𝗧𝗛𝗘 𝗔𝗥𝗧 𝗢𝗙 𝗗𝗥𝗔𝗙𝗧𝗜𝗡𝗚 𝗥𝗘𝗣𝗟𝗬 𝗧𝗢 𝗡𝗢𝗧𝗜𝗖𝗘𝗦 𝗢𝗥/𝗔𝗡𝗗 𝗔𝗣𝗣𝗘𝗔𝗟𝗦..!! (𝗣𝗮𝗿𝘁-𝟮 𝗼𝗳 𝟯) In Part 1, we started drafting reply or Appeal which I will continue here.

There is a basic difference in drafting in Direct Taxes and Indirect Taxes. In Direct Taxes everything revolves around "undisclosed or unexplained transactions" whereas Indirect Taxes it is usually around reported ones.

In case the reply is against Scrutiny Notice then also there is vast difference in approach of both authorities. In Direct Taxes usually the additions are made when assessee is unable to produce records such as purchase vouchers for number of purchases etc

whereas in GST the issues relate to reversal of Input Tax Credit (ITC) whether due to mismatch of ITC as per GSTR-2A and GSTR-3B or ITC claim for Suppliers whose registration is cancelled retrospectively.

In GST person usually has all the relevant documents what is needed is to be proved that these are genuine transactions, there has been actual movement and receipt of goods and the tax has been deposited with the Revenue.

As you understand the replies needs different things to be proved therefore, the replies have to be drafted with different strategies.

𝗗𝗜𝗦𝗖𝗨𝗦𝗦𝗜𝗢𝗡 𝗢𝗙 𝗘𝗩𝗜𝗗𝗘𝗡𝗖𝗘 In last part we discussed "Points of Determination." As these cases are more or less civil suits the approach should be to co-relate the evidence with other documents or facts.

For Example, Goods Purchased could be proved with Weighing Slip, Gate Pass Register, Goods Receipt, E-Way Bill, Transport Lorry Slip etc. If this can be linked to actual sales transaction to third party or PSU it would be better.

𝗘𝗩𝗜𝗗𝗘𝗡𝗖𝗘 𝘃𝘀 𝗝𝗨𝗗𝗜𝗖𝗜𝗔𝗟 𝗣𝗥𝗢𝗡𝗢𝗨𝗡𝗖𝗘𝗠𝗘𝗡𝗧𝗦 𝘛𝘳𝘶𝘵𝘩 𝘥𝘰𝘦𝘴 𝘯𝘰𝘵 𝘮𝘢𝘵𝘵𝘦𝘳, 𝘍𝘢𝘤𝘵𝘴 𝘥𝘰..!!! As any Criminal case the weightage of evidence is equally important in Civil case if not more.

Judicial case laws helps in advancement of the arguments but those cannot act as the base of the argument. Unless you master the facts, no case law could be of your help.

𝗘𝗫𝗣𝗟𝗔𝗡𝗔𝗧𝗜𝗢𝗡𝗦 All documents which you are reling and submitting to the Department should be self-explanatory and if not proper explanation of facts, documents, evidence, case laws etc should form part of your reply.

𝗔𝗙𝗙𝗜𝗗𝗔𝗩𝗜𝗧𝗦 Whenever you are short of any evidence or document and you are 100% sure about the fact then submit Affidavit. Affidavits helps in establishing the fact unless contrary proved.

𝗖𝗜𝗥𝗖𝗨𝗠𝗦𝗧𝗔𝗡𝗖𝗘𝗦 Like in any civil suit, circumstances plays an important role in establishing a fact in Tax matters too. Failure to disclose income or a particular source of income could be construed as an attempt to evade tax. Hope you will find this useful.