litigation under GST
CA Poonam Gandhi

Updated on February 9th, 2024

The historical date i.e. 1st July 2017 was the date on which major tax reform in the form of Goods and Services Tax (GST) was implemented in India. Basically, GST was introduced with the primary objective of ‘One Nation One Tax’. Litigation under GST is going tough day by day. This article explain how to handle litigation under GST in easy five step. 

Notably, the initial stage of implementation of GST was loaded up with lots and lots of hurdles. However, with all the ups and downs, the Goods and Services Tax (GST) law is slowly and steadily growing bigger and older.

We know, taxation and litigation go hand in hand. Accordingly, with the passing of time, litigation under GST is also taking its own pace. It can easily be pointed out that, now, GST is slowly moving from compliance towards litigation. Moreover, ever changing nature of GST law is also one of the reasons for the increase in litigation.

Under GST law, the trade and industry have witnessed many litigation/ disputes like transition input tax credit issues, refunds of taxes, non-filing/ late filing of GST returns, e-way bills, availment/ utilization of input tax credit etc.

In this background, it is important for each and every person to briefly understand the manner of handling litigation under GST. Let us understand the basics of how to handle litigation under GST in this current article.

Notice under GST : Manner of issuance

notices under GST

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As we are talking here about GST litigation, before going through the details about the manner of handling the litigation under GST, let us go through the basics about the manner of issuance of notice under GST.



Section 61

Scrutiny of returns

Section 65

Notice for the conduct of audit by tax authorities

Section 66

Special audit

Section 67

Notice for inspection, search and seizure

Section 70

Summons to any person for obtaining evidence and documents

Issuance of litigation notices

Section 73

Notice for determination of tax not paid/ short paid or erroneously refunded or input tax credit wrongly availed/ utilized for any reasons other than fraud or any willful-misstatement or suppression of facts.

Section 74

Notice for determination of tax not paid/ short paid or erroneously refunded or input tax credit wrongly availed/ utilized by reason of fraud or any willful-misstatement or suppression of facts.

Section 76

Notice for tax collected but not paid to the Government.

Notices for specified issues

Notice relating to blocking of input tax credit in terms of rule 86A of the Central Goods and Services Tax Rules, 2017

Notice relating to e-way bill issue

5 Proven ways to manage litigation under GST

Handle litigation under GST

With the increase in the number of departmental audit by GST; stringent rules relating to the cancellation of GST registration and input tax credit, resulting into an increase in the number of litigations under GST. It is essential to understand and adopt the basic manner of handling litigation under GST. The same is explained hereunder –

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1. Well conversant with the GST law

Since the inception of the GST law, it has undergone a drastic change. Additionally, still, with each GST council meeting being conducted, new changes are being recommended, introduced and implemented.

This being the case, it is next to impossible for the individual (or in fact even for the professional) to be fully well conversant with the GST law.

However, one should always make it a point to be well updated with the part of the law which relates to its respective business or service like filing of GST returns; input tax credit; e-way bill generation etc.

 In case the matter is complex, it is always advisable to hire a professional and work accordingly.

2. Brief examination of show cause notice

On receipt of show cause notice, instead of working on assumptions that show cause notice since issued by the department would be lawfully accurate. One should thoroughly go through the same and mark the following –

  • Make note of the Document Identification Number (DIN in GST) if applicable;
  • Provision under which show cause notice is issued;
  • Applicability of said provision in the matter;
  • Period covered vis-à-vis applicability of period of limitation;
  • Verifying figurative facts mentioned in the notice; etc.

3. To carry out initial home work before drafting defense reply

Once all the above facts are verified, it is now necessary to carry out the home work as briefed hereunder –

  • Form an opinion i.e. whether the issue covered in the notice is legally valid or not;
  • If the issue is valid and acceptable, then, just accept the same and carry out the necessary compliances as directed in the show cause notice;
  • If the issue is not acceptable, then, go through the provisions of law which are helpful in the matter. Also, segregate the documents which are useful/ needed while a drafting defense reply.

4. Drafting and submitting of defense reply

If the matter; show cause notice as well as the probable reply is pretty clear, drafting of the defense reply will be easy. The following points should be noted while drafting a defense reply in the matter –

  • Respectfully put up all the arguments against the allegation mentioned in the notice;
  • Don’t forget to mention relevant sections/ rules as applicable in the matter;
  • Also, try to put up the points with the help of illustrations;
  • Attach all the necessary relevant documents with the defense reply.

It is important to note here that additional professional help will not be needed, in case the matter is simple and clear in your mind, and also you are well versed with the legal provisions.

However, in case there is any doubt, it is always advisable to take the professional help in drafting a defense reply.

Once the drafting work of the defense reply is completed and the same is re-verified, submit the same to the departmental officer. Importantly, under GST, most of the defense reply is to be submitted online.

5. Representing the matter during a personal hearing

After the submission of the defense reply, the same will be analyzed by the respective departmental officer. Thereafter, prior to issuance of an order, it is mandatory for the officer to provide an opportunity of being heard to the assessee.

As and when the personal hearing is held, attend the same with confidence and keep all the documents handy.

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CA Poonam Gandhi

About the author

Poonam Gandhi is a Chartered Accountant and a Lawyer, with practical experience of 9+ years in the field of Indirect Taxation.

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