Demands for tax short paid or not paid or erroneously refunded :
Since tax is payable on self assessment basis, it is possible that the taxable person may not have correctly paid the tax or may not have paid the tax at all. It is also possible that the taxable person might have claimed refund and got refund of tax or input tax credit.
In such case, department can issue show cause notice and adjudicate the demand.
In normal cases, such order is required to be passed within three years from the due date of filing return. However, if the non-payment was on account of fraud, wilful mis-statement or suppression of facts to evade tax, the order can be passed within five years from the due date of filing return.
The provisions apply to recovery of interest also.