Page 104 - GSTL_21st May 2020_Vol 36_Part 3

350 GST LAW TIMES [ Vol. 36
“8. A plain reading of this provision shows that this provision shall be ful-
ly applicable in cases where the tax was not paid for any reason other than
fraud. In the present case, though it is submitted by learned counsel for
CGST that since the tax was paid, fact remains that the tax was not paid by
the petitioner Company in the Government account within the due date,
and accordingly, it is a case of tax not being paid, within the period pre-
scribed, or when due. In that view of the matter, we are unable to accept the
contention of Learned Counsel for CGST that no show cause notice was re-
quired to be given in this case. Even otherwise, if any penal action is taken
against the petitioner, irrespective of the fact whether there is provision
under the Act or not, the minimum requirement is that the principles of
natural justice must be followed. In the present case admittedly, prior to the
issuance of letter dated 6-2-2019, no show cause notice or an opportunity of
being heard was given to the petitioner and no adjudication order was
passed.”
20. This Court, while interpreting the term “tax not paid” has held that
if a tax has not been paid within the prescribed period, the same would fall with
the expression “tax not paid” as mentioned under Section 73 of the CGST Act.
The aforesaid interpretation further finds support from other sub-sections of Sec-
tion 73, particularly sub-sections (5), (6) and (7) of Section 73. A bare reading of
the aforesaid sub-sections (5), (6) and (7) of Section 73 would reveal that a person
chargeable with tax, if before service of notice pays the amount of tax along with
interest payable thereon under Section 50 of the Act on the basis of his own as-
certainment, then the Assessing Officer, if satisfied that correct tax along with
interest has been paid by the said assessee, shall not issue any notice under Sec-
tion 73(1) of the Act. However, Section 73(7) of the Act provides that if an as-
sessee, who has itself on his own ascertainment, deposited the tax along with
interest, but if in the opinion of the Proper Officer, the amount paid on own as-
certainment falls short of the amount actually payable, then a notice would be
issued by the said Proper Officer under Section 73(1) of the Act for recovery of
the actual amount payable. Thus, from a conjoint reading of the aforesaid provi-
sions, it would be evident that even in a case where an assessee files his return as
per his own ascertainment, pays the tax and even pays interest, but if the said
amount paid by the assessee is falling short of the amount actually payable, the
Proper Officer is required to initiate proceedings under Section 73(1) for recovery
of the said amount of tax and interest. The natural corollary of the above inter-
pretation is that if an assessee has allegedly delayed in filing his return, but dis-
charges the liability of only tax on his own ascertainment and does not discharge
the liability of interest, the only recourse available to the Proper Officer would be
to initiate proceedings under Section 73(1) of the CGST Act for recovery of the
amount of “short paid” or “not paid” interest on the tax amount.
21. It is not a true that liability of interest under Section 50 of the CGST
Act is automatic, but the said amount of interest is required to be calculated and
intimated to an assessee. If an assessee disputes the liability of interest i.e. either
disputes its calculation or even the leviability of interest, then the only option left
for the Assessing Officer is to initiate proceedings either under Section 73 or 74 of
the Act for adjudication of the liability of interest. Recently, the Hon’ble Madras
High Court, in its decision dated 19th December, 2019 rendered in Writ Appeals
in the case of The Assistant Commissioner of CGST & Central Excise and Others v.

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