THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
DEMANDS AND RECOVERY
Section 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 misstatement or suppression of facts (Relevant Rule 142 & 142A)
(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 sub-section
(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 sub-section (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.