RECIEVED DEMAND ORDER TO PAY PENALTY

This query is : Resolved

Pawan Gupta (Querist)
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28 December 2023 RECIEVED A DEMAND ORDER ASKING TO PAY PENALTY OF Rs 40000/- IGST-20000/- CGST-10000/- SGST-10000/- WE HAVE REVERSED THE ITC AND PAID THE INTEREST TOO THROUGH DRC 03 ON 5.12.23 BUT WE HAVE RECIVED THE SCN ON 29.9.23

NOW THE OFFICER IS SAYING TO PAY PENALTY AS ABOVE THE TAX AMOUNT WAS AROUND 5000/- AND INTEREST WAS AROUND 4000/- I AM NOT IN POSITION TO PAY THE PENALTY WHAT SHOULD I DO

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)
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30 December 2023 The law prescribes for levy of penalty in case the amount in the show cause is not paid within 30 days of that SCN. In your case you have not disputed the liability to reverse the ITC and has reversed the same after 30 days time period of SCN. So penalty is leviable but you can only contest the same through appeal pleading that tax component and interest was low which has been paid ultimately through DRC-03. you can argue that levy of heavy penalty is harsh considering the genuine financial hardship. In this way you have to frame the arguments and hope to succeed in appeal. This is the slim hope as you have committed mistake of not reversing within 30 days of SCN.