Passing of Order Under Section 74(9) Without Issuing Show Cause Notice Under Section 74(1)Validity ofVineet Tiwari

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The Tax Publishers GST--Assessment Passing of Order Under Section 74(9) Without Issuing Show Cause Notice Under Section 74(1)--Validity of Vineet Tiwari The learned author seeks to analyse an issue as to whether assessment order passed under section 74 on the basis of a summary of show cause notice issued in Form DRC-01A under section 74(5), without issuing a show cause notice in Form DRC-01 under section 74(1) is sustainable in law. The related issue is being discussed in the light of relevant statutory provisions and a recent Madras High Court decision in the case of V.R.S. Traders v. Asstt. Commr. (ST), decided on 10-2-2022. 1. Introduction Section 74 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts. As per sub-section (1) of section 74 of the CGST Act, 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. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

GST--Assessment

Passing of Order Under Section 74(9) Without Issuing Show Cause Notice Under Section 74(1)--Validity of

Vineet Tiwari

The learned author seeks to analyse an issue as to whether assessment order passed under section 74 on the basis of a summary of show cause notice issued in Form DRC-01A under section 74(5), without issuing a show cause notice in Form DRC-01 under section 74(1) is sustainable in law. The related issue is being discussed in the light of relevant statutory provisions and a recent Madras High Court decision in the case of V.R.S. Traders v. Asstt. Commr. (ST), decided on 10-2-2022.

1. Introduction

Section 74 of the Central Goods and Services Tax Act, 2017 (in short "the CGST Act") deals with determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts.

As per sub-section (1) of section 74 of the CGST Act, 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.