Understanding Adjudication Proceedings & Penalty Under GST

WEEKEND MCQ SELF CHALLENGE #018

Special Focus On Adjudication Proceedings & Penalty Under GST

Dear Professional Seniors & Friends,

Welcome to this wonderful weekend MCQ self-challenge!

This weekend's challenge is on Special focus on Special Focus on Adjudication Proceedings & Penalty under GST having 5 MCQs to be self-answered by participants to take a challenge. The detailed answers to these MCQs shall be posted on Monday for the self-assessment of the participants. This post shall be of immense use to the participant providing them in depth knowledge shared by our tax consultant in Gurgaon.

MCQ 18.1: Mr. X has not paid taxes of F.V. 2017-18 due to reasons other than fraud. Tut what time a demand order can be made by the assessing officer?

A. Till 3 years from the date of filing an annual return.

B. Till 3 years from the due date of filing an annual return.

C. Till 5 years from the date of filing an annual return.

D. Till 5 years from the due date of filing annual return

MCQ 18.2: Which among the following is correct in the cases other than due to fraud?

A. Penalty is not required to be paid at any stage

B. Penalty is required to be paid after the issue of SCN.

C. Penalty is required to be paid only after demand order & Maximum penalty is 10% of Tax or Rs 10000

D. Penalty is required to be paid at the first stage, along with tax

MCQ 183: Which among the following is correct in the cases due to fraud?

A. Penalty is not required to be paid at any stage.

B. Penalty is required to be paid after the issue of SCN.

C. Penalty is required to be paid only after demand order & Maximum penalty is 109% of Tax.

D. Penalty is required to be paid at the first stage that is along with tax.

MCQ 18.4: Mr.X has been served a demand order 5 years from the due date of filing an annual return. He has filed an appeal in response to the same and M.X has been found to be an honest person.

A. Proceeding can be conducted by treating him as an honest person

B. Proceeding cannot be initiated since the order is issued after 3 years.

C. Proceeding cannot be initiated since the order was issued before 5 years notwithstanding that after filing the appeal he has found to be honest person

D. None of the above

MCQ 18.5: Appellate tribunal stays the service of notice or issuance of order for FY. 2017-18 by 2 years, Upto when can a demand order be raised by an assessing officer if the reason for the demand is due to fraud?

A. 3 years from the due date of filing an annual return.

B. 5 years from the due date of filing an annual return.

C. 7 years from the due date of filing annual return

D. None of the above.

Answer MCQ Self Challenge #018 Weekend Dhamaka

This post of MCQ is on the provisions relating to Adjudication Proceedings & Penalty under GST.

Answer MCQ 18.1:

B) Till 3 years from the due date of filing an annual return.

Answer MCQ 18.2:

C) Penalty is required to be paid only after demand order & Maximum penalty H 109% of Tax or Rs 10000 whichever is higher.

Answer MCQ 18.3:

D) Penalty is required to be paid at the first stage that is along with tax.

Practical Analysis For MCQ 18.1.18.2 & 18.3

Section 73 deals with cases other than due to fraud while Section 74 deals with cases due to fraud. The time limit for issuance of notice and demand order and the stage and amount of penalty applicable have been described in detail below in slides-

• As per the analysis of the provisions above. It is to be understood that the maximum time for issuance of demand order is 3/5 years from the due date of ting annual return for the relevant period.
  
• Also as far as penalty is concerned, in the case of Section 73 e no fraud case), the penalty is applicable only after a demand order has been issued, and that too up to a maximum of 10% of the Tax amount or Rs 10,000 whichever is higher.
  
• While penalty as per Section 746 e fraud case), the penalty is applicable at first stage i.e. as soon as default arises and the amount of penalty varies from 15% to 100% of tax amount as per the period of delay.

Based on the above Correct Answer to MCQ 18.1 : B) Till 3 years from the due date of filing an annual return, Correct answer to MCQ 18.2: C) Penalty is required to be paid only after demand order & Maximum penalty is 10% of Tax or Rs 10000 whichever is higher and Correct answer to MCQ 18.3: D) Penalty is required to be paid at the first stage that is along with tax.

Answer MCQ18:4:

B) Proceeding cannot be initiated since the order is issued after 3 years

Practical Analysis for MCQ 18.4:

• Section 75(2) provides that where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud or any wilful misstatement or suppression of facts to evade tax has not been established against the person to whom the notice was issued, the proper officer shall determine the tax payable by such person, deeming as if the notice were issued under sub-section (1) of section 73.
  
• As per Section 73, the time limit to issue an order is 3 years from the due date of furnishing the annual return.

Based on the above analysis. Correct Answer is 18.4: B) Proceeding cannot be initiated since the order is issued after 1 year.

Answer MCQ18.5:

C) years from the due date of filing annual return

Practical Analysis for 18.5:

• Section 75(1) provides that where the service of notice or issuance of order is stayed by an order of a court or Appellate Tribunal, the period of such stay shall be excluded in computing the period specified in Section 73 or 74 as the case may be.
  
• Our case belongs to reasons involving fraud for which the time limit is 5 years.
  
• 2 years, the tribunal has stayed the service of notice which will be excluded from the limit of 5 years.
  
• So total time limit available to the officer is 7 years from the due date of furnishing the annual return

Based on the above analysis Correct Answer is 18.5: C) 7 years from the due date of filing an annual return.

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen by change of facts, and the answer may be different Please do not treat this as professional opinion: you can definitely have your own opinion

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321