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Start by treating the notice as a legal timetable, not as a routine portal message. Record the date it was communicated, identify the statutory section and tax period, reconcile every allegation and calculation with your books and returns, and file a point-by-point reply by the stated deadline. Ask in writing for a hearing if you need to explain evidence or contest the proposed demand.
If the adjudication order is adverse, the ordinary first appeal is made under section 107 of the Central Goods and Services Tax Act, 2017 (CGST Act) to the Appellate Authority. The surfaced statutory text gives three months from communication of the order, with a possible additional one-month admission period for sufficient cause. FORM GST APL-01 is the prescribed appeal form in the rules reviewed here. Because GST procedures and forms can be amended, check the current consolidated Act, Rules, portal instructions, and the applicable State or Union Territory law before filing.
What a GST show-cause notice requires you to do
A show-cause notice (SCN) sets out the department’s proposed case: the transactions or returns under review, the legal provision relied on, the proposed tax, interest, fine or penalty, and the time allowed for your response. Sections 73 and 74 of the CGST Act describe notice-based determinations. The section cited in your notice matters; so do the tax period, the issuing officer’s jurisdiction, and whether the notice alleges fraud, wilful misstatement or suppression.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesDo not draft from a portal summary alone. Read the signed notice, annexures, relied-upon statements and calculations. Section 75 provides important limits on adjudication: the eventual demand cannot exceed the amount specified in the notice or be confirmed on grounds outside those stated there. Whether an order has crossed those limits depends on the actual documents, not on a general assumption.
First response: secure the deadline and the record
Make a notice-control sheet
Create one page containing the following details as soon as the notice arrives:
- Notice number, date of issue and date it was communicated.
- The section invoked (for example, section 73 or 74), the tax period and the issuing officer.
- The response date and the method by which the notice says to respond.
- Tax, interest, fine, fee and penalty proposed, shown separately where the notice does so.
- Every allegation, document, statement and calculation cited by the officer.
- The login, email or physical address specified for submission, and any acknowledgement number once filed.
Communication date is not a clerical detail. It controls the time available for the reply and, later, the appeal period. Preserve the original electronic message, downloaded PDF, annexures and delivery metadata in an unaltered folder.
Check whether the notice is complete
List anything you cannot understand or cannot reconcile: a missing annexure, an unexplained turnover figure, an incorrect tax period, a calculation that does not add up, or evidence that appears to relate to another taxpayer. Ask for the missing material through the permitted channel and state in the reply how its absence affects your ability to answer. Do not simply ignore an unclear allegation; identify it precisely.
Build a point-by-point reply
Use an issue schedule before writing prose
A schedule prevents a broad denial from leaving individual transactions unanswered. Use a row for every allegation or calculation line.
| Notice item | Department’s position | Your factual response | Evidence | Tax position |
|---|---|---|---|---|
| Paragraph or annexure reference | Alleged transaction, omission or mismatch | What occurred, with dates and parties | Return, invoice, ledger, contract, payment proof or correspondence | Admitted, partly admitted or disputed; amount and reason |
Keep the schedule as a working document even if the filed reply uses numbered paragraphs. It gives your adviser, finance team and hearing representative one consistent map of the case.
Separate facts, law and calculation
For each issue, follow the same order:
- Facts: state the transaction, period, supplier or customer, return entry and payment history that can be proved from the records.
- Evidence: identify the exact document and page or data reference supporting each factual statement.
- Law: explain why the proposed treatment applies or does not apply to those facts. Address the section and rule cited in the notice rather than arguing an unrelated provision.
- Calculation: show the tax base, rate, credit or adjustment, interest period and penalty position. State the amount admitted and the amount disputed.
If an amount is genuinely payable, identify it rather than burying it in a general denial. A precise admission can narrow the dispute; an unsupported denial can damage credibility and make the officer’s calculation harder to test.
Address fraud or suppression allegations specifically
Where section 74 or another provision alleges fraud, wilful misstatement or suppression, answer each alleged act and the evidence said to prove it. Distinguish an arithmetic error, classification dispute or documentation gap from an allegation about intent. The section and tax period determine which statutory framework applies, and amendments may have different commencement dates. Obtain advice on the exact version applicable to the period in dispute.
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Match documents to issues instead of uploading an unindexed archive. Depending on the allegation, the useful record may include:
- Relevant GST returns, amendments, payment challans and electronic liability ledgers.
- Tax invoices, debit or credit notes, e-way records, delivery evidence and contracts.
- Purchase and sales registers, general ledger extracts, trial balances and reconciliation workpapers.
- Input tax credit records, supplier communications and proof of receipt or use of goods or services.
- Bank statements or payment confirmations where consideration or tax payment is disputed.
- Earlier replies, inspection correspondence, statements and documents referred to in the notice.
Use a contents page and sequential file names. Redact information only when legally appropriate; unexplained redactions can create a new question. Retain the original files and a read-only copy of what was submitted.
File the reply and request a hearing
Choose the response method stated in the notice
The rules reviewed here identify FORM GST DRC-06 for covered representations or replies. Not every notice type, State or Union Territory instruction and portal release uses the same workflow. Follow the form and channel specified in the notice, and save the generated acknowledgement, ARN or receipt. If the portal fails, capture dated screenshots and use the alternative channel formally offered by the department; do not rely on an informal email unless the authority accepts it.
Make the hearing request explicit
Section 75 provides an opportunity of hearing when the person requests it in writing or when an adverse decision is contemplated. Put a clear sentence in the reply and in the form field, such as: “The taxpayer requests an oral hearing before any adverse order is passed.” Explain briefly why a hearing is needed—for example, to walk through a reconciliation or clarify a relied-upon statement.
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The same section permits an adjournment for sufficient cause, with reasons recorded, but limits adjournments to three during the proceedings. Request an adjournment before the scheduled date, give the reason and propose workable dates. Do not assume an adjournment is automatic.
Keep proof of filing
Download the submitted form, attachments, acknowledgement and any officer communication. Maintain a chronology with the date, sender, recipient, subject and document name. If an attachment was rejected for size or format, record the rejection and resubmit through the permitted route so the evidentiary record is complete.
What the adjudicating officer must decide
Section 75 says the order should set out relevant facts and the basis for the decision. Compare the final order with the notice and your reply:
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- Does it decide the allegations actually notified?
- Does the confirmed amount exceed the notice amount?
- Does it introduce a new ground that you were not asked to answer?
- Does the calculation explain tax, interest, penalty, fine and fee separately?
- Does it address material documents and submissions?
These are statutory guardrails, not an automatic cancellation checklist. A possible departure must be assessed against the complete notice, hearing record and order, preferably with professional advice.
If the order is adverse: calculate the appeal deadline
Ordinary first appeal
Section 107 provides an appeal to the Appellate Authority within three months from the date the decision or order is communicated. Start the calculation from documented communication, not merely the date printed on the order. The surfaced text allows the Appellate Authority to admit a delayed appeal for a further period of one month when sufficient cause for the delay is shown. Treat that as a limited condonation window, not as an extension you can claim automatically.
Immediately record:
- Order number, order date and communication date.
- The last day of the ordinary three-month period.
- If relevant, the last day of the additional one-month period and the evidence explaining delay.
- Any recovery communication or separate demand entry that could affect urgency.
Decide what is actually being challenged
Compare the order with your issue schedule. Decide whether the appeal concerns the whole demand or specific tax, interest, penalty, fine or fee components. A focused challenge should identify each disputed issue, amount and legal ground; do not assume that disputing tax automatically answers a separate penalty finding.
Prepare FORM GST APL-01
The rules surfaced for this subject prescribe FORM GST APL-01 for an appeal to the Appellate Authority. Its fields call for:
- The order number, order date and date of communication.
- The disputed issue and tax period.
- Amounts disputed, with the relevant tax and other components.
- A statement of facts.
- Grounds of appeal.
- The relief or prayer requested.
- Your choice on whether an oral hearing is wanted.
Write grounds as numbered propositions tied to the order’s paragraph and your evidence. The prayer should state the outcome sought—for example, setting aside a specified demand, recomputing an amount or removing a penalty—without asking for relief that the appeal forum cannot grant.
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Certified copy and acknowledgement
The rule text surfaced here also refers to submission of a certified copy of the order within seven days and describes filing and final-acknowledgement consequences. The available consolidation is older, so verify the current rule, portal workflow and definition of “certified copy” for your jurisdiction before relying on that seven-day operational detail. If the portal generates a provisional filing number, monitor it until the final acknowledgement is issued and preserve every status message.
First-appeal pre-deposit and recovery stay
The section 107 text reviewed for the first appeal requires:
- Payment in full of the admitted amount of tax, interest, fine, fee and penalty; and
- A sum equal to 10% of the remaining disputed tax.
It states that, after payment under this condition, recovery proceedings for the balance are deemed stayed. The 10% applies to the remaining disputed tax in the surfaced text, not automatically to every disputed component. Verify the current law, any statutory cap, special category, amendment and the amount the department treats as disputed before paying.
Illustrative calculation
Suppose an order records ₹30,000 as admitted tax and ₹200,000 as disputed tax, with separate interest and penalty figures. On the surfaced section 107 wording, the basic first-appeal calculation would be the full admitted components plus 10% of ₹200,000 (₹20,000) for the disputed tax portion. This is only a mathematical illustration; it does not determine your liability, applicable cap or current portal amount.
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| Question | SCN response | First appeal |
|---|---|---|
| Forum | The issuing proper officer through the channel stated in the notice | Appellate Authority under section 107 |
| Core document | Point-by-point reply, commonly using the applicable reply form such as DRC-06 | FORM GST APL-01 and supporting statement, grounds and prayer |
| Time anchor | Response date printed in or served with the notice | Three months from communication of the order; possible further one month for sufficient cause under the surfaced text |
| Hearing | Request in writing; section 75 provides the opportunity in the stated circumstances | Indicate the oral-hearing preference in the appeal and follow the authority’s later notice |
| Payment condition | No universal amount can be inferred without the notice and current law | Admitted amount plus the surfaced 10% disputed-tax pre-deposit rule, subject to current verification |
Common mistakes and how to correct them
Missing the communication date
Problem: The taxpayer counts from the order date or opens the notice late.
Correction: Preserve delivery evidence and calculate the response or appeal period from the legally relevant communication event. If delay has already occurred, document the cause immediately and obtain advice on available relief.
Answering the summary instead of the allegation
Problem: A short statement says the demand is wrong but does not address individual invoices, returns or calculations.
Correction: Use the issue schedule and number the reply to match every paragraph and annexure.
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Problem: The officer cannot tell which document supports which assertion.
Correction: Add an indexed bundle, page references and a short explanation of each document’s relevance.
Failing to request a hearing
Problem: The written reply contains the merits but no explicit hearing request.
Correction: Select the hearing option where available and repeat the request in a signed paragraph.
Assuming the order can raise any new demand
Problem: The taxpayer treats the order as an unrestricted reassessment.
Correction: Compare amount and grounds with the notice, then identify any apparent departure as a specific appellate ground supported by the record.
Paying the wrong pre-deposit
Problem: The calculation includes or excludes components incorrectly, or relies on an outdated cap or rule.
Correction: Reconcile the order’s admitted and disputed figures with the current section 107 text, portal computation and jurisdiction-specific directions before payment.
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A practical chronology for a live matter
- Day received: download the notice, record communication evidence and calendar the response date.
- Early review: identify section, period, officer, allegations, relied-upon material and proposed amounts.
- Evidence phase: reconcile returns, ledgers, invoices, credit records and payments; request missing documents.
- Drafting phase: complete the issue schedule, then write facts, evidence, law and calculation for each item.
- Filing phase: submit through the stated form and channel, request a hearing, and save the acknowledgement.
- Proceeding phase: attend the hearing, answer follow-up requests and track any adjournment limit.
- Order received: compare the order with the notice and reply, record communication date and decide on appeal.
- Appeal phase: prepare APL-01, statement of facts, grounds, prayer, hearing preference, certified-copy submission and verified pre-deposit.
When to obtain professional help
A GST tax adviser, chartered accountant or tax counsel can be important where the notice alleges fraud or suppression, involves several tax periods, relies on third-party data, contains a large or disputed input-tax-credit calculation, or is close to a statutory deadline. Give the professional the complete notice, annexures, order, issue schedule, filings, acknowledgements and communication timeline. Advice is most useful when the record is complete; do not wait until after the appeal period has expired.
Checks before relying on this procedure
The statutory outline above is based on the CGST Act and Rules texts reviewed for this topic. Before filing, verify the current consolidated versions and amendments, their commencement dates for the relevant tax period, the notice’s exact section, the current GST portal workflow, State or Union Territory instructions, and any special waiver, settlement or recovery procedure. A procedural detail in an older rule consolidation—especially form fields, certified-copy timing or payment computation—should not be treated as current without that check.
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