The Central Board of Indirect Taxes & Customs (CBIC) has advised its officers to avoid issuing show cause notices (SCNs) under GST recklessly, as it will lead to litigations. This instruction has come as the new due date for issuing SCNs related to FY19 approaches its end on January 31, 2024.
Last week, businessline reported that with the new due date approaching, businesses are bracing for a flurry of show-cause notices from GST officials for FY19 regarding any possible shortfall in tax payment. Similarly, the new due date for SCNs related to FY20 is June 30, 2024.
In a communication to taxmen, CBIC Chairman Sanjay Kumar Agrawal said, “It needs to be kept in mind by proper offices that the issuance of show cause notices should be done after due consideration of facts and circumstances of the case and after examining the relevant documents submitted by the taxpayers. Needless to say, issuance of show cause notices recklessly will lead to unnecessary litigations in future.”
“The Chief Commissioners of the Zones are advised to keep a close watch on the number of pending investigations, scrutiny, etc., to ensure that the officers under their supervision are working in a methodical manner,” Agrawal said. It may be noted that the extended deadlines mentioned above apply specifically to time-barring periods under Section 73. The GST department will still have an additional two years to issue notices and orders under suppression or misrepresentation cases under Section 74. It is expected that following a court ruling, the department might give businesses 15-30 days to reply to ensure that taxpayers have a reasonable opportunity to be heard.
Industry sources say that a large number of notices were issued just before the due date for the fiscal year 2017-18. Various reports suggest that in December itself, GST authorities issued demand notices totalling ₹1.45-lakh crore to around 1,500 businesses for inconsistencies in annual returns and input tax credit claims for the financial year 2018. Now, the expectation is that with advise from Chairman, the situation might not be as seen for last fiscal.
Legacy cases
The Chairman also highlighted the issue of legacy adjudication. He emphasised that nearly 1 lakh legacy cases involving over ₹29,000 crore, need to be adjudicated quickly as it has been more than 6 years since the rollout of GST. “With the promotion of 2,398 officers from Group ‘B’ to Group ‘A’ level, there has been a substantial increase in manpower at the level of adjudicating officers. The increase strength should also translate into faster liquidation of pendency,” he advised.
Source: The Hindu Business Line
