Determination of unpaid tax triggers notice, interest and specified penalty with statutory time limits for assessment orders.

Where a proper officer finds tax unpaid, short paid, erroneously refunded, or input tax credit wrongly availed other than due to fraud or wilful suppression, he must serve a show cause notice requiring payment of the tax, interest and a penalty. A statement covering additional periods on identical grounds is deemed notice. Voluntary payment of tax and interest before notice precludes further notice for that amount; payment within thirty days of a show cause notice removes penalty. The officer determines tax, interest and penalty after representations and must issue the assessment order within the statutory time limit.

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