Chapter XV DEMANDS AND RECOVERY

1[pertaining to the period up to Financial Year 2023-24]

not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason other than fraud or any wilfulmisstatement or suppression of facts.-

1[pertaining to the period up to Financial Year 2023-24]

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.

credit wrongly availed or utilised for any reason pertaining to Financial Year 2024-25 onwards

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 2[or sub -sections (2) and (7) of section 74A]2, 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. 2[(2A) Where any Appellate Authority or Appellate Tribunal or court concludes that the penalty under clause (ii) of sub -section (5) of section 74A is not sustainable for the reason that the charges of fraud or any wilful misstatement or suppres sion of facts to evade tax has not been established against the person to whom the notice was issued, the penalty shall be payable by such person, under clause (i) of sub -section (5) of section 74A.]2 (3) Where any order is required to be issued in pursuance o f 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 88 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 Authori ty 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. 3[(10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued within the period specified in sub-section (10) of section 73 or in sub-section (10) of section 74 or in sub -section (7) of section 74A. ]3 (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 an d 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 s ub-section (10) of section 73 or sub - section (10) of section 74 2[or sub -section (7) of section 74A]2 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 2[or section 74A]2, 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.]1 (13) Where any penalty is imposed under section 73 or section 74 2[or section 74A]2, 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 Ac t 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 89 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. (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 90 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 office r 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 cons equences 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 disc harge 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 perso nally 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 Governm ent any such money or part thereof; (d) the proper officer may, in accordance with the rules to be made in this behalf, 91 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 (Central Act 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 regulation s 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 s aid 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. 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.]1 .

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 out standing 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 92 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 (Central Act 31 of 2016), any amount payable by a taxable person or any other perso n 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 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 prop erty, including bank account, belonging to the taxable person or any person specified in sub -section (IA) of section 122, in such manner as may be prescribed.]1 (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. CHAPTER XVI LIABILITY TO PAY IN CERTAIN CASES