In my opinion this is not a claim of exemption notification . This is an issue that goes to the core of taxation in GST ie. whether there is a supply or not.
Naturally burden of proof rests with the person who makes an assertion or allegation (Evidence Law). GST has declared burden of proof on the person claiming eligibility to claim input tax credit. A person claiming benefit of exemption notification should also assume burden of proof. So in this case clearly the officer is bound to prove DEPENDENCE.It is just not enough for him to say that the recipient is the father of taxable person.
In practical situations the AO will give an SCN stating
Read with Schedule 1 and Explanation to Sec 15 you are bound to pay tax on supplies made to your father........
All it takes the assessee is to reply
" No tax can be demanded without first establishing the transaction as a supply under the GST law.It is submitted that my father is not dependent on me and as such is not my family as per explanation to Sec 15 read with definition of family as per the GST law and therefore Schedule 1 deeming provisions are not applicable to me. Further it is also necessary to prove that the giving of goods or services were done in course or furtherance of business . Revenue has not brought any evidence to prove any of these allegations and as such it asserted that our self assessment is correct and the allegation is rejected and demand is disputed. We are attaching affidavits to the effect that my father is not dependent on me."
In such a scenario the allegation should automatically fall flat because show cause notice is the end of the investigation and no further enquiries or presentation of evidence not relied upon are permitted as far as the revenue is concerned.
Even otherwise it will be interesting to see how the adjudicating officer would be able to prove or produce documentary evidence regarding dependence for physical well-being, emotional well-being and social well-being in spite of an assertion against it by the tax payer. No presumption runs against a person to allege his dependence, against his own assertion, unless appropriate evidence is brought in.
The revenue cannot make just an allegation and expect the tax payer to run around and disprove such an allegation.
The drafting of definition of family is
1. Either a deliberate or intentional one to reflect the times we live in.
2. A drafting slip
Remember the argument of drafting slip in case of "plant and machinery" and "plant or machinery" were not accepted by Supreme Court in case of Safary Retreats.
Moreover deeming fictions in the law as in Schedule 1 are to be construed strictly and not very loosely especially when it seeks to foist a tax liability on an otherwise non taxable transaction.
Further this father son transaction fails on both counts to establish a supply. The business test as well as the consideration test. Schedule 1 deems only consideration but not in course or furtherance test from the side of supplier , which is also mandatory to even venture into examining applicability of taxes whether on forward charge or reverse charge.
At the most input reversals may be insisted on not output tax liability.
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