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.––(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.
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(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.
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.
Explanation 1.—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;
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(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 1
[sections 122 and
125] 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 sub-section (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 on the tax 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
1. Subs. by Act 13 of 2021, s. 113, for the words and figures “sections 122, 125, 129 and 130” (w.e.f. 1-1-2022).
66
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 73 or section 74, 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.
1
[Explanation.—For the purposes of this sub-section, the expression “self-assessed tax” shall include
the tax payable in respect of details of outward supplies furnished under section 37, but not included in
the return furnished under section 39.]
(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 sub-section (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.
1. The Explanation ins. by Act 13 of 2021, s. 114 (w.e.f. 1-1-2022).
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(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 or, as the case may be, the central tax and the
Union territory 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 central tax and State tax or, as the case may be, the Central tax and the
Union territory 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;
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(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
State tax or Union territory 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 State tax or Union territory 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.
1
[Explanation.––For the purposes of this section, the word person shall include “distinct persons” as
referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.]
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:
1. The Explanation ins. by Act 31 of 2018, s. 24 (w.e.f. 1-2-2019).
69
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
[(1) Where, after the initiation
of any proceeding under Chapter XII, Chapter XIV or Chapter XV, 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 or any person specified in sub-section (1A) of section 122, 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 sub-section (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.