assessment order

[HELEN JUDE]

I got an show cause notice on 28.12.2023 u/s 73(1), had many personal hearing on that and on 30.042024 we get an original order and, on that we filed an appeal on 27.08.2024, the very next day we get an additional order. on original order assessment officer had mistakenly left off to add Flood cess On original order. and now on additional order is under sec 74 without any SCN, or hearing. advise.

[KASTURI SETHI]

Without SCN and without P.H. such additional Adjudication Order is a null order. It is not in consonance with CGST Act. It is a total violation of principles of natural justice. You have no other option but to file afresh appeal against this additional adjudication order treating it afresh Order-in-Original and not Additional. If the Common Portal does not allow, (Order No. being same), file the appeal manually.. Let the Appellate Authority decide whether to tag it with the earlier appeal filed against Order-in-Original or not.

[Shilpi Jain]

What is Flood cess?

If demand is huge file a Writ to get the order quashed .

[KASTURI SETHI]

Flood Cess is a Natural Calamity Cess. It was levied by Kerala State Govt. for two years w.e.f. 1.8.19 vide sub-clause (2) of clause 14 of the Kerala Finance Bill, 2019. Thereafter, it was Kerala Flood Cess.

The querist should also take care of the period involved in the SCN.

[Yash Shah]

As per relevant provisions of section 73 & section 74, Where it appears to the PO that any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised for any reason, 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 (SCN) as to why he should not pay the amount specified in the notice along with interest & penalties.

In other words, to issue an order PO need to serve notice (u/s 73(1) or 74(1))  or  statement (u/s 73(3) or 74(3))

Therefore, in the given case issue of additional order u/s 74 without any SCN or hearing is against the provision of CGST act. Hence, that additional order is not valid.

Also, technically what was never part of Show cause notice, can never be part of the order, Multiple High courts can be relied where in it was held.

AI Summary

Lack of show cause notice invalidates subsequent tax adjudication without hearing, reinforcing requirement for notice and opportunity to be heard. A subsequent tax adjudication purporting to raise additional liability without service of a prior show cause notice or personal hearing is procedurally infirm; material not included in the original notice cannot be validly adjudicated later without restarting the statutory notice process, and such orders conflict with principles of natural justice and the statutory requirements for assessment proceedings.