Show cause notice (SCN) is a document served by the department on a person asking him to explain with reasons as to why a particular course of action should not be taken against him. It is similar to an opportunity given to a person who is proposed to be charged with violation of law by giving him sufficient opportunity to submit his view point as to why he should not be proceeded against for the alleged violation.
- Section 73 of the Central Goods And Services Tax Act, 2017 provides for determination of tax not paid/short paid/erroneously refunded/wrong ITC availed for reasons other than fraud or any wilful misstatement or suppression of facts. The proper officer shall issue the notice under this section within 2 years & 9 months from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within 2 years & 9 months from the date of erroneous refund.
- Section 74 of the Central Goods And Services Tax Act, 2017 provides for determination of tax not paid/short paid/erroneously refunded/wrong ITC availed by reasons of fraud or any wilful misstatement or suppression of facts. The proper officer shall issue the notice under this section within a period of four years & 6 months from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or within four years & 6 months from the date of erroneous refund.
- Section 76 of the Central Goods And Services Tax Act, 2017 provides for the procedure in case tax is collected by the taxpayer but is not remitted to the Government account. There is no time limit prescribed for issuance of a notice under this section.
Section 169 of the CGST Act 2017 provides for manner of service of a notice, order or summon as follows:
| (a) | by giving or tendering it directly or by a messenger including a courier to the addressee or the taxable person or to his manager or authorised representative or an advocate or a tax practitioner holding authority to appear in the proceedings on behalf of the taxable person or to a person regularly employed by him in connection with the business, or to any adult member of family residing with the taxable person; or | |
| (b) | by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorised representative, if any, at his last known place of business or residence; or | |
| (c) | by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or | |
| (d) | by making it available on the common portal; or | |
| (e) | by publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or | |
| (f) | if none of the modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who or which passed such decision or order or issued such summons or notice. |
Responding to Show Cause Notices:
Any reply to the GST notices can be submitted online on the GST portal. A taxpayer can use the digital signature of the authorised personnel of such taxpayer or himself. Where the payment of tax and interest is required, such liability can be paid in the requisite form and manner. After such payment, the reply letter in requisite form must be submitted to the tax authority who sent the notice.