Date:…………………..

To,
Assistant Commissioner
…………………………………….
…………………………………….

Subject: Reply to Show Cause Notice Issued Under Section 74 of CGST Act, 2017 (Request for SCN DRC-…… Withdrawal)

Dear Sir,

We acknowledge receipt of the Show Cause Notice (SCN) issued to us under Section 74 of the Central Goods and Services Tax Act, 2017, Reference number ……………………………..dated ……………….,

Upon thorough examination of the notice and the grounds on which it has been issued, we respectfully submit that the invocation of Section 74 in this instance is inappropriate and unjustified. We would like to bring to your attention the distinction between Section 73 and 74 of the CGST Act, 2017:

• Section 73 pertains to the determination of tax not paid or short paid or erroneously refunded, or Input Tax Credit (ITC) wrongly availed or utilized for any reason other than fraud or any willful misstatement or suppression of facts.
• Section 74 pertains to cases where tax not paid or short paid or erroneously refunded, or ITC wrongly availed or utilized is due to fraud or any willful misstatement or suppression of facts.

In our case, there is no evidence or indication of fraud, willful misstatement, or suppression of facts. The discrepancies noted are purely unintentional and occurred without any malafide intent. Therefore, the correct provision applicable to our case is Section 73, and not Section 74.

We would like to draw your attention to the judgment in the case of M/S. GREENSTAR FERTILIZERS LIMITED, REP. BY ITS CHIEF OPERATING OFFICER, E. BALU vs. JOINT COMMISSIONER (APPEALS)(MAD-HC) :(2024) 78 TLC(GST) 019, W. P. (MD)No. 26254 of 2022 And W. M. P. (MD)Nos. 20437 and 20438 of 2022, Dated – 11-06-2024 and AATHI HOTEL vs. THE ASSISTANT COMMISSIONER (ST) (FAC), NAGAPATTINAM DISTRICT (MAD-HC) :(2021) 48 TLC (GST) 128, W.P.NO. 3474 OF 2021 AND W.M.P.NOS. 3980 & 3982 OF 2021, Dated – 08-12-2021 where it was held that for a notice under the provision dealing with fraud, there must be a clear indication of intent to evade tax, which is absent in our case.

In light of the above, we kindly request you to:

1. Reconsider the issuance of the Show Cause Notice (SCN) under Section 74.
2. Withdraw the Show Cause Notice (SCN) issued under Section 74.
3. If deemed necessary, reissue the notice under the appropriate provision, i.e., Section 73 of the CGST Act, 2017.

We are committed to complying with all applicable tax regulations and ensuring that any inadvertent discrepancies are promptly rectified. We look forward to your understanding and cooperation in resolving this matter amicably.

Thank you for your attention to this matter. Please feel free to contact us at [your contact number] or [your email address] for any further information or clarification.

Yours sincerely,

For
…………………………………
Designation ………………………….
E-mail ID …………………………………
Mobile No. ………………………………

Attachments: Copy of:

1. The Show Cause Notice (SCN) DRC-……..
2. Relevant documents ………………………………
3. Evidence supporting our claim …………………..
4. ……………………………………………………