• Show Cause Notice from Service Tax Department - 2015-16

Basis the ITR and ST Returns comparison, a short payment of (ST) has been worked out by the Department and an SCN issued on 30.12.21 - the last day of limitation. 

1. The basis is ITR and Annexure gives two "Documents relied upon" which are not annexed to the SCN.
2. The first document in annexure refers to a letter which pertains to the Service tax the year 2014-15 (duly replied) and not to the year under notice, viz., 2015-16.. The second document is referred to as an email Reminder to the first letter. The email has not been received,
3, Apparent arithmetical error whereby the difference between the taxable value as per the ITR and the ST returns has been shown as the taxable value as per the ST Returns instead of the taxable value as per the ITR minus the taxable value as per the ST Returns and ST demanded thereon. This alone has shot up the ST demand by approx. 500%.
4. The SCN itself is addressed to a firm whose name and ST registration no. are different from ours - though the ITR and ST Returns figures more or less match with ours subject to reconciliation.

The difference in taxable value as per the ITR and ST Returns is reconcilable as the ITR figure taken is inclusive of ST whereas the ST Returns figure is only taxable value.

An extension of 30 days has been sought beyond the 30 days time to reply given in SCN.

Advice sought :

a. Can seek the corrections of the arithmatical errors resulting in an astronomically high demand of service tax? And seek a time of 2 weeks after the corrections are carried out to enable us to reply properly?

b. Or do we validly raise the objection that the SCN has been served without following a laid down procedure for issuance of an SCN since we were not given a proper notice prior to servicing the SCN to explain our case? The letter referred to as one of the two documents relied upon was not for the year under notice and therefore the reminder e-mail too pertaining to this letter was not for the year of the SCN. 

c. In case of b. above, does the Notice (which was served on the last day of the limitation) get time barred?

d. Once we reply to the SCN mentioning that it is an invalid SCN, can they proceed to finalise the assessement and raise demand ex-parte?

What could be the suggested course of action?