Dera experts,
Our client received one SCN u/s 74 of FY 18-19 & 19-20 for the alleged fake purchase & thereby proposed disallowance of ITC & liability for Int & penalty. In the summary of DRC 01, the tax amount has been shown in FY 18-19 columns, though our alleged fake purchases are in FY 19-20. Now if we reply that during FY 18-19 we have not made any such purchases & then in assessment whether we will be taxed in FY 18-19 or 19-20. & if the dept does not issue a separate SCN for FY 19-20 before 30.09.2025, then whether our matter is over.
plz guide
Single Show Cause Notice Under GST Section 74 Must Separate Financial Years for Valid Tax Demands A client received a single show cause notice (SCN) under GST Section 74 covering two financial years for alleged fake purchases and disallowance of input tax credit. The SCN and accompanying summary incorrectly attribute tax demand for the earlier year, while the disputed transactions pertain to the later year. Legal advice emphasizes that each financial year must be assessed separately with clear year-wise breakups due to independent limitation periods under Section 74. A combined SCN lacking specificity may violate principles of natural justice and lead to invalid demands for the later year. Courts have held that if a separate SCN for the later year is not issued before the statutory deadline, the department loses jurisdiction to raise demands for that year. Additionally, procedural rules require issuance of specific notices before SCNs for periods prior to October 2020. Thus, failure to issue a timely SCN for the later year effectively closes the matter for that period. (AI Summary)
TaxTMI 
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TaxTMI 
