SERVICE OF NOTICE UNDER MODEL GST ACT

[Mr. M. GOVINDARAJAN]

In the course of time the GST Authorities may take various decisions, issued orders, issued summons, notice or other communications to the assessee or other required persons.  The service of communication of any sort is to fulfill the requirements of principles of Natural Justice.  Serving the same is not enough and the confirmation of receipt of the said communication should be ensured by the issuing authorities.  Some sort of notices, orders, summons etc., to be issued or communicated by the proper officers under the provisions of this Act is discussed in this Article as below.

Cancellation or revocation of registration

Section 26 (4) of the Act provides that the proper officer shall not cancel the registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.

Section 27 (3) provides that the proper officer shall not reject the application for revocation of cancellation of registration without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.

Notice to return defaulters

Section 41 provides that where a registered person fails to furnish a return under Section 34, Section 39 or Section 40, a notice shall be issued requiring him to furnish such return within 15 days in such form and manner as may be prescribed.

Refund

Section 48 (5) provides that if, on receipt of refund application, the proper officer is satisfied that the whole or part of the amount claimed as refund is refundable, he may make an order accordingly and the amount so determined shall be credited to the Fund.

Section 48 (6) provides that the proper officer may, in the case of any claim for refund on account of export of goods and/or services made by registered taxable persons, other than such category of registered taxable persons as may be notified in this behalf, refund on a provision basis, 90% of the total so claimed, excluding the amount of input tax credit provisionally accepted, in the manner and subject to the conditions, limitations and safeguards as may be prescribed and thereafter make an order for final settlement of the refund claim after the due verification of documents furnished by the applicant.

Section 48 (11) provides that where  an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending and the Commissioner is of the opinion that grant of such refund is likely to adversely affect the revenue in the said appeal or other proceeding on account of misfeasance or fraud committed, he may, after giving the taxable person an opportunity of being heard, withhold the refund till such time as he may determine.

Electronic Commerce

Section 56 (9) provides that any authority not below the rank of Joint Commissioner may serve a notice either before or during the course of any proceeding under this Act, requiring the operator to furnish such details relating to-

• supplies of goods or services effected through such operator during any period; or
• stock of goods held by the suppliers making supplies through such operator in the godowns or warehouses, by whatever name called, managed by such operators and declared as additional places of business by such suppliers

as may be specified in the notice.

Provisional assessment

Section 58 (1) provides that where the taxable person is unable to determine the value of goods and/or services or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis and the proper officer may pass an order allowing payment of tax on provisional basis at such rate or on such value as may be specified by him.

Section 58(3) provides that the proper officer shall, within a period not exceeding 6 months from the date of communication of the order issued under Section 58(1), pass the final order after taking into account such information as may be required for finalizing the assessment.

Assessment of non filers of returns

Section 60 (1) provides that where a registered taxable person fails to furnish the return required under Section 34 or Section 40, even after the service of a notice under Section 41, the proper officer may proceed to assess the tax liability of the said person to the best of judgment taking into account all the relevant material which is available or which he has gathered and issue an assessment order within time limit specified in Section 67 (8).

Assessment of unregistered persons

Section 61 provides that notwithstanding anything to the contrary contained in Section 66 or Section 67 where a taxable person fails to obtain registration even though liable to do so, the proper officer may proceed to assess the tax liability of such taxable person to the best of his judgment for the relevant tax periods and issue an assessment order within a period of 5 years from the due date for filing of the annual return for the year to which the tax has not paid relates.   No such assessment order shall be passed without giving a notice to show cause and without giving the person a reasonable opportunity of being heard.

Audit by tax authorities

Section 63 (3) provides that the taxable person shall be informed by way of a notice, sufficiently in advance, not less than 15 working days, prior to the conduct of audit in the manner prescribed.

Determination of tax not paid or short paid or erroneously refunded

Section 66 (1) provides that where any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized for any reason, other than the reason of fraud or willful mis-statement or suppression of facts to evade tax, the proper officer shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Section 45 and a penalty leviable under the provisions of this Act or the rules made there under.

Section 66(7) provides that where the proper officer shall, after considering the representation, if any, made by the person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to 10% of tax or ₹ 10,000/- whichever is higher, due from such person and issue an order.

Section 67 (1) provides that where any tax has not been paid or short paid or erroneously refunded, or where input tax credit has been wrongly availed or utilized by reason  of  fraud or willful mis-statement or suppression of facts to evade tax, the proper officer shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilized input tax credit, requiring to show cause why he should not pay the amount specified in the notice along with interest payable thereon under Section 45 and a penalty equivalent to the tax specified in the notice.

Section 67 (7) provides that the proper officer shall, after considering the representation, if any, made by the person chargeable with tax determine the amount of tax, interest and penalty due from such person and issue an order.

General provisions to determination of tax

Section 68 (3) provides that where any order is required to be issued in pursuance of the direction of the Tribunal or a Court, such order shall be issued within 2 years from the date of communication of the said direction.

Tax collected but not deposited with the Central or a State Government

Section 69 (2) provides that where any amount is required to be paid to the credit of the Central or a State Government and which has not been so paid, the proper officer may serve on the person liable to pay such amount a notice requiring to show cause why the said amount as specified in the notice, should not be paid by him to the credit of the Central or a State Government and why a penalty equivalent to the amount specified in the notice should not be imposed on him  under the provisions of this Act.

Section 69 (6) provides that the proper officer shall issue an order within one year from the date of issue of the notice.

Recovery of tax

Section 72 (c) (i) provides that the proper officer may, by a notice in writing, require any person from whom money is due or become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government either forthwith upon the money becoming due or being held, or at or within the time specified in the notice not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due from such person or the whole of the money when it is equal to or less than that amount.

Provisional attachment

Section 77 (1) provides that where during the pendency of any proceedings under Section 60, 61, 62, 66, 67 or 79 the Commissioner is of the opinion that for the purpose of protecting the interest of Government revenue, it is necessary so to do, he may by order in writing attach provisionally any property, including bank account, belonging to the taxable person in such a manner as may be prescribed.

Power of Inspectors

The proviso to Section 79(2) provides that where it is not practicable to seize any such goods, the proper officer may serve on the owner or the custodian of the goods an order that he shall not remove, part with, or otherwise deal with the goods except with the previous permission of such officer.

Power to summon

Section 82 (1) provides that any CGST/SGST officer, duly authorized by the competent authority in this behalf, shall have power to summon any person whose attendance he considers necessary either to give evidence or to produce a document or any other thing in any inquiry which such officer is making for any of the purposes of this Act.

Power to impose penalty in certain cases

Section 88 provides that where the proper officer is of the view that a person is liable o a penalty and the same is not covered under any proceeding under Sections 59, 60, 61, 62, 66, 67, 89 or 90, he may issue an order levying such penalty after giving a notice and after giving a reasonable opportunity of being heard to such person.

Confiscation of goods

Section 90 (4) provides that no order of confiscation of goods and/or conveyance and/or imposition of penalty shall be issued without serving a notice on such person requiring him to show cause and without giving the person a reasonable opportunity of being heard.

First appeal

Section 98 (11) provides that the order of the First Appellate Authority disposing of the appeal shall be in writing and state the points for determination, the decision thereon and the reasons for the decision.  Section 98 (13) provides that on disposal of the appeal, the First Appellate Authority shall communicate the order passed by him to the appellant and to the adjudicating authority.

Revisional powers

Section 99 (4) provides that every order passed by Chief Commissioner or Commissioner in revision shall, subject to the provisions of sections 102, 106 or 107 be final.

Orders of Appellate Tribunal

Section 102 (5) provides that the Appellate Tribunal send a copy of every order passed under this Section to the First Appellate Authority or the revisional authority, or the original adjudicating authority, as the case may be, the appellant, the jurisdictional Commissioner of CGST and the jurisdictional Commissioner of SGST.

Advance ruling

Section 117 (3) provides that a copy of every order made by the Authority for Advance Ruling shall be sent to the applicant and to the prescribed officers.

Orders of the Appellate Authority

Section 119 (2) provides that the order shall be passed within a period of 90 days from the date of filing of appeal.

Service of notice

Section 159 of the Act provides that any decision, order, summons, notice or other communication under the Act or the rules made there under shall be served by any one of the following methods-

• by giving or tendering it directly or by a messenger including a courier-

• to the addressee; or
• the tax payer; or
• to his manager; or
• to agent duly authorized; or
• to an advocate or a tax practitioner holding authority to appear in the proceeding on behalf of the tax payer; or
• to a person regularly employed by him on connection with the business; or
• to any adult member of family residing with the tax payer; or

• by registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorized agent, if any at his last known place of business or residence; or
• by sending a communication to his e-mail address provided at the time of registration or as amended from time to time; or
• by making it available on the Common Portal; or
• by publication in a newspaper circulating in the locality in which the taxpayer or the person to whom it is issued is last known to have resided, carried on business or personally worked for gain; or
• if none of these modes aforesaid is practicable, by affixing it in some conspicuous place at his last known place of business or residence; or
• if the mode last discussed is also not practicable for any reason, then by affixing a copy thereof on the notice board of the office or authority who or which passed such decision or order or issued such summons or notice.

Deemed service

Every decision, order, summons, notice or any communication shall be deemed to have been served on the date on which it is tendered or published or a copy thereof is affixed in the manner provided as above.  When such decision, order, summons, notice or any communication is sent by registered post or speed post, it shall be deemed to have been received by the addressee at the expiry of the period normally taken by such post in transit unless the contrary is proved.

Discussions to this article

[Ganeshan Kalyani]

Sir, nice article. In case where the assessee required to be registered under the act but did not do in that it would be challenging for the authority to catch hold of that assessee. There would be some mechanism or process through which the unregistered dealers would be caught. More clarity is required. Pls share your view in this respect sir.