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Section 75 of GST – 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, 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.
(3) 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.
(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 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 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.
(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.
(10) The adjudication proceedings shall be deemed to be concluded, if the order is not issued within three years as provided for in sub-section (10) of section 73 or within five years as provided for in sub-section (10) of section 74.
(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 and 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 sub-section (10) of section 73 or sub-section (10) of section 74 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, 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.
(13) 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.
These provisions are general provisions for determination of tax and are applicable irrespective of whether the notice invokes the extended period or not
1. If an order of court or Appellate Tribunal stays the service of notice or issuance of order then, the period of such stay will get excluded from the period of issuance of order i.e. 3 years or 5 years as the case may be.
2. When a notice has been issued considering the case to be for fraud or for willful representation or for suppression of facts, and whereas the charges of fraud, suppression and misstatement of facts were not sustainable or not established by an order of Appellate Authority or Appellate Tribunal, then in such case the officer shall determine the tax as if the notice is issued for the normal period of 3 years.
3. An order required to be issued in pursuance of the direction of the Tribunal or a Court shall be issued within two years from the date of communication of the said direction.
4. Opportunity of personal hearing has to be granted when requested for in writing by the person chargeable with tax or where any adverse decision is proposed to be taken against the person.
5. Personal hearing can be adjourned when sufficient cause is shown in writing. However, such adjournment can be granted for a maximum of 3 times. It should be noted that a departmental show cause notice which specifies three consecutive dates for personal hearing (failing which an ex-parte order is passed) will not be held to be valid as this is against the principles of natural justice.
6. The relevant facts and basis of the decision shall be set out in the order, which means a speaking order needs to be placed.
7. The amount of tax along with interest and penalty should not exceed the amount mentioned in the notice and the grounds shall not go beyond what is mentioned in the notice.
8. When the decision of Tribunal/ Court/ Appellate authority modifies the amount of tax, correspondingly interest and penalty shall also be modified to that extent by the proper officer.
9. Interest shall be payable in all cases whether specifically mentioned or not.
While this sub-section specifically mandates payment of interest even if the same is not mentioned in the order, would it over-ride the provision of sub-section 75(7) in a case where no interest has been specified even in the original notice is a point to be considered.
Further, this sub-section makes special mention for payment of interest even if it is not specified in the Order while payment of penalty finds no such special mention. Could it be safely interpreted to mean that no penalty need be paid on account of it not being specified in the Order? It would be important to draw your attention to Section 126(6) which specifies that a proper officer is obligated to levy penalties in all cases where the penalty specified under the GST law is either a fixed sum or expressed as a fixed percentage. Considering the above, would it be possible for the proper officer to issue an additional order specifically for levy of penalty? This could be possible since Section 75(13) will come into force only when a penalty has been levied under Sections 73 or 74. Thus, non-levy of penalty in an order issued under Sections 73 or 74 could still attract penalty under our provisions of the Act, viz. Sections 122, 125, 129 and 130.
10. If the order is not issued within the time limits as prescribed in sub-section (10) of section 73 or (10) of section 74, i.e., 5 years in case of fraud, misstatement or suppression and 3 years in any other case, the adjudication proceedings shall be deemed to be concluded.
11. An issue on which a first appellate authority or Tribunal or High Court has given its decision which is prejudicial to the interest of the revenue and an appeal to the Appellate Tribunal or High Court or Supreme Court against such decision is pending, then the period spent between the two dates of decision shall be excluded in computing the period of 3 years or 5 years respectively, for issue of order.
12. Any amount of self-assessed tax or intent payable, whether wholly or in part in accordance with a return furnished under section 39 shall be recovered under the provisions of section 79.
13. It is also provided that when the penalty is imposed under Section 73 & 74 that no penalties shall be imposed under any other provisions of this Act for the same act or omission.
These provisions of Section 73, 74, and 75 are much broader than the provisions contained in erstwhile Central Indirect Tax laws.
Earlier in Central Excise and Service Tax laws, the demand of tax can be made up to a maximum of 5 years. The normal period for which the notice could be issued is 2 years in Central Excise Law and 30 months in Service Tax Law. The VAT law seems to be quite different from the central excise and service tax provisions.
However, the conditions for such extended period are the same as in the erstwhile Indirect Tax Laws. The meanings of fraud, misstatement or suppression are still to be understood in the same way as in the erstwhile law i.e., deliberate intent to avoid tax requires to be established and sustained.
Unlike the erstwhile law, the time limit of 3 years and 5 years from the issue of orders and not for serving of show cause notice.
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