Delhi GST Department issues Instructions on Scrutiny of GST Returns for FY 2017-18

The Delhi Goods and Services Tax (GST) department has issued instructions on scrutiny of GST returns for Fiscal year 2017-18 on 31st October 2023.

In relation to the subject mentioned above, the Proper Officers have issued show cause notices (SCNs) pertaining to the fiscal year 2017-18. It’s worth noting that Subsection (8) of Section 73 of the Delhi Goods and Service Tax Act, 2017 (DGST Act) prescribes a 30-day time frame within which taxpayers are expected to submit their responses or representations concerning the mentioned SCN. Additionally, Sub-section (4) of Section 75 of the DGST Act specifies that before any adverse order is issued, a personal hearing is mandatory.

The department has noted that, in certain instances, Situation Compliance Notices (SCNs) have been issued with a fixed personal hearing date before the 30-day deadline expires. It is important to clarify that conducting personal hearings before submitting any written reply or representation would not be of any significant benefit.

Furthermore, there have been instances where SCNs were issued to address discrepancies, even though earlier notices in FORM GST ASMT-IO had already been issued, and proceedings had been finalized by providing information in Form GST ASMT-12. This situation also applies to cases where audit proceedings have been concluded. Consequently, it would not be appropriate to adjudicate matters that have already been resolved or dismissed under Section 61 of the DGST Act or settled during audit proceedings.

In this regard, the following clarifications are issued for compliance concerned:

1. Cases where notices have been issued even after completion of audit proceedings, SCNs need to be withdrawn after following the required course of action on the audit report.
2. Cases where notices have been issued after completion of scrutiny of return proceedings, SCNs need to be withdrawn to the extent of subject matter or issues which have already been covered in previous proceedings, after due verifications and recording of reasons.

3. In cases of ITC reversal, Proper Officer shall make due verification of input used for making taxable/non taxable supplies or input used for non-business or personal purposes or making exempt supply.

4. In cases of blocked credit where notices have been issued on the basis of HSN/SAC Codes OR cases where transactions have been made with cancelled taxpayers, Proper Officer shall examine relevant facts along with supporting records and take decisions on a case to case basis, in accordance with law.

5. Proper Officer shall provide a personal hearing after filing of reply/representation by the taxpayer or after the expiry of a period of 30 days, as the case may be. Moreover, before passing any adverse order, a personal hearing must be given to the taxpayer in terms of Section 75(4).

6. Proper Officer shall also duly record/document the proceedings of personal hearing.

7. In cases where it comes/has been brought to the knowledge of Proper that the notice is required to be withdrawn, the Proper Officer after recording reasons may, without any written submission of the taxpayer or any personal hearing, drop the proceedings on the basis of facts and contents of each case.

8. A taxpayer must be informed about dropping of proceeding without fail, wherever applicable.

The department has emphasised that it is imperative for all Proper Officers to meticulously follow the legal regulations and the applicable guidelines and circulars in this context. Non-compliance will result in stringent measures being taken. Furthermore, it is essential to guarantee that no undue hardship is imposed on any taxpayer, and the department receives the rightful tax amounts.

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