GST AUDIT U/S 65 AND SHOW CAUSE U/S 73

[BARUN MUKHERJEE]

Respected Sir,

Department has already conducted GST Audit u/s 65 and ADT-2 was issued accordingly for the F.Y. 2018-19 to 21-22. As per audit observation the taxpayer has already paid the tax along with applicable interest and penalty. Now Jurisdiction office has sent show cause notice u/s 73 for the F.Y. 2020-21. Is there any provision or notification by which proceeding u/s 73 can be dropped.

[KASTURI SETHI]

What is the date of issue of the SCN ?

What is the date of payment of tax and interest  ?

[BARUN MUKHERJEE]

Respected sir, SCN is issued on 25/11/2024 and tax along with interest and penalty has already been paid through DRC-03 ON 31/07/2024.

[KASTURI SETHI]

(i) The SCN was not required to be issued under Section 73. However, now the purpose of SCN is meant for only confirmation of demand, interest and penalty.

(ii) You were not required to pay penalty as you deposited due tax along with interest much before the issuance of the SCN. Section 73 (8) does not require to pay penalty. As per Sub-Section 8 all proceedings shall be concluded without payment of penalty.

(iii) Now reply to the SCN has to be filed within stipulated period and while filing reply you must contest the penalty and request for relief i.e. refund of penalty.

(iv) My reply is relevant only if all facts have been disclosed truly and correctly.

[Shilpi Jain]

Can the amount paid be appropriated by the department without issuing SCN? What happens to the other years where SCN is not issued (other than 20-21)

[BARUN MUKHERJEE]

Respected Shilpi Mam, 

Taxpayer has already paid the tax along with applicable interest and penalty u/s 74 as per audit observation before issuance of SCN for the F.Y. 2018-19 to 21-22. Mam for your further information no SCN was issued for those F.Y. other than 20-21.

[KALLESHAMURTHY MURTHY K.N.]

Dear sir,

The query is incomplete. Whether the notice was issued u/s 73 or 74, Pl, specify. Whether the SCN was issued by the same authority and on the same issue.  Sometimes, it happens with the department due to duplication of assignments to different Officers. Even once the audit u/s 65 is completed, Sec. 73 or 74 can also be invoked for any issues that remain non-complined or any other issues found subsequently.

[KASTURI SETHI]

I concur with the following view of Sh.Kallashamurhy Murthy, Sir.

"Even once the audit u/s 65 is completed, Sec. 73 or 74 can also be invoked for any issues that remain non-complied  or any other issues found subsequently".

AI Summary

Taxpayer Challenges Show Cause Notice Issued Under Section 73 After Paying GST Dues; Questions Procedural Duplications A taxpayer underwent a GST audit under Section 65 for the fiscal years 2018-19 to 2021-22 and paid the due tax, interest, and penalty. Despite this, a show cause notice (SCN) under Section 73 was issued for the fiscal year 2020-21. A participant questioned the necessity of the SCN since the tax was paid before its issuance, noting that Section 73(8) does not require a penalty if payment is made timely. The discussion also highlighted potential procedural duplications and the possibility of invoking Sections 73 or 74 for unresolved issues post-audit. Participants advised contesting the penalty in the SCN response.