Section 74 of CGST, Goods and Services Tax - GST

[Vikas Dahiya]

Respected Sir/ Madam

I humbly seek your valuable suggestions to my query We have received a SCN u/s 74 pursuant to audit u/s 65 of the CGST Act. A single SCN is issued for two years FY 2019-20 to FY 2020-21. However, the summary of SCN in Form GST DRC-01 is issued only for one year FY 2019-20. The order is also passed for consolidated period of two years but the summary of order in DRC -07 is issued only for one year FY 2019-20. My query is - Whether legality of SCN and the Order can be challenged on this ground?

Posts / Replies

[KASTURI SETHI]

Yes, it is challengeable.

Summary of the SCN is not a substitute for SCN-----Gauhati High Court reported as 2024(12)TMI/828.

Also see the  judgments of Chhattisgarh High Court, A.P.High Court, Delhi High Court,, Telangana High Court and Jharkhand High Court.

Issue ID of TMI 763247.

You will get sufficient legal material in your favour.

[Vikas Dahiya]

Thankyou very much Sir.

[Sadanand Bulbule]

Absolutely right Sir

[Vikas Dahiya]

Respected Sirs, 

Sorry for the inconvenience, it seems that I am not able to explain my query in a proper way.

My query is that a single SCN u/s 74 has been received on email covering two years FY 2019-20 to FY 2020-21 along with Summary of SCN uploaded on portal, but in the summary the period mentioned is only FY 2019-20. Although the amount of tax, interest, penalty as per SCN and Summary of SCN are same. Similarly, a single demand order has been issued for two years FY 2019-20 to FY 2020-21 along with Summary of Order, but in the summary the period mentioned is only FY 2019-20. Demand raised is matching.

So, can this be treated as a typo error or it has some legal implications.

[KASTURI SETHI]

It is a typo error and  not challengeable. 

Regarding a single SCN for multiple years the case laws have already  been mentioned above.

You are to examine yourself on the basis of above mentioned  judgements of High Courts. 

Another judgement :

 "A single consolidated SCN for multiple years is invalid-------Kerala High Court".

  TMI  ID :764339

   My view : The department will not accept such  judgments  and the matter will travel to the Hon'ble Supreme Court.  Until and unless the issue is decided by the Supreme Court, such practice will continue.

[RAHUL MODI]

The CBIC Instruction No. 04/2023-GST (dated 23.11.2023) mandates that summaries of notices (GST DRC-01) and orders (GST DRC-07) must be uploaded electronically, ensuring procedural compliance. However, this instruction does not explicitly mandate separate SCNs for each financial year under Sections 73 and 74.

The requirement for separate SCNs per financial year is rooted in judicial precedents and statutory interpretation rather than this instruction. Courts, including the Kerala High Court, have ruled that each financial year is an independent assessment unit, requiring separate proceedings to ensure adherence to statutory timelines and the principles of natural justice.

The onus remains on taxpayers to contest such consolidated SCNs based on established legal grounds.