Most GST disputes that end badly do not turn on the law. They turn on a reply that answered the wrong question, went to the wrong officer, or arrived after the date. The first discipline is to read the notice for what it is: which provision it is issued under, which period it covers, and when the reply is due.
Which notice is this?
| Form | What it is | Provision | Reply |
|---|---|---|---|
| ASMT-10 | Discrepancies found on scrutiny of returns | s. 61; r. 99 | ASMT-11, within the time stated (normally 30 days) |
| DRC-01A | Intimation of tax before a show-cause notice | r. 142(1A) | Pay, or reply in Part B |
| DRC-01 | Show-cause notice: the formal demand | s. 73, 74 or 74A | DRC-06 |
| DRC-07 | Order confirming a demand | s. 73, 74 or 74A | Appeal under s. 107 |
The form tells you the stage. A scrutiny notice is an invitation to explain; a show-cause notice is the start of formal proceedings, and the reply to it is the document an appellate authority will read years later.
Section 74A in brief
For tax periods up to 2023-24, demands are raised under section 73 (no fraud) or section 74 (fraud, wilful misstatement or suppression), each with its own time limit. For 2024-25 and later years, section 74A replaces both with a single procedure:
- One time limit. The show-cause notice must be issued within 42 months of the due date of the annual return for the year, and the order within 12 months of the notice. That period can be extended by up to six months by a senior officer.
- Fraud now affects the penalty, not the clock. Where there is no fraud, the penalty is 10 per cent of the tax or ₹10,000, whichever is higher. Where fraud or suppression is alleged, the penalty equals the tax, with reductions for early payment.
- Early payment still helps. Paying the tax and interest within 60 days of the notice reduces or removes the penalty, depending on the category.
- No notice for small amounts. No notice is issued where the amount for a financial year is below ₹1,000.
Because the fraud allegation no longer decides the time limit, a reply under section 74A must deal with two questions separately: whether the amount is due at all, and whether the facts support the fraud characterisation the notice relies on.
Reply discipline
- Log the notice the day it arrives. Record the form, provision, period, officer, reference number and due date. Notices served on the portal count as served, whether or not anyone has read them.
- Reconcile before you write. Most scrutiny points arise from differences between GSTR-1, GSTR-3B, GSTR-2B and the annual return. Build the reconciliation first; the reply follows from it.
- Answer each allegation in the notice’s own order. Quote the paragraph, state the facts, attach the evidence, cite the provision. Do not add arguments the notice did not raise without reason.
- Ask for time in writing, before the date. An adjournment request made after the date is an admission that the date was missed.
- File on the portal and keep the acknowledgement. A reply sent only by email may not be on the record.
Hearing and order
Before an adverse order, a personal hearing must be given where it is asked for or where an adverse decision is contemplated (section 75(4)). Adjournments are limited to three. Attend with the reconciliation and the documents the reply relied on, and ask for anything said at the hearing to be recorded.
If the order goes against you
An appeal lies to the appellate authority under section 107 within three months of the order, with a pre-deposit of 10 per cent of the disputed tax. The appeal is built on the reply: points not taken before the adjudicating officer are harder to raise later. That is the practical reason for writing the first reply as though it will be read by a tribunal.