Adjudication proceedings in any assessment or penal proceedings is a very important aspect of tax administration. It provides an opportunity to the assessee to be heard and show cause before any action is taken in proceedings relating to him. Issue of show cause notice is a pre-condition to a proper adjudication which is an intimation to assessee of the proposed action by the department. The adjudicating officer adjudicates the show cause notice by considering the reply to show cause notice and other available or produced evidences by the noticee. A SCN should follow certain principles to be legally sustainable.
‘To adjudicate’ means to decide, determine or to settle. Literally, it means the act of adjudicating, the process of trying and determining a case judicially. The application of the law to the facts and an authoritative declaration of the result.
Section 75 of CGST Act, 2017 sets out the general principles governing the adjudication under the GST law. It provides for the principles and norms to be observed by proper officer carrying out any adjudication under section 73 and 74 or any other provisions of the GST law.
The adjudication is done by the departmental officers, and in this capacity they act as quasi-judicial officers. It is an important function of the officers and casts heavy responsibility on the officers invested with the powers of adjudication to use it with utmost care and caution, free from any prejudice or bias. It is important to know and understand the facts of the case, processing them properly and to apply correctly the sections and rules of law or Notifications that may be relevant to the facts of each case.
It has been provided in section 75(4) of the CGST Act, 2017 that the opportunity of personal hearing will be granted to the person chargeable with tax in following circumstances:
(a) When a written request is made by person chargeable with tax.
(b) Where any adverse decision is contemplated against such person.
Handling Show Cause Notices
- Once you receive the Show Cause Notice (SCN) and have submitted the reply to it, one needs to prepare for the hearing for adjudication of the SCN.
- Following actions are crcuicial for adjudication of SCN:
- When the personal hearing is fixed, one should ensure to attend the same.
- If you are not in a position to attend the same on the scheduled date and time, you can seek adjournment in writing.
- Written adjournment request shall be made quoting the reason for the same.
- More than three adjournments shall not be granted.
- If you don’t attend the hearing and/or don’t seek adjournment either, the SCN may be adjudicated ex-partie for which plea of violation of principle of natural justice cannot be taken.
- Draft / prepare for additional written submissions to be made at the time of hearing which will be considered by the adjudicating authority.
- It should be specifically mentioned in written submission that these are in addition to reply to SCN and to be considered while adjudicating the SCN, apart from oral arguments being advanced during the hearing.
- Such additional written submission may certain relied upon judicial pronouncements not provided earlier or which the assessee wants to put forth before the authority alongwith any new defence to be taken, new circular and clarification etc. Any binding precedent may also be submitted.
- You may be asked to provide the copy of reply / submissions on email which may be done.
SCN Hearings
- Any Show Cause Notice ought to be adjudicated and such adjudication is a quasi judicial process to be done by the proper officer.
- Assessee / notice should take care of the following:
- Personal hearing can be attended by assessee in person and a consultant / advocate may be appointant for representing him before the proper officer.
- If so, such authorised representative may be appointed by way of a power of attorney / vakalatnama to be filed at or before the personal hearing, duly stamped.
- Personal hearing / PH should be attended to at appointed time, date and place.
- The documents / explanations / submissions being submitted must be taken along and submitted. Generally, an acknowledgment will be given or such submission will be mentioned in the proceedings sheet.
- After the hearing, proper officer shall prepare the proceedings sheet containing the gist of PH. Which is required to be signed by both- assessee / authorised representative and the proper officer.
- Make sure that you explain all your defence grounds and arguments at ease (no haste)
- If it is felt that more time is required or more documents are to be submitted, you may ask for more time or another date of PH. It is not that only one PH is given.
- Whatever tranperes during the hearing should be properly recorded in the proceedings sheet. You can insist for the same.
- Generally, adjudicating authority writes ‘...they reiterated the reply to SCN and have nothing more to add..’
You may or may not agree to this.
(To be continued….)
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