SECTION 45 SCRUTINY OF RETURNS

GST Update 05.09.2016

GST DAILY DOSE OF UPDATION:-

SECTION 45 SCRUTINY OF RETURNS:-

(1)              The proper officer may scrutinize the return and related particulars furnished by the taxable person to verify the correctness of the return in such manner as may be prescribed.

(2)              The proper officer shall inform the taxable person of the discrepancies noticed, if any, after such scrutiny in such manner as may be prescribed and seek his explanation thereto.

(3)              In case the explanation is found acceptable, the taxable person shall be informed accordingly and no further action shall be taken in this regard.

(4)              In case no satisfactory explanation is furnished within a period of thirty days of being informed by the proper officer or such further period as may be permitted by him or where the taxable person, after accepting the discrepancies, fails to take the corrective measure within a reasonable period, the proper officer may initiate appropriate action including those under section 49-Audit by tax authorities, 50-Special Audit or section 60-Power of Inspection, Search, Seizure and Arrest, or proceed to determine the tax and other dues under sub-section (6) of section 51 A or under sub-section (6) of section 51 B.

It is observed that if an assessee does not gives satisfactory reply for discrepancy noticed during the course of scrutiny of returns, then such assessee may be liable to face the audit by tax authorities or special audit being conducted or search, seizure and arrest proceedings being initiated against him. Hence, furnishing satisfactory reply for objections raised during scrutiny of returns will become another liability for the assessees. Not only this, it is prescribed that it may also result in passing of orders under section 51A (6) or 51B(6) thereby meaning that the letter stating discrepancy shall be deemed to be issuance of show cause notice under section 51A(1) or 51B(1). Hence, passing of ex-parte orders may become a common phenomenon in the proposed GST regime. This is for the reason that when a show cause notice is issued, opportunity of personal hearing is mandatorily required to be given but in case of mere discrepancy letters, opportunity of personal hearing may not be granted to the assessees for defending their case.

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GST Update 05.09.2016

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