GST Show Cause Notice Lawyer in Delhi
Overview and Legal Basis of SCNs in Delhi
A Show Cause Notice (SCN) under GST is a formal instrument issued by the jurisdictional authorities in Delhi to propose a demand for tax, interest, and penalty. These notices are governed primarily by Section 73 (for non-fraud cases) and Section 74 (for cases alleging fraud, willful misstatement, or suppression of facts) of the CGST Act, 2017. The process involves specific forms: DRC-01A (pre-notice intimation), DRC-01 (SCN summary), and DRC-06 (for filing the reply). In Delhi, tax authorities frequently utilize data analytics, making precise reconciliations critical.
Common Grounds for SCNs in Delhi Matters
- Return Mismatches: Discrepancies between GSTR-1, GSTR-3B, and GSTR-2B, often flagged by automated systems.
- Input Tax Credit (ITC) Issues: Ineligibility of ITC due to supplier non-compliance (non-payment of tax or non-filing of returns), or blocked credits under Section 17(5).
- Classification and Place of Supply: Disputes regarding HSN/SAC codes and incorrect determination of supply as intra-State vs. inter-State, particularly for service-oriented businesses.
- E-way Bill Contraventions: Lapses in e-way bill generation or documentation for goods moving through or originating from the Delhi region.
Procedural Steps for an Effective Reply
- Analysis of Notice: Scrutinize the SCN, DRC-01, and any annexed documents to understand the precise allegations, period, and quantification. Verify jurisdiction and check for limitation.
- Evidence Collation: Compile all relevant documents: tax invoices, contracts, e-way bills, delivery challans, bank statements, and vendor correspondence.
- Reconciliation: Prepare detailed reconciliations (e.g., GSTR-1 vs. 3B, Books vs. 3B, ITC as per books vs. 2B) to substantiate your position.
- Drafting the Reply (DRC-06): Structure the reply with preliminary objections (if any), a point-wise rebuttal to each allegation with cross-references to evidence, legal submissions citing relevant provisions and case law, and a clear prayer for relief.
- Filing and Hearing: Submit the reply via the GST portal within the stipulated time and request a personal hearing. Prepare a concise written synopsis for the hearing.
Evidence and Documentation Checklist
- Complete SCN with all annexures.
- GSTR-1, GSTR-3B, and GSTR-2B for the disputed period.
- Audited financials and tax audit reports.
- Invoices, purchase orders, and contracts.
- E-way bills and transporter records (LR/GRN).
- Bank statements reflecting payments to vendors.
- Vendor confirmations or declarations, where applicable.
AMLEGALS – Delhi Office
For assistance with GST Show Cause Notices in Delhi, please contact our local office at info@amlegals.com or call on boardline on 91-8448548549.
Frequently Asked Questions (FAQs)
1. What distinguishes a Section 73 from a Section 74 SCN in Delhi? A Section 73 notice is for tax demands without allegations of fraud and has a shorter limitation period and lower penalty exposure. A Section 74 notice alleges intent (fraud, suppression) and carries higher penalties (up to 100% of the tax demanded) and a longer limitation period.
2. Can I rely on vendor evidence to support my ITC claim in the reply? Yes. Submitting evidence like vendor invoices, bank payment proofs, and delivery challans is essential to prove your compliance with Section 16 conditions, even if the supplier has defaulted.
3. How should I handle an SCN citing IGST vs. CGST/SGST payment errors? In your reply, provide a reconciliation demonstrating the correct tax head and proof of payment under the incorrect head. You can argue that there is no revenue loss to the exchequer and request adjustment, citing relevant circulars and case law.
4. Is a personal hearing granted as a matter of course in Delhi? If a personal hearing is requested in your DRC-06 reply, the adjudicating authority is statutorily bound to grant it to comply with the principles of natural justice.
5. What should I do if the SCN relies on documents that were not provided to me? This is a violation of natural justice. In your preliminary objections, you must state that relied-upon documents were not supplied and that the notice is deficient until they are provided, reserving your right to file a detailed reply thereafter.
6. How can I seek an extension for filing the reply? You can file a formal written request with the issuing authority citing valid reasons (e.g., complexity of data, unavailability of key personnel). Granting an extension is at the authority’s discretion.
7. Can I file a single consolidated reply for multiple GSTINs in Delhi? No. A separate reply must be filed for each GSTIN, as each is a distinct legal entity for GST purposes, and the SCN would be issued to a specific registration.
