In your opinion, whether department can issue show cause notice when tax, interest and penalty has been paid? Further, whether the company has…

The person chargeable with tax, where any tax has not been paid or short paid by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, may, before service of notice, pay the amount of tax along with interest payable under section 50 of the CGST Act, 2017 and a penalty equivalent to 15% of such tax on the basis of his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment, and the proper officer, on receipt of such information, shall not serve any notice, in respect of the tax so paid or any penalty payable. Show cause notice cannot be issued for the amount of tax paid, i.e.8,00,000 and penalty already paid. However, show cause notice can be issued for the amount of tax unpaid - 2,00,000 plus applicable interest and penalty on the same. In view of above provisions, penalty equivalent to 15% of the tax is payable but only 10% of the penalty has been paid by the company. So, penalty is short paid by - 40,000. Thus, required amount of penalty is not paid by company. The legal remedy available to RESL is as under: (i) pay the said tax along with applicable interest and a penalty equivalent to 25% of such tax within 60 days of issue of the notice, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded. (ii) pay the tax along with applicable interest and a penalty equivalent to 50% of such tax within 60 days of communication of the order, and on doing so, all proceedings in respect of the said notice shall be deemed to be concluded.