A GST notice attributed to a State Tax Assistant Commissioner in Gujarat has raised questions over its stated justification for proceeding with a show cause notice: the department records that verification of the taxpayer’s reply could not be completed because of time constraints and administrative work.

The excerpt shared with JurisHour acknowledges that the taxpayer submitted explanations in response to DRC-01A. However, it states that additional documents, supporting records and detailed verification are required before the correctness of the taxpayer’s claims can be ascertained.

Despite recording that verification remains incomplete, the authority proposes issuing DRC-01 for determination of liability under the applicable provisions of the GST Act and Rules.

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Taxpayer’s Reply Considered, But Verification Remains Incomplete

Under the heading relating to the taxpayer’s submissions, the document records that a reply to DRC-01A was furnished, along with explanations concerning discrepancies identified by the department.

It further states that supporting documents and records are required to substantiate those explanations and facilitate complete reconciliation and verification of the issues raised.

In its observations, the adjudicating authority acknowledges that the taxpayer’s reply has been duly considered. It then explains why the examination could not be completed:

“Due to time constraints and the administrative work involved, complete verification could not be concluded at this stage.”

The document follows this statement with a proposal to issue DRC-01 to determine the taxpayer’s liability.

Administrative Constraints Become Part Of The Recorded Reasoning

The central concern arising from the excerpt is the connection drawn between the department’s inability to complete verification and its decision to proceed to the show cause notice stage.

The passage does not merely seek further records. It expressly refers to time constraints and administrative workload while explaining the proposed next step. This raises the question of whether the proposed proceedings are supported by identified discrepancies and supporting material elsewhere in the notice, or whether incomplete verification itself has been treated as a reason to proceed.

The excerpt also leaves unanswered which additional documents are required, what aspects of the taxpayer’s explanations remain unresolved, and how those unresolved issues translate into a proposed tax liability. These particulars may appear in portions of the document that have not been supplied.

Further Documents Required Does Not Establish Tax Liability

The authority’s statement that additional records are necessary indicates that its examination of the taxpayer’s claims remains unfinished. On its own, the reproduced passage does not establish that the explanations are incorrect or that a particular amount of tax is payable.

Equally, the excerpt cannot establish that the entire notice lacks specific allegations. Assessing that issue would require examination of the complete notice, including the discrepancies identified, the proposed demand, its calculation and the provisions invoked.

The wording nevertheless brings into focus an important procedural question: how clearly has the department explained the basis for seeking a response on tax liability when its own recorded observations acknowledge that verification could not be concluded?

The available image contains only an extract and does not disclose the taxpayer’s identity, the officer’s name, the notice date, the tax period or the amount involved. While the notice has been described as issued, the reproduced passage itself states that DRC-01 is “proposed to be issued.” No final determination of liability or judicial ruling on the notice’s validity is shown in the material supplied.

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