General provisions relating to demand of tax :
The following provisions apply to both types of demands i.e. with charge of fraud, wilful mis-statement or suppression of facts to evade tax or without such charge.
Period of stay to be excluded for computing period of three/five years – Where the service of notice or issuance of order is stayed by an order of a Court or Tribunal, the period of such stay shall be excluded in computing the period of three years or five years – section75(1) of CGST Act. The stay should be for service of notice or issuance of order. Mere stay of recovery is not sufficient.
If charge of suppression, fraud not established – If Appellate Authority or Appellate Tribunal or Court concludes that the charge of fraud or any wilful mis-statement or suppression of facts to evade tax has not been established, the proper officer shall determine the tax payable by such person for the period of three years, i.e. without charge of suppression etc. – section 75(2) of CGST Act.
Time limit for issue of order on direction of Tribunal or Court – 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- section 75(3) of CGST Act. This happens when matter is remanded to lower authority with certain directions for determining the issue.
Opportunity of personal hearing – An opportunity of personal 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. – section 75(4) of CGST Act.
Adjournment of hearing – The proper officer shall, if sufficient cause is shown adjourn the hearing for reasons to be recorded in writing. Maximum three adjournments can be given — section 75(5) of CGST Act.
Order with reasons – The proper officer, in his order, shall set out the relevant facts and the basis of his decision- section 75(6) of CGST Act.
Demand cannot be more than specified in notice and cannot be confirmed on other ground – 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 grounds other than the grounds specified in the notice- section 75(7) of CGST Act.
Interest and penalty gets automatically modified, if tax amount increased or reduced – 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- section 75(8) of CGST Act.
Interest mandatory even if not specified in order – Interest on the tax short paid or not paid shall be payable whether or not specified in the order determining the tax liability – – section 75(9) of CGST Act.
Adjudication concludes if order not issued within three/five years – The adjudication proceedings shall be deemed to be concluded if the order is not issued within three/five years- section 75(10) of CGST Act.
However, if the Show Cause Notice was issued but kept pending as department had filed appeal against an order adverse to revenue in some other proceedings on same issue, that period shall be excluded- section 75(11) of CGST Act.
[In such cases, the SCN is transferred to ‘call book’ in excise and service tax department].
Recovery proceedings without issue of show cause notice if self assessed tax and interest thereon not paid – 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 of CGST Act – – section 75(12) of CGST Act.
Penalty equal to 10% of tax is payable if self assessed tax is not paid within 30 days from due date – section 73(11) of CGST Act.
No other penalty once penalty imposed under sections 73 or 74 – 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 – section 75(12) of CGST Act.