Top Stories Pre-SCN Reply must be considered before Issuing GST SCN: Calcutta HC quashes Notice [Read Order] The court found that the show-cause notice is a replica of the intimation given earlier By Yogitha S. Yogesh – On January 27, 2025 11:31 am – 2 mins read The Calcutta High Court has held that the pre-show cause notice (SCN) reply should be considered before issuing SCN under Goods and Service Tax Act (GST), Act , 2017.The court found that the show-cause notice is a replica of the intimation given earlier and all that the assessing officer has said is that the reply furnished by the appellants in response to the intimation is not found to be satisfactory and hence, not acceptable.
A show-cause notice issued under Section 74(1) of the CGST Act, 2017 and the W.B.G.S.T. Act, 2017 read with Rule 142(1)(a) of the Rules for the fiscal year 2023–2024 was challenged by Jyoti Tar Products Private Limited, the petitioners. A number of decisions were cited to buttress the Single Bench’s opinion that the writ petition is not maintainable against the show-cause notice. Know When to Say No to Cash Transactions, Click Here The petitioner argued that the appellants received an indication of tax determined to be payable under Section 74(5) after the show-cause notice was issued. Details were provided in the notification, which claimed that the appellants had claimed input tax credit for the purported inward supply of goods from non-existent companies whose registrations had been revoked.
The notification told the appellants that they would be subject to a show-cause notice under Sections 73(1) and 74(1) if they did not pay the tax that was determined. In addition to providing a thorough explanation, the appellants have included some supporting documentation and cited a number of court rulings. Therefore, before deciding whether to issue a show-cause notice under Section 74(1) of the Act, the authority is required to take into account the reply where it deems it appropriate to exercise its authority under Section 74(5). Know When to Say No to Cash Transactions, Click Here The bench consisting of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has noted that the department ought to take into account the response dated July 18, 2024, to the previous notification, address those concerns, and then proceed with issuing a show-cause notice. The court determined that the show-cause notice was a duplicate of the earlier notification, and the assessing officer’s only statement was that the appellants’ response to the notification was deemed inadequate and, therefore, unacceptable.
The show-cause notice does not address any of the arguments made by the appellants in their response to the intimation dated July 18, 2024, and the remaining portion of the notice has been reproduced from the previous intimation. The court quashed the show-cause notice issued under Section 74(1) and remanded the matter back to the assessing authority to consider the reply and if it still finds it to be not satisfactory, it will be well-open to the authority to proceed in accordance with law. To Read the full text of the Order CLICK HERE