A show cause notice in Form DRC-01 demands tax with interest and penalty. For FY 2017-18 to 2023-24, notices are issued under Section 73 (non-fraud) or Section 74 (fraud or suppression). For FY 2024-25 onwards, both situations are covered by Section 74A.
GST, Chhattisgarh
What this notice means
The reply in Form DRC-06 is the main defence document. It must answer each allegation on facts and law, challenge wrong invocation of the extended period, and request a personal hearing.
Common reasons it is issued
- ITC mismatch or ineligible ITC
- Short payment of tax or rate classification
- Fake invoice allegations against suppliers
- Audit and investigation findings
Time limit to respond
Documents to keep ready
- SCN, its annexures and relied-upon documents
- Returns, books and invoices for the period
- Supplier confirmations and payment proofs
- Earlier ASMT / audit correspondence
How we handle it
- Check limitation, jurisdiction and whether fraud or suppression is actually alleged
- Prepare a para-wise reply in DRC-06 with evidence and case laws
- Attend the personal hearing and file written submissions
- Evaluate rectification or appeal after the order
Points to note
- Ask for relied-upon documents if not supplied
- Payment of tax and interest within 30 days of a non-fraud SCN can avoid penalty
What usually comes next
- First Appeal u/s 107Appealing the demand order
- Rectification u/s 161Correcting errors in the order
- Stay of GST RecoveryStopping recovery after the order
- Tax Notices and Appeals in ChhattisgarhGST offices and tribunal for Chhattisgarh
Frequently asked questions
Can the extended period be challenged?
Yes. Section 74 (or the fraud limb of 74A) requires specific allegations of fraud, wilful misstatement or suppression. Many notices invoke it without basis.
Is a personal hearing compulsory?
A personal hearing must be granted when requested or when an adverse decision is contemplated. Always request one in the reply.
Official sources
- GST portalgst.gov.inView notices, file replies and first appeals
- CBIC – GSTcbic-gst.gov.inCGST Act, rules, notifications and circulars
Received a notice or an order?
Call us to talk it through. Keep the notice and its response date handy.