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GST Notice Reply Lawyer – DRC-01, DRC-07 & SCN
GST Notice Reply Lawyer – DRC-01, DRC-07 & SCN
This guide serves as a roadmap to help you decode legal communications from the GST department, respond accurately within statutory timelines, and protect your business from unnecessary litigation.
In the evolving digital landscape of Indian taxation, a GST Notice is no longer just a letter; it is an automated compliance alert triggered by advanced data analytics. For taxpayers in Bihar, Jharkhand, and West Bengal—where scrutiny on inter-state trade, mining, and manufacturing has intensified—timely action is critical.
What Is a GST Notice?
A GST notice is an official communication issued by the GST authorities to a taxpayer. It typically seeks clarification, demands tax payments, or warns of potential non-compliance
1. Legal Basis under the CGST Act
Notices are issued under specific sections of the CGST Act, 2017. The most common sections include:
- Section 61: Scrutiny of returns.
- Section 73: Demand and recovery for non-fraud cases.
- Section 74: Demand and recovery for cases involving fraud or suppression of facts.
- Section 169: Governs the service of notice, outlining valid modes like the GST Portal, email, or registered post.
2. When a GST Notice Becomes Legally Binding
A notice is legally binding the moment it is “served.” Under Section 169(2), a notice is deemed served once it is made available on the Common Portal or sent to the registered email address.
Note for 2025: Courts (including the Patna High Court) have recently emphasized that notices must be posted in the correct tab on the portal. Checking the “Additional Notices and Orders” tab is now as mandatory as checking the primary notice section.
Difference: Notice vs. Intimation vs. Scrutiny
A GST notice is an official communication issued by the GST authorities to a taxpayer. It typically seeks clarification, demands tax payments, or warns of potential non-compliance
Difference: Notice vs. Intimation vs. Scrutiny
Feature | Intimation (e.g., DRC-01C) | Scrutiny (ASMT-10) | Notice (SCN/DRC-01) |
Nature | Preliminary alert. | Detailed review of returns. | Formal legal demand. |
Purpose | To highlight a mismatch (e.g., ITC 2B vs 3B). | To seek an explanation for specific discrepancies. | To show cause why tax/penalty shouldn’t be levied. |
Urgency | Low to Medium (Early warning). | Medium (Requires factual reply). | High (Requires legal defense). |
Why Are GST Notices Issued? (Top Reasons)
A GST notice is an official communication issued by the GST authorities to a taxpayer. It typically seeks clarification, demands tax payments, or warns of potential non-compliance
- GSTR-1 vs GSTR-3B Mismatch: Differences in outward supplies reported.
- Excess ITC Claim: ITC in GSTR-3B exceeds what is available in GSTR-2B/2A.
- Late Filing: Consistent delays in filing monthly or annual returns.
- Fake Invoice Red Flags: Invoices from suppliers whose registrations are cancelled or flagged for fraud.
- E-Way Bill Non-Reconciliation: Mismatch between goods moved (E-way bills) and sales reported.
- Unusual Turnover Jump: A sudden, unexplained spike in sales or tax liability.
- Non-payment of Interest: Delaying tax payment without paying the 18% p.a. interest.
- ITC Reversal Failure: Not reversing ITC for payments not made to suppliers within 180 days.
- Wrong HSN/SAC Codes: Using non-standard or generic codes (flagged heavily in 2025).
- Ineligible ITC: Claiming credit for personal expenses or blocked items (Section 17(5)).
- Mismatch with ITR: Discrepancies between turnover reported in Income Tax Returns vs. GST.
- Refund Anomalies: Excessive or suspicious GST refund claims.
- Anti-Profiteering: Not passing on tax rate cut benefits to customers.
- Registration Defaults: Not updating business address or authorized signatory details.
- Non-filing for 6 months: Leads to automatic cancellation triggers.
- Reverse Charge (RCM) Goof-ups: Failure to pay tax on imported services or specified goods.
- Inconsistent Tax Rates: Charging different rates for the same product across different invoices.
- High Ratio of ITC to Output Tax: If almost all tax is paid via ITC with zero cash outflow.
- Inter-state vs. Intra-state Errors: Incorrectly tagging IGST instead of CGST/SGST.
- Audit Findings: Issues discovered during a departmental audit (Section 65).
TYPES OF GST NOTICES
Notice under Section 61 — Scrutiny of Returns
This is the most common “first-level” notice, usually automated and system-generated based on data analytics.
- Why it is issued: When the tax officer finds discrepancies between your filed returns (e.g., GSTR-1 vs GSTR-3B) or inconsistencies in Input Tax Credit (ITC) between GSTR-3B and GSTR-2B.
- Form: ASMT-10.
- Time Limit: Usually 30 days to respond.
- How to respond online: 1. Log in to the GST Portal.
2. Go to Services > User Services > View Additional Notices/Orders.
3. Click on ‘View’ and file your reply in Form ASMT-11. - Sample Reply Format:
“With reference to Notice No. [XXX] dated [Date], we state that the discrepancy of ₹[Amount] in ITC is due to [Reason, e.g., credit note not reflected by supplier]. Supporting invoices and reconciliation statements are attached for your perusal.”
Notice under Section 67 — Search & Seizure Notice
This is the most severe enforcement action, usually reserved for cases of massive tax evasion or “circular trading.”
- Authority: Only an officer of the rank of Joint Commissioner or above can authorize this.
- Rights of Taxpayer:
- You can demand to see the Search Warrant and the officer’s ID.
- You are entitled to a copy of the Panchnama (inventory of seized items).
- You can make copies of seized documents in the presence of an officer.
- Prohibition: Officers cannot seize “stock-in-trade” unless it is liable for confiscation; they usually only seize “documents, books, or things.”
Notice under Section 62 — Best Judgment Assessment
This notice is the “nightmare scenario” for non-filers.
- What happens: If you fail to file GSTR-3B or GSTR-4 even after a reminder (GSTR-3A), the officer can assess your tax liability based on their “best judgment” using available data (like your E-way bills or GSTR-1).
- Form: ASMT-13.
- How to Revoke: The assessment order is automatically withdrawn if you file the pending valid return within 30 days of receiving the order. However, late fees and interest remain payable.
Notice under Section 73/74 — Demand Notice
- Section 73 (Non-Fraud): Issued for mistakes or clerical errors, the penalty is 10% of the tax or ₹10,000 (whichever is higher), and the order must be passed within 3 years.
- Section 74 (Fraud/Suppression): Issued for wilful misstatement, fraud, or tax evasion, the penalty is 100% of the tax amount, and the order must be passed within 5 years.
- Additionally, a DRC-01A (Pre-notice Consultation) may be issued before the formal SCN, allowing the taxpayer to voluntarily pay the tax and interest to avoid heavy penalties.
Notice under Section 29 — Cancellation of GST Registration
- Reasons: Non-filing for 6 months, conducting business from a non-declared place, or obtaining registration by fraud.
- Form: REG-17 (Show Cause Notice for Cancellation).
- How to Reply: Submit REG-18 within 7 working days explaining why your GST should not be cancelled.
- Revocation: If cancelled, you can apply for revocation in REG-21 within 90 days (extendable up to 270 days with permissions).
Notice under Section 65/66 — Audit Notices
- Section 65 (Departmental Audit): Conducted by GST officers at your place of business. You receive a notice in ADT-01 at least 15 days in advance.
- Section 66 (Special Audit): If the department finds the case complex or turnover values suspicious, they can direct a Chartered Accountant (CA) or CMA nominated by the Commissioner to conduct an audit.
Received Any of These GST Notices?
- DRC‑01 / DRC‑01C mismatch notice
- Excess ITC demand or reversal
- Fake invoice or bogus supplier allegation
- GST Registration Cancellation (REG‑17)
STATE-WISE GST NOTICE DETAILS
In Bihar, GST administration is governed by the Bihar Commercial Taxes Department. Understanding the local hierarchy and specific triggers is crucial for timely compliance.
GST Notices in Bihar — Full Process for Taxpayers
Jurisdiction of Bihar SGST
Bihar is divided into 9 Administrative Divisions, which are further broken down into Circles. Your notice will typically be issued by the Assistant/Deputy Commissioner of your specific Circle.
- Key Divisions: Patna (Central, West, East), Bhagalpur, Tirhut (Muzaffarpur), Saran, Darbhanga, Purnea, Magadh (Gaya).
- State Code: 10 (The first two digits of your GSTIN).
Common Reasons for Notices in Bihar
While national triggers apply, Bihar taxpayers often see increased scrutiny in these areas:
- E-way Bill Mismatches: Frequent checks on the NH-2 (GT Road) and NH-31 routes lead to many detention notices under Section 129.
- Data Analytics (BIFA): The Bihar government uses the Business Intelligence & Fraud Analytics (BIFA) tool to flag mismatches between GSTR-3B and GSTR-1 instantly.
- Professional Tax Links: In Bihar, the department often cross-references GST turnover with Professional Tax payments.
Important Offices and Contact Points
If you receive a notice and need clarification, you can contact the Helpdesk or visit the Head Office:
- Head Office: Commissioner & Secretary, Vikas Bhawan, Bailey Road, Patna – 800015.
- Toll-Free Helpdesk: 1800-3456-102
- Landline: 0612-2233512 / 13 / 14 / 15
- Email: cct@bihar.gov.in / vattcs.helpdesk@gmail.com
Time Limit for SCN Reply in Bihar
- Standard SCN (Sec 73/74): Usually 30 days from the date of service.
- Scrutiny (ASMT-10): 30 days (Form ASMT-11).
- Registration Cancellation: Only 7 working days to reply to REG-17.
Bihar-Specific Jurisdiction & Contact Table
Division | Major Circles | Contact Email (Official) |
Central Div (Patna) | Patliputra, Patna Special | ctd.patliputra@bihar.gov.in |
Patna West Div | Danapur, Gandhi Maidan, Patna Central | ctd.gandhimaidan@bihar.gov.in |
Tirhut Div | Muzaffarpur East/West, Motihari, Bettiah | ctd.muzaffarpureast@bihar.gov.in |
Magadh Div | Gaya, Aurangabad, Sasaram | ctd.gaya@bihar.gov.in |
Purnea Div | Purnea, Katihar, Kishanganj | ctd.purnea@bihar.gov.in |
Darbhanga Div | Begusarai, Darbhanga, Samastipur | ctd.begusarai@bihar.gov.in |
GST NOTICE RESPONSE TEMPLATES
Responding to a GST notice requires a mix of factual data, reconciliation, and legal language. In 2025, the GST portal has made this process entirely digital.
Ready-to-Use Templates
Subject: Reply to Notice Ref No: [Notice ID] regarding Scrutiny of Returns.
Respected Sir/Madam,
With reference to the discrepancies pointed out in Form ASMT-10, we wish to submit that the difference in tax liability is due to [e.g., a clerical error in GSTR-1 which was rectified in the subsequent month]. We have attached the reconciliation statement for the period [FY 2024-25]. We request you to drop the proceedings.
Subject: Clarification on Input Tax Credit (ITC) mismatch.
Respected Sir/Madam,
The notice alleges excess ITC of ₹[Amount]. Upon reconciliation, we found that:
- ₹[X] pertains to ITC of the previous year claimed in the current year as per Section 16(4).
- ₹[Y] is due to a timing difference where the supplier filed GSTR-1 late.
All tax-paying invoices and payment proofs are attached. As per legal precedents, ITC cannot be denied if the buyer has a valid invoice and has made the payment.
Subject: Response to SCN regarding alleged wrongful availment of ITC.
Respected Sir/Madam,
We strongly deny the allegation of “fake invoices.” The transactions with M/s [Supplier Name] are genuine. We have provided:
- Copy of Tax Invoices and E-way bills.
- Proof of payment via Banking Channels (Bank Statement attached).
- Evidence of physical receipt of goods (G.R. Note).
We acted in good faith and complied with all conditions of Section 16. We request a personal hearing to present further evidence.
Subject: Reply to SCN for Cancellation of Registration [Notice Date].
Respected Sir/Madam,
My GST registration was suspended due to non-filing of returns for [Number] months. The delay was caused by [e.g., medical emergency/technical glitch].
Current Status: I have now filed all pending returns up to [Month] and paid the late fees and interest of ₹[Amount]. Acknowledgment receipts are attached. I request you to revoke the suspension and restore my GSTIN.
Subject: Response to Best Judgment Assessment Order (ASMT-13).
Respected Sir/Madam,
We acknowledge the receipt of the assessment order. As per Section 62(2) of the CGST Act, we have filed the valid return for the period [Tax Period] on [Date] (ARN: [Number]).
Since the return has been filed within 30 days of the service of the assessment order, the said order deemed to be withdrawn. Kindly update your records.
COMMON MISTAKES IN HANDLING GST NOTICES
With the GST department deploying AI-driven tools like BIFA (in Bihar) and ADVAIT (Central), errors in handling notices are caught instantly. In 2025, a single procedural mistake can lead to the automated freezing of bank accounts or suspension of your GSTIN.
1. Ignoring Notices (The “Wait and See” Approach)
The most fatal mistake. Under Section 169, a notice is “served” once it is uploaded to the portal. Claiming you didn’t receive a physical letter is no longer a valid legal defense.
- Risk: Ex-parte orders (orders passed without your input) and immediate tax recovery.
2. Late Responses
Missing the 30-day window for an SCN or the 7-day window for registration issues.
- Tip: If you need more time, file an Interim Reply on the portal requesting an extension (Form GST ASMT-11 allows this).
3. Checking Only the “Primary” Notice Tab
Many taxpayers only check the “View Notices and Orders” section.
- Mistake: Significant notices (like ASMT-10 or SCNs) are often tucked away under User Services > View Additional Notices/Orders.
4.Using Generic or Non-Standard Reply Formats
Filing a simple “We have paid all taxes” without referencing the specific DIN (Document Identification Number) or legal sections.
- Solution: Use the standard templates provided in Section 4 of this guide.
5. Not Attaching Documentary Evidence
A reply without an invoice copy, bank statement, or E-way bill is treated as a mere “bare denial.”
- Tip: Ensure all attachments are in PDF/JPEG format and below 5MB.
6. Failure to Reconcile ITC (GSTR-2B vs 3B)
Replying to an ITC mismatch notice without a month-on-month reconciliation sheet.
Error: Not realizing that your supplier might have filed their GSTR-1 late, causing a “timing difference” rather than a “tax evasion.”
7. Missing the Personal Hearing (PH)
If the notice offers a date for a hearing, failing to attend (or send a representative) allows the officer to pass an order based solely on the department’s data.
- Pro-Tip: Always tick the “Yes” box for a Personal Hearing in your online reply.
8. Not Consulting a Professional Early
Handling a Section 74 (Fraud) notice without a CA or Advocate.
- Risk: Admitting to facts in your reply that can later be used for criminal prosecution.
9. Paying the Demand Without “Under Protest”
Paying a disputed amount just to stop the notice without marking the payment as “Paid Under Protest.”
- Consequence: This makes it nearly impossible to claim a refund later if you win the case on appeal.
DOCUMENTS REQUIRED FOR EACH TYPE OF NOTICE
With the GST department deploying AI-driven tools like BIFA (in Bihar) and ADVAIT (Central), errors in handling notices are caught instantly. In 2025, a single procedural mistake can lead to the automated freezing of bank accounts or suspension of your GSTIN.
1. Fundamental Tax Records
These are the primary documents used to verify the numbers reported on the GST Portal.
- GSTR-1 & GSTR-3B: Copies of all filed returns for the period under notice.
- GSTR-2B/2A Statements: Downloaded from the portal to prove ITC eligibility.
- Payment Challans (PMT-06): Proof of tax paid in cash for each month.
- GSTR-9 & 9C: Annual returns and reconciliation statements (for FY-specific audits).
2. Purchase and Sales Ledgers
Authorities will cross-check your “Books of Accounts” against your portal data.
- Purchase Register: Detailed list of all inward supplies, including vendor GSTIN, invoice date, and tax components.
- Sales Register: List of all outward supplies (B2B and B2C).
- Debit/Credit Notes: Documents issued for sales returns or price adjustments.
- RCM Ledger: A separate record of purchases where you are liable to pay tax under the Reverse Charge Mechanism.
3. Logistics and Movement Proofs
Particularly important for Bihar and West Bengal transit notices (Section 129/130).
- E-way Bills: All generated e-way bills linked to your sales invoices.
- Delivery Challans: Used for movement of goods for reasons other than sale (e.g., job work).
- Lorry Receipts (LR) / Goods Receipt Notes (GRN): Evidence of physical movement and receipt of goods to defend against “fake invoice” allegations.
4. Inventory and Financial Records
Required heavily during Section 65 (Departmental Audit) and Section 67 (Search).
- Stock Register: A real-time record showing Opening Balance, Inwards, Outwards, and Closing Balance of all raw materials and finished goods.
Note: Discrepancies between physical stock and the Stock Register are a major source of high-value penalties. - Bank Statements: Clear records showing payments made to suppliers within 180 days (to avoid ITC reversal under Rule 37).
- Trial Balance & Profit & Loss Account: To reconcile “Total Turnover” as per Financials vs. “Taxable Turnover” as per GST.
- Fixed Asset Register: To track ITC claimed on capital goods and its subsequent depreciation.
PENALTIES UNDER GST NOTICES
The GST penalty structure in 2025 is designed to reward early compliance while severely punishing intentional evasion. Penalties are primarily governed by Sections 73, 74, and 122 of the CGST Act.
GST Penalties — Full Chart (Updated 2026)
1. Late Fees for Delayed Filing
Late fees are automatic and are calculated from the day following the due date until the actual date of filing.
Return Type | Nature of Return | Daily Late Fee (CGST + SGST) | Maximum Cap (Per Return) |
GSTR-1 / 3B | Nil Return | ₹20 per day | ₹500 |
GSTR-1 / 3B | Turnover < ₹1.5 Cr | ₹50 per day | ₹2,000 |
GSTR-1 / 3B | Turnover ₹1.5 – 5 Cr | ₹50 per day | ₹5,000 |
GSTR-1 / 3B | Turnover > ₹5 Cr | ₹50 per day | ₹10,000 |
GSTR-9 (Annual) | All Filers | ₹200 per day | 0.5% of State Turnover |
2. Interest on Late Payment (Section 50)
Interest is mandatory and must be self-assessed, even if not mentioned in a notice.
- Delayed Tax Payment: 18% per annum on the net tax liability (portion paid via cash ledger).
- Wrongful ITC Claim (Availed & Utilized): 24% per annum.
Crucial Update: If you claimed wrong ITC but did not utilize it (i.e., your credit ledger balance never fell below that amount), no interest is payable upon reversal.
3. Demand & Recovery Penalties (The “Graduated” Scale)
The penalty amount depends on whether the department classifies your case as Non-Fraud (Sec 73) or Fraud (Sec 74).
Timing of Payment | Non-Fraud (Sec 73) | Fraud / Suppression (Sec 74) |
Before SCN is issued | 0% (No Penalty) | 15% of tax amount |
Within 30 days of SCN | 0% (if tax + int. paid) | 25% of tax amount |
After 30 days of SCN | 10% of tax or ₹10k (Higher) | 50% of tax amount |
After Final Order (DRC-07) | 10% of tax or ₹10k (Higher) | 100% of tax amount |
Penalties for Specific Offences
- Fake Invoicing (Section 122(1A)): In 2025, the law targets the “beneficiary” of the fake invoice. The penalty is 100% of the tax evaded or ITC passed on. Additionally, if the fraud exceeds ₹2 Crores, it can lead to immediate arrest and imprisonment up to 3 years.
- ITC Mismatch: If the mismatch is due to a clerical error, it falls under Section 73 (10% penalty). If it’s proven that you knowingly took credit on missing invoices, it’s treated as fraud (100% penalty).
- E-Way Bill Violations (Section 129): If goods are intercepted without a valid E-way bill, the penalty is 200% of the tax payable. For exempted goods, the penalty is 2% of the value or ₹25,000 (whichever is less).
GST Appeal Procedure After a Notice
If you disagree with the findings in a GST order (Form DRC-07), the law provides a structured multi-tier appeal mechanism. In 2025, the activation of the GST Appellate Tribunal (GSTAT) has significantly changed the second-level appeal process.
1.First Appeal
- Authority: Appellate Authority (Section 107)
- Form: GST APL-01 (Online)
- Time Limit: 3 months + 1 month extension
- Pre-deposit: 10% of disputed tax
Note: Remaining 90% demand is automatically stayed
2.Second Appeal
- Authority: GST Appellate Tribunal (GSTAT)
- Form: GST APL-05
- Time Limit: 3 months from First Appeal order
- Pre-deposit: Additional 10% (Total 20%)
2026 Update: GSTAT now operational with e-Courts Portal
3.High Court & Supreme Court
- High Court: Only for “Substantial Question of Law”
- Time Limit: 180 Days
- Supreme Court: Final authority
Note: Cannot appeal simple factual disputes at HC level
Bihar-Specific Appeal Rules & Contacts
Jurisdiction in Bihar: First appeals are handled by the Joint Commissioner (Appeals) of your respective division.
Important Appellate Offices:
- Patna: Central Revenue Building, Birchand Patel Path
- Gaya: Divisional Office, Gandhi Maidan Road
- Muzaffarpur: Commercial Taxes Building, Maripur
⚡ Patna High Court Writs: For urgent matters like bank account freezing or orders passed without hearing, file a Writ Petition (Article 226) for immediate relief.
How the GST Department Detects Irregularities
1. AI-Based Mismatch Detection
The GSTN (GST Network) uses artificial intelligence to perform “Genome Mapping” of taxpayers.
- Peer Group Analysis: The AI compares your tax profile with other businesses in the same sector and geography (e.g., a steel trader in Patna). If your ITC-to-Sales ratio is significantly higher than your peers, the system auto-triggers an ASMT-10 (Scrutiny Notice).
- Automated Red Flags: Real-time matching between GSTR-1 (Sales) and GSTR-3B (Payment) is now instantaneous. By July 2025, the system introduced “Hard-locking,” preventing taxpayers from manually editing auto-populated liability values in GSTR-3B.
2. GSTN Risk Scoring
Every taxpayer is assigned a System-generated Risk Rating.
- Low Risk: Eligible for 90% “Provisional Refunds” within days (Instruction No. 06/2025).
- High Risk: Placed under “Intense Scrutiny” where even small refunds are withheld until a physical audit is conducted. Factors affecting your score include filing history, vendor compliance, and Aadhaar authentication status.
3. Biometric & Aadhaar Verification Failures
To combat the ₹3,000+ crore fake registration scams detected in 2025, the government now mandates Biometric-based Aadhaar Authentication.
- The Trap: If a registrant fails biometric verification or skips the “Ghar Se” (location) verification, the GSTIN is suspended immediately, and a notice in REG-17 is issued.
4. E-Invoice & E-Way Bill Analytics
The integration of these two systems has created a “Track and Trace” mechanism.
- The Logic: If you generate an E-invoice but no corresponding E-way bill (or vice versa), the system flags it as a “Potential Bogus Supply.”
- 2025 Update: Unique Identification Marking (Track and Trace) is now mandatory for evasion-prone goods like cigarettes and pan masala, allowing the department to track every single pack from factory to retailer.
5. BIFA (Business Intelligence and Fraud Analytics)
BIFA is the primary tool used by State GST officers (including Bihar SGST).
- Supply Chain Tracking: It can trace an invoice through 10 layers of buyers. If the 10th buyer claims ITC from a “Shell Company” at the 1st layer, BIFA alerts the officers of every buyer in between.
- Network Diagrams: Officers can view a visual map of your “business community.” If you are linked to “Risky Taxpayers,” you will receive a notice under Section 74 (Fraud).
6. DGARM (Directorate General of Analytics and Risk Management)
This is the “Brain” of the CBIC.
- Data Mining: DGARM cross-references GST data with other government databases like Income Tax (PAN), Customs (ICEGATE), and MCA (Company records).
- Actionable Intelligence: DGARM identifies “risky” exporters and “risky” suppliers and shares these lists directly with field officers for immediate raids or summons.
Need Help Filing an Appeal?
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Advanced Notice Analytics: How You Get Flagged
In 2025, the GST department has shifted from "random checks" to "predictive enforcement." If you receive a notice today, it is likely because a machine learning algorithm flagged your profile before a human officer even saw your name.
Landmark Case Laws (2026 Updates)
Personal Hearing is Mandatory (Section 75(4))
- Case: Exide Industries Ltd vs. Assistant Commissioner (Delhi High Court, 2025)
- Verdict: The Court set aside a ₹12 Crore demand because the officer passed the order without a personal hearing. The Court ruled that even if the taxpayer does not specifically request a hearing, the officer must grant one if they intend to pass an adverse order.
- Key Takeaway: If your order was passed without a hearing date, it is legally void.
Cancellation of Closed Firms (Alternative Service)
- Case: M/S Kapoor Marketing vs. State of U.P. (Allahabad High Court, Dec 2025)
- Verdict: For a business that has surrendered its registration, the department cannot just upload notices on the GST portal (which the taxpayer no longer accesses). They must use alternative modes like registered post or physical service under Section 169.
- Key Takeaway: Notices served only on an “inactive” portal for a closed firm are invalid.
Notices in “Additional Notices” Tab
- Case: M/s Raiyan Traders vs. State of Bihar (Patna High Court, 2024-25)
- Verdict: The court noted that many notices are “hidden” in the portal. While it is the taxpayer’s duty to check, the court has been lenient in remanding cases for fresh hearings if the taxpayer can prove they missed the notice due to it being placed in the wrong tab.
Bona Fide Purchaser’s Right to ITC
- Case: Commissioner of Trade & Tax vs. M/s Shanti Kiran India (Supreme Court, Oct 2025)
- Verdict: In a historic win for buyers, the SC held that ITC cannot be denied to a purchaser who paid tax in good faith, even if the supplier later fails to deposit that tax or has their registration cancelled retrospectively.
- Key Takeaway: You are not a “policeman” for your suppliers. If you have a valid invoice and payment proof, your ITC is safe.
Pre-deposit via Credit Ledger
- Case: M/s Raiyan Traders vs. State of Bihar (Patna High Court, 2024)
- Verdict: The court allowed taxpayers to pay the 10% pre-deposit for appeals using the Electronic Credit Ledger (ITC) instead of cash, pending a final decision by the Supreme Court.
- Key Takeaway: In Bihar, you can currently use your ITC balance to file an appeal.
No Retrospective Cancellation Mismatch
- Case: M/s Himalaya Communication vs. Union of India (Himachal Pradesh HC, June 2025)
- Verdict: ITC cannot be denied mechanically just because a supplier’s GST was cancelled retrospectively. The department must prove fraud or collusion between the buyer and seller.
GSTR-2A vs 3B is Not Absolute
- Case: Calcutta High Court (2025)
- Verdict: A discrepancy between GSTR-2A and 3B is not sufficient grounds for ITC rejection if the taxpayer can provide physical proof of goods movement (E-way bills/LR).
Expert Help for (GST Notices in Bihar)
Receiving a GST notice can be overwhelming, but you don't have to navigate the legal complexities alone. In Bihar, the tax environment is increasingly digital and stringent, making professional intervention a strategic necessity rather than just an option.
Why Seek Professional Assistance?
How a GST Lawyer Helps in Responding to GST Notices
GST notices are statutory communications issued under the Central or State GST laws and require strict legal compliance within prescribed timelines. An incorrect, delayed, or incomplete response may result in adverse consequences such as tax demand, penalty, interest, suspension, or cancellation of GST registration. A GST lawyer ensures that notices are handled lawfully, accurately, and within time.
Identification of the Nature and Legal Basis of Notice
A GST lawyer first examines:
The section under which the notice is issued
The authority issuing the notice
The allegations and proposed action
This helps determine whether the notice relates to:
Registration discrepancies
Return mismatches
ITC issues
Audit, inspection, or enforcement proceedings
Correct identification is crucial for an effective reply.
Verification of Jurisdiction and Procedural Validity
Many GST notices suffer from:
Lack of jurisdiction
Mechanical issuance
Absence of supporting material
A GST lawyer checks whether the notice complies with:
Statutory provisions
Principles of natural justice
Applicable rules and circulars
Procedural defects can be a strong legal defence.
Drafting a Legally Sustainable Reply
A GST lawyer drafts replies that:
Address each allegation specifically
Are supported by documents and records
Rely on statutory provisions, rules, and judicial precedents
This prevents vague or self-incriminatory responses that may weaken the taxpayer’s position.
Ensuring Timely and Proper Filing of Reply
GST notices are time-bound. A GST lawyer:
Tracks statutory deadlines
Ensures replies are filed within time
Prepares condonation or extension requests where permissible
Timely compliance avoids ex parte orders and penal consequences.
Preparation and Organisation of Supporting Documents
A GST lawyer assists in:
Compiling invoices, returns, and reconciliations
Explaining mismatches or discrepancies
Presenting documents in a legally acceptable format
Proper documentation strengthens the factual defence.
Representation During Personal Hearing
Where personal hearing is granted, a GST lawyer:
Makes oral submissions before the authority
Clarifies factual and legal issues
Counters departmental allegations effectively
This often plays a decisive role in notice proceedings.
Preventing Escalation to Adjudication or Recovery
A well-drafted reply can:
Close the proceedings at notice stage
Prevent adjudication orders
Avoid recovery, attachment, or registration cancellation
Early legal intervention reduces litigation risk.
Guidance on Further Remedies
If the authority passes an adverse order, a GST lawyer:
Advises on appeal or writ remedies
Assesses limitation and pre-deposit requirements
Strategically plans further legal action
Importance of Legal Assistance in GST Notices
GST notices involve serious civil and financial consequences. Professional legal assistance ensures that statutory rights are protected and responses are accurate, complete, and legally defensible.
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Don't wait for a small discrepancy to turn into a legal demand