Accordingly, adjudication notice means a notice issued by the ‘proper officer’ either section 73 and section 74 under CGST act.
In the present article, the adjudication notice as well as the adjudication procedure involved under the GST law is briefly discussed in the form of Frequently Asked Question for easy understanding.What is section 73 and 74 under CGST act?
Adjudication notice under GST can be issued by the proper officer to the registered person under any of the following circumstances
Provisions for section 73 and 74 under CGST act
Governing provision | Particulars |
|---|---|
Section 73 | When a proper officer wants to issue notice for non-payment/ short payment of tax or erroneous refund or wrong availment or utilization of input tax credit by any reason other than fraud/ wilful mis-statement/ suppression of facts. |
Section 74 | When a proper officer wants to issue notice for non-payment/ short payment of tax or erroneous refund or wrong availment or utilization of input tax credit by reason of fraud/ wilful mis-statement/ suppression of facts. |
What is procedure for notice issue under section 73 and 74 of CGST act 2017
Following is the specified procedure which needs to be followed before the issuance of notice either under section 73 and 74 of CGST act.
It is important to note here that if the ascertained tax liability is acceptable, it is advisable to make payment of the same either before issuance of an adjudication notice or within a specified period. Such timely payment results into either NIL penalty or reduction of penalty, as explained in the table below
The time limit within which ascertained tax liability is paid | Benefits: notice under section 73 | Benefits: notice under section 74 |
|---|---|---|
Payment of tax and interest before issuance of an adjudication notice | Entire penalty is not payable (i.e. NIL penalty) | A penalty equal to 15% of the tax amount is payable |
Payment of tax and interest within 30 days of issuance of an adjudication notice | Entire penalty is not payable (i.e. NIL penalty) | A penalty equal to 25% of the tax amount is payable |
Payment of tax and interest after the issuance of an adjudication order | A penalty equal to higher of the following amount is payable – 10% of tax or Rs. 10,000 | A penalty equal to 50% of the tax amount is payable |
What are the rights of the taxable person during adjudication?
Following are the basic rights of the taxable person during the adjudication procedure
Right to produce all the relevant evidences
In order to support their claim, it is a basic right available to the taxable person to produce/ submit all the relevant evidence while filing their defence reply.
Right to be heard
It is mandatory to provide the opportunity of being heard to the taxable person before issuing an adjudication order. In case, the opportunity is not provided the same results in the violation of the principle of natural justice.
Right to receive a speaking order
As and when the order is passed by the adjudicating authority, the same should be a speaking order.
Right to appeal
In case the taxable person is aggrieved by the order passed by the adjudicating authority, then, an appeal can be preferred against the relevant authority.
What is the adjudication proceedings under GST?
The adjudication proceedings under GST are simplified hereunder
- The proper officer issues notice either under section 73 or section 74 under CGST act;
- On receipt of the notice, the registered person should furnish an appropriate defence reply within the specified period;
- Post submission of the reply, an opportunity of being heard should be issued to the registered person by the proper officer;
- Considering both the submission and representation done during the personal hearing, a speaking order should be passed by the adjudicating authority.
- If the registered person is aggrieved by the order passed by the adjudicating authority, then, an appeal can be filed as per the appeal mechanism.
What are the appeal mechanism available to the taxable person under the adjudication proceeding?
Following is the appeal mechanism available to the taxable person under adjudication proceedings under GST
Particulars | Appellate authority | Period within which appeal is to be filed |
|---|---|---|
The first level of appeal | Commissioner (Appeals) | Within a period of three months from the date of receipt of an order |
The second level of appeal | Appellate Tribunal | Within a period of three months from the date of receipt of an order |
The third level of appeal | High Court and Supreme Court | Within such a specified period |
What are the practical tips on handling of an adjudication notice under GST?
Following are the practical tips on handling of an adjudication notice under GST –