Who can issue a show cause notice under section 74?
Asked by: Jordi Kilback DDS | Last update: April 6, 2026Score: 4.3/5 (44 votes)
A Show Cause Notice (SCN) under Section 74 of the CGST Act is issued by proper GST officers (tax authorities), including Superintendents, Deputy/Assistant Commissioners, and Additional/Joint Commissioners of Central Tax, for cases involving tax evasion due to fraud, willful misstatement, or suppression of facts, empowering them to initiate recovery proceedings for unpaid taxes, interest, and penalties with an extended limitation period.
Who can issue a show cause notice under section 74 of CGST?
What is Section 74 of the CGST Act? Non-payment of GST, misreporting or erroneous refund and excess appropriation of input tax credit can occur for various reasons, and an appropriate GST officer can issue show cause notices to the respective GSTIN holders.
Who has the power to invoke section 74?
Tax authorities invoke Section 74 when they detect specific fraudulent patterns in your GST compliance: Intentional Non-payment of GST – Collecting tax from customers but not depositing it with the government.
Who can issue a show cause notice?
A Show Cause Notice (SCN) is a formal notice issued by the tax authorities under the Goods and Services Tax (GST) in India, to a taxpayer, requiring them to explain or justify a particular action or inaction that is in violation of the GST laws.
Who is the proper officer for issuing SCN?
SCNs issued by the Officers of Audit Commissionerates and Director General GST Inteligence: As per this circular, the central tax officers of Audit Commissionerates and Directorate General of Goods and Services Tax Intelligence (“DGGSTI”) shall exercise the powers only to issue show cause notices.
Showcause Notice - Sec.74 of the GST Act
Who are the proper officers under section 74A of Cgst act?
Additional/Joint Commissioner, Deputy/Assistant Commissioner, and Superintendent of Central Tax – designated as proper officers for functions under Section 74A – determination of tax in cases other than fraud (newly notified provision), Section 122 – imposition of penalties, Rule 142(1A) – pre-show cause notice ...
What are the grounds for a show cause notice?
An Order to Show Cause is a court directive requiring you to appear before a judge to explain why you should not be held in contempt for allegedly violating a court order. It is typically filed by the opposing party when they believe you failed to comply with a previous court ruling.
Who should write a show cause letter?
A show cause letter, also known as a notice to explain or a disciplinary letter, is a formal document issued by an employer to an employee. Its purpose is to inform the employee of specific concerns or allegations regarding their behavior, performance, or any other issue that requires clarification.
How to make a show cause notice?
A well-drafted show cause notice should include the following key elements:
- Name and designation of the sender and recipient.
- Detailed description of the alleged misconduct or issue.
- Date(s), location(s), and facts supporting the allegation.
- Reference to applicable laws, policies, or clauses violated.
What is the time limit for issuing a notice under section 73?
Section 73 of the CGST Act Time Limit
The newly added Section 74A prescribes clear time limits as follows: The notice should be issued within 42 months of: the last day of filing the annual return or. The erroneous refund.
What are common disputes under section 74?
Section 74 of the CGST Act deals with cases where tax has not been paid, wrongly refunded, or ITC has been wrongly claimed with the intention to evade tax. It empowers the GST department to issue a demand notice and initiate proceedings in matters involving fraud or deliberate misstatement.
What is the difference between Section 73 and 74?
Section 73 applies to any tax liability when there is no suspicion of fraud, wilful misstatement or suppression of facts. Section 74 applies to a tax liability only when there is a suspicion of fraud, wilful misstatement or suppression of facts.
What is the role of intent in Section 74?
The commonalities between all three factors of Section 74 is judging the intention of the taxpayer by whom the mistake is made. Hence, the intention behind the mistake/error of the taxpayer, identifies the provisions under which the show cause notice is issued and gives a character to the taxpayer.
What is the difference between Section 73 and 74 of the ICA?
Section 73 of the Contract Act pertains specifically to liquidated damages, which are predetermined amounts agreed upon by the party at the time of the contract. Section 74 deals with unliquidated damages, addressing situations where the parties have not predetermined the compensation in the event of a breach.
What is the purpose of a notice to show cause?
Notice to Show Cause: A formal notice requiring an individual or business to explain or justify their actions to avoid a particular consequence, such as termination, disciplinary action or legal penalties. Purpose: Ensures procedural fairness by giving the recipient an opportunity to respond before a decision is made.
Can an internal auditor do a GST audit?
Only a Chartered Accountant or a Cost Accountant can perform a GST Audit u/s 35. Points to Note: An internal auditor cannot parallelly be appointed as a GST Auditor.
What is the time limit for show cause notice under section 74?
Time limit/period for issuing SCN under Section 74:
Accordingly, SCN for fraud cases will have to be issued on or before 6 months prior to expiry of 5 years from the date of filing of annual return/erroneous refund.
How to issue a show cause letter?
The notice should:
- be clear and free from emotion;
- be issued as soon as practicable;
- identify the issue, which may be a breach of a law, code of conduct, or term of employment;
- state the standard of performance expected;
What are the essentials of show cause notice?
Basic Features of Show Cause Notice
Cogent and straight forward. Simple language with clean logic. All facts shall be marshalled. There should not be any ambiguity as to the facts or to the legal provisions.
When should a show cause letter be issued?
As a preliminary step before the commencement of disciplinary proceedings, the employee should be given a show cause letter, which states, in precise terms, the particulars of the misconduct the employee is alleged to have committed.
What are common mistakes in show cause replies?
Common Mistakes to Avoid in Show Cause Letters
- Mistake 1: Unclear Language and Ambiguity.
- Mistake 2: Skipping the Formalities.
- Mistake 3: Failing to Offer Guidance or Support.
- Mistake 4: Neglecting Employee Rights.
- Mistake 5: Lack of Follow-Up.
- Frequently Asked Questions(FAQs)
Can HR issue a warning letter?
If the employee repeats or commits another misconduct or doesn't improve performance within a set time frame the employer can then give a final written warning which must explicitly warn the employee that if they might be dismissed if they don't meet the requirements of the final written warning.
What are the four types of notice?
Types of notices
- Actual notice.
- Constructive notice.
- Funding Opportunity Announcement.
- Judicial notice.
- Notice of proposed rulemaking (administrative law)
- Previous notice (parliamentary procedure)
- Public notice.
- Resign.
How to start a show cause letter?
Dear [insert name], I have received [a report/an investigation report/a statement/information] dated [insert date], from [investigator/complainant/internal consultant/external consultant], concerning [insert high-level description of allegation[s].
What is the time period for show cause notice?
Where a person has made payment of taxes, interest or other dues in form DRC-03within 30 days of issuance of show cause notice/statement in formDRC-01 or formDRC-02 and if the proper officer is satisfied with the intimation of payment of tax and other dues againstsuch notice, then the officer shall issue an order in ...