Notice under Sec 63 of CGST Act, 2017, Goods and Services Tax - GST

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XYZ received notice on 13-01-2025 under Sec 63 for FY 2017-18. However, on the date of issueance of notice, XYZ is registered. Please share your views if the same can be done by the department ?

Further Sec 63 talks about issuance or order within a period of five years from the date specified under section 44 for furnishing of the annual return for the financial year to which the tax not paid relates, in this case, what shall be the due date for FY 2017-18 for passing the order ?

Posts / Replies

[KASTURI SETHI]

Due date for passing the Order for 17-18 under Section 74 is 05.02.2025. The period is to be computed from the due date of GSTR-9. Due date for filing GSTR-9 for 17-18 was extended. The extended due date was 5 and 7 February, 2020.

See Instruction No. 2/2021-22/GST-Investigation, dated 22-9-2021 and Notification No. 6/20-CT dated 3.2.2020

[VENU K]

In my opinion the notice is without jurisdiction since registration ousts jurisdiction under Sec 63 due to  the following reasons.

1.The section starts with a non obstante clause, meaning whenever the provisions of Sec 73 or 74 applies , the provisions of Sec 63 of the Act cannot be invoked.

2.Tax payers who have obtained registration cannot be directed to submit information and records pertaining to period prior to date of registration and initiate proceedings under Sec 63.

3.There is no authority in Sec 63 for the proper officer to secure tax payers involvement in investigation.

4.The section can be invoked only when such unregistered person has 'FAILED' to obtain registration. As such , once registration is obtained use of best judgment method permitted in case of unregistered persons cannot be applied against registered persons even for a period prior to date of registration.

5.If past failures (for the period prior to registration) are open to proper officer to act upon under Section 63, the provisions of Sec 63 will be retro active (taking steps prospectively of anterior facts)

The best option under such circumstances is to approach the High Court to quash the proceedings because the Section grants the power to the Officer to make a unilateral assessment as per his best judgment. Such judgment would  invariably result in a WORST JUDGMENT assessment.

There is no mention in the query as to the contents of the notice and as such replies are based on  pure reading of the section.