenty-five crore rupees,] in
relation to which the appeal has been filed:

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 10 Appeals to BUDGETARY
Amendment of section 107 PROPOSAL
Appellate Authority.
Section 107(6):- No appeal shall be filed under sub-section (1), unless the
appellant has paid-
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute
arising from the said order 1 [subject to a maximum of twenty five crore
rupees], in relation to which the appeal has been filed.

“Provided that no appeal shall be filed against an order under sub-section (3) of section 129, unless a
sum equal to twenty-five per cent. of the penalty has been paid by the appellant.”.
Private Presentation Only not Professional Advice
Analysis

• Appeal against order of detention and seizure of goods in transit can

now be made only after making pre deposit of 25% of penalty as
levied under Section 129(3).

• This is in lieu of deposit of 10% of tax amount .

• This will lead to blockage of working capital.

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 Sun mac Enterprises Vs. The Commissioner of
Central Excise (Madras High Court)

• Inability to pay Pre- Deposit can’t be ground to entertain a

Writ Jurisdiction
• Appeal Number : Writ Petition No. 285 of 2018 & WMP. No.
340 of 2018
• Date of Judgement/Order : 09/01/2018

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Conditions for Admissibilty of Writ Petition 2021 (9) TMI 480 –
Supreme Court in the Assistant Commissioner of State Tax And
Others Versus M/S Commercial Steel Limited
The existence of an alternate remedy is not an absolute bar to the
maintainability of a writ petition under Article 226 of the Constitution.
But writ petition can be entertained in exceptional circumstances
where there is:
i. A breach of fundamental rights;
ii. A violation of the principles of natural justice;
iii. An excess of jurisdiction; or
iv. iv. A challenge to the vires of the statute or delegated legislation.

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As there was no violation of the principles of natural justice since a notice
was served on the person in charge of the conveyance. In this backdrop, it
was not appropriate for the High Court to entertain a writ petition.

Private Presentation Only not Professional Advice

Once appeal is accepted what about payment of
balance amounts demanded? Would that be
considered as demand stayed?
•Yes, as per Section 107(7)
•where the appellant has paid the required
pre-deposit,
•the recovery proceedings for the balance
amount shall be deemed to be stayed.

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Is it mandatory on the part of Appellate Authority
to provide opportunity of hearing?
• As per Section 107(8),
• Appellate Authority shall have to give opportunity of
hearing to the appellant.

Private Presentation Only not Professional Advice

Whether parties to an appeal could seek
adjournment of the hearing?
• As per Section 107(9) the Appellate Authority may, grant
adjournment of personal hearing if sufficient cause is shown
at any stage of hearing of an appeal.

• However as per Proviso Section 107(9), no such

adjournment shall be granted more than three times to a
party during hearing of the appeal.

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Sec 107(10)

The Appellate Authority may, at the time of hearing of an appeal, allow

an appellant to add any ground of appeal not specified in the grounds
of appeal, if it is satisfied that the omission of that ground from the
grounds of appeal was not wilful or unreasonable.

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 Sec 107(11)
The Appellate Authority shall, after making such further inquiry as may
be necessary, pass such order, as it thinks just and proper, confirming,
modifying or annulling the decision or order appealed against but
shall not refer the case back to the adjudicating authority that passed
the said decision or order:

No fresh
Adjudication

Can enhance
the demand?
Yes
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Provided that an order enhancing any fee or penalty or fine in lieu of
confiscation or confiscating goods of greater value or reducing the amount of
refund or input tax credit shall not be passed unless the appellant has been
given a reasonable opportunity of showing cause against the proposed
order:

Provided further that where the Appellate Authority is of the opinion that
any tax has not been paid or short-paid or erroneously refunded, or where
input tax credit has been wrongly availed or utilised, no order requiring the
appellant to pay such tax or input tax credit shall be passed unless the
appellant is given notice to show cause against the proposed order and the
order is passed within the time limit specified under section 73 or section 74.

Private Presentation Only not Professional Advice

Sec 107(12)

The order of the Appellate Authority disposing of the appeal shall be in

writing and shall state the points for determination, the decision
thereon and the reasons for such decision.

Sec 107(13)
The Appellate Authority shall, where it is possible to do so, hear and
decide every appeal within a period of one year from the date on which
it is filed: Provided that where the issuance of order is stayed by an order
of a court or Tribunal, the period of such stay shall be excluded in
computing the period of one year.
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Sec 107(14)
On disposal of the appeal, the Appellate Authority shall communicate
the order passed by it to the appellant, respondent and to the
adjudicating authority.

Sec 107(15)

A copy of the order passed by the Appellate Authority shall also be sent to
the jurisdictional Commissioner or the authority designated by him in this
behalf and the jurisdictional Commissioner of State tax or Commissioner
of Union Territory tax or an authority designated by him in this behalf.
Private Presentation Only not Professional Advice
 Sec 107(16)
Every order passed under this section shall, subject to the provisions of section 108
or section 113 or section 117 or section 118 be final and binding on the parties.

Appeal to HC Powers of Revisional

Appeal to SC
Orders of Authority
Appellate Tribunal

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Appeal U/s 107 (16)

113
Order of Appellate Tribunal

117 Appeal to High Court

118 Appeal to Supreme Court

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 Rule 108 Appeal to the Appellate Authority

(1) An appeal to the Appellate Authority under sub-section (1) of section

107 shall be filed in FORM GST APL-01, along with the relevant
documents, either electronically or otherwise as may be notified by the
Commissioner, and a provisional acknowledgement shall be issued to the
appellant immediately.

(2) The grounds of appeal and the form of verification as contained in FORM
GST APL-01 shall be signed in the manner specified in rule 26.

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(3) A certified copy of the decision or order appealed against shall be
submitted within seven days of filing the appeal under sub-rule (1) and a final
acknowledgement, indicating appeal number shall be issued thereafter in
FORM GST APL-02 by the Appellate Authority or an officer authorised by him
in this behalf:

Provided that where the certified copy of the decision or order is submitted
within seven days from the date of filing the FORM GST APL-01, the date of
filing of the appeal shall be the date of the issue of the provisional
acknowledgement and where the said copy is submitted after seven days, the
date of filing of the appeal shall be the date of the submission of such copy.

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Explanation.—For the provisions of this rule, the appeal shall be
treated as filed only when the final acknowledgement, indicating the
appeal number, is issued.

Private Presentation Only not Professional Advice

 Rule 109 Appeal to the Appellate Authority

(1) An application to the Appellate Authority under sub-section (2) of

section 107 shall be made in FORM GST APL-03, along with the
relevant documents, either electronically or otherwise as may be
notified by the Commissioner.

(2) A certified copy of the decision or order appealed against shall be

submitted within seven days of the filing the application under
sub-rule (1) and an appeal number shall be generated by the
Appellate Authority or an officer authorised by him in this behalf.

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 Commissioner to direct any officer
Appeal by Aggrieved person against
subordinate to him to appeal to
the order of Adjudicating Authority
Appellate Authority

Pre-Deposits No Pre Deposits

Mandatory Pre Deposit =AA
Appellate Authority (Rule 109A)
a. Full amount of undisputed Ordered Passed By (N/N 55/2017)
tax/interest/penalty/fine
i) Addt. Comm/Joint Comm. Comm. (Appeal)
b. 10% of disputed TAX amount ii) Asst.Comm. /D.Comm. or Any officer not below the rank of
Subject to max 25 Crores (each) Superintendent joint Comm.
i.e Rs. 50 crores
AA shall not refer the case back for fresh adjudication.

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 Rule 110 & 111 deals procedure related with
Appeal to the Appellate Tribunal
Rule 112 - Production of Additional Evidence

Additional Evidence means an evidence other than the evidence

produced by him during the proceeding before Adjudicating Authority
or the Appellate Authority or Appellate Tribunal
The appellant shall not be allowed to produce before the Appellate
Authority or the Appellate Tribunal any evidence, whether oral or
documentary except in following :-

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EXCEPTIONS :
i.e. Cases where Additional Evidence can be produced
where the adjudicating authority or the Appellate Authority has refused to admit
evidence which ought to have been admitted

where the appellant was prevented by sufficient cause from producing the evidence
prevented by sufficient cause from producing the evidence which he was called
upon to produce by the adjudicating authority or the Appellate Authority

where the appellant was prevented by sufficient cause from producing before the
adjudicating authority or the Appellate Authority any evidence which is relevant
to any ground of appeal

where the adjudicating authority or the Appellate Authority has made the order appealed against
without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of
appeal.
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REVISIONAL AUTHORITY or purposes of Sec
108 [N/N 05/2020 – CT (dated 13-Jan-20)

Principal
JC/Addl. Comm.
Comm./ Comm.
OIO passed by
AC/DC or Sup. JC/Addl. Comm.

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RA is Supervising Authority to keep check on
OIO passed by GST Officers

OIO is
Process of Revision:
Erroneous
3 a) Operation of “OIO”
Pre-Judicial to Revenue Years stayed
Illegal/Improper/Ignoring
b) Revised – RO passed
Material Facts

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 What is Revision & Review?

Revision: The act of Examining again in order to

remove any defect or grant relief against the irregular
or improper exercise or non exercise of jurisdiction.

Review: - Re-examination or re-consideration - An act

of looking after something again with a view of
correction or improvement.

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Revisional Authority

• The Revisional Authority can, on his own, or on request from the Commissioner
of SGST/CGST, examine the records of any proceeding. He will examine the
records if he considers that any decision by any subordinate officer is-

• Prejudicial to the interest of the revenue

• Illegal or
• Improper or
• Not taking into account certain (whether or not available at the time of issuance
of the order) or
• An observation was made by the C&AG
If he thinks it is necessary, he can stay the order for a time period as he deems fit.
The person concerned will be given an opportunity of being heard.

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 Types of
Orders

Order in Orders in
Original (OIO) Appeal (OIA)
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 Section 3 (Administration) – (Officers under CGST Act 2017)

a). Principal Chief Commissioner / Chief Commissioner CGST:- Principal Chief commissioner/ Chief commissioner
are the senior most officer who has administrative control over all the officers within his zone . For the purpose of the Act ,
country is divided in 21 Zones and each zone is under supervision of Principal Chief commissioner or Chief Commissioner of
Central Zone . Senior grade Chief Commissioner will be designated as Principal Chief Commissioner, though both have same
powers

b). Director General – Offices of Director General have been created for monitoring some specified functions ie , DG GST
Intelligence, DG GST Audit Etc .Powers have been delegated to them vide Notification No. 14/2017-CT dated 1-7-2017

c). Principal Commissioner/Commissioner of Central Tax : Notification No 2/2017 –CT dated 19.06.2017 notified 107
Commissionerate's in each 21 Zones and Principal Commissioner/Commissioner of Central Tax is Administrative in-charge of
the Commissionerate's.

d). First Appellate Authority of Central Tax – These are Commissioner of Central Tax (Appeals) or Additional Commissioner
of Central Tax (Appeals) or Joint Commissioner of Central Tax (Appeals).

e). Commissioner of Central Tax (Audit) The Government vide notification No. 2/2017-CT dated 19-6-2017 has appointed
48 Commissioners of Central Tax (Audit) for the purpose of GST Act.

f). Additional and Joint Commissioners: There are Additional Commissioner/s and Joint Commissioner/s of Central Tax in
each Commissionerate.

g). Deputy Commissioner, Assistant Commissioner and Superintendent – Each Commissionerate is divided into divisions
and each division is under administrative control of ‘Deputy Commissioner of Central Tax’ or ‘Assistant Commissioner of
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Only notTax’.
Professional Advice
Time Limit for Revision
• After 6 months
• Upto 3 years

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Time Limit of Documents

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If Order is in Appeal: No Revision till appeal is decided

Revision

Issue not raised in

Issue raised in Appeal
Appeal

Cannot be revised Can be revised

Time Limit: Later of

two
a) 1 year from OIA
b) 3 year from OIO

Private Presentation Only not Professional Advice

Appeal against Order of Revision
• Appellate Tribunal

Private Presentation Only not Professional Advice

When is revision not allowed?
The Chief Commissioner or Commissioner will not revise the order if-

• The order was already under appeal

• 6 months have not passed from the date of order (i.e., there is time left for appeal)
• More than three years have passed after the date of order
• The order has already been taken for revision
• The Chief Commissioner or Commissioner can pass an order on any point which has not
been raised in any appeal. Such order must be passed before one year from the date of
the appeal order or before three years.

If the order is stayed by the order of a Court or Tribunal, the period of the stay will be
excluded.

Private Presentation Only not Professional Advice

Mindset of Department in IDT Regime was …?
• (a) Tax Payer Friendly
• (b) Professional Friendly
• (c) Both of the above
• (d) None of the above

Private Presentation Only not Professional Advice

CBEC issued a Circular No. 967/1/2012-CX
dated 01-01-2013
• (a) If appeal is not filed by assessee, recovery proceedings
should start immediately after statutory period of appeal is
over [90days in case of appeal before CESTST and 60days in
case of appeal before Commissioner (Appeals)].

• (b) If appeal is filed but application for stay is not made,

recovery proceedings should start immediately on filing
appeal before commissioner (Appeal) or CESTAT as
applicable.
Private Presentation Only not Professional Advice
CBEC issued a Circular No. 967/1/2012-CX
dated 01-01-2013
• (c) If appeal is filed and application for stay has been made by
assessee, recovery proceedings to be initiated 30days after filing of
appeal before commissioner (Appeal) [where lower authority had
dropped the demand but Commissioner (Appeals) confirms the
demand ]or CESTAT as applicable. [whether or not stay has been
granted by the commissioner (Appeals) or CESTAT].

• (d) If Commissioner (Appeals) confirms demand in the O-I-O (Order in

original) passed by lower authority [i.e both confirm the demand],
recovery proceedings should be initiated immediately (i.e. without
even waiting for filing of appeal by assessee).
Private Presentation Only not Professional Advice
Mindset of Department in IDT Regime was …?
(a) Tax Payer Friendly
(b) Professional Friendly
(c) Both of the above
(d) None of the above

Private Presentation Only not Professional Advice

IDT REGIME GST REGIME

Adjudicating Order
Adjudicating
Order
First Appellate
Commissioner Authority
(Appeals) Place of Supply Other issues
issues

Appellate Tribunal
(CESTAT) Appellate
Appellate
Tribunal
Tribunal
National
For State or
or
High Court Classification Area
Divisional
and Valuation Bench
Bench

Supreme Court
High Court

Supreme Court

Private Presentation Only not Professional Advice

 What is Appeal?
An appeal is a continuation of proceedings/
orders wherein the entire proceedings/ orders
are again left open for consideration by the
Appellate Authorities.

Private Presentation Only not Professional Advice

Can department be aggrieved person?
• The expression “any person aggrieved” does not mean the “the
revenue” it only means the assessee or person other than the
revenue. - CCE, Ahmedabad vs. Narendra P. Umrao, 1984 (15) ELT
275 (Tribunal)

Private Presentation Only not Professional Advice

Can a third person be considered “aggrieved person”?

• Appeal before the Delhi VAT Tribunal U/s 76 of DVAT Act can be filed by a
person affected by the order of the Commissioner U/s 84 (i.e.
Determination of Question) in the case of third party.
• Ex- The Commissioner determines the matter U/s 84 in the case of M/s
ABC; the appeal can also be filed by M/s XYZ if he is aggrieved from the
said Commissioner’s order. By going through provisions of Sec 74(1) and
84(8), the DVAT Tribunal held that determination orders are binding not
only on the applicant but also to other dealers and the subordinate
officers, thus, are right in rem.
• Thus, the third party can also be considered as person aggrieved.
• C.L. Micromed vs. CIT, 2015 (1487/ATVAT/2012-13 dated 18.02.2015) Tri.-
Delhi
Private Presentation Only not Professional Advice
 Adjudicating Authority
• Section 2(4) defines adjudicating authority to mean any authority appointed or
authorized to pass any order or decision under this Act. However, the following are not
covered under the ambit of adjudicating authority:
• Central Board of Customs & Excise
• Revisional Authority
• Authority for Advance Ruling
• Appellate Authority for Advance Ruling
• Appellate Authority
• Appellate Tribunal

Therefore an order passed by an officer other than the revisionary as well as the other
authorities mentioned above could be contested before the Appellate Authority.

Private Presentation Only not Professional Advice

 Example
• Assessee : Turnover Rs. 100 Lakhs
• Local Sales: CGST & SGST @9% each
• Paid: 9 Lakhs each
• Department passed Order: Valuation Rs. 200 Lakhs, GST Rate @28%
• Demand Order: Rs. 38 Lakhs (19+19)
• Thus Department has objected both Valuation & Classification (GST
Rate)

Private Presentation Only not Professional Advice

Appeal by Assessee
Option Challenge Accepted Contested Pre-Deposit
Demand &
Paid
1 Both Valuation 0 38 Lakhs 3.80 Lakhs
& Rate

2 Valuation 10 Lakhs 28 Lakhs 2.80 Lakhs

3 Classification 18 Lakhs 20 Lakhs 2.00 Lakhs

Private Presentation Only not Professional Advice

 Refund of Pre-Deposit

From
Available Rate
Date

Private Presentation Only not Professional Advice

What is a Sufficient Cause?
• Sufficient cause has not been defined in GST Laws.
• So Sufficient cause varies from case to case. It cannot be
weighted in golden scale. It has to vary from circumstances
to circumstances.
• So we can also say that “sufficient cause” essentially means
adequate or enough.
• There cannot be any scientific formula to define Sufficient
cause.

Private Presentation Only not Professional Advice

 What type of order could the
Appellate Authority pass?

Confirming Modifying Annulling

(invalid)

Private Presentation Only not Professional Advice

the decision or order appealed against.
What type of order could the Appellate
Authority pass?
The First Appellate Authority can
• confirm,
• modify or
• Annul
the decision but will not refer the case back to the authority.
The order shall be in writing giving details as to determination. The
Appellate Authority shall, along under section 107(11) issue a summary
of the order in FORM GST APL-04 clearly indicating the final amount of
demand confirmed.

Private Presentation Only not Professional Advice

Whether Appellate Authority could refer the
case back to Adjudicating authority?
• As per Section 107(11) the Appellate Authority
• may pass order
• but does shall not refer the case back to the
Adjudicating Authority.

Private Presentation Only not Professional Advice

Time limit for the decision

The order must be passed within 1 If the order is stayed by an order

year from the date of filing the of a Court or Tribunal, the period
appeal. of such stay shall be excluded in
from the one year period.

Private Presentation Only not Professional Advice

 Composition of Appellate Tribunal
CENTER STATE
National Bench Regional Bench State Bench Area Bench
JM TM TM JM TM TM JM TM TM JM TM TM
To hear appeals involving issues relating to POS (in To hear appeals involving issues relating to other
cases where one of the issues involved relates to POS than POS
(Sec 109) )
MEMORANDUM OF CROSS OBJECTIONS CAN BE FILED within 45 days from the receipt of notice in Form GST
APL-06 ( Condonation-45days).
FEES =1000/- (For every 1 lakh of tax, penalty etc) max 25000/- per act i.e (Rs. 2000 max Rs. 50000) No fee
for Rectification.

SUPREME COURT HIGH COURT

• PIL filed to SC for its constitution SUPREME COURT

• Tribunal can remand backPrivate Presentation Only not Professional Advice

Sec 112
Appeal to Appellate Tribunal (GSTAT)
Against the order of Appellate Authority

Pre-Deposits
Mandatory Pre Deposit =AT

a. Full amount of tax/interest/penalty/fine

b. b. 20% of remaining amt of tax in dispute

(in addition to 10%) Subject to max 50
Crores Private Presentation Only not Professional Advice
Sec 117
Appeal to High Court
Against the order of Appellate Tribunal (State/Area Tribunal)
where disputed point is other than Place of Supply

Private Presentation Only not Professional Advice

 Section 117 Appeal to High Court (HC)

Aggrieved person from

the order of Appellate High Court
tribunal File an appeal in FORM APL-08 within a period of
180 days from the date of order of appellate
tribunal received.

Private Presentation Only not Professional Advice

 Procedure to be adopted by High Court (HC)

Step-I HC shall admit an appeal only in case when he is satisfied that matter
involved Substantial question of Law.

Step-II IF High court is satisfied above that, shall formulate the question and
appeal shall be heard only on formulate question And respondent allowed to
argue that the case does not involve such question.

Step-III HC may determined only those issues which- (a) Has not been
determined by Tribunal, or (b) Has been wrongly determined by Tribunal

Step-IV Case heard by a bench of at least two judges of HC and decide on the
basis of majority of such judges.

Step-V In case of difference of opinion of judges on any point or points that same
shall be forward to additional judge and accordingly decide by majority.

NOTE :- Pre deposit of all tax dues is required to pay otherwise the inherent powers of HC have to be invoked for obtaining a
stay pending disposal of appeal. Private Presentation Only not Professional Advice
 Section 118Appeal to Supreme Court

Against which order appeal shall be filed to Supreme Court?

Against order of HC, OR

Against order of Tribunal in case of matter related with “Place

of Supply”

NOTE:- As per sec. 119, Sums due to govt. as result of an order passed by Tribunal or HC and an appeal has
been preferred to HC or Supreme Court, shall be payable in accordance with the order so passed.
Private Presentation Only not Professional Advice
 Sec 119
Payment of Due confirmed by AT or HC :- Notwithstanding that an
appeal has been preferred to the High Court or the Supreme Court,
sums due to the Government as a result of an order passed by the
Tribunal or an order passed by the High Court, as the case may be, shall
be payable in accordance with the order so passed by AT or HC.

Private Presentation Only not Professional Advice

 Not defined
APPEAL
in the act

“An Appeal under any law is an application to a higher court for a reversal of the
decision of a court. Appeals arise when there are any legal disputes.
Disputes arise due to non-compliance of
taxpayer with the provisions under law.

ADJUDICATION ORDER
The initial resolution of this dispute is done by a departmental officer
by a quasi judicial process resulting into the issue of an initial order
known as Adjudication order.
Private Presentation Only not Professional Advice
 Rights to Appeal

• Rights to appeal is a statutory right, it is not constitutional right.

• Right to appeal is a vested Right.
• CIT v. Ashoka Engineering Co. (1992) 194 ITR 645 (SC) it was held assessee and that it has to be spelt from the words of the
statute, If any, providing for an appeal. But it is an equally wellsettled proposition of law that, if there is a provision
conferring a right of appeal, it should be read in a reasonable, practical and liberal manner.

• (CIT v. Bengal Card Board Industries And Printers (P). Ltd. (1989) 176 ITR 193 (Cal), CIT v. Kerala Transport Co. (2000)242 ITR
263 (Ker). In Hoosein Kasam Dada (India ) Ltd vs. The State of Madhya Pradesh & Ors. (1953) 4 STC 114 (SC) : AIR 1953 SC
221

• Garikapati Veerayya vs. Subhiah Choudhry- AIR 1957 SC 540

• Hoosein Kasam Dada (India) Ltd. vs. State of M.P. – 1983 (13) ELT 1277 (SC)
• Thirumalai Chemicals Ltd. vs. UOI- 2011 (268) ELT 296 (SC)
• Sumages Pharma Pvt. Ltd. vs. CCE- 1987 (89) ELT 139 (Tribunal)

Private Presentation Only not Professional Advice

 Rights to Appeal

• Is right to file an appeal a natural right or Creature of statute?

Right by statute

• Ganga Bai vs. Vijayakumar – AIR 1974 SC 1126

• Anant Mills vs. State of Gujarat- AIR 1975 SC 1234

Private Presentation Only not Professional Advice

Are the following orders?

Notice

Summons

Audit Memos

In Commissioner of Central Excise,Haldia v. Krishna Wax (P.) Ltd. (2020) 77 GST 562 (SC). The Supreme
Court held that an internal order is not a decision or determination and hence can not be appealed
against an order or decision in general parlance refers to any which effects right and liabilities issued
by the department.

Private Presentation Only not Professional Advice

 Illustrative list of orders under GST

• Cancelation of registration
• Tax Not paid, short paid, input tax wrongly availed under section 73 without
willful misstatement of facts or fraud
• Tax Not paid, short paid, input tax wrongly availed under section 74 with
willful misstatement of facts or fraud
• Order of refund
• Rejection of LUT
• Order of provisional assessment, reassessment, summary assessment

Private Presentation Only not Professional Advice

Aggrieved Person

Meaning of ‘person Aggrieved’

▪ “Aggrieved” means one whose pecuniary interest is directly affected by the adjudication, one whose
right of property may be established or divested thereby.”
[‘Advanced Law Lexicon- P. Ramantha Aiyar]

▪ right of appeal to be exercised by the persons permitted by the statute to prefer appeal subject to
conditions regarding filling the appeals.

▪ Appeal – person aggrieved and locus-stand!

❖ Can a customer or receipient of goods or services file the appeal? No

• Mahindra and Mahindra Ltd. vs. CCE- 1983 (13) ELT 974 (Tribunal)

• Jagat Industries vs. CCE - 1998 (104) ELT 566 (Tribunal)

Private Presentation Only not Professional Advice
 APPEAL WHO CAN FILE IT?

• Rohit Pulp and Paper Mills vs. CCE – 2000 (120) ELT 566 (Tribunal)

• Ahisma Mines and Minerals Ltd. vs. Designated Authority – 2002 (142) ELT 71
(Tribunal)

• Oil Dale Trading Private Ltd. vs. CCE. 1983 (140 ELT 1835 (Tribunal)

• Polychem Ltd. vs. Collector – 1987 (30) ELT 1007 (Tribunal)

Private Presentation Only not Professional Advice

Important Definitions
Adjudicating Authority – Sec2(4) of CGST Act, 2017 -amended as per the Finance (No.2 ) Act,2019
Means any authority appointed or authorized to pass any order or decision under this act but does not
include :

Central Board of Indirect Taxes and Customs

Revisional Authority

Authority for Advance Ruling

National Appellate Authority for Advance Ruling *

Appellate Authority for Advance Ruling

Appellate Authority

Appellate Tribunal

Anti-Profiteering
PrivateAuthority u/snot
Presentation Only 171(2)*
Professional Advice
 Section 120 Appeal not be filed in certain cases

(A) HC In case where Monetary limit has been fixed filing by department

(B) IF Due to monetary limits, if department does not file an appeal in a case then it shall
not preclude that such officer would not be file an appeal for same or similar issue or
question of law in any other case.

(C) Appellate cannot contend that the CGST officer has acquiesced in the decision on
the disputed issues by not filing an appeal or application due to on account of monetary
limits.

(D) Tribunal or court hearing such appeal or application shall have regard to
circumstances for non filing of appeal or application by CGST officer due to on account
of monetary limits.
Private Presentation Only not Professional Advice
 Section 121 Non appealable decisions and orders

No appeals can be filed against following orders -

Where order/direction Where order has been

given by commissioner or given for seizure or In case order of In case of order
other authority to transfer retention of books of prosecution under this Act passed u/s 80 where
the proceedings from one accounts, register and (S.132(6)) amount paid in
officer to another officer other documents instalment (S.80)
(S.67(2))

Private Presentation Only not Professional Advice

 Section 105 Power of AAR and AAAR

Power of AAR and AAAR

To discovery and To enforcing the attendance To Compelling production

To issuing off books of accounts and
inspection of any person and examining
commission other records
him on oath

NOTE:- Power of AAR/AAAR as powers if a civil court.

Private Presentation Only not Professional Advice

 Section -100 Appeal to Appellate authority
Person aggrieved
from order of AAR Can file to + Fees of Rs. 10,000
OR AAAR

Concerned officer
Can file appeal to

Time limit to file an appeal to AAAR

Within 30 days from the date on which the ruling sought to be appealed
against is communicated to the concerned officer.

Extension allowed by AAAR further 30 days

Section -101 Order of AAAR

Confirm the AAR order

Order of AAAR
Within 90 days from the date of filling of appeal OR
Modify the AAR order
NOTE:-1 Copy of AAAR order
No Advance ruling forwarded to
can be issued IF
AAAR members has
differ opinion. Private Presentation Only notApplicant
Professional Advice Concerned officer Jurisdictional officer
 Production of Additional evidence before the Appellate authority or Appellate Tribunal

The appellate shall not be allowed to produce additional evidence EXCEPT in following circumstances

Evidences which Adjudicating officer or

Appellant was prevented by AA has made the order
has refused to AA called upon to
sufficient cause from producing appealed against without
admit by AA which produce evidence and
evidences before adjudicating giving sufficient opportunity
ought to have appellant was
officer or AA, which is relevant to to adduce evidence relevant
been admitted, or prevented by sufficient
any ground of appeal. to any ground of appeal.
cause.

NOTE:-1 Appellate authority or Appellate tribunal shall not be admitted any evidences unless to examine the evidences or
documents or to cross examine any witness produced by appellant.
NOTE:-2 Reasons for admitted evidence to be recorded in writing.

Private Presentation Only not Professional Advice

 Section 113 Order of Appellate Tribunal

Order of appellate tribunal

To confirm, modifying, annulling the Refer back the case to Appellate authority or Revisional authority or
decision or order appealed against Adjudicating authority for fresh adjudication after taking additional
which. evidence, if necessary.

Private Presentation Only not Professional Advice

 Rectification of mistake
If any error apparent on face of records, rectification of such error

On own motion if noticed by Brought to noticed by commissioner Brought to noticed by other party to the
Appellate tribunal or SGST/UTGST commissioner appeal

Appellate Tribunal shall rectify Within a period of 3 months from the date of order

NOTE:- Rectification shall be made after giving a opportunity of being heard.

Time limit for disposal of appeal ?

Within a period of 1 year from the date on which appeal is filed.

Copy of order communicate to

Appellate authority or Revisional Jurisdictional commissioner or commissioner of

Appellant
authority or Original Adjudicating Private Presentation Only not Professional Advice state tax or union territory tax
 Section 116 Authorised Representative

Who can act as a authorised representative ?

a) Relatives or regular employees of appellant,
b) An advocate who is in a practice in any court of India and who has not been debarred from practice by any Indian court,
c) Any chartered accountant, cost accountant or company secretary who holds certificate of practice and has nor been debarred
from practice.
d) A retired officer of commercial tax department, who had worked in a post not below rank of Group-B gazette officer for a
minimum period of 2 years but he is barred up to 1 year after retirement or resignation to become authorised representative.
e) GST Practitioner on behalf of concerned registered person.

Who cannot act as a authorised representative?

a) Any person who b) Who is convicted of an offence

c) Who is found
has been dismissed connected with any proceeding d) Who has been
guilty of
or removed from under – CGST Act, SGST Act, adjudicated as an insolvent
misconduct, or
govt. services, or IGST Act, UTGST Act, or

NOTE:- Person disqualified under SGST/UTGST Act shall be deemed to be disqualified under CGST Act.
Private Presentation Only not Professional Advice
 Section -102 Rectification of Advance Ruling giving by AAR/AAAR

Who such rectification is possible ? If any error exist apparent on the face of the record and
noticed by

AAR/AAAR on its Jurisdictional officer

Applicant Concerned officer
own record

Rectification shall be made within 6 months from the date of order

Private Presentation Only not Professional Advice

 Section -103 Applicability of Advance Ruling

Advance Ruling pronounce by AAR/AAAR is binding only.

Concerned officer or
On applicant who In respect of matter referred for
Jurisdictional officer of the
had sought it. advance Ruling
applicant

Private Presentation Only not Professional Advice

 Section -98 Procedure for obtaining Advance Ruling

Applicant AAR
Submitted a application with fee of Rs. 5,000
Shall issue a copy of
application and call upon him
Examine the validity of application and to furnish required documents
NOTE:-1 If difference in called to application and concerned officer
opinion of AAR members on or these representatives
any point or points, Refer to
AAAR Concerned officer

Rejection order copy forwarded to

NOTE:-2 Application not be
If application accepted If application Rejected
accepted on that matters
already pending in appeal or
decided in any proceedings Examine the question Opportunity of being heard
specified in application given and reason of rejection
in records in rejection order
AAR shall pronounce Advance ruling
within 90 days from the date of receipt
of application.

A copy of advance ruling forwarded to-

Applicant
Concerned officer
Private Presentation Only not Professional Advice Applicant
Jurisdiction officer
 Whether Appellate Authority could refer
the case back to Adjudicating authority?

• As per Section 107(11) the Appellate

Authority may pass order but does
shall not refer the case back to the
Adjudicating Authority.

Private Presentation Only not Professional Advice

What is Refer back or Remand of case?
• Returning case back to the lower authority against whom
appeal is filed.
• Sometimes, the matter is remanded (refer the case back to
Adjudicating Authority) as an easy course

Private Presentation Only not Professional Advice

Refer back or Remand: view of Courts
• Remand to lower authorities was superfluous (unnecessary) and tribunal
could have decided the matter itself, when the matter was fully argued
and all relevant material were before the tribunal. - MG Shahani & Co.
(Delhi) Ltd. vs CCE (SC) , 1994 (73) ELT 3
• If material on record is sufficient to analyse evidence & arrive at factual
conclusion then matter should not be remanded instead order should
be passed on merits. - L’oreal India Pvt. Ltd vs UOI (HC-Bombay), 2014
(35) STR 72
• When Tribunal has considered the evidence as sufficient to record a
finding on merits, the case should be decided by the Tribunal itself. -
Dimple Overseas vs. CC (SC), 1995 (80) ELT 10

Private Presentation Only not Professional Advice

Whether the Appellate Authority can enhance
the penalty or fee?
• First Proviso to Section 107(11) lays down certain conditions for an
order enhancing any fee or penalty or fine in lieu of confiscating
goods etc.
• However, certain conditions are mentioned in the Proviso itself before
issuing such order. The appellant should have been given a
reasonable opportunity of showing cause against the proposed order
enhancing penalty or fine etc.
• Thus, giving harmonious interpretations of law we can say that the
Appellate Authority has the powers to enhance the penalty or fine
etc.

Private Presentation Only not Professional Advice

2nd Appeal: Appellate Tribunal
• The Tribunal is the second level of appeal, where appeals can be filed
against the orders-in-appeal passed by the AA or order in revision
passed by revisional authority, by any person aggrieved by such an
order-in-appeal/Order in revision.
• The law envisages constitution of a two-tier Tribunal i.e. National
Bench/Regional Benches and the State Bench/ Area Benches.

Private Presentation Only not Professional Advice

 National Bench
Place of Supply or Divisional
Appellate Bench
Tribunal
Other than Place State Bench or
of Supply Area Bench

Private Presentation Only not Professional Advice

2-Tier Issue Bench

National or
Place of Supply
Regional
Appellate
Tribunal
Other than
State or Area
Place of Supply

Private Presentation Only not Professional Advice

2nd Appeal: Time Limit for aggrieved person
• The time limit for the party to file an appeal before
the Appellate Tribunal is 3 months from the date of
Time Limit communication of the impugned order.

• But the AT may condone a delay of up to 3 (three)

Condonation
months for appeal & 45 days for cross objections.

Private Presentation Only not Professional Advice

2nd Appeal: Time Limit for Department

• 6 months from the date on which the said order has been
passed for determination of such points arising out of the said
Time Limit order as may be specified by the Commissioner in his order.

• But the AT may condone a delay of up to 3 (three) months for

appeal & 45 days for cross objections.
Condonation

Private Presentation Only not Professional Advice

Summary of time limits for AT
Time Limits for Assessee Department

Appeal 3 months from the date of receipt of 6 months from the date of receipt of
the order the order

Cross-Objection 45 days from the date of receipt of notice of appeal

Form: Appeal APL-05 APL-07

Private Presentation Only not Professional Advice

2nd Appeal: Forms

Any person
aggrieved
FORM GST APL-05 Department
FORM GST APL-07

Private Presentation Only not Professional Advice

Can Tribunal refuse to admit appeal?
• As per Section 112(2) the Tribunal has discretion to refuse to admit
such appeal in cases where the appeal involves –
• tax amount or input tax credit or
• the difference in tax or the difference in input tax credit involved or
• amount of fine, fees or amount of penalty determined by such order,
does not exceed Rs 50,000/-.

Private Presentation Only not Professional Advice

Whether entire amount of tax, interest, penalty, fine or
fee has to be remitted before preferring appeal?
Demands
• Entire amount of such demands (tax,
which are
interest and penalty) shall have to be
not
remitted.
contested
• A sum equal to 20% of the remaining
Demands
amount of tax in dispute arising from
which are
the said order shall have to be
contested
remitted.
Private Presentation Only not Professional Advice
20% is in addition to 10% or it should be net-
off?
• This amount (20%) is in addition to the pre-
deposit paid while filing appeal before Appellate
Authority. – Section 112 (8)

Private Presentation Only not Professional Advice

Whether payment of balance amounts of
demand would be stayed?
• As per Section 112(9) where the appellant has
paid the required pre-deposit (as per Section
112(8)), the recovery proceedings for the
balance amount shall be deemed to be stayed
till the disposal of the appeal.

Private Presentation Only not Professional Advice

Whether parties to an appeal could seek
adjournment of the hearing?
• As per Section 113(2) the Appellate Authority may, grant
adjournment of personal hearing if sufficient cause is shown
at any stage of hearing of an appeal.

• However as per Proviso Section 113(2), no such

adjournment shall be granted more than three times to a
party during hearing of the appeal.

Private Presentation Only not Professional Advice

 Confirm

Original Order Modify

Annulling
Order by Tribunal

Revisional
Authority
Remand/ Refer
Back Original
Adjudicating
Private Presentation Only not Professional Advice
Authority
Once appeal is accepted what about payment of balance amounts
demanded? Would that be considered as demand stayed?

• Yes, as per Section 107(7) where the appellant has paid the required
pre-deposit, the recovery proceedings for the balance amount shall
be deemed to be stayed.

Private Presentation Only not Professional Advice

Whether parties to an appeal could seek
adjournment of the hearing?
As per Section 107(9) the Appellate Authority may, grant adjournment
of personal hearing if sufficient cause is shown at any stage of hearing
of an appeal.
•However as per Proviso Section 107(9), no such adjournment shall be
granted more than three times to a party during hearing of the appeal.

Private Presentation Only not Professional Advice

What is a Sufficient Cause?
•Sufficient cause has not been defined in GST Laws.
•So Sufficient cause varies from case to case. It cannot be weighted in
golden scale. It has to vary from circumstances to circumstances.
• So we can also say that “sufficient cause” essentially means adequate
or enough.
•There cannot be any scientific formula to define Sufficient cause.

Private Presentation Only not Professional Advice

2nd Appeal: Appellate Tribunal
• The Tribunal is the second level of appeal, where appeals can be filed
against the orders-in-appeal passed by the AA or order in revision
passed by revisional authority, by any person aggrieved by such an
order-in-appeal/Order in revision.
• The law envisages constitution of a two-tier Tribunal i.e. National
Bench/Regional Benches and the State Bench/ Area Benches.

Private Presentation Only not Professional Advice

Procedure in Appeal before Tribunal
Section 112(1) of GST Act :
Appeal to be filed within 3/6 months from the date on which the order
sought to be appealed against is communicated to the person
preferring the appeal.
Section 112(5) of GST Act
On receipt of notice of filing of appeal, the party against whom the
appeal has been preferred may file memorandum of cross-objections
within 45 days of receipt of notice against any part of the order
appealed against and such cross objections shall be disposed of by the
Tribunal as appeal presented within the specified time.
Private Presentation Only not Professional Advice
Procedure in Appeal before Tribunal
Section 112(6) of GST Act :
The Appellate Tribunal may admit an appeal within three months after
the expiry of the period referred to in sub-section (1), or permit the
filing of a memorandum of cross-objections within forty-five days after
the expiry of the period referred to in sub-section (5) if it is satisfied
that there was sufficient cause for not presenting it within that period.

Private Presentation Only not Professional Advice

 Summary of time limits for AT
Time Limits for Assessee Department

Appeal 3 months from the date of receipt of 6 months from the date of receipt of
the order the order

Cross-Objection 45 days from the date of receipt of 45 days from the date of receipt of
notice of appeal notice of appeal

Form: Appeal APL-05 APL-07

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 2nd Appeal:
Forms
Any person aggrieved
FORM GST APL-05

Any authorised officer

on direction of the
Commissioner FORM
GST APL-07
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 As per Section 112(2) the Tribunal
has discretion to refuse to admit
such appeal in cases where the
appeal involves –
• tax amount or input tax credit or
Can Tribunal refuse • the difference in tax or the difference in
input tax credit involved or
to admit appeal? • amount of fine, fees or amount of penalty
determined by such order,

does not exceed Rs 50,000/-.

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Pre-Deposit before Tribunal under
GST Act
Section 112(8)of GST
• Full amount of tax, interest, fine and penalty arising from the
impugned order as is admitted by him and
• Sum equal to 20% of the remaining amount of TAX in dispute in
addition to the amount deposited u/s 107(6) arising from the order
subject to a maximum of Rs.50 Cr in relation to which the appeal has
been filed.

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Whether entire amount of tax, interest, penalty, fine
or fee has to be remitted before preferring appeal?
Demands
which are
• Entire amount of such demands (
tax, interest and penalty) shall have
not
to be remitted.
contested

Demands
• A sum equal to 25% of the
which are
remaining amount of tax in dispute
arising from the said order shall
contested
have to be remitted.
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Whether payment of balance amounts of
demand would be stayed?
• As per Section 112(9) where the appellant has paid the required pre-
deposit (as per Section 112(8)), the recovery proceedings for the
balance amount shall be deemed to be stayed till the disposal of the
appeal.

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Whether
parties to an As per Section 113(2) However as per

appeal could the Appellate

Authority may, grant
adjournment of
Proviso Section
113(2), no such
adjournment shall be

seek personal hearing if

sufficient cause is
shown at any stage of
granted more than
three times to a
party during hearing

adjournment of hearing of an appeal. of the appeal.

the hearing?

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Review Appeals by Revenue before Tribunal
under GST Act
Sec 112(3) of GST Act: The Department may file an appeal before the
Tribunal against the order of the Appellate Authority or the Revisional
Authority within (6) months from the date on which the said orders has
been passed.
Sec 112(4) of GST Act:
An application shall be dealt with by the Appellate Tribunal as if it were
an appeal made against the order under sub-section (11) of section 107
or under subsection (1) of section 108 and the provisions of this Act
shall apply to such application, as they apply in relation to appeals filed
under sub-section (1).

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Orders of Appellate Tribunal
• The Appellate Tribunal may conform, modify or annul the decision or order appealed
against or may refer the case back to the AA or to the adjudicating authority or revisional
authority, with such directions as it may think fit, for a fresh adjudication or decision
after taking additional evidence if necessary. (Section 113(1)
• The Appellate Tribunal may grant time to parties on sufficient cause being shown,
however no more than three such adjournments can be given. (Section 113(2))
• Tribunal may amend its order to rectify any mistake apparent on record, suo-motu or if
such mistake is brought to its notice by any of the parties within a period of three
months from the date of order. (Section 113(3))
• To enhance the demand the Tribunal has to provide a reasonable opportunity of being
heard. (proviso to Sec 113(3))
• The Appellate Tribunal shall wherever it is possible to do so hear and decide every appeal
within one year from date of filing. (Section 113(4))
• Copy of order shall be served on the concerned parties. (Section 113(5))

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 Confirm

Original Order Modify

Annulling

Order by Tribunal

Confirm

Remand/Refer
Back Modify

Annulling
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 Question

Framing

Fitment Order

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Appeal before High Court
• Section 117(2) of both CGST and SGST
Section 117 provides that any person aggrieved by any order passed by
the State Bench or Area Benches of the Appellate Tribunal may file an
appeal to the High Court and the High Court may admit such appeal, if
it is satisfied that the case involves a substantial question of law
• Appeal to be filed within 180 days, but High Court has the power to
condone delay on sufficient cause being shown.

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Appeal before Supreme Court
• • An appeal shall lie to the Supreme Court—
– (a) from any order passed by the National Bench or Regional Benches
of the Appellate Tribunal; or
– (b) from any judgment or order passed by the High Court in an
appeal made under section 117 in any case which, on its own motion
or on an application made by or on behalf of the party aggrieved,
immediately after passing of the judgment or order, the High Court
certifies to be a fit one for appeal to the Supreme Court.
Centre-State or inter-state differences relating to treatment of supply
as inter-state or intra-state or differences relating to place of supply
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Appeals not to be filed in certain cases
• (3) Notwithstanding the fact that no appeal or application has been
filed by the GST Officer pursuant to the orders or instructions or
directions issued under sub-section (1), no person, being a party in
appeal or application shall contend that the GST officer has
acquiesced in the decision on the disputed issue by not filing an
appeal or application.
• (4) The Appellate Tribunal or court hearing such appeal or application
shall have regard to the circumstances under which appeal or
application was not filed by the GST Officer in pursuance of the orders
or instructions or directions issued under subsection (1).

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Appeals not to be filed in certain cases
• (1) The Board may, on the recommendation of the Council, from time
to time, issue orders or instructions or directions fixing such
monetary limits, as it may deem fit, for the purposes of regulating the
filing of appeal or application by the GST officer under the provisions
of this Chapter.
• (2) Where, in pursuance of the orders or instructions or directions,
issued under sub-section (1), the GST officer has not filed an appeal
or application against any decision or order passed under the
provisions of this Act, it shall not preclude such GST officer from filing
appeal or application in any other case involving the same or similar
issues or questions of law.

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 SUMMARY OF APPELLATE PROVISIONS
Appeal by Appeal by Appellate
Aggrieved person aggrieved person Tribunal
National or
Regional
*MoC-GST APL- Bench
First Appellate
Order by 06
Authority
Adjudicating
(Sec.107)
Authority 45 days + 45
days

Appellate
Appeal by Tribunal State
Appeal by dept Commissioner or Area Bench

Order is Deposit
Deposit Time = 180 days + Extn. and
erroneous +
Prejudicial to (a) 100% of admitted (a) 100% of admitted question of Law
unit revenue (Tax + Int. + Fine + Fee + Penalty) (Tax Int. + Fine + Fee + Penalty)

(a) + 10% of tax in dispute (a) + 20% of tax in dispute

High Court
(Sec.117)

Question of Law

Revisional Supreme
Court
Authority
(Sec.118)
(Sec.108)

*Memorandum of Cross Objections

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 Grounds of Appeal
➢ Constitutional
➢ Time barring
➢ Not a reasoned order or non- speaking order
➢ Without application of mind
➢ Not given fair or reasonable hearing
➢ SCN is Vague- on the basis of presumption and assumptions
➢ Authority has not acted as quasi judicial authority
➢ Deemed acceptance of an appeal

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Sec 75(4)- Opportunity of being heard
An opportunity of being heard shall be granted

• where a request is received in writing from the person chargeable

with tax or penalty ,or
• where any adverse decision is contemplated against such person

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 Sec 75(6) - Speaking Order
• The proper officer, in this order, shall set out the relevant facts and
the basis of his decisions.

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Sec 75(13)- One penalty for one default
• Where any penalty is imposed under section 73 or section 74, no
penalty for the same act or omission shall be imposed on the same
person under any other provision of this Act.

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Sec 75(7)- Notice and order should be on same
lines
• The amount of tax , interest and penalty demanded in the order shall
not be in excess of the amount specified in the notice and no demand
shall be confirmed on the grounds other than grounds specified in the
notice.

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No Penalty is imposable in case of
Retrospective amendment
• In one of its historic judgments rendered in the case of J.K. Spinning
and Weaving Mills Ltd. vs. UOI – 1987 (32) ELT 234 (SC), the Supreme
Court held that it would be against all principles of legal jurisprudence
to impose a penalty on a person or to confiscate his goods for an act
or omission which was lawful at the time when such act was
performed or omission made, but subsequently made unlawful by
virtue of any provision of law

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Penalty is not imposable when issue relates to
the statutory interpretation
• In the case of Uniflex Cables Ltd. vs. CCE – 2011 (271) ELT 161
(SC), the Supreme Court dealt with the issue with regard to the
imposition of penalty where the issue involved was of interpretational
nature. Taking note of the fact that the Commissioner himself had
found that it was only a case of interpretational nature, the Supreme
Court quashed the order of the Commissioner imposing the penalty as
also the order of the Tribunal so far as it confirmed the imposition of
penalty on the Appellant.

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 DIN
• CBIC vide its Circular No 128/47/2019-GST has mandated that in all
the communications (except in exceptional circumstances) with the
assessee (including on e-mails), Documents Identification No is
required to be mentioned.
• DIN can be confirmed by the assessee online at Cbic.gov.in
• All the communication with the assessee which does not contain DIN
shall be treated Invalid and shall be considered as never been issued.

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Monetary limits for SCN – 31/2018 (Circular)
Designation of Officer Monetary limit of the Monetary limit of the Monetary limit of the
amount of CGST amount of IGST amount of CGST and IGST
(including cess) for (including cess) for (including cess) for
issuance of show cause issuance of show cause issuance of show cause
notices & orders u/s 73 & notices & orders u/s 73 & notices & orders u/s 73 &
74 of CGST 74 of CGST Act made 74 of CGST Act made
applicable to IGST applicable to IGST

Superintendent Up to Rs. 10 lakhs Up to Rs. 20 lakhs Up to Rs. 20 lakhs

Deputy or Assistant Above Rs. 10 lakhs up to Above Rs. 20 lakhs up to Above Rs. 20 lakhs up to
Commissioner Rs. 1 crore Rs. 2 crore Rs. 2 crore

Additional or Joint Above Rs. 1 Crore Above Rs. 2 Crore Above Rs. 2 Crore
Commissioner

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Notice and order should be on same lines(
Order beyond SCN)
• The adjudicating authority has to pass his order within the parameter
of the allegations levelled in the show cause notice
• In the case of Commissioner of customs, Mumbai v. Toyo Engineering
India ltd. [(2006) 7 SCC 592] , the apex court while delivering
judgement under para 16 held that, the department cannot travel
beyond the scope of the show cause notice

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Power of Limitation
• Order cannot be issued beyond the time limit mentioned U/s 73(10)
and 74(10)
• In view of section 74(2), SCN is required to be issued at least 6
months prior to the time limit of issuing order which is 5 years from
“DUE DATE” for furnishing annual return of relevant F.Y. or date of
erroneous refund {i.e. within 4 years 6 months from due date of
annual return}
• Annual return F.Y. 17-18: 31.01.2020, order can be passed upto
30.01.2025. Order passed after this date is invalid.
• SCN issued after 31.07.2024 will be time- barred
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Time limit u/s 73 and 74
Sr. No. Relevant F.Y. to Due date for furnishing the AR Last date for Last date for
which the demand in FORM GSTR-9 issuance of the issuance of the
relates show cause notice show cause notice
as per S.73(2) r/w. as per S.74(2) r/w.
S.73(10) S.74(10)

1. 2017-18 05.02.2020 05.11.2022 05.08.2024

07.02.2020 07.11.2022 07.08.2024

2. 2018-19 31.12.2020 30.09.2023 30.06.2025

3. 2019-20 31.03.2021 31.12.2023 30.09.2025

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SEC 115 - Interest on refund of amount paid
for admission of appeal.
• Where an amount paid by the appellant under sub-section (6) of
section 107 or sub-section (8) of section 112 is required to be
refunded consequent to any order of the Appellate Authority or of
the Appellate Tribunal,
• Interest at the rate specified under section 56 (i.e. 9%) shall be
payable in respect of such refund from the date of payment of the
amount till the date of refund of such amount.

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Show Cause Notices to Taxpayers Under GST Act Mandatory to Upload on
Website – Mere E-Mail is not Suffice.[Akash Garg Vs State of M.P, vide
order dated 19.11.2020]
• The Honorable Madhya Pradesh Court in case of Akash Garg Vs State
of M.P, vide order dated 19.11.2020 held that statutory procedure
prescribed for communicating show-cause notice or order under Rule
142(1) of CGST Act is required to be followed mandatorily by the
revenue.
• Rule 142 prescribes the manner to upload show-cause notices on
Website.
• Thus, a mere e-mail of show-cause notices to the taxpayer would not
suffice. Upload of such notices on the website is mandatory.

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Cognizance for Extension of Limitation [Suo Moto
W.P. (C) No. 3/2020 dated on July 10, 2020]
• The Hon’ble Supreme Court in Re: Cognizance for Extension of Limitation
[Suo Moto W.P. (C) No. 3/2020 dated on July 10, 2020] w.r.t. I.A. No.
48461/2020 observed that service of notices, summons and exchange of
pleadings/documents, is a requirement of virtually every legal proceeding
and that the service of notices, summons and pleadings etc. have not been
possible during the period of lockdown because this involves visits to post
offices, courier companies or physical delivery of notices, summons and
pleadings.
• The Court therefore, considered it appropriate to direct that such services
may be effected by e-mail, FAX, commonly used instant messaging
services, such as WhatsApp, Telegram, and Signal etc.
• However, if such services are made by means of said instant messaging
services, then in addition thereto, the service of the same
document/documents must be made via e-mail on the same date.
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 CROSS EMPOWERMENT
• Show cause notice
Authority empowered to issue show cause notice
❖‘Proper officer’
❖ Sec- 2(91)
❖ Circular No. 3/3/2017 –GST dt. 05-07-2017

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Section – 2(91) , Central Goods And Services
Tax Act, 2017

• "proper officer" in relation to any function to be performed under

this Act, means the Commissioner or the officer of the central tax
who is assigned that function by the Commissioner in the Board;

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Section - 6, Central Goods And Services Tax
Act, 2017
(1) Without prejudice to the provisions of this Act, the officers appointed under the State
Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are
authorised to be the proper officers for the purposes of this Act, subject to such conditions
as the Government shall, on the recommendations of the Council, by notification33,
specify.
(2) Subject to the conditions specified in the notification issued under sub-section (1),—
(a) where any proper officer issues an order under this Act, he shall also issue an order
under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax
Act, as authorised by the State Goods and Services Tax Act or the Union Territory Goods
and Services Tax Act, as the case may be, under intimation to the jurisdictional officer of
State tax or Union territory tax;
(b) where a proper officer under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act has initiated any proceedings on a subject matter, no
proceedings shall be initiated by the proper officer under this Act on the same subject
matter.

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[2021] 125 taxmann.com 188 (SC)
Canon India Private Limited v. Commissioner of Customs
• Section 28 of the Customs Act, 1962 - Recovery - Of duty or tax not levied/paid or short-
levied/paid or erroneously refunded - Proper Officer - Appellant importers had imported
cameras/goods which were released without any customs duty after being allowed benefit of
exemption notifications as per law by Deputy Commissioner of Customs being Proper officer -
Later, a show cause notice was issued under section 28(4) by Additional Director General DRI,
alleging that Customs Authorities had been induced to clear cameras by wilful mis-statement and
suppression of facts about cameras - However, it was found that section 28(4) empowers recovery
of duty not paid, part paid or erroneously refunded by reason of collusion or any wilful mis-
statement or suppression of facts and, reassessment and recovery of duties contemplated by
section 28(4) is by same authority and not by any superior authority such as Appellate or
Revisional Authority - Further, it is impermissible to allow an officer, who has not passed original
order of assessment to reopen assessment on ground that duty was not paid/not levied, by
original officer who had decided to clear goods and who was competent and authorized to make
assessment - Whether therefore, when cameras had been cleared for import by Deputy
Commissioner of Customs who decided that cameras were exempted, Additional Director General
of DRI was not proper officer to exercise power under section 28(4) and thus, entire proceedings
initiated by Additional Director General of DRI for recovery of duty not paid under section 28(4)
were invalid, without any authority of law and liable to be set-aside - Held, yes [Paras 14,15 and
23].

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[2021] 125 taxmann.com 188 (SC)
Canon India Private Limited v. Commissioner of Customs
• An officer who did assessment, could only undertake reassessment
under section 28(4) of Customs Act, hence, goods, cameras having
been cleared for import by a Deputy Commissioner of Customs who
decided that goods were exempted, Additional Director General of
DRI was not proper officer to exercise power under section 28(4)

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 DIR officers are not proper officers
• Judgement by Larger bench of 3
• The expression ‘the’ in Section 28 indicates that the re-assessment by
way of issuance of SCN is to be done by the same officer who has
initially assessed- ‘the’ is difference from ‘a/an’
• Where the statue confers the same power to perform an act on
different officers, the two officers cannot exercise their power in the
same case. Where one officer has exercised his powers of
assessment, the power to order re-assessment must also be exercised
by the same officer or his successor and not by another officer of
another department though he is designated to be an officer of the
same rank.- Doctrine of Comity

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• Parallel proceedings cannot be initiated by State GST authorities on
the same subject matter

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Raj Metal Industries & Anr. v. UOI & Ors. [W. P. A.
1629 of 2021,]
Facts:-
• Raj Metal Industries (“the Petitioner”) has filed this petition challenging the
actions initiated by the State GST Authorities (“the Respondent”) with respect to
summons issued dated October 19, 2020 under Section 70 of the WBGST Act
• Challenging blocking of the electronic credit ledger on December 8, 2020 being
challenged the vires of Rule 86A of the West Bengal Goods and Services Tax
Rules, 2017 (“the WBGST Rules”)/ Central Goods and Services Tax Rules, 2017
(“the CGST Rules”) & Section 16(2)(c) of the WBGST Act/ CGST Act
• Further, the proceedings were already pending against the Petitioner on the
same subject matter under the CGST Act.

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Raj Metal Industries & Anr. v. UOI & Ors. [W. P. A.
1629 of 2021,]
Issues:-
Whether the summon issued and proceedings initiated by the Respondent is in
violation of the Section 6(2)(b) of the WBGST Act?

Held:-
The Hon’ble Calcutta High Court in W. P. A. 1629 of 2021, dated March 24, 2021
stayed the summons and proceedings thereunder and held that the summons
issued by the Respondent is, prima facie, in violation of Section 6(2)(b) of the
WBGST Act.

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Parallel proceedings cannot be initiated by State
GST authorities on the same subject matter

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Certain relevant judgement on stated issue
• The Hon’ble Punjab & Haryana High Court in Kaushal Kumar Mishra
v. Additional Director General & Anr. [CWP21387-2020 (O&M),
decided on February 12, 2021] dismissed the petition and refused to
interfere with the investigations undertaken by the competent
authorities against the proprietor, for alleged misuse and fake
availment of Input Tax Credit (“ITC. Further, the Court held that where
different officers appointed are independently investigating
altogether different matters involving contraventions of prima facie
cognizable and punitive offences under CGST Act, without any
overlapping, such investigation is not barred by Section 6(2)(b) of the
CGST Act.

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Certain relevant judgement on stated issue
• The Hon’ble Allahabad High Court in G.K. Trading Company v. Union
of India & Ors. [Writ Tax No. 666 of 2020, dated 2.12.2020]
dismissed the petition filed for prohibiting another proper officer to
initiate any inquiry/proceeding on the same subject-matter. The Court
observed and held that, there was no proceeding initiated by a
proper officer against the assessee on the same subject-matter
referable to Section 6(2)(b) of the CGST Act as it was merely an
inquiry by a proper officer under Section 70 of the CGST Act.
• Koenig Solutions Pvt. Ltd. Vs. UOI – 2021-TIOL-1013-HC-DEL-GST
• Himanshu Balram Gupta vs. UOI – 2020-TIOL-2241-HC-AHM-GST.

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Overlapping/Different Jurisdictions [Sec .6
(2)(b)]
• Koenig Solutions Pvt. Ltd. Vs. UOI – 2021-TIOL-1013-HC-DEL-GST
• Raj Metal Indus. Vs. UOI – 2021-TIOL-744HC-KOL-GST
• Himanshu Balram Gupta vs. UOI – 2020-TIOL-2241-HC-AHM-GST.
• Kaushal Kumar Mishra vs. ADG, Ludhiana ZU-2021-TIOL-387-HC-P &
H-GST

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The powers vested in Commissioner u/s. 69 be
further delegated by him
• Nathalal Maganlal Chauhan vs. State of Gujarat-2020 (35) GSTL 145
(Guj.)

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Authority which initiates will conclude
• RAJ METAL INDUSTRIES-Kolkatta HC 2021-TIOL-744HC-KOL-GST
Proceedings pending before CGST , simultaneously initiated by SGST

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The stay on arrest grantable in case of GST
frauds
• Govind Enterprises vs. State of UP -2019 (27) GSTL 161 (All.)

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 PERIOD OF LIMITATION_APPLICABILTY IN GST
of SUPREME COURT SUO MOTO ORDER

Order in SCAORA
Interlocutory Application for
Order in Suo Motu Writ
Order in Suo Motu Writ Petition No. 3/2020 restoration of Suo Motu Writ
Petition No. 3/2020 dated
dated 23.03.2020 (Now alive till further Petition No. 3/2020 dated
08.03.2021 (Now has
orders) 27.04.2021(seems to
become infructuous)
extended the scope of order
dated 23.03.2020)

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Order in Suo Motu Writ Petition No. 3/2020
dated 23.03.2020

• This Court has taken Suo Motu cognizance of the situation arising out of
the challenge faced by the country on account of Covid-19 Virus and
resultant difficulties that may be faced by litigants across the country in
filing their petitions/applications/suits/appeals/all other proceedings
within the period of limitation prescribed under the general law of
limitation or under Special Laws (both Central and/or State).

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• To obviate such difficulties and to ensure that lawyers/litigants do not have
to come physically to file such proceedings in respective Courts/Tribunals
across the country including this Court, it is hereby ordered that a period
of limitation in all such proceedings, irrespective of the limitation
prescribed under the general law or Special Laws whether condonable or
not shall stand extended w.e.f. 15th March 2020 till further order/s to be
passed by this Court in present proceedings.

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• We are exercising this power under Article 142 read with Article 141 of
the Constitution of India and declare that this order is a binding order
within the meaning of Article 141 on all Courts/Tribunals and authorities.

• This order may be brought to the notice of all High Courts for being
communicated to all subordinate Courts/Tribunals within their
respective jurisdiction.

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 Order in SCAORA Interlocutory Application for
restoration of Suo Motu Writ Petition No. 3/2020
dated 27.04.2021
• We also take judicial notice of the fact that the steep rise in COVID-19 Virus cases
is not limited to Delhi alone but it has engulfed the entire nation. The
extraordinary situation caused by the sudden and second outburst of COVID-19
Virus, thus, requires extraordinary measures to minimize the hardship of litigant–
public in all the states. We, therefore, restore the order dated 23rd March, 2020
and in continuation of the order dated 8th March, 2021 direct that the period(s)
of limitation, as prescribed under any general or special laws in respect of all
judicial or quasi judicial proceedings, whether condonable or not, shall stand
extended till further orders.

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• It is further clarified that the period from 14th March, 2021 till further
orders shall also stand excluded in computing the periods prescribed under
Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996,
Section 12Aof the Commercial Courts Act, 2015 and provisos (b) and (c) of
Section 138 of the Negotiable Instruments Act, 1881 and any other laws,
which prescribe period(s) of limitation for instituting proceedings, outer
limits (within which the court or tribunal can condone delay) and
termination of proceedings.

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• We have passed this order in exercise of our powers under Article 142
read with Article 141 of the Constitution of India. Hence it shall be a
binding order within the meaning of Article 141 on all
Courts/Tribunals and Authorities.

• This order may be brought to the notice of all High Courts for being
communicated to all subordinate courts/Tribunals within their
respective jurisdiction.

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 Meaning of ‘Judicial Proceedings’
• Section 2 (i) of the Criminal Proceeding Code defines Judicial
Proceeding:

• "judicial proceeding" includes any proceeding in the course of which

evidence is or may be legally taken on oath.

• Judicial Proceedings Includes Trial and Inquiry but not Investigation.

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• Section-70 of the CGST Act, 2017

• Power to summon persons to give evidence and produce

documents.

• 70. (1) The proper officer under this Act shall have power to summon
any person whose attendance he considers necessary either to give
evidence or to produce a document or any other thing in any inquiry
in the same manner, as provided in the case of a civil court under the
provisions of the Code of Civil Procedure,1908 (5 of 1908).

• (2) Every such inquiry referred to in sub-section (1) shall be deemed

to be a “judicial proceedings” within the meaning of section 193 and
section 228 of the Indian Penal Code (45 of 1860).

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 Meaning of ‘Quasi-Judicial Proceedings’
• “Quasi-judicial Proceedings”:

• Similar to but not exactly the same as judicial proceedings.

• Quasi-judicial proceedings are similar to but not exactly court

proceedings.

• Deal in facts and give decision by considering Law. e.g

Tribunals/CIT(A)

• No formal Affidavits are filed.

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• The term also implies that these authorities are not routinely
responsible for holding such proceedings and often may have other
duties.

• E.g National Human Rights Commission, Dispute Rederessal

Commissions, ITAT, GSTAT, CCI etc.

• Judicial bodies are Courts like High Court, District Court or Supreme
Court etc.

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Refer VIKAS WSP Ltd. & ORS. V Director Enforement
2021 376 ELT 201. The order cannot be made
universally applicable i.e in PMLA , Bank a/c
attachment valid for 1 year. It will not extend. e.G
Period of Detention 60 days will not extend.

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 Quasi Judicial Authority
• Appellate authority is quasi judicial authority

• Indian National Congress (I) v. Institute of Social Welfare, (2002) 5 SCC

685

• The dictionary meaning of the word quasi is “not exactly” and it is just
in between a judicial and administrative function. It is true, in many
cases, the statutory authorities were held to be quasi-judicial
authorities and decisions rendered by them were regarded as quasi-
judicial

Private Presentation Only not Professional Advice

• In Orient Paper Mils Ltd. vs. UOI – 1978 (2) ELT J 345 (SC) . It was held
that adjudication, appeal and revision are quasi-judicial proceedings and
the same would get vitiated if administrative considerations , namely
departmental clarifications and Board rulings influence the quasi-judicial
authority.

• In Asst. Collector of C. Ex vs. National Tobacco of India ltd. – 1978 (2) ELT
416 (SC), it was held that the assessment of tax on a person or property
is of a quasi-judicial character, therefore, the rules of natural justice have
to be followed and assessment is a quasi judicial process involving due
application of mind to the fats as well as to requirements of law.

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• Article 141--- Law declared by Supreme Court to be binding on all
courts

• Article 142--- 1) The Supreme Court in the exercise of its jurisdiction

may pass such decree or make such order as is necessary for doing
complete justice in any cause or matter pending before it, and any
decree so passed order so made shall be enforceable throughout the
territory of India in such manner as may be prescribed by or under
any law made by Parliament and, until provision in that behalf is so
made, in such manner as the President may by order prescribe.

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• (2) Subject to the provisions of any law made in this behalf by
Parliament, the Supreme Court shall, as respects the whole of the
territory of India, have all and every power to make any order for the
purpose of securing the attendance of any person, the discovery or
production of any documents, or the investigation or punishment of
any contempt of itself.

• Article 142 of the Constitution, confers on the Hon'ble Supreme Court

a plenipotentiary power to pass any order to do complete justice in
any cause or matter pending before it.

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 Clarification regarding extension of
CIRCULAR NO. 157/13/2021 DATED limitation under GST Law in terms of
20.07.2021 Hon’ble Supreme Court’s Order dated
27.04.2021.

The extract of the Hon’ble Supreme order dated 27th April 2021 is reproduced below for reference:

“We, therefore, restore the order dated 23rd March, 2020 and in continuation of the order dated 8th
March, 2021 direct that the period(s) of limitation, as prescribed under any general or special laws in
respect of all judicial or quasi-judicial proceedings, whether condonable or not, shall stand extended
till further orders. It is further clarified that the period from 14th March, 2021 till further orders shall
also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the
Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b)
and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe
period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can
condone delay) and termination of proceedings. We have passed this order in exercise of our powers
under Article 142 read with Article 141 of the Constitution of India. Hence it shall be a binding order
within the meaning of Article 141 on all Courts/Tribunals and Authorities.”

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OBSERVATIONS OF THE LEGAL OPINION
i) Hon’ble Supreme Court has stepped into to grant extensions
only with reference to judicial and quasi-judicial proceedings in
the nature of appeals/ suits/ petitions etc. and has not extended
it to every action or proceeding under the CGST Act.

ii) As on date, the Orders of the Hon’ble Supreme Court apply to

appeals, reviews, revisions etc., and not to original adjudication.

Private Presentation Only not Professional Advice

iii) Even under category judicial and quasi-judicial proceedings ,
Hon’ble Supreme Court Order, applies only to a list which needs
to be pursued within a time frame fixed by the respective
statutes.

iv) Wherever proceedings are pending, judicial or quasi-judicial which

requires to be heard and disposed off, cannot come to a standstill by
virtue of these extension orders. Those cases need to be adjudicated
or disposed off either physically or through the virtual mode based on
the prevailing policies and practices besides instructions if any.

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v) The following actions such as scrutiny of returns, issuance of
summons, search, enquiry or investigations and even
consequential arrest in accordance with GST law would not be
covered by the judgment of the Hon’ble Supreme Court.

vi) As regards issuance of show cause notice, granting time for replies
and passing orders, the present Orders of the Hon’ble Supreme Court
may not cover them even though they are quasi-judicial proceedings
as the same has only been made applicable to matters relating to
petitions/applications/suits, etc

Private Presentation Only not Professional Advice

 CLARIFICATIONS OF THE LEGAL OPINION

(a) Proceedings that need to be initiated or compliances that need to be done

by the taxpayers:-These actions would continue to be governed only by the
statutory mechanism and time limit provided/ extensions granted under the
statute itself. Various Orders of the Hon’ble Supreme Court would not apply to
the said proceedings/ compliances on part of the taxpayers.

Private Presentation Only not Professional Advice

(b) Quasi-Judicial proceedings by tax authorities:- The tax authorities can
continue to hear and dispose off proceedings where they are performing
the functions as quasi-judicial authority. This may interalia include disposal
of application for refund, application for revocation of cancellation of
registration, adjudication proceedings of demand notices, etc.

Similarly, appeals which are filed and are pending, can continue to be heard
and disposed off and the same will be governed by those extensions of
time granted by the statutes or notifications, if any

Private Presentation Only not Professional Advice

(c) Appeals by taxpayers/ tax authorities against any quasi- judicial
order:- Wherever any appeal is required to filed before Joint/ Additional
Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for
Advance Ruling, Tribunal and various courts against any quasi-judicial
order or where a proceeding for revision or rectification of any order is
required to be undertaken, the time line for the same would stand
extended as per the Hon’ble Supreme Court’s order.

Private Presentation Only not Professional Advice

 TITBITS OF APPEALS

• No Pre deposit in case of Refund Appeals.

• If Online Order then Online Appeal, if manual Order then Manual

Appeal.

• No specific Format of Memorandum of Cross Objections in case of

First Appellate Authority.

• Online gearing through VIDYO app and Online Vkalatnama to be

submitted. Should be in proper dress.
Private Presentation Only not Professional Advice
• Difference in Income Tax and GST Appeals 1) Detailed Appeal Drafting in GST 2)
First Appeal can be by Department in GST 3) No Pre Deposit waiver in GST 4) Max
3 adjornments 5) Directory time period of 1 year for disposal. 6 )1st Appeal may
like to JC/Addl/ Comm, as per order passing authority.

• Appeal be made to both CGST & SGST authorities? –No As per the GST Act, CGST
& SGST/UTGST officers are both empowered to pass orders. As per the Act, an
order passed under CGST will also be deemed to apply to SGST. If an officer under
CGST has passed an order, any appeal /review/revision/ rectification against the
order will lie only with the officers of CGST, vice a versa for SGST.

Private Presentation Only not Professional Advice

• Payment of excise service tax pre –Deposit Pre-deposit can be made
through CGST Credit ( even of arrears of excise duty and service tax )- Dell
International Service v. CCT(2019) 365 ELT 813 (CESTAT). Circular No.
58/32/2018-GST, dated 4-9-2018 and also circular No. 42/16/2018- GST
dated 13-4-2018 and submitted that the Circular very clearly states that the
arrears of central excise duty, service tax or wrongly availed Cenvat credit
under the old law is permissible to be paid through the utilization of
amounts available in the electronic Credit Ledger.

Private Presentation Only not Professional Advice

• In case of transfer of appellate authority

• Same officer to hear and decide the case The requirement of fair
hearing involves decision being taken by the officer who heard the
case. If after hearing, that particular officer is transferred, normal rule
would be that the successor must hear the arguments afresh before
he could pass an order. Laxmi Devi v. State of Bihar, (2015) 10 SCC
241.So Stringent is this right that it mandates that the person who
heard and considered the objections can alone decide them; and
not even his successor is competent to do so even on the basis of the
materials collected by his predecessor

Private Presentation Only not Professional Advice

 Condonation of delay by appellate authority S.
107(4) CGST Act

• Authorities created by statute cannot apply limitation Act, 1963. They

cannot condone delay unless empowered by statute- Om Parkash v.
Ashwini Kumar Bassi (2010) 258 ELT 5(SC)

• M.P. Steel Corporation v. commissioner of Central Excise [2015] 319 ELT 373
(SC) (A.K.SIKRI AND ROHINTON FALI NARIMAN, JJ.)

Private Presentation Only not Professional Advice

• Provisions of limitation Act do not apply to Tribunal, Other quasi-
judicial authorities; but principles there in may be extended to
proceedings before Tribunal and other quasi-judicial authorities so as
to advance cause of justice.

• Time spent in pursuing remedy before wrong forum bona fide would
stand excluded but period prior to institution of initiation of any
abortive preceeding cannot be excluded which is principle which has
been derived from section 14 of the limitation act.

Private Presentation Only not Professional Advice

 Effect of withdrawal of Appeal

• In its recent decision of the Supreme Court for a matter pertaining to

income tax commissioner of income-tax, central-I v. Ansal Housing And
construction Ltd. [2020] 116 taxmann.com 322 held that when an
appeal is withdrawn due to circular the effect of the same would be
dismissed as withdrawn leaving the question of Law open. Similar view
as taken by the Bombay High court Commissioner of CGST, ST & Central
Excise vs. Cea Raj Constructions [2018] 98 taxmann.com 169.

Private Presentation Only not Professional Advice

 Summary of Forms Used in Appeals
S. No. FORM No. CONTENT

1 GST APL-01 Appeal to Appellate Authority by Taxpayer

2 GST APL-02 Acknowledgement of submission of appeal
3 GST APL-03 Application to the Appellate Authority by Department under sub-section (2) of section
107

4 GST APL-04 Summary of the demand after the issue of order by the Appellate Authority, Tribunal
or Court

5 GST APL-05 Appeal to the Appellate Tribunal

6 GST APL-06 Cross-objections before the Appellate Tribunal
7 GST APL-07 Application to the Appellate Tribunal under subsection (3) of section 112
8 GST APL-08 Appeal to the High Court under section 117

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 RECENT CIRCULARS

Clarification regarding extension of time limit

CIRCULAR NO. 158/14/2021 DATED to apply for revocation of cancellation of
06.09.202 registration in view of Notification No.
34/2021-Central Tax dated 29th August, 2021

Private Presentation Only not Professional Advice

The extract of the Notification No. 34/2021-Central Tax
dated 29th August, 2021 is given below for reference:

The Government, on the recommendations of the Council, hereby

notifies that where a registration has been cancelled under clause (b)
or (c) of sub-section (2) of section 29 of the said Act and - the time limit
for making an application of revocation of cancellation of registration
under sub-section (1) of section 30 of the said Act falls during the
period from the 1st day of March, 2020 to 31st day of August, 2021,
the time limit for making such application shall be extended upto the
30th day of September, 2021.

Private Presentation Only not Professional Advice

 CLARIFICATIONS REGARDING EXTENSION OF TIME LIMIT FOR APPLICATION FOR
REVOCATION OF CANCELLATION OF REGISTERATION

All applications are covered under the scope of

theAll applications
said areirrespective
notification covered under thestatus
of the scopeofof
the said notification irrespective of the status of
the applications
the applications

(iii) application (iv) application for (v) application

(ii) application for(iii) application
revocation of (iv) application
of for for(v) application
for(ii) application
revocation of cancellation of of
for revocation revocation
revocationofof revocation of
(i) application for cancellation of of
for revocation cancellation cancellation cancellation of of
for revocation
(i) application
of for cancellation registration wasof cancellation
registration wasof cancellation
wasof
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revocationofof registration hasof registration
filed, but waswas registration
filed, the properwas registration
registration was
cancellation registration
already beenhas filed, but was filed,rejected
the proper filed, the proper
cancellation officer the
registration hasof already
filed been
and which
rejected
rejected
by the
by the officer
application and the
rejected filed, the
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been filed are
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and
and
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the appeal
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officer appeal against pending
appellate before
authority- has been
against decided
taxpayer
theappeal against
rejection - appellate authority- against taxpayer
the rejection -

Private Presentation Only not Professional Advice

With effect from 01.01.2021, proviso to sub-section (1) of section 30 of
the CGST Act has been inserted which provides for extension of time
for filing application for revocation of cancellation of registration
• by 30 days by Additional/ Joint Commissioner and
• by another 30 days by the Commissioner.

Private Presentation Only not Professional Advice

 CLARIFICATIONS REGARDING THE TIME LIMIT
OF 30 DAYS

(i) where the thirty days’ time limit falls

The time limit to apply for revocation
between 1st March, 2020 to 31st
of cancellation of registration stands
December, 2020, there is no provision
extended up to 30th September, 2021
available to extend the said time period of
only
30 days under section 30 of the CGST Act

Private Presentation Only not Professional Advice

 (ii) where the time period of thirty days since
The time limit for applying for revocation of
cancellation of registration has not lapsed as on
cancellation of registration shall stand
1st January, 2021 or where the registration has
extended as follows:
been cancelled on or after 1st January, 2021,

(c)Where the time period of 30 days (and not

(a) Where the time period of 90 days (initial 30 days registration has elapsed by 31.08.2021 (c)
and extension of 30 + 30 days) since cancellation of Where the time period of 30 days (and not 60
registration has elapsed by 31.08.2021 days or 90 days) since cancellation of
registration has elapsed by 31.08.2021
(b) Where the time period of 60 days (and not elapsed
by 31.08.2021 Where the time period of 60 days (and
not 90 days) since cancellation of registration has

the time limit to apply for revocation of the time limit to apply for revocation the time limit to apply for revocation of
of cancellation of registration stands cancellation of registration stands
cancellation of registration stands extended upto 30th September 2021,
extended upto 30th September 2021, extended upto 30th September 2021, with the extension of timelines by
without any further extension of time by with the extension of timelines by another 30 days beyond 30.09.2021 by
another 30 days beyond 30.09.2021 the Joint/ Additional Commissioner and
Joint Commissioner/ Additional another 30 days by the Commissioner, on
Commissioner/ Commissioner. by the Commissioner, on being being satisfied, as per proviso to section
satisfied, as per proviso to section 30(1) of the CGST Act
30(1)
Privateof the CGST
Presentation Act
Only not Professional Advice
 Clarification in respect of applicability
of Dynamic Quick Response (QR) Code
Circular no. 156/12/2021 21st
on B2C invoices and compliance of
June,2020
notification 14/2020- Central Tax
dated 21st March, 2020 - Reg.

Notification No. 14/2020-Central Tax, dated 21st March 2020 had been issued which requires Dynamic QR Code on B2C
invoice issued by taxpayers having aggregate turnover more than 500 crore rupees, w.e.f. 01.12.2020.

Further, vide notification No. 06/2021-Central Tax, dated 30th March 2021, penalty has been waived for non-compliance
of the provisions of notification No.14/2020 – Central Tax for the period from 01st December, 2020 to 30th June, 2021,
subject to the condition that the said person complies with the provisions of the said notification from 1st July, 2021

Private Presentation Only not Professional Advice

 Issues
1 Whether Dynamic QR Code is to be provided on an invoice, issued to a Any person, who has obtained a
person, who has obtained a Unique Identity Number as per the Unique Identity Number (UIN) as per
provisions of Sub Section 9 of Section 25 of CGST Act 2017? the provisions of Sub-Section 9 of
Section 25 of CGST Act 2017, is not a
“registered person” as per the
definition of registered person
provided in section 2(94) of the CGST
Act 2017. Therefore, any invoice,
issued to such person having a UIN,
shall be considered as invoice issued
for a B2C supply and shall be required
to comply with the requirement of
Dynamic QR Code.
2 UPI ID is linked to the bank account of the payee/ person collecting UPI ID is linked to the bank account of
money. Whether bank account and IFSC details also need to be provided the payee/ person collecting money.
separately in the Dynamic QR Code along with UPI ID? Whether bank account and IFSC
details also need to be provided
separately in the Dynamic QR Code
along with UPI
Private Presentation Only not Professional Advice
 Issues
3 In cases where the payment is collected by some person other than the Yes. In such cases where the payment
supplier (ECO or any other person authorized by the supplier on his/ her is collected by some person,
behalf), whether in such cases, in place of UPI ID of the supplier, the UPI authorized by the supplier on his/ her
ID of such person, who is authorized to collect the payment on behalf behalf, the UPI ID of such person may
of the supplier, may be provided? be provided in the Dynamic QR Code,
instead of UPI ID of the supplier.
4 In cases, where receiver of services is located outside India, and payment No. Wherever an invoice is issued to a
is being received by the supplier of services in foreign exchange, recipient located outside India, for
through RBI approved modes of payment, but as per provisions of the supply of services, for which the place
IGST Act 2017, the place of supply of such services is in India, then such of supply is in India, as per the
supply of services is not considered as export of services as per the IGST provisions of IGST Act 2017, and the
Act 2017; whether in such cases, the Dynamic QR Code is required on payment is received by the supplier in
the invoice issued, for such supply of services, to such recipient located foreign currency, through RBI
outside India? approved mediums, such invoice may
be issued without having a Dynamic
QR Code, as such dynamic QR code
cannot be used by the recipient
located outside India for making
payment to the supplier.
Private Presentation Only not Professional Advice
 Issues
5 In some instances of retail sales over the counter, the payment from In such cases, where the invoice
the customer in received on the payment counter by displaying number is not available at the time
dynamic QR code on digital display, whereas the invoice, along with of digital display of dynamic QR code
invoice number, is generated on the processing system being used by in case of over the counter sales and
supplier/ merchant after receiving the payment. In such cases, it may the invoice number and invoices are
not be possible for the merchant/ supplier to provide details of invoice generated after receipt of payment,
number in the dynamic QR code displayed to the customer on payment the unique order ID/ unique sales
counter. However, each transaction i.e. receipt of payment from a reference number, which is uniquely
customer is having a unique Order ID/ sales reference number, which is linked to the invoice issued for the
linked with the invoice for the said transaction. Whether in such cases, said transaction, may be provided in
the order ID/ reference number of such transaction can be provided in the Dynamic QR Code for digital
the dynamic QR code displayed digitally, instead of invoice number. display, as long as the details of such
unique order ID/ sales reference
number linkage with the invoice are
available on the processing system of
the merchant/ supplier and the cross
reference of such payment along
with unique order ID/ sales reference
number are also provided on the
invoice.
Private Presentation Only not Professional Advice
 Issues
6 When part-payment has already been received by the merchant/ The purpose of dynamic QR Code is to
supplier, either in advance or by adjustment (e.g. using a voucher, enable the recipient/ customer to
discount coupon etc), before the dynamic QR Code is generated, what scan and pay the amount to be paid
amount should be provided in the Dynamic QR Code for “invoice to the merchant/ supplier in respect
value”? of the said supply. When the part-
payment for any supply has already
been received from the customer/
recipient, in form of either advance or
adjustment through voucher/
discount coupon etc., then the
dynamic QR code may provide only
the remaining amount payable by
the customer/ recipient against
“invoice value”. The details of total
invoice value, along with details/
cross reference of the partpayment/
advance/ adjustment done, and the
remaining amount to be paid, should
be provided on the invoice.
Private Presentation Only not Professional Advice
VKC Footsteps India (P.) Ltd V. Union Of India
[2020]

Explanation (a) to substituted rule 89(5) which denies refund of ‘unutilised

input tax’ paid on ‘input services’ as part of ‘ input tax credit’ accumulated
on account of inverted duty structure is in conformity with section 54(3)

Private Presentation Only not Professional Advice

VKC Footsteps India (P.) Ltd V. Union Of India
[2020]

Clause (ii) of the first proviso to Section 54(3) is not merely a condition of eligibility for
availing of a refund but a substantive restriction under which a refund of unutilized ITC
can be availed of only when the accumulation is relatable to an inverted duty
structure, namely the tax on input goods being higher than the rate of tax on output
supplies. There is therefore no disharmony between Rule 89(5) on the one hand and
Section 54(3) particularly Clause (ii) of its first proviso on the other hand. Explanation
(a) to Rule 89(5) in defining ‘Net ITC’ to mean ITC availed on inputs (goods) is, as a
matter of fact, entirely in line with the main provision, Section 54(3).

Private Presentation Only not Professional Advice

Mr G Natarajan’s submission indicates an aberration where a registered
person with a single product with an inverted duty structure is neither
able to use the unutilized ITC for the payment of tax on output supply
nor is allowed a refund. On the other hand, a registered person with
products involving an inverted duty structure and otherwise, is in a
position to utilize the ITC availed on input services for payment of tax
on turnover not having an inverted rate structure. Mr G Natarajan has
given the following example:

Private Presentation Only not Professional Advice

The formula in Rule 89(5)

Maximum Refund Amount = {(Turnover of inverted rated supply of goods

and services) x Net ITC ÷ Adjusted Total Turnover} – tax payable on such
inverted rated supply of goods and services (emphasis supplied)

Private Presentation Only not Professional Advice

 Sec. 54 (REFUND OF TAX)
(3) Subject to the provisions of sub-section (10), a registered person may claim
refund of any unutilised input tax credit at the end of any tax period.
Provided that no refund of unutilised input tax credit shall be allowed in cases i.e. Export/
Supply to SEZ
other than—
under Bond/
I. zero-rated supplies made without payment of tax; LUT
II. where the credit has accumulated on account of rate of tax on inputs being
higher than the rate of tax on output supplies (other than nil rated or fully N.N. 5/2017 for
goods N.N.
exempt supplies), except supplies of goods or services or both as may be 15/2017 for
notified by the Government on the recommendations of the Council: services(Services
as specified in
5(b) of schedule
II)( construction)
Private Presentation Only not Professional Advice
 Sec. 54 (REFUND OF TAX)

Provided further that no refund of unutilised input tax credit shall be

allowed in cases where the goods exported out of India are subjected
to export duty:

Provided also that no refund of input tax credit shall be allowed, if the
supplier of goods or services or both avails of drawback in respect of
central tax or claims refund of the integrated tax paid on such supplies.

Para 40 of
circular
125/44/2019
Private Presentation Only not Professional Advice
 Sec. 54 (REFUND OF TAX)

Sec. 2(106) "tax period" means the period for which the
return is required to be furnished;

This point is relevant, as in case of exports the period of two years is to be checked
from relevant date INDIVIDUALLY and when the two or more relevant dates fall
under same tax period then the relevant date from latter should be considered, as
there can be SINGLE application for a Tax period. As per Law applicant can file refund
application at the end of Tax Period only, and the situation is beyond his control. But
in this artificial bunching should be avoided to extend the period of Limitation and
minimum tax period for which refund can be applied should be considered.
Private Presentation Only not Professional Advice
 SEC. 2(62) Input Tax
“Input tax" in relation to a registered person, means the central tax, State tax,
integrated tax or Union territory tax charged on any supply of goods or services
or both made to him and includes—
a) the integrated goods and services tax charged on import of goods;
b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the
Integrated Goods and Services Tax Act;
d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the
respective State Goods and Services Tax Act; or
e) the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the
Union Territory Goods and Services Tax Act,
but does not include the tax paid under the composition levy;

Private Presentation Only not Professional Advice

 SEC. 2(63) (Input Tax Credit)

“Input tax credit” means the credit of input tax

Private Presentation Only not Professional Advice

 Recent Case Laws on Refund
[2020] 118 taxmann.com 81 (Gujarat) VKC Footsteps India (P.) Ltd. v.
Union of India

Explanation (a) to Rule 89(5) of CGST Rules, 2017 which denies the
refund of “unutilized input tax “ paid on “input services” as part of
“input tax credit” accumulated on account of inverted duty structure is
held to be ultravires the provisions of sub section (3) of section 54 of
CGST ACT, 2017

Private Presentation Only not Professional Advice

Refund - Tax - Rule 89(5) as originally introduced was substituted vide
Notification No. 21/2018-Central Tax, dated 18-4-2018 prescribing a
revised formula for determining refund on account of inverted duty
structure; revised formula inter alia excluded input services from
scope of 'net input tax credit' for computation of refund amount
under rule and, thus, substituted rule 89(5) denied refund on input
tax credit availed on input services and allowed relief of refund of
input tax credit availed on inputs alone –

Private Presentation Only not Professional Advice

• Section 54(3) allows refund of any unutilized ITC but Rule 89(5) restricts refund to
Inputs. [Para 23]

• Clause (ii) of proviso to section 54(3) also deals with both supply of goods and
services and not only supply of goods [Para 23].

• Law in section 54(3) has been wrongly interpreted in Circular No. 79/53/2018
dated 31-12-2018 to deny refund of ITC on input services. [Para 24]

• Explanation (a) to Rule 89(5) which denies refund of unutilized Input tax on input
services is ultra vires the provisions of section 54(3) [Para 25].

• Therefore refund of input services be also allowed under inverted duty structure
[Para 27].
Private Presentation Only not Professional Advice
• Court drew support from first discussion paper on GST issued by
empowered committee dated 10-11-2009 [Para 16]; International
VAT/GST Guidelines published on Feb 2006 [Para 17]; FAQ on GST
dated 31-03-207 {Para 18].
• Court also drew support from Delhi High Court in Intercontinental
Consultants & Technocrats affirmed by Supreme Court to hold that
rule which goes beyond statute is ultra vires.
• Supreme Court decision in Lohara Steel Industries quoted to lay down
that offending portion which is severable can be struck down.

Private Presentation Only not Professional Advice

 No Refund on entire unutilized ITC accumulated on
account of being subjected to an inverted Duty
Structure
Tvl. Transtonnelstroy Afcons Joint venture v. Union of India [Madras High
Court]
(1) Section 54(3)(ii) does not infringe Article 14.
(2) Refund is a statutory right and the extension of the benefit of refund only
to the unutilized credit that accumulates on account of the rate of tax on
input goods being higher than the rate of tax on output supplies by
excluding unutilized input tax credit that accumulated on account of input
services is a valid classification and a valid exercise of legislative power
Private Presentation Only not Professional Advice
(3) Therefore, there is no necessity to adopt the interpretive device of reading down
so as to save the constitutionality of Section 54(3)(ii).

(4) Section 54(3)(ii) curtails a refund claim to the unutilized credit that accumulates
only on account of the rate of tax on input goods being higher than the rate of tax
on output supplies. In other words, it qualifies and curtails not only the class of
registered persons who are entitled to refund but also the imposes a source-based
restriction on refund entitlement and, consequently, the quantum thereof.

(5) As a corollary, Rule 89(5) of the CGST Rules, as amended, is in conformity with
Section 54(3)(ii). Consequently, it is not necessary to interpret Rule 89(5) and, in
particular, the definition of Net ITC therein so as to include the words input services.

Private Presentation Only not Professional Advice

 Fake Invoicing Transaction
Mediator/
KINGPIN

* For Penalty - covered under Sec Invoice

122(1A) Retains the benefit of a transaction Supply
Invoice
* For Prosecution- under Sec 132 and at whose instance such
But G/S
* Provisional Attachment- under transaction is conducted
Bogus Bill ITC – without
Sec 83( Budgetary) Receipt of G/S ISD

Private Presentation Only not Professional Advice

 Supplier Receiver

• For Penalty -covered under Sec • For Penalty -covered under Sec
122(1) 122(1)

• For Prosecution- under Sec 132 • For Prosecution- under Sec 132

• Provisional Attachment- under Sec • Provisional Attachment- under Sec

83 83

Private Presentation Only not Professional Advice

 GSTR 3B
GSTR 1- Filed
GSTR 2A- Reflected

If Liability in GSTR-3B < GSTR-1 will

GSTR 3B lead to :
GSTR 1- Filed * Cancellation (Rule 21) Rule 86B Pay 1% in Cash , credit can
Cannot file GSTR-1 if GSTR-3B is not * Suspension (Rule 21 A) be utilised upto 99%
filed for 2 months or 1 quarter

Private Presentation Only not Professional Advice

 Fake Invoicing
• No definition of Fake Invoicing is given in GST Law. It is an Economic
Offence . It can be Invoice Supply , Invoice but G/S Bogus Bill

• Check Jurisdiction on receipt of summon and the other legal issues

like DIN etc. For the checking the Jurisdiction one must check :- Who
is the Proper Officer? (He must be an authorized person ). Person
cannot be put to prejudice by having multiple assessments by center
and state

Private Presentation Only not Professional Advice

• Confirm whether the invoice is indeed fake or not.

 If it is indeed fake and credit is reversed with interest – Intimate the Department

 If it is not fake – One can go for Writ Remedy in the High Court

• In this case question of penalty may arise later on even if reversed

• Income tax disallowance will arise in case of fake invoice.

• Question whether reversal=not availed is still a question mark(Partibha Processors, Bombay Dyeing
–
-If assesssee reverses credit on his own without utilising then it will be presumed as never been
taken.)

Private Presentation Only not Professional Advice

 Fake Invoicing
• One should submit the evidences and documents on receipt of DRC-01.

• For goods you have to submit: E-way Bill, Vehicle No., Toll Receipts , Transport Documents, For
Services, its difficult as it leaves no trail but e.g in advertisement Services, hoarding etc. documents
can be furnished.

• Statements can be cross verified . Statements made under duress can be retracted within reasonable
time of Receipt of copy. Statement made, can be retracted but within a reasonable time as held in
VINOD SOLANKI (SC)(Civil Appeal FEMA matter)- SC says Statement retracted are relevant but
becomes weak and need corroborative Evidences)

• If person alleges that Statement is made under coercion/ duress then it will not be presumed but he
needs to establish.

• It is not mandatory for a person to make statement appearing for the summon. One has a Right of
Silence during Summon proceedings.
Private Presentation Only not Professional Advice
 Fake Invoicing

• Presence of Tax Professional during Statement –There are

contradictory views available in this regard in various judgements . In
few custom and other cases, it allowed Visible Distance but not
Hearing Distance.

• Burden of proof is on Department to prove Fake Invoicing. If assessee

furnishes documents , the officer cannot ignore the submissions,
against principle of Natural Justice.

Private Presentation Only not Professional Advice

• You have to evaluate arrest provisions- whether these are applicable
or not. Decision as to Anticipatory Bail is to be carefully examined. Its
very difficult to get anticipatory bail in Economic Offences involving
high stakes.

• Check that Principle of Natural Justice is followed and adherence to

norms concerning Ladies. Can refer to Human Right Commission.

Private Presentation Only not Professional Advice

 Other Points
1. Simultaneous Investigation by Center and State GST Authorities for
same period is not allowed. A person cannot be put to adjudication
under both.

Eg. If person has state jurisdiction then center cannot assess. It can
be challenged as violation of Article 14 (Equality Before Law)

Private Presentation Only not Professional Advice

• Sri Balaji Rice Mill, vs The State Of Andhra Pradesh (WRIT PETITION
No.20786 of 2020 )

• Krishna ShivRam Hegde – Kerala High Court

• Raj Metal Industries & Anr. Vs. Union of India & Ors (W.P.A. 1629 OF
2021) Anurag Suri Vs. DGGSIT (WP (c ) no. 158 of 2020)

Private Presentation Only not Professional Advice

2. Maximum detention under section 167 CRPC is 60 days

3. Bail is the rule, not the jail, if a person cooperates even if Cognizable
+ Non Bailable -> No Need to arrest, held in case of Naresh Kumar
Mangla–SC. In Vimal Yashwantgiri Goswami vs. State Of Gujarat
(GHC) -The powers of arrest under section 69 are to be exercised with
lot of care and circumspection. Prosecution should normally be
launched only after the adjudication is completed. To put it in other
words, there must be in the first place a determination that a person is
liable to a penalty. Till that point of time, the entire case proceeds on
the basis that there must be an apprehended evasion of tax by the
assessee.

Private Presentation Only not Professional Advice

4. Any professional filing Returns cannot be arrested directly, unless
found involved and defending client in Fake Invoice cases as a counsel
is not challengeable, as ones job is to defend. Canon India (P.) Ltd. v.
Commissioner of Customs [2021] 125 taxmann.com 188 (SC)[09-03-
2021]

Private Presentation Only not Professional Advice

 Audi Alteram Partem

To hear a person, such person should be

Audi alteram partem meaning ‘let the
"put at notice” which clearly states
other side be heard’ that no person can be
various aspects about the charges or
adjudged guilty without being given an
allegations in such notice so that the
opportunity to answer charges against
person can understand the allegations
such person.
and answer them.

• In GST ,as with every legislation, this notice is called “show cause notice” and this show cause notice is a
mandatory requirement for raising demands.

• Any other communication, letter, endorsement, suggestion or advisory from tax Department cannot be
considered to be a show cause notice.

• Notice is thus a sine qua non for any demand proceedings and SCN is the one that ‘sets the law in motion’
Private Presentation Only not Professional Advice
 Audi Alteram Partem
The rule of audi alterm partem is a principle of natural justice
Maneka Gandhi v. Union of India (1978) 1 SCC 248
• The rule of audi alterm partem mandates of giving the other side an opportunity
of being heard and it was recgnised as a part of article 21 of the constitution
making it a fundamental right available to the citizens by the 7 judge bench of the
Hon’ble Supreme Court of India by Majority decision of J. PN Bhagwati

• Being a fundamental right hence it is available to all assesses and not given a
reasonable opportunity of being heard frustrates the proceedings

Private Presentation Only not Professional Advice

Validity of Show Cause Mere letter or Show Cause Notice
Notice issued by an communication asking for shall not be based on
officer in excess of payment is not a ‘show conjunctures,
monetary limit assumptions and
cause notice’ surmises
Pahawa Chemicals (P) Ltd. vs. • Metal Forgings vs. UOI (supra)
CCE – 2005 (181) ELT 339 (SC). Oudh Sugar Mills Ltd. vs. UOI -
• CC vs. Merchant Impex – 2012 1978 (2) ELT (J172) (SC)
(276) ELT 458 (Kar.)

Show Cause Notice – a • Steel Ingots vs. UOI – 1988 (36)

ELT 529 (MP)
‘condition precedent’
to a demand Show Is oral show cause notice
Cause Notice – valid? Can a show cause
• Gokak Patel Volkart Pvt. Ltd. vs. notice be waived?
CCE -1987 (28) ELT 53 (SC)
• CC vs. Virgo Steels – 2002 (141)
• Madhumilan Syntex Pvt. Ltd. vs.
ELT 598 (SC)
UOI -1981 (35) ELT 349 (SC)
• Metal Forgings vs. UOI-2002
• National Co-op. Bank Ltd. vs. CST
(146) ELT 2141 (SC) Private Presentation Only not Professional Advice
(Audit)-2018 (15) GSTL 202 (Kar.)
Show Cause Notice Notice must contain all Show cause notice to
must be in writing? essential details indicate the amount
Voltas Ltd. vs. CCE – 2000 (121) CCE vs. Brindavan Beverages demanded
ELT 802 (Tri-Mum.) (P) Ltd.-2007 (213) ELT 487 (SC) • Hindustan Aluminium Corp.
Ltd. vs. Supdt. of C.Ex. -
1981 (8) ELT 642 (Del.)

• JBA Printing Inks Ltd. vs.

UOI -1980 (6) ELT 121
(Mad)

• Gwalior Rayon (Wgt.) Ltd.vs.

UOI -1982 (10) ELT 844
(MP).

Private Presentation Only not Professional Advice

 Revisional Authority (RA)
*On its own motion
Revisional Authority – Sec 2(99) of CGST Act,
2017
*On information received by him
Means any authority appointed or authorized
for revision of decision or orders as referred to
*On request of SGST/UTGST Commissioner
in sec 108
May call for & examine all records.

Private Presentation Only not Professional Advice

 RA cannot revise following
Revision Authority orders
- Order subject to appeal
before AA/AT/HC/SC
Ordered passed by (N/N S/2020)
- Order having period before
6 months, & after 3yrs
i) Addt. Comm/Joint Comm. Principal Comm./Comm. from communication of
order
- Order already taken for
ii) Addt. Comm/D Comm. or J.Comm/Addt.Comm revision
Superintendent - Revisional order

RA may pass an order on any

1. Sec 108 of CGST ACT gives power to Revisional Authority to revise the order point not raised in any appeal
of officer subordinate to him if it is prejudicial to interest of Revenue, before AA/AT/HC/SC, before
erroneous, illegal or improper expiry of:-

2. As per Sec. 108(2)(b) The Revisional Authority shall not exercise any power *1 yr. from date of order in
under sub-section (1), if the period specified under sub-section (2) of section appeal, (or)
107 has not yet expired which is six months from the date of communication
of the said decision. *3 yr. from date of initial
Private Presentation Only not Professional Advice order, whichever i later
 SEC 161 – Rectification
• Without prejudice to the provisions of section 160, and notwithstanding
anything contained in any other provisions of this Act,
• any authority, who has passed or issued any decision or order or notice or
certificate or any other document,
• may rectify any error which is apparent on the face of record in such
decision or order or notice or certificate or any other document,
• either on its own motion or where such error is brought to its notice by any
officer appointed under this Act or by the affected person
• within a period of three months from the date of issue of such decision or
order or notice or certificate or any other document.
Private Presentation Only not Professional Advice
• Provided that no such rectification shall be done after a period of six months
from the date of issue of such decision or order or notice or certificate or any
other document:

• Provided further that the said period of six months shall not apply in such
cases where the rectification is purely in the nature of correction of a clerical
or arithmetical error, arising from any accidental slip or omission:

• Provided also that where such rectification adversely affects any person, the
principles of natural justice shall be followed by the authority carrying out
such rectification.

Private Presentation Only not Professional Advice

Points to be considered for Grounds of Appeal
Approvals DIN
Jurisdiction

Speaking
Order?
Limitation Mode of
Period Service

Pre-SCN
consultation
Proper Officer? Order issues
beyond SCN

Private Presentation Only not Professional Advice

 If tax:-
• Not paid,
• Short paid or
• Erroneous refund

Section 73 Section 74
(Other than fraud) (fraud)

2 years 9 months 4 years 6 months

(i.e. 33 months (i.e. 54 months
SCN from due date of from due date of
annual return annual return)

Demand 3 years from due 5 years from due

date of annual date of annual
Order return return
Private Presentation Only not Professional Advice
 Service of Notice in certain circumstances

Section 169 of CSGST Act,

2017

Serving by Serving by affixing

Serving directly or Any of the
Serving by post publication in at conspicuous
by messenger following
newspaper place

Serving by GST
Serving by e-mail
Portal

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Question??
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Advice
Thanking You
This presentation was meant for private
participation and any circulation of the
same without permission of Team
GSTpanacea &/or Abhishek Raja Ram is
an offence.

This PPT was compiled for Information

purpose not to be considered as
Professional Advice from us.

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Advice
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