Issuance of SCN under GST

In R.S. Senthilkumar v. Additional Commissioner of S. T., Chennai-II, 2017 (7) TMI 852 - MADRAS HIGH COURT , where show cause notice issued and adjudication order passed despite the fact on record that assessee already having paid impugned tax with interest. Adjudication order passed by Additional Commissioner without discussion and findings, and rectification application filed with records indicating payment, also dismissed. In counter affidavit of Assistant Commissioner filed the writ petition against adjudication order, Department stated the amount paid by assessee did not match with demand raised by them.

The High Court held that Adjudication order should have referred to payments by the assessee and their bank statements should have been called. It was the cryptic and arbitrary order passed to harass assessee. It was more so as payment made by the assessee was more than demand.

Use of this judgment under GST:

• Section 73(5) of the CGST Act, 2017 provides that the person chargeable with tax may, before service of notice under sub-section (1) or, as the case may be, the statement under sub-section (3), pay the amount of tax along with interest payable thereon under section 50 on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment.
• Section 73(6) of the CGST Act, 2017 provides that the proper officer, on receipt of such information, shall not serve any notice under sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the tax so paid or any penalty payable under the provisions of this Act or the rules made thereunder.
• Accordingly, the proper officer shall not issue show cause notice to the person if such person pays tax amount along with interest to the Government and intimate to the proper officer.