Show cause notice (SCN) in GST

Show cause notice (SCN)

What is a Show cause notice (SCN) ? Why it is important. When it is deemed to be served. What is the importance of service of notice?  We will try to find out the answers for all of these questions. 

Related Topic:
Delay In Adjudication of SCN

Importance of a Show cause notice(SCN)

Supreme court in case of Commissioner of Central Excise, Bangalore Vs Brindavan Beverages private ltd. observed that:
 “The show cause notice is the foundation on which the department has to build up its case. If the allegations in the show cause notice are not specific and are on the contrary vague, lack details and/or unintelligible that is sufficient to hold that the noticee was not given proper opportunity to meet the allegations indicated in the show cause notice. “

What is a show cause notice?

Show cause notice is a formal communication to a person, asking to explain his side for the issue mentioned in the notice. It is generally issued in case of a breach or misconduct at the part of the recipient. 

Why is a show cause notice (SCN)  issued?

It is issued to give the right to the recipient to express his side of the matter. It derives its power from the principle of natural justice. Every person has the right to be heard before any action is taken against him/her.

When it is deemed to be served. 

Now there are two parts of this story. Issuance of a show-cause notice and its service. It should be properly served. There are many case laws clarifying this issue. In some cases, self-declaration by the taxpayer is enough.  Section 169 of the CGST Act also provides the mechanism to deliver it.

Section 169 of CGST Act covers the mode of delivery.

• Hand delivered to the taxpayer
• By speed post or registered post
• Via sending an email
• By making available on the common portal
• Publishing in a newspaper circulated in the vicinity of the taxpayer.
• By affixing it on his place of business

Related Topic:
SCN Is Must – No Demand Or Coercive Action Without SCN & Personal Hearing.

Kashi Bartan Bhandar : Revenue can go for afixing the show cause notice only when other modes are not practicable

See the text of the section.

It can be delivered in the manner provided above but the last manner of affixing it shall be used as a last resort.

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GST Show cause notice – 20+ cases covered in one article

An SCN  shall carry a DIN, when it will be valid even without a DIN?

Circular no. 128/2019 made it mandatory to issues an SCN with DIN. No SCN can be issued without a DIN from 24.12.2019. There are some specific circumstances where it can be issued without a DIN. Even in that case it shall bear on its face that it is without DIN. IT should be regularised within 15 days.

Related Topic:
Service of GST notice via email, Valid or not

When SCN is not required? case laws 

Kabeer Reality:  No SCN is required to give him the opportunity of being heard.In the case of Kabeer reality this was observed by MP High court. While filing GSTR1 taxpayer is making a self-declaration of his liability. But he didn’t file GSTR 3b. It had twin effects, Buyers claim ITC based on data auto-populated in 2A as filed in GSTR 1. But no tax was deposited to the government. In this case a bank account was attached.  A notice was sent to the tenants u/s 79(1)(c). The rest was recovered against dues of tax.