Q 1. Which is the applicable section for the purpose of recovery of tax short paid or not paid or amount erroneously refunded or input tax credit wrongly availed or utilized?
Ans. Section 51A in cases where there is no invocation of
fraud/suppression/mis-statement etc and Section 51B where the ingredients of
fraud/suppression/mis-statement etc are present.
Q 2. Can the person chargeable with tax pay the amount of
demand along-with interest before issue of notice under section 51A?
Ans. Yes. In such cases no notice can be issued by the proper
officer.
Q 3. If notice is issued under Section 51A and thereafter
the noticee makes payment, is there any need to adjudicate the case?
Ans. Where the person to whom a notice has been issued under
sub-section (1) of section 51A, pays the tax along with interest within 30 days
of issue of notice, no penalty shall be payable and all proceedings in respect
of such notice shall be deemed to be concluded.
Q 4. What is the relevant date for issue of Show Cause
Notice under Section 51A/B?
Ans. The relevant date is the date of filing of annual
return 146 where such returns of actually filed or where such returns are not
filed, the due date for filing of annual return.
Q 5. Is there any time limit to issue SCN or adjudicate the
case u/s 51A/B?
Ans. There is no time limit to issue SCN. However the issuance
of SCN and adjudication of the case has to be completed within the period of 3
years (for Section 51A cases) and 5 years (for Section 51B cases) from the
relevant date.
Q 6. Can the person chargeable with tax pay the amount of
demand along-with interest before issue of notice under section 51B?
Ans. Yes. Before issue of notice under sub section (1) or a statement
under sub-section (2), a person chargeable with tax, shall have an option to
pay the amount of tax along with interest and fifteen percent penalty,
ascertained either on his own or informed by the proper officer, and on such
payment, no notice shall be issued with respect to the tax so paid.
Q 7. If notice is issued under Section 51B and thereafter
the noticee makes payment, is there any need to adjudicate the case?
Ans. No if tax/interest and penalty has been paid. Where the
person to whom a notice has been under sub-section (1) issued, pays the tax
along with interest with twenty five percent penalty within 30 days of issue of
notice all proceedings inrespect of such notice shall be deemed to be
concluded.
Q 8. In case a notice is adjudicated under Section 51B and
order issued confirming tax demand and penalty, does the noticee have any
option to pay reduced penalty?
Ans. Yes. He needs to pay tax/interest and 50% of penalty
within 30 days of communication of order. Where any person served with an order
issued under sub-section (6) of Section 51B pays the tax along with interest
and a penalty equivalent to fifty percent of such tax within thirty days of the
communication of order, all proceedings in respect of the said tax shall be
deemed to be concluded.
Q 9. What happens in cases (both under Section 51A & B)
where notice is issued but order has not been passed within 3 years (51A)/5
years (51B)?
Ans. The Model GST Law provides for deemed conclusion of the
adjudication proceedings if the order is not issued within three years as
provided for in section 51A (7) or within five years as provided for in section
51B (7).
Q 10. What happens if a person collects tax from another
person but does not deposit the same with Government?
Ans. As per Section 52 of MGL, every person who has collected
from any other person any amount as representing the tax under this Act, shall
deposit the said amount to the credit of the Central or a State Government,
regardless of whether the supplies in respect of which such amount was collected
are taxable or not.
Q 11. In case the person does not deposit tax collected in
contravention of Section 52, what is the proper course of action to be taken?
Ans. Notice to be issued. Principles of natural justice to be
followed and order to be issued. It is to be noted that such order has to be
invariably issued within 1 year of date of issue of notice. However there is no
time limit for issue of show cause notice. Thus, in such cases duty can be recovered
even after ten years.
Q 12. Is there any time limit to issue notice in cases under
Section 52- tax collected but not paid?
Ans. No. There is no time limit. Notice can be issued on detection
of such cases without any time limit. Once notice is issued, the order has to
be passed within 1 year from the date of issue of notice.
Q 13. What are the modes of recovery of tax available to the
proper officer?
Ans. The following options are available to the proper officer:
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;
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;
c) 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 credit of the Central or a State Government;
d) The proper officer may, on an authorization by the competent
authority, 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;
if the dues remains unpaid for a period of thirty days after any such distress,
he 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 pay 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 and on receipt of such certificate, the Collector shall proceed to
recover from such person the amount specified as if it were an arrear of land
revenue.
Q 14. Can the proper officer allow payment of tax dues in
installments?
Ans. Yes, in cases other than self-assessed tax. The 150
Commissioner/Chief Commissioner may extend the time for payment or allow
payment of any amount due under the Act, other than the amount due as per the
liability self-assessed in any return, by such person in monthly installments’
not exceeding twenty four, subject to payment of interest under section 36 with
such restrictions and conditions as may be prescribed. However, where there is default
in payment of any one installment on its due date, the whole outstanding
balance payable on such date shall become due and payable forthwith and
recovered without any further notice.
Q 15. What happens in cases where the tax demand confirmed
is enhanced in appeal/revision proceedings?
Ans. The notice of demand is required to be served only in
respect of the enhanced dues. In so far as the amount already confirmed prior
to disposal of appeal/revision, the recovery proceedings may be continued from
the stage at which such proceedings stood immediately before such disposal.
Q 16. If a person liable to pay tax has certain tax liability
and in the meantime he transfers his business to another person, what happens
to the existing tax liability?
Ans. Where any person liable to pay tax, transfers his business
in whole/part, by sale, gift, lease, leave and license, hire, or in any other
manner, then such person and the person to whom the business is transferred
shall jointly and severally be liable to pay the tax, interest or penalty due
from the taxable person up to the time of such transfer, whether such dues has
been determined before such transfer, but has remained unpaid or is determined thereafter.
Q 17. What happens to tax dues where the Company (taxable
person) goes into liquidation?
Ans. When any company is wound up and any tax or other dues
determined whether before or after liquidation that remains unrecovered, every
person who was a director of the company during the period for which the tax
was due, shall jointly and severally be liable for payment of dues unless he
proves to the satisfaction of the Commissioner that such non-recovery is not
attributed to any gross neglect, misfeasance or breach of duties on his part in
relation to the affairs of the company.
Q 18. What is the liability of partners of a partnership firm
(Taxable person) to pay outstanding tax?
Ans. Partners of any firm shall jointly and severally liable
for payment of any tax, interest or penalty. Firm/ partner shall intimate the
retirement of any partner to the Commissioner by a notice in writing –
liability to pay tax, interest or penalty up to the date of such retirement, whether
determined on that date or subsequently, shall be on such partner. If no
intimation is given within one month from the date of retirement, the liability
of such partner shall continue until the date on which such intimation is received
by the Commissioner.
Q 19. What happens to the tax liability of a taxable person,
whose business is carried on by any guardian / trustee or agent of a minor?
Ans. Where the business in respect of which any tax is payable
is carried on by any guardian / trustee / agent of a minor or other
incapacitated person on behalf of and for the benefit of such
minor/incapacitated person, the tax, interest or penalty shall be levied upon
and recoverable from such guardian / trustee / agent.
Q 20. What happens when the estate of a taxable person is
under the control of Court of Wards?
Ans. Where the estate of a taxable person owning a business in
respect of which any tax, interest or penalty is payable is under the control
of the Court of Wards/Administrator General / Official Trustee / Receiver or
Manager appointed under any order of a Court, the tax, interest or penalty shall
be levied and recoverable from such Court of Wards/ Administrator General /
Official Trustee / Receiver or Manager to the same extent as it would be
determined and recoverable from a taxable person.