If an individual is found liable for tax, interest, and penalties under section 73 or 74 of the CGST Act, the concerned officer is required to complete Part A of Form GST DRC-01A. This section of the form should include detailed information regarding the determined amounts for tax, interest, and penalty. Providing accurate specifics in Part A ensures a comprehensive record of the liabilities imposed under the CGST Act in such cases.
Intimation of Tax Ascertained Payable under Form GST DRC-01A
Under the Central Goods and Services Tax Act, Section 73 pertains to situations involving tax non-payment or under-payment without the element of intent or allegation of fraud. In contrast, Section 74 addresses cases of tax evasion or underpayment specifically with the intention of defrauding the government.
Understanding Role of Form GST DRC-01A in the Context of Sections 73 and 74
In this context, it is essential to examine Form GST DRC-01A, which serves as a means of providing intimation regarding the tax ascertained as payable in accordance with the provisions outlined in Sections 73 and 74 of the CGST Act. It is important to understand the details of the said form for purposes of taxation.
Purpose of Issuing Form DRC-01A in GST
In the pre-GST Rules scenario, the proper officer was required to issue a summary in either Form GST DRC-01 or Form GST DRC-02, depending on the nature of the case, when issuing a notice or statement detailing the specifics of the tax payable. However, with the addition of this new sub-rule, there is a procedural shift. Now, before issuing the notice or statement, the amount of tax, interest, and penalty owed must be communicated to the taxpayer. Consequently, instead of a show-cause notice, the issuance of Form DRC-01A serves as an intimation in accordance with the GST Registration Process.
Recent Judicial Pronouncements on Form DRC-01A in GST
Mentioned below are some recent judicial decisions concerning the form DRC-1A:
Case: Shri Tyres Vs State Tax Officer
In a recent case involving Shri Tyres and the State Tax Officer, the assessee received a Section 73 order from the Competent Authority. Subsequently, the assessee filed a writ petition, contending that the prescribed procedure for issuing the impugned order had not been followed. Specifically, the petitioner argued that the impugned order lacked the requisite accompanying documentation in the form of Form GST DRC-01 and Form GST DRC-01A.
The Honourable High Court emphasised that the issuance of Form GST DRC-01 and Form GST DRC-01A is mandated by law under Rule 142 of the CGST Rules, 2017. The court clarified that this requirement was not merely a procedural formality; it constituted a legal obligation and failing to adhere to it would violate the rights of the assessee. Consequently, the court set aside the ruling and directed the Competent Authority to recommence the procedures, ensuring compliance with the rules, particularly Rule 142.
Case: M/S Nanhey Mal Munna Lal Versus State Of U.P.
In a more recent case, the Allahabad High Court, presided over by Justice Surya Prakash Kesarwani and Justice Jayant Banerji, highlighted the significance of Form GST DRC-01A as a pre-show cause notice indication aimed at minimising litigation.
The court underscored that Section 74(1) of the CGST Act, in conjunction with Rule 142(1A) of the CGST Rules, seeks to afford a pre-show cause notice opportunity to the dealer/assessee. This is facilitated through the filing of Part-A of GST DRC-01A. The court reasoned that such a provision benefits both the assessee and the department, ultimately reducing litigation. This approach aligns with the principles of natural justice at this early stage of the legal process.
Responding to a Notice on Form DRC-01A
Mentioned below is the process for responding to a notice on the said form:
1. Utilising Part B of Form DRC-01A:
When a taxpayer receives a notice in Form DRC-01A, it is crucial to engage with the process by using the designated sections effectively. Part B of the form provides an avenue for the taxpayer to communicate specific details:
Part-Payment Information:
If the taxpayer has made part-payment of the ascertained responsibility, this should be clearly communicated in Part B. Providing accurate and detailed information about the payment made helps in ensuring transparency in the proceedings.
Disputing Liability:
In case the taxpayer finds the liability ascertained in the notice to be unacceptable, this should also be stated in Part B. Clearly outlining the reasons for disputing the liability will aid in addressing the concerns effectively.
2. Making Submissions:
Should the taxpayer have any additional submissions or explanations related to the notice, these can be communicated in writing. The taxpayer may attach supplementary documents or provide a detailed written response to support their case.
Key Considerations:
- Accuracy and Clarity:
Ensure that all information provided in Part B is accurate and presented clearly. This includes details of any payments made and reasons for disputing the liability.
- Timely Response:
Adhere to the specified timelines for responding to the notice. Timely communication reflects cooperation and may positively impact the resolution process.
- Documentary Evidence:
If there are supporting documents or evidence relevant to the taxpayer’s case, these should be attached along with the response. This strengthens the credibility of the taxpayer’s position.
- Professional Assistance:
In complex cases, seeking professional advice or assistance may be beneficial. Tax experts or advisors like at StartupFino can provide guidance on the appropriate response and help navigate the proceedings.
By actively engaging with Part B of Form DRC-01A and providing comprehensive responses, the taxpayer contributes to a transparent and fair resolution process, potentially resolving any disputes or concerns effectively.
Final Thoughts
Form GST DRC-01A plays a vital role in the GST adjudication process. Its issuance, as mandated by law, ensures transparency and adherence to procedural requirements, as underscored in recent court judgments. The form allows taxpayers to respond effectively, particularly through Part B, enabling them to communicate part-payment details or dispute liabilities. Recent legal decisions, such as the Shri Tyres case and M/S Nanhey Mal Munna Lal case, emphasise the significance of complying with Form DRC-01A in accordance with GST rules. Effectively dealing with this form is crucial for both taxpayers and authorities, contributing to fair and just tax proceedings in the GST framework.
