Non issuance of SCN mandated under Section 74.

[Deepak]

In my Jurisdiction (Tier 3 district in Tamil Nadu), there is a problem with State GST officers. They are issuing DRC 01 under section and refuse to issue SCN as mandated by Section 74. Most of the tax practitioner and even some CAs are not aware of this fact and participated in proceeding. Let's say, 10 clients received DRC 01 under rule 142 and none of this client received SCN under 74 and most of the issues were mismatch between GSTR 2A and GSTR 3B. When i asked the department officers via phone for SCN, they are saying DRC 01 is more than sufficient and it is not mandatory to issue SCN just because the act says.

Now, this is specific to my own case. Classic, GSTR 2A vs GSTR 3B. DRC 01A and DRC 01 issued u/s 74 and fails to issue detailed allegation as mandated to the client. The client did not reply or did not personal hearing and hence order passed. He came to me for appeal and i filed on following grounds:

1. Non issuance of SCN

2. Not proving fraud or other ingredients of Section 74 and many such. Filed appeal and appeal accepted. Now my questions for this specific case and general is:

1. Do i have to submit reconciliation table explaining the difference between GSTR 2A and GSTR 3B before appeal stating the differences and whether defense council will accept this.

2. What if department uses Section 160 and says, the client must have communicated before.

3. On what basis the order will be quashed by FAA accepting my grounds or confirm the order invoking section 160.

4. What other measures should I follow for personal hearing of appeal.

5. Some orders are passed by State Tax Officer u/s 74. How to check jurisdiction of the same in state level. Whether circular 03/03/2017 will be of any use for state jurisdiction.

PS: This is my first meeting between myself and client. He just came to me for filing appeal.

AI Summary

GST section 74 dispute over non-issuance of show cause notice and mismatch-based demand proceedings Challenge to GST demand proceedings under section 74 on the ground that the department issued DRC-01 and DRC-01A but did not serve a separate show cause notice, despite proceeding on mismatches between GSTR-2A and GSTR-3B. The dispute also raises whether the materials supplied contained the detailed allegations required for a section 74 case and whether the record disclosed the fraud, wilful misstatement, or suppression elements associated with that provision. The issue is framed in the context of an appeal against the resulting order.