Section 16 - Determination of cess not paid or short paid or erroneously refunded

Unpaid or wrongly refunded cess: show-cause notice deadlines, ?1,000 threshold, penalties, and settlement payments ending proceedings

Where cess has not been paid, short paid, or erroneously refunded due to a lapse by the taxable person, the proper officer must serve a show cause notice requiring payment of the specified cess with interest under section 17 and applicable penalty; no notice may be issued if the amount for a financial year is below one thousand rupees. The notice must be issued within twenty-four months from the relevant return due date or the date of erroneous refund, and additional periods may be covered by a statement deemed to be a notice if based on the same grounds. Penalties are fixed at 10% of cess due or ten thousand rupees (whichever higher) for non-fraud cases, and 100% for fraud/wilful misstatement/suppression. Orders must be issued within twelve months (extendable by six months), and specified pre-notice or post-notice payments can conclude proceedings with reduced or nil penalty, subject to short-payment review and a 30-day default rule triggering penalty.