DEMANDS AND RECOVERY
73. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilful missta tement or suppression of facts.
(1) Where it appears to the proper officer that any tax has not been
paid or short paid or erroneously refunded, or where input tax credit has
been wrongly availed or utilised for any reason, other than the reason of
fraud or any wilful misstatement or suppression of facts to evade tax, he
shall serve notice on the person chargeable with tax which has not been so
paid or which has been so short paid or to whom the refund has erroneously
been made, or who has wrongly availed or utilised input tax credit, requiring
him to show cause as to why he should not pay the amount specified in the
notice along with interest payable thereon under section 50 and a penalty
leviable under the provisions of this Act or the rules made thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least
three months prior to the time limit specified in sub-section (10) for issuance
of order.
(3) Where a notice has been issued for any period under sub-section (1),
the proper officer may serve a statement, containing the details of tax not
paid or short paid or erroneously refunded or input tax credit wrongly availed
or utilised for such periods other than those covered under sub-section (1),
on the person chargeable with tax.
(4) The service of such statement shall be deemed to be service of notice
on such person under sub-section (1), subject to the condition that the grounds
relied upon for such tax periods other than those covered under sub-section
(1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under
sub-section (1) or, as the case may be, the statement under sub-section (3),
pay the amount of tax along with interest payable thereon under section 50
on the basis of his own ascertainment of such tax or the tax as ascertained by
the proper officer and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve
any notice under sub-section (1) or, as the case may be, the statement under
sub-section (3), in respect of the tax so paid or any penalty payable under the
provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to
issue the notice as provided for in sub-section (1) in respect of such amount
which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) or subsection (3) pays the said tax along with interest payable under section 50
within thirty days of issue of show cause notice, no penalty shall be payable
and all proceedings in respect of the said notice shall be deemed to be
concluded.
(9) The proper officer shall, after considering the representation, if any,
made by person chargeable with tax, determine the amount of tax, interest
and a penalty equivalent to ten per cent. of tax or ten thousand rupees,
whichever is higher, due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within
three years from the due date for furnishing of annual return for the financial
year to which the tax not paid or short paid or input tax credit wrongly availed
or utilised relates to or within three years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or subsection
(8), penalty under sub-section (9) shall be payable where any amount of self-assessed tax or any amount collected as tax has not been paid within a
period of thirty days from the due date of payment of such tax.
74. Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful misstatement or suppression of facts.
(1) Where it appears to the proper officer that any tax has not been
paid or short paid or erroneously refunded or where input tax credit has
been wrongly availed or utilised by reason of fraud, or any wilful misstatement
or suppression of facts to evade tax, he shall serve notice on the person
chargeable with tax which has not been so paid or which has been so short
paid or to whom the refund has erroneously been made, or who has wrongly
availed or utilised input tax credit, requiring him to show cause as to why he
should not pay the amount specified in the notice along with interest payable
thereon under section 50 and a penalty equivalent to the tax specified in the
notice.
(2) The proper officer shall issue the notice under sub-section (1) at least
six months prior to the time limit specified in sub-section (10) for issuance of
order.
(3) Where a notice has been issued for any period under sub-section (1),
the proper officer may serve a statement, containing the details of tax not
paid or short paid or erroneously refunded or input tax credit wrongly availed
or utilised for such periods other than those covered under sub-section (1),
on the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be
service of notice under sub-section (1) of section 73, subject to the condition
that the grounds relied upon in the said statement, except the ground of
fraud, or any wilful-misstatement or suppression of facts to evade tax, for
periods other than those covered under sub-section (1) are the same as are
mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under
sub-section (1), pay the amount of tax along with interest payable under
section 50 and a penalty equivalent to fifteen per cent. of such tax on the
basis of his own ascertainment of such tax or the tax as ascertained by the
proper officer and inform the proper officer in writing of such payment.
(6) The proper officer, on receipt of such information, shall not serve
any notice under sub-section (1), in respect of the tax so paid or any penalty
payable under the provisions of this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to
issue the notice as provided for in sub-section (1) in respect of such amount
which falls short of the amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays
the said tax along with interest payable under section 50 and a penalty
equivalent to twenty five per cent. of such tax within thirty days of issue of
the notice, all proceedings in respect of the said notice shall be deemed to be
concluded.
(9) The proper officer shall, after considering the representation, if any,
made by the person chargeable with tax, determine the amount of tax, interest
and penalty due from such person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within
a period of five years from the due date for furnishing of annual return for
the financial year to which the tax not paid or short paid or input tax credit
wrongly availed or utilised relates to or within five years from the date of
erroneous refund.
(11) Where any person served with an order issued under sub-section (9)
pays the tax along with interest payable thereon under section 50 and a
penalty equivalent to fifty per cent.of such tax within thirty days of
communication of the order, all proceedings in respect of the said notice
shall be deemed to be concluded.
Explanation1.– For the purposes of section 73 and this section, —
(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132 ;
(ii)where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such
proceedings against the main person have been concluded under section
73 or section 74, the proceedings against all the persons liable to pay
penalty under sections 122, 125, 129 and 130 are deemed to be concluded.
Explanation 2.––For the purposes of this Act, the expression
“suppression” shall mean non-declaration of facts or information which
a taxable person is required to declare in the return, statement, report
or any other document furnished under this Act or the rules made
thereunder, or failure to furnish any information on being asked for, in
writing, by the proper officer.
75. General provisions relating to determination of tax.
(1) Where the service of notice or issuance of order is stayed by an
order of a court or Appellate Tribunal, the period of such stay shall be excluded
in computing the period specified in sub-sections (2) and (10) of section 73 or
sub-sections (2) and (10) of section 74, as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court
concludes that the notice issued under sub-section (1) of section 74 is not
sustainable for the reason that the charges of fraud or any wilful misstatement
or suppression of facts to evade tax has not been established against the
person to whom the notice was issued, the proper officer shall determine the
tax payable by such person, deeming as if the notice were issued under subsection (1) of section 73.
(3) Where any order is required to be issued in pursuance of the direction
of the Appellate Authority or Appellate Tribunal or a court, such order shall
be issued within two years from the date of communication of the said
direction.
(4) An opportunity of hearing shall be granted where a request is
received in writing from the person chargeable with tax or penalty, or where
any adverse decision is contemplated against such person.
(5) The proper officer shall, if sufficient cause is shown by the person
chargeable with tax, grant time to the said person and adjourn the hearing
for reasons to be recorded in writing :
Provided that no such adjournment shall be granted for more than three
times to a person during the proceedings.
(6) The proper officer, in his order, shall set out the relevant facts and
the basis of his decision.
(7) The amount of tax, interest and penalty demanded in the order shall
not be in excess of the amount specified in the notice and no demand shall be
confirmed on the grounds other than the grounds specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court
modifies the amount of tax determined by the proper officer, the amount of
interest and penalty shall stand modified accordingly, taking into account
the amount of tax so modified.
(9) The interest onthetax short paid or not paid shall be payable whether
or not specified in the order determining the tax liability.
(10) The adjudication proceedings shall be deemed to be concluded, if
the order is not issued within three years as provided for in sub-section (10)
of section 73 or within five years as provided for in sub-section (10) of section
74.
(11) An issue on which the Appellate Authority or the Appellate Tribunal
or the High Court has given its decision which is prejudicial to the interest
of revenue in some other proceedings and an appeal to the Appellate Tribunal
or the High Court or the Supreme Court against such decision of the Appellate
Authority or the Appellate Tribunal or the High Court is pending, the period
spent between the date of the decision of the Appellate Authority and that of
the Appellate Tribunal or the date of decision of the Appellate Tribunal and
that of the High Court or the date of the decision of the High Court and that
of the Supreme Court shall be excluded in computing the period referred to
in sub-section (10) of section 73 or sub-section (10) of section 74 where
proceedings are initiated by way of issue of a show cause notice under the
said sections.
(12) Notwithstanding anything contained in section 73or section74,
where any amount of self-assessed tax in accordance with a return furnished
under section 39 remains unpaid, either wholly or partly, or any amount of
interest payable on such tax remains unpaid, the same shall be recovered
under the provisions of section 79.
(13) Where any penalty is imposed under section 73 or section 74, no
penalty for the same act or omission shall be imposed on the same person
under any other provision of this Act.
76. Tax collected but not paid to Government.
(1) Notwithstanding anything to the contrary contained in any order
or direction of any Appellate Authority or Appellate Tribunal or court or in
any other provisions of this Act or the rules made thereunder or any other
law for the time being in force, every person who has collected from any
other person any amount as representing the tax under this Act, and has not
paid the said amount to the Government, shall forthwith pay the said amount
to the Government, irrespective of whether the supplies in respect of which
such amount was collected are taxable or not.
(2) Where any amount is required to be paid to the Government under
sub-section (1), and which has not been so paid, the proper officer may serve
on the person liable to pay such amount a notice requiring him to show cause
as to why the said amount as specified in the notice, should not be paid by
him to the Government and why a penalty equivalent to the amount specified
in the notice should not be imposed on him under the provisions of this Act.
(3) The proper officer shall, after considering the representation, if any,
made by the person on whom the notice is served under sub-section (2),
determine the amount due from such person and thereupon such person shall
pay the amount so determined.
(4) The person referred to in sub-section (1) shall in addition to paying
the amount referred to in sub-section (1) or sub-section (3) also be liable to
pay interest thereon at the rate specified under section 50 from the date
such amount was collected by him to the date such amount is paid by him to
the Government.
(5) An opportunity of hearing shall be granted where a request is
received in writing from the person to whom the notice was issued to show
cause.
(6) The proper officer shall issue an order within one year from the
date of issue of the notice.
(7) Where the issuance of order is stayed by an order of the court or
Appellate Tribunal, the period of such stay shall be excluded in computing
the period of one year.
(8) The proper officer, in his order, shall set out the relevant facts and
the basis of his decision.
(9) The amount paid to the Government under sub-section (1) or subsection (3) shall be adjusted against the tax payable, if any, by the person in
relation to the supplies referred to in sub-section (1).
(10) Where any surplus is left after the adjustment under sub-section
(9), the amount of such surplus shall either be credited to the Fund or refunded
to the person who has borne the incidence of such amount.
(11) The person, who has borne the incidence of the amount, may apply
for the refund of the same in accordance with the provisions of section 54.
77. Tax wrongfully collected and paid to Central Government or State Government.
(1) A registered person who has paid the central tax and State tax
on a transaction considered by him to be an intra-State supply, but which is
subsequently held to be an inter-State supply, shall be refunded the amount
of taxes so paid in such manner and subject to such conditions as may be
prescribed.
(2) A registered person who has paid integrated tax on a transaction
considered by him to be an inter-State supply, but which is subsequently
held to be an intra-State supply, shall not be required to pay any interest on
the amount of State tax payable.
78. Initiation of recovery proceedings.
Any amount payable by a taxable person in pursuance of an order
passed under this Act shall be paid by such person within a period of three
months from the date of service of such order failing which recovery
proceedings shall be initiated :
Provided that where the proper officer considers it expedient in the
interest of revenue, he may, for reasons to be recorded in writing, require
the said taxable person to make such payment within such period less than a
period of three months as may be specified by him.
79. Recovery of tax.
(1) Where any amount payable by a person to the Government under
any of the provisions of this Act or the rules made thereunder is not paid, the
proper officer shall proceed to recover the amount by one or more of the
following modes, namely :––
(a) the proper officer may deduct or may require any other specified
officer to deduct the amount so payable from any money owing to such person
which may be under the control of the proper officer or such other specified
officer ;
(b) the proper officer may recover or may require any other specified
officer to recover the amount so payable by detaining and selling any goods
belonging to such person which are under the control of the proper officer or
such other specified officer ;
(c) (i) the proper officer may, by a notice in writing, require any other
person from whom money is due or may become due to such person or who
holds or may subsequently hold money for or on account of such person, to
pay to the Government either forthwith upon the money becoming due or
being held, or within the time specified in the notice not being before the
money becomes due or is held, so much of the money as is sufficient to pay
the amount due from such person or the whole of the money when it is equal
to or less than that amount ;
(ii) every person to whom the notice is issued under sub-clause (i) shall
be bound to comply with such notice, and in particular, where any such notice
is issued to a post office, banking company or an insurer, it shall not be
necessary to produce any pass book, deposit receipt, policy or any other
document for the purpose of any entry, endorsement or the like being made
before payment is made, notwithstanding any rule, practice or requirement
to the contrary ;
(iii) in case the person to whom a notice under sub-clause (i) has been
issued, fails to make the payment in pursuance thereof to the Government,
he shall be deemed to be a defaulter in respect of the amount specified in the
notice and all the consequences of this Act or the rules made thereunder
shall follow ;
(iv) the officer issuing a notice under sub-clause (i) may, at any time,
amend or revoke such notice or extend the time for making any payment in
pursuance of the notice ;
(v) any person making any payment in compliance with a notice issued
under sub-clause (i) shall be deemed to have made the payment under the
authority of the person in default and such payment being credited to the
Government shall be deemed to constitute a good and sufficient discharge of
the liability of such person to the person in default to the extent of the amount
specified in the receipt ;
(vi) any person discharging any liability to the person in default after
service on him of the notice issued under sub-clause (i) shall be personally
liable to the Government to the extent of the liability discharged or to the
extent of the liability of the person in default for tax, interest and penalty,
whichever is less ;
(vii) where a person on whom a notice is served under sub-clause (i)
proves to the satisfaction of the officer issuing the notice that the money
demanded or any part thereof was not due to the person in default or that he
did not hold any money for or on account of the person in default, at the time
the notice was served on him, nor is the money demanded or any part thereof,
likely to become due to the said person or be held for or on account of such
person, nothing contained in this section shall be deemed to require the
person on whom the notice has been served to pay to the Government any
such money or part thereof ;
(d) the proper officer may, in accordance with the rules to be made in
this behalf, distrain any movable or immovable property belonging to or under
the control of such person, and detain the same until the amount payable is
paid ; and in case, any part of the said amount payable or of the cost of the
distress or keeping of the property, remains unpaid for a period of thirty
days next after any such distress, may cause the said property to be sold and
with the proceeds of such sale, may satisfy the amount payable and the costs
including cost of sale remaining unpaid and shall render the surplus amount,
if any, to such person ;
(e) the proper officer may prepare a certificate signed by him specifying
the amount due from such person and send it to the Collector of the district
in which such person owns any property or resides or carries on his business
or to any officer authorised by the Government and the said Collector or the
said officer, on receipt of such certificate, shall proceed to recover from such
person the amount specified thereunder as if it were an arrear of land
revenue ;
(f) notwithstanding anything contained in the Code of Criminal
Procedure, 1973(2 of 1974)., the proper officer may file an application to the appropriate
Magistrate and such Magistrate shall proceed to recover from such person
the amount specified thereunder as if it were a fine imposed by him.
(2) Where the terms of any bond or other instrument executed under
this Act or any rules or regulations made thereunder provide that any amount
due under such instrument may be recovered in the manner laid down in
sub-section (1), the amount may, without prejudice to any other mode of
recovery, be recovered in accordance with the provisions of that sub-section.
(3) Where any amount of tax, interest or penalty is payable by a person
to the Government under any of the provisions of this Act or the rules made
thereunder and which remains unpaid, the proper officer of central tax, during
the course of recovery of said tax arrears, may recover the amount from the
said person as if it were an arrear of central tax and credit the amount so
recovered to the account of the Government.
(4) Where the amount recovered under sub-section (3) is less than the
amount due to the Central Government and State Government, the amount
to be credited to the account of the respective Governments shall be in
proportion to the amount due to each such Government.
80. Payment of tax and other amount in instalments
On an application filed by a taxable person, the Commissioner may,
for reasons to be recorded in writing, extend the time for payment or allow
payment of any amount due under this Act, other than the amount due as per
the liability self-assessed in any return, by such person in monthly instalments
not exceeding twenty four, subject to payment of interest under section 50
and subject to such conditions and limitations as may be prescribed :
Provided that where there is default in payment of any one instalment
on its due date, the whole outstanding balance payable on such date shall
become due and payable forthwith and shall, without any further notice being
served on the person, be liable for recovery.
81. Transfer of property to be void in certain cases
Where a person, after any amount has become due from him, creates
a charge on or parts with the property belonging to him or in his possession
by way of sale, mortgage, exchange, or any other mode of transfer whatsoever
of any of his properties in favour of any other person with the intention of
defrauding the Government revenue, such charge or transfer shall be void as
against any claim in respect of any tax or any other sum payable by the said
person :
Provided that, such charge or transfer shall not be void if it is made for
adequate consideration, in good faith and without notice of the pendency of
such proceedings under this Act or without notice of such tax or other sum
payable by the said person, or with the previous permission of the proper
officer.
82. Tax to be first charge on property
Notwithstanding anything to the contrary contained in any law for
the time being in force, save as otherwise provided in the Insolvency and
Bankruptcy Code, 2016 (31 of. 2016), any amount payable by a taxable person or any other
person on account of tax, interest or penalty which he is liable to pay to the
Government shall be a first charge on the property of such taxable person or
such person.
83. Provisional Attachment to protect revenue in certain cases
(1) Where during the pendency of any proceedings under section
62 or section 63 or section 64 or section 67 or section 73 or section 74, the
Commissioner is of the opinion that for the purpose of protecting the interest
of the Government revenue, it is necessary so to do, he may, by order in
writing attach provisionally any property, including bank account, belonging
to the taxable person in such manner as may be prescribed.
(2) Every such provisional attachment shall cease to have effect after
the expiry of a period of one year from the date of the order made under subsection(1).
84. Continuation and validation of certain recovery proceedings
Where any notice of demand in respect of any tax, penalty, interest
or any other amount payable under this Act, (hereafter in this section referred
to as “Government dues”), is served upon any taxable person or any other
person and any appeal or revision application is filed or any other proceedings
is initiated in respect of such Government dues, then––
(a) where such Government dues are enhanced in such appeal,
revision or other proceedings, the Commissioner shall serve upon the
taxable person or any other person another notice of demand in respect
of the amount by which such Government dues are enhanced and any
recovery proceedings in relation to such Government dues as are covered
by the notice of demand served upon him before the disposal of such
appeal, revision or other proceedings may, without the service of any
fresh notice of demand, be continued from the stage at which such
proceedings stood immediately before such disposal ;
(b) where such Government dues are reduced in such appeal,
revision or in other proceedings––
(i) it shall not be necessary for the Commissioner to serve upon
the taxable person a fresh notice of demand ;
(ii) the Commissioner shall give intimation of such reduction
to him and to the appropriate authority with whom recovery proceedings is pending ;
(iii) any recovery proceedings initiated on the basis of the
demand served upon him prior to the disposal of such appeal,
revision or other proceedings may be continued in relation to the
amount so reduced from the stage at which such proceedings stood
immediately before such disposal.__
