DRC-O1A has no provision for correction of error

- Sales Tax : Soham Mashruwala

Many audit assessments have been done under the GST Act and the final audit report with non-controversial and contentious issues has been issued by the Department. Further action will be taken for those issues which are in dispute. The first step in this process is the notice in Form DRC-O1A and if there is any deficiency in giving this notice, will the whole process be cancelled. Today's article discusses the importance of Form DRC-O1A and related issues.

Rule 142 (1A)

Rule 142 provides the procedure regarding the amount to be paid under the GST Act. Under sub-rule (1A) thereof, it is prescribed that before giving notice under section 74(1) or section 73(1), the proper officer is required to give notice in Form DRC-O1A. Part 'A' of this form is to give details of tax, interest and penalty payable.

Opportunities with suppliers

In case under GST law the supplier has to settle the dispute by making payment on any point before receipt of a specific action i.e. show-cause, he can make payment on the basis of Form DRC-O1A and part of Form DRC-O1A as per Rule 142(2A). 'B' should be answered and proof of amount paid should be enclosed in DRC-03. Due to this, the provision of 100% fine under Section 74 is reduced, if the case is under Section 74(5) then 15% fine and if the case is under Section 74(8) 25% fine, all proceedings can be ended by paying the fine.

Ambition of DRC-O1A

DRC-O1A acts as a kind of pre-shock notification. In cases where this notice has not been given, the High Court (of various states) and Hon. The proceedings of the Supreme Court account have been quashed as frivolous.

The most noble judgment of this has been given by the Supreme Court in Radha Krishna Industries due to which the government has now instructed the authorities to stop the indiscriminate mining process.

Regarding audit assessment, it is mandatory to give notice in form DRC-O1A before giving show-cause notice when contentious issues have arisen after giving final audit report. Now, if such notice is given with the wrong amount, the case of the particular account is said to be void and the whole procedure is considered null and void on the basis of revision without any reason or groundless action. Now there is no order in this notice so there is no scope for correction of errors like supplier cannot correct GSTR3B.