LITIGATION MANAGEMENT IN GST REGIME (PART -4)

[Dr. Sanjiv Agarwal]

Adjudication is the process of deciding an issue relating to tax matters through departmental authorities empowered to determine issues relating to classification, valuation, refund claim, tax or duty payable etc. The department raises demands by way of Show Cause Notices (SCNs) to the assessees when irregularities are observed or suspected.

Adjudication pre-supposes issuance of a show cause notice (SCN) - an intimation to show cause, explain or defend the proposed action as mentioned in the SCN. Infact, SCN is the first limb of principle of natural justice i.e., no one should be condemned unheard. SCN should be clear, precise and unambiguous.

‘Adjudication’ has not been defined in the Act but according to www. wikipedia. org, “Adjudication is the legal process by which an arbiter or judge reviews evidence and argumentation including legal reasoning set forth by opposing parties or litigants to come to a decision which determines rights and obligation between the parties involved. The decision has to be based on settled principles of adjudication which is a quasi judicial exercise involving judicious application of mind.

Principles Governing Adjudication Order

The following principles involving interpretation govern the adjudication proceedings and issuance of an adjudication order:

• An order shall follow the following principles / doctrines:

• legislative intention
• reasoned or speaking order
• natural justice
• judicial discipline
• res judicata
• noscitur-a-sociis

• Non-speaking and vague order ought to be avoided.
• A proper adjudication order must be a speaking or well reasoned order
• Ascertain whether the order is within prescribed limitation period.
• An OIO shall follow binding precedents and judicial discipline.
• No demand can be confirmed on any ground other than grounds specified in the SCN itslef.

Adjudication order: Actions to follow

Once an assessee receives the adjudication order (order-in-original), following actions should follow:

• Read the OIO carefully line-by-line, particularly paras on discussions, findings and conclusion.
• Make notes / summary for internal discussion and deciding further course of action .
• See that the OIO is proper and captures all details correctly and completely, at least on factual matrix.
• Based on the order, decide whether to:

• Accept the order and deposit the demand in full, if any.
• Accept the order partially and deposit the admitted amount and prepare for filing the appeal, i.e., contesting the order.
• Don’t accept the order and decide to file an appeal before appropriate appellate authority.

• If there are mistakes / errors apparent on the face of record, assessee may seek remedy of rectification of errors provided under section 161 of the CGST Act, 2017.
• Subject to section 161, an adjudication order shall be considered as a valid order in terms of section 160 of CGST Act, 2017.