Chapter 15

Section 73 – Tax Not Paid or Short Paid (Other than Fraud)

• Scope: Short payment or erroneous ITC not due to fraud.
• Notice: Show cause notice served.
• Time limits: Order within 3 years from due date of annual return or erroneous refund.
• Penalty: 10% of tax or ₹10,000, whichever is higher.
• Voluntary Payment: Payment within 30 days avoids penalty.

 

Section 74 – Tax Not Paid or Short Paid (Due to Fraud)

• Scope: Fraud, willful misstatement, suppression of facts.
• Notice: Show cause notice with minimum 6 months’ lead time.
• Penalty:
  • 15% if paid before notice.
  • 25% if paid within 30 days of notice.
  • 50% if paid within 30 days after order.
• Time limits: Order within 5 years.

 

Section 75 – General Provisions

• Court/Tribunal stays excluded from time limit.
• Tax from self-assessment can be recovered under Section 79.
• No double penalty for the same act.

 

Section 76 – Tax Collected but Not Paid

• Tax collected from others but not remitted must be paid to Government.
• Interest under Section 50 applies.
• Recovery notice can be issued with hearing opportunity.

 

Section 77 – Tax Wrongfully Paid

• Refund provisions if tax classification (intra-state vs inter-state) changes.

 

Section 78 – Initiation of Recovery

• Amounts due must be paid within 3 months or shorter period if required.
• Recovery proceedings initiated on default.

 

Section 79 – Recovery of Tax

• Modes:
  • Deduction from money owed.
  • Sale of goods.
  • Notice to third-party holding money.
  • Distress of movable/immovable property.
  • Certificate to Collector.
  • Application to Magistrate.
• Allocation: Proportionate credit to central and state governments.

 

Section 80 – Payment in Instalments

• Commissioner may allow payment in up to 24 monthly instalments (other than self-assessed tax).
• Default in any instalment triggers full payment.

 

Section 81 – Transfer of Property to Defraud Revenue

• Any property transfer with intent to defraud Government is void.
• Exception: Adequate consideration, good faith, or prior permission.

 

Section 82 – Tax First Charge on Property

• Tax dues have first charge over all properties (except as per Insolvency Code).

 

Section 83 – Provisional Attachment

• Commissioner may provisionally attach property (including bank accounts) to protect revenue.
• Validity: 1 year unless otherwise extended.

 

Section 84 – Continuation and Validation of Recovery

• Recovery proceedings can continue even if appeal or revision is pending.
• Adjustments made if dues are enhanced or reduced during proceedings.