Joint Com m issioner(recovery) Page 4 of 127

Transcription

1 Disclaimer 1. This is a manual of procedure. It does not replace the Act, Rules or Notification. Any future amendment to the Act, Rules or Notifications may require changes in the procedure. The manual should be read accordingly. 2. Any Trade or Departmental Circular issued after the publication of this manual may modify the procedure. 3. The manual is intended for the internal use of the Department. Nothing from the manual should be quoted in any statutory order, notice or intimation to the dealers or other persons. 4. Circulars issued before the 1st April 2005, contain references to the designations of officers as per the Bombay Sales Tax Act, It is needless to add that these references should be construed as references to the corresponding designations under the Maharashtra Value Added Tax Act, Page 1 of 127

2 Index 1. Objects/functions of the Branch 4 2. Organizational structure Mumbai Zone Thane Zone Pune Zone Nagpur Zone Relevant provisions of the Act, Rules, Notifications and Internal circulars Targets Process of recovery Recovery Procedure Allotment of cases Bank and debtor s attachment MLRC procedure Grant of Instalments Write-off Unavailable Recovery Recovery under Sugarcane Purchase Tax Act Closure of Recovery Proceedings Issue of Tax Clearance Certificate Generation of Notices, Reminders, etc Duties and Accountabilities of officers/staff in hierarchy and Key Performance Indicators (K.P.I.) Duties and Accountabilities: - Joint Commissioner of Sales Tax Duties and Accountabilities: - Deputy Commissioner of Sales Tax Duties and Accountabilities: - Page 2 of 127

3 Assistant Commissioner of S.T./ S.T.O Duties and Accountabilities: - S.T.I Duties and Accountabilities: - Clerk K.P.I.: - Joint Commissioner of Sales Tax K.P.I.: - Deputy Commissioner of Sales Tax K.P.I.: - Assistant Commissioner of Sales Tax/ Sales Tax Officer K.P.I.: - Sales Tax Inspector K.P.I.: - Clerk Reporting formats Monthly/weekly statement Available Recovery Unavailable Recovery Control registers Inspection procedure and frequency Comment on record filing system Responsibilities and date for updating the manual Linkage: - Linkage with other branches i.e. Return, Business Audit, Refund Audit etc Annexures 62 Page 3 of 127

4 1) Objects/functions of the Branch 1.1 Objective To recover arrears by taking recovery actions in the cases referred to the recovery section under all Acts administered by the department. 1.2 Functions To attach bank account of the dealer or debtors of the defaulters To apply the provisions of Maharashtra Land Revenue Code, 1966 including issue of R.R.C.'s to other districts/states To levy and recover post assessment interest where ever applicable To write off arrears To grant instalments in the deserving cases and monitor the payments To launch prosecutions under MVAT Act, 2002, for willful non payment of taxes under section 74 (2) and 74 (3) (g) To create a charge on asset of the defaulters under section 38 of the MVAT Act, To grant tax clearance certificate to dealer. 2) Organizational structure. 2.MUMBAI ZONE. Joint Com m issioner(recovery) Page 4 of 127

5 Office of the J.C. Steno - 1 P.A. - 1 E.O. - 1 S.T.I. - 4 Clerk - 11 Naik - 1 Peon - 1 Deputy Com m issioner(recovery) There will be two Dy. Com m issioners under the Joint Com m issio ner namely D.C. ( Recovery- 1) and D.C. ( Recovery- 2) Office of the D.C. S.T.I. - 5 Clerk - 5 Peon -2 Asst. Com m issioner(recover y) / Sales Tax Officer (Recovery) There will be three Asst. Com m i ssio ners and seven S.T.O.s under a Dy. Com m issioner i.e. A.C. ( Recovery) and S.T.O. ( Recovery) Two S.T.I.s, 1 clerk, 1 peon and 1 notice server will assist each officer. 2 Organizational structure.(mofussil) 2.2 THANE ZONE Page 5 of 127

6 Additional Commissioner (Thane Zone, Raigad) (Having Jurisdiction over Thane and Raigad Districts.) J.C. (Raigad) (Vat Adm) J.C. (Thane City) (Vat Adm) J.C.(Thane Rural) (Vat Adm) (2)Raigad 3) Thane 4) Kalyan 5) Palghar 1) A.C.(Recovery) 1) D.C.(Recovery) 1) D.C.(Recovery) 1) A.C.(Recovery) 2) S.T.O(Recovery) 2) A.C.(Recovery) 2) A.C.(Recovery) 2) S.T.O(Recovery)(2) 3) S.T.O.(Recovery) Page 6 of 127

7 2. Organization structure.(mofussil) 2.3 PUNE ZONE. Additional Commissioner(Pune Zone) (Having Jurisdiction over Pune Zone) J.C.(Pune) (Vat Adm) J.C.(Solapur) (Vat Adm) J.C.(Nashik) (Vat Adm) J.C.(Dhule) (Vat Adm) J.C.(Kolhapur) (Vat Adm) 6) Pune 7) Solapur 10)A' Nagar 12) Dhule 15) Kolhapur 1) D.C.(Recovery)(2) 1) A.C.(Recovery) 1) A.C.(Recovery) 1) D.C.(Recovery) 1) A.C.(Recovery) 2) A.C.(Recovery)(2) 2) S.T.O(Recovery) 2) S.T.O(Recovery) 2) A.C.(Recovery) 2) S.T.O(Recovery) 3) S.T.O (Recovery)(4) 3) S.T.O(Recovery) 8) Barshi 11)Malegaon 13) Jalgaon 16) Ratnagiri 1) A.C.(Recovery) 1) A.C. (Recovery/VAT) 1) D.C.(Recovery/VAT) 1) D.C.(Recovery/VAT) 2) S.T.O(Recovery) 2) A.C.(Recovery) 2) A.C.(Recovery) 3) S.T.O (Recovery) 3) S.T.O (Recovery) 9) Usmanabad 14)Nashik 14) Nandurbar 17) Sindhudurg 1) A.C.(Recovery) 1) A.C. (Recovery) 1) A.C.(Recovery/VAT) ( ORAS) 2) S.T.O (Recovery) 1) D.C.(Recovery/VAT) 2) S.T.O (Recovery) 18) Sangli Page 7 of 127

8 2.Organizational structure.(mofussil) 2.4 NAGPUR ZONE. Additional Commissioner Nagpur (Having Jurisdiction over Nagpur Zone) J.C. (Nagpur) ( VAT ADM) J.C. (Amravati) ( VAT ADM) J.C. (Nanded) ( VAT ADM) J.C(Aurangabad) ( VAT ADM) 20) Nagpur 36)Amaravati 31)Nanded 35)Aurangabad 1) D.C.(Recovery) 1) A.C.(Recovery) 1) A.C.(Recovery) 1) A.C.(Recovery) 2) A.C.(Recovery) 2) S.T.O(Recovery) 2) S.T.O(Recovery) (2) 2) S.T.O(Recovery) 3) S.T.O. (Recovery)(2) 21)Chandrapur 27)Akola 32)Parbhani 36)Beed 1) D.C.(Recovery/VAT) 1) A.C.(Recovery) 1) A.C.(Recovery/VAT) 1) A.C.(Recovery) 2) A.C.(Recovery) 2) S.T.O(Recovery) 3) S.T.O(Recovery) 33)Hingoli 37)Jalana 22)Gondia 28)Yaotmal 1) A.C.(Recovery/VAT) 1) D.C.(Recovery/VAT) 1) A.C.(Recovery) 1) A.C.(Recovery) 2) A.C.(Recovery) 2) S.T.O(Recovery) 2) S.T.O 34)Latur 23)Bhandara 29)Washim 1) D.C.(Recovery/VAT) 1) A.C.(Recovery/VAT) 1) A.C.(Recovery/VAT) 2) A.C.(Recovery) 2) S.T.O(Recovery) 2) S.T.O(Recovery) 3) S.T.O(Recovery) 24)Wardha 30)Khamgaon 1) A.C.(Recovery/VAT) 1) A.C.(Recovery) Allocation of Officers for recovery in the State Sr. No. Zone Addition al CST Jt. CST Dy. CST A.C. STO 1 Mumbai Thane Pune Nagpur *having multiple functions Page 8 of 127

9 3. Relevant provisions of the Act, Rules, Notifications and Circulars. 3.1 Section 20 Short Payment Every dealer who has furnished a return or revised return under section 20, but has not paid whole amt. of tax into Govt. treasury, notice in F-213 as per R-46 is served on him requiring him to pay the balance tax. Please see Rule 17, 18, 19 & 20. Format in form No. 213 is enclosed as Annexure I. 3.2Section -29(7) Penalty This section governs levy of penalty in certain instances. When any dealer or person has failed without reasonable cause to comply with any notice in respect of any proceedings, penalty equal to amount of Rs. 2000/- can be imposed on him by recovery branch. Please see Rule 39 & 90. Format of order is enclosed as Annexure II. 3.3 Section 30 Interest on delayed payments. If a registered dealer fails to pay the tax within the specified time then he will be liable to pay interest in addition to tax under this section. Please see Rule 88. Format of demand notice is enclosed as Annexure III. 3.4 Section -32- Payment of Tax (Instalment) The Commissioner may, in respect of any particular dealer or person, and for reasons to be recorded in writing, allow him to pay tax, penalty, interest or the sum forfeited, by instalments but the grant of instalment to pay tax shall be without prejudice to the other provisions of this Act including levy of penalty or interest or both. Powers under proviso of section 32(4)(v) of the MVAT Act, 2002, Page 9 of 127

10 have been delegated up to the level of Sales Tax officers. (See Annexure-21) Please see Rule 45 (6). Format in form No. 417 for instalment order is enclosed as Annexure IV. 3.5 Section -33 special mode of recovery If there is an outstanding liability of tax, interest & penalty against a dealer, or person on whom a notice u/s 32(4) has already been served, the Commissioner may, at any time, by notice in writing require. i) Any person from whom any amount of money is due, or may become due, to the said dealer or person or ii) Any person who holds or may subsequently hold money for or on account of such dealer or person, to pay the taxes. Please see Rule 48 & 88. Format of notice is enclosed as Annexure V. 3.6 Section 34- Special power of sales tax authorities for recovery of tax as arrears of land revenue. If the amount of tax, penalty, interest, amount forfeited or any other sum, due & recoverable from any dealer or any other person by or under the provisions of this Act, then the Commissioner shall have and exercise all the powers and perform all the duties of the Commissioner under MLRC, Special powers of Sales Tax authorities for recovery of tax as arrears of Land Revenue: Sr. No. Designation Powers delegated 1 Commissioner All powers of Commissioner under MLRC Additional CST All powers of Additional Commissioner under MLRC Joint CST All powers of Collector under MLRC Sr. D.C./D.C. All powers of Dy./Asst. Collector under MLRC 1966 (except powers of confirmation of sale and arrest and confinement) 5 A.C./STO All powers of Tahsildar under MLRC 1966 Page 10 of 127

11 Sr. No. Designation Powers delegated (except powers of confirmation of sale and arrest and confinement) 3.8 Section 36- Continuation & Validation of certain recovery proceedings. If the demand of tax, interest, penalty etc. has been enhanced in the appeal, then the Commissioner has to serve a fresh notice on the dealer. If the demand is reduced he need not serve the notice but he has to send intimation (Sub section 1 of section 36) and if there is no change, he need not serve any notice or intimation (Sub Section (2) of section 36) 3.9 Section 37- Liability under this Act to be the first charge. Notwithstanding anything contained in any contract to the contrary, but subject to any provision regarding creation of first charge in any Central Act for the time being in force, any amount of tax, penalty, interest, sum forfeited, fine or any other sum, payable by a dealer or any other person under this Act, shall be the first charge on the property of the dealer, or as the case may be, person Section 38- Transfer to defraud revenue. (1) Where, during the pendency of any proceedings under this Act or after the completion thereof, the Commissioner has reason to believe that the liability of the dealer to pay tax or any other sum payable under this Act, is likely to be in excess of rupees twenty-five thousand and the dealer, creates a charge, or parts with the possession by any mode of transfer whatsoever, including sale, mortgage, gift, or exchange of any of the assets of his business valued at rupees ten thousand or more in favour of any other person with intent to defraud revenue, then, notwithstanding anything contained Page 11 of 127

12 in any Act or contract to the contrary such charge or transfer shall be void as against any claim in respect of any tax or other sum payable by the dealer as a result of the completion of such proceedings or otherwise: Provided that, such charge or transfer shall not be void if made for adequate consideration and without notice of the pendency of the proceeding or of the liability to pay any sum on completion of any proceedings. (2) Where any person liable to pay tax or other sum payable under this Act has, during the pendency of any proceeding under this Act or after completion thereof, created a charge on or parted with possession by any mode of transfer including sale, mortgage, gift, or exchange of any of his assets in favour of any other person and the Commissioner is of the opinion that such charge of transfer becomes void under sub-section (1), then the Commissioner shall issue a notice and hold enquiry and decide whether the charge or transfer become void under sub-section (1). (3) If, after holding such enquiry the Commissioner is satisfied that the charge or transfer is void, he shall make an order declaring such charge or transfer to be void for the purpose of this Act Section 43 Applicability of all the provisions of this Act or any earlier law to person liable to pay tax under this Act. Any amount payable under this Act or any earlier law by any dealer or person or any other person liable for the payment under section 44 of the MVAT Act, 2002, is recoverable under all the relevant provision of this Act or the earlier law Section 44- Special provision regarding liability to pay tax in certain cases. i) Where a dealer dies and business is discontinued his legal Page 12 of 127

13 representative or any person becomes liable to pay any amount due. ii) If HUF is partitioned then each member shall jointly and severally be liable to pay amount due. iii) If the dealer transfers or dispose off his business or effect any change in ownership then the dealer or the person succeeding, shall jointly and severally be liable to pay the amount due Section -74- Offences & Penalties. 74(2) Whoever willfully attempts in any manner whatsoever to evade any tax leviable under this Act or payment of any tax, penalty or interest under this Act, shall, on conviction, be punished with rigorous imprisonment which shall not be less than 3 Months but which may extent to 1 year and with fine. 74(3) (g) Whoever fails, without sufficient cause, to pay the tax deductible at source or to deduct at source such tax, or fails without sufficient cause to obtain the sales tax deduction account number or fails without sufficient cause to file a return as required under the provisions of Sec.31. MLRC Section 183 & 184 These Sections provides arrest and imprisonment of the defaulters under the MLRC Act, Page 13 of 127

14 4. TARGETS 4.1 Sales Tax Inspector: - A target of closure of 10 cases is fixed for each sales tax inspector for a month/ follow up of 30 recovery cases per month which should includes 50% of oldest and 50% of biggest cases pertaining to his charge. 4.2 Assistant Commissioner /Sales Tax Officer: - As quoted above, if two sales Tax inspectors are appointed under the Assistant Commissioner or Sales Tax Officer then target of Assistant Commissioner/Sales Tax Officer is set at 20 recovery cases for a month/follow up of 60 recovery cases per month. 4.3 Deputy Commissioner:- Target of a Deputy Commissioner will be set accordingly. 4.4 Available recovery:- Target of available recovery should be 100%. 4.5 Review of target:- The target will be reviewed on quarterly basis, based on the cases received in recovery branch. 5. Process of recovery 5.1 Generation of recovery : - Action of recovery is initiated in following circumstances:- 5.2 Short payment in Return: - Dealer files returns in the return branch. In return, dealer provides details of turnover; taxes to be paid, taxes paid along with return and balance taxes payable. In the case where taxes are shown payable but are not paid, return branch officer issues a notice u/s. 20 of the MVAT Act, 2002 Page 14 of 127

15 (Annexure I) and demand is generated. 5.3 Statutory orders: - Similarly, when the assessing officer passes an assessment order demand is raised. He issues a demand notice, directing dealer to pay the amount shown in demand notice within thirty days of receipt of demand notice. If these dues are not paid by the dealer within time limit and if the dealer does not prefer an appeal challenging the assessment order, then arrears are created. 5.4 Arrears from Return Branch, Business Audit Branch and other branches: - Arrears from Return Branch, Business Audit Branch and other branches where demand is created are to be received after sixty days from service of the demand notice/form no. 213 by the officer of the respective branch. Up to sixty days the officer of the respective branch should take actions to recover the dues by way of attachment, i.e. bank attachment, debtor attachment etc. After sixty days concerned branch should send recovery papers to recovery branch. 5.5 Information to be received from Branch:- Various branches have to send information along with recovery papers as follows; Sr.No Name of Branch Return Branch Business Audit Branch Refund Branch Nature of Information Demand notice, all addresses, all phone/mobile numbers, bank details, PAN, assets details, etc. Demand notice, all addresses, all phone/mobile numbers, bank details, PAN, assets details, etc. Demand notice, all addresses, all phone/mobile numbers, bank details, PAN, assets details, etc. Page 15 of 127

16 5.6 Arrears from Enforcement Branch & L.T.U.: - Enforcement Branch & L.T.U. have to do the recovery including MLRC recovery on their own. 5.7 Disposal of cases: - The cases so obtained are distributed category wise among various Officers in the Recovery branch. As per the provisions of Act, by exercising appropriate method, arrears are to be recovered. Post assessment interest is also to be levied wherever necessary. Case is closed after proof of payment of recovery including interest payment, is obtained from dealer. The fact of closure is to be communicated to the branch, from whom arrears were received. 5.8 Information to be sent to the branch:- Recovery branch have to send information along with recovery papers as follows; Sr.No. Information to be sent to (Name of Branch) Nature of Information 1 Return Branch Recovery Report 2 Business Audit Branch Recovery Report 3 Refund Branch Recovery Report Page 16 of 127

17 6. Recovery Procedure 6.1 Allotment of cases: - When case is obtained from the return branch or any other branch, the case is registered in the Inward Register (See Annexure-33) maintained by the Joint commissioner. Reference number is generated and then the case is forwarded to the Deputy Commissioner and further, as per the convenience and work load of the respective officer, for recovery action. The reference number will include reference number of the concerned branch, from where the case is received, followed by the serial number in the Inward register of J.C. (recovery). Assistant Commissioners of Sales Tax & STO s are empowered to initiate recovery actions and get arrears recovered. The concerned clerk of the officer shall take entry of the cases in the register maintained by the officer. ( Annexure-33) 6. Bank and debtors Attachment: -After the cases are entered by the clerk in the entry register, cases are to be distributed among the Sales Tax Inspector by rotation, for recovery, by recovery officer. STI should contact all the defaulters on phone and obtain information regarding payment of taxes, including name of the bank, branch, and date of payment. If the dealer has not paid the taxes then action of Bank attachment (See Annexure 5) should be initiated and all bank accounts should be attached. If this action fails, then officer as well as STI should visit the POB of the dealer. They should collect the information of dealer s current debtors and assets and serve a notice u/s.33 of the MVAT Act, 2002 on all debtors. (See Annexure 5). If the arrears are still not recovered, then action under MLRC should be initiated. Page 17 of 127

18 6.2MLRC procedure is described as under. Maharashtra MLRC code is in operation since First of all, the Recovery Officer has to issue a Revenue Recovery Certificate (Pl see Annexure-6) to himself. Thereby the Recovery Officer empowers himself to initiate action under MLRC. Immediately, thereafter, demand notice in form no. 1 (Pl see Annexure-7) is to be issued to defaulting dealer. Demand notice can be served on salaried servants, manager or any responsible person, if the dealer is not available. If the demand notice is not accepted by the dealer or the dealer refuses to accept the notice or nobody is available to accept the demand notice then demand notice can be pasted on given address, in presence of two witnesses. For Mumbai city limit, notice is required to be issued u/s. 267 of the MLRC, 1966 and under this section notice period of 20 days is given to clear the dues. For other than Mumbai city limit (including Mumbai Suburbs), notice required to be issued u/s. 178 of the MLRC, 1966 and under this section notice period of 10 days are given to clear the dues. After completion of the Notice period, if dealer fails to clear the dues, a warrant of attachment is required to be issued by the recovery officer in the name of sales tax inspector working under him. (Pl see Annexure-8) u/s. 180/181 of code in case of movable/immovable property respectively. Fee of warrant of attachment is as under: Amount to be attached Fee (in Rs) Less than Rs Rs. 5 to Rs Rs. 10 to Rs Rs. 15 to Rs Rs. 20 to Rs Rs. 25 to Rs Rs. 30 to Rs Rs. 35 to Rs Rs. 40 to Rs Page 18 of 127 is

19 Rs. 45 to Rs Rs. 50 to Rs Rs. 60 to Rs Rs. 80 to Rs More than Rs The sales tax inspector executes the warrant of attachment. He visits the place of business/shop/factory/godown, etc as well as place of residence of the dealer (if it is a proprietary or partnership concern) for the purpose of execution of warrant of attachment. The visit should be made after collecting the necessary information from office record including online access of all branches CARE TO BE TAKEN AT THE TIME OF ATTACHMENT OF PLANT & MACHINERY AND OTHER ASSET: The Recovery Officer should refer to the assessment record available in his office. He should draw the list of machinery and other movable assets from the Balance Sheet of the defaulting dealer. In number of cases, the purchase invoices of plant & machinery as well as other movable assets are available in the assessment record, therefore the Recovery Officer should note the following contents which shall be useful to the S.T.I for the attachment purchase ; (1) Date of purchase of machinery; (2) Invoice No. & Date (3) Name of the machinery (4) Model No. Make No. etc. (5) Date of manufacture (6) No. of years the machinery is in use (7) Rate of depreciation (8) Production capacity of the machinery Note:- The auction shall not permit the attachment and sale of Page 19 of 127

20 the following, namely. (i) The necessary wearing apparel, cooking vessels, beds and bedding of the defaulter, his usage, cannot be parted with by any woman. (ii) Tools of artisans and, if the defaulter is an agriculturists, his implements of husbandry, except an implement driven by mechanical power and such cattle and seed as may, in the opinion of the collector, be necessary to enable him to earn his livelihood as such and also such portion of the agricultural produce as in the opinion of the collector is necessary for the purpose of providing, until the next harvest, for the due cultivation of the land and for the support of the holder and his family. (iii) Articles set aside exclusively for the use of religious endowments. (iv) Houses and other buildings (with the materials and sites thereof and the land immediately appurtenant thereto and necessary for their enjoyment) belonging to an agriculturist and occupied by him ATTACHMENT OF IMMOVEABLE PROPERTY; Immovable property is Land, building, flat or machinery embedded to the earth. In the case of machinery referred to the above, the part procedure should be as detailed above, however, in the case of Land, Building or Flat following details should be brought on the record which can be available in R.C Record or assessment record. If the immovable property is possessed under lease agreement or tenancy agreement then copy of such should be obtained and attached. If agreement copy is not available then on the basis of Rent receipt lease/tenancy rights should be attached. 1) City Survey No ) Total Area ) Area under construction sq. fts/ mtrs. 4) Date of construction Page 20 of 127

21 5) Total No. of rooms and their area room sq. fts/ mtrs. 6) Market value as per the ready reckoner issued by concerned government authority for that particular year. While executing the attachment of immovable property the Recovery Officer should issue order u/r. 11 or Maharashtra realization of Land Revenue Rules, 1967 (R & W.D. No. UNE /2363/R. date ) in form No. 4 Model Format (See annexure 9). The S.T.I shows the warrant of attachment to the defaulting dealer and inquires whether the outstanding dues are paid or not. If the dues are not paid then, the S.T.I proceeds to attach the moveable property of the dealer Step for attachment of moveable property. 1. STI should call two panchas, he should tell them provisions under the Act, importance of the Act and request them to cooperate in attachment. If panchas are not available, help from local police station can be availed. 2. The S.T.I should draw inventory of attachable property before Panchas (See annexure-10). The S.T.I. should put the approximate sales price of every item considering market value and date of purchase of the item. He should affix paper sheet on all attachable property. This paper sheet should bear Recovery Officer s seal, stamp, and serial number of the inventory drawn before panchas and signature with date. 3. The S.T.I should take an undertaking from the defaulting dealer /or the person present at the time of attachment on behalf of the dealer, that he will not dispose off attached movable goods under seal by sale, etc. before two witnesses as per the model undertaking (See Page 21 of 127

22 annexure- 11) 4. The S.T.I will draw the PANCHANAMA (SEE PANCHANAMA FORM AS ANNEXURE - 12 ) The panchanama shall be preferably hand written and in Marathi and a model panchanama annexed hereto should be used as a guide line. After completion of attachment of moveable goods, the proper entries are required to be brought on record i.e. proceeding sheet for submission of report to the Recovery Officer (Annexure 13) PREPARATION OF AUCTION PROCLAMATION NOTICE : (a) On receipt of S.T.I attachment report, if any claimant lodges claim as to property attached quasi judicial proceedings are to held & claim is to be decided, either in favour or otherwise (S. 218) by the recovery officer. If there is no claim, property is to be put for sale. The Recovery officer shall prepare Proclamation notice in form No. 6 u/r 12 (2) (b) of Maharashtra Realization of Land revenue Rules 1967 (as per Auction Proclamation Notice Form) u/s. 192 of the Code. This is a proclamation and a written notice of sales of restrained, moveable property under attachment. In case of immovable property Auction Proclamation notice is in form 7 u/r 12 (2) (c ). From 6 & From 7 should be drawn separately. (See annexure-14). This notice contains date & time of auction. (b) The Proclamation of auction note is required to be approved by the Joint Commissioner of Sales Tax. (c) The Recovery Officer should, further forward this proclamation Page 22 of 127

23 of Notice of auction to the Govt. Printing Press situated at Charni road, Mumbai for printing with the request to arrange at least 100 copies for circulation at the place of auction. The auction sale shall not take place earlier than 30 days for immovable property & 7 days for movable property from the date of publication of notice. Copies of notice should be distributed in the premises where auction is to be conducted before three/four days of auction. This will attract more bidders to auction. (d) This proclamation is required to be forwarded to Deputy Commissioner of Sales Tax (P.R.O.) Mazgaon, Mumbai for advertisement in local newspaper with request to forward advertisement bill. This bill is to be included in upset price. In case of moffusil area, this action should be taken under the guidance of concerned Joint Commissioner. (e) While drafting the Terms and Conditions of auction, due care is required to be taken to fix the up-set price of each attached moveable property, as well as immovable property.(annexure 15) POINTS FOR FIXING UP SET PRICE: 1. Actual purchase price and date of purchase of movable property should be brought on record. 2. Suitable percentage of depreciation shall be considered to decide up-set price of movable property. 3. In case of immovable property valuation report is required to be obtained from competent authority. Officer shall refer the book issued by town planning authority, generally issued by D.I.G stamp, Maharashtra State. 4. Expenses incurred from date of attachment and up to Page 23 of 127

24 proclamation of auction i.e. advertisement expenses, etc. are to be added in upset price suitably. This process requires at least two month up to the date of auction ON THE DAY OF AUCTION : (1)The Recovery officer along with Inspector should remain present on the date of Auction minimum one hour before the time of auction at the auction place with the Recovery file. Recovery Officer should take care to start the auction process at given time in the notice. He should take following steps to conduct Auction. (i) He should take the name, address, occupation and age of person present at the place of Auction being the prospective bidder (As per List of Bidder)(Annexure 16). (ii)he should read out the term and condition of auction and bring the same on record by taking signature of bidders present. He should read out the up-set price of assets (etc) put for auction. (iii)if the defaulting dealer takes objection for the upset price, the same should be brought on the record with proper explanation of defaulter and if explanation is found in order that auction price is less etc. then by putting the reason on record he should postpone the auction proceeding u/s 195 of M.L.R.C If no objection on upset price is raised, the defaulter s signature should be taken on the proceeding. (iv)the bidding starts by purchasing bidders present one by one. The Recovery Officer should note down each bidding. (as per Bidding statement, see Annexure 17). (v) The final bid should be hammered three times at every asset auction. After completion of each bid the Recovery officer should bring the details of bidding on the proceeding sheet. (vi)after completion of bidding the Recovery officer takes the Page 24 of 127

25 undertaking from the defaulter dealer and hands over all bided assets to the defaulting dealer as a custodian of the same. (vii)the Recovery officer should immediately receive 25 % amount of every final bid in cash and pass on receipt to the successful bidder. (viii) The recovery officer should draw the Panchnama giving auction detail and then close the proceeding for the day Submission of report for confirmation of Auction. The recovery officer should submit the detailed report along with the proceeding of auction to his next higher authority for recommendation / approval. This said report should be forwarded to the next higher authority for confirmation of auction with recommendation Confirmation of auction. The confirmation of auction should be done by the Joint Commissioner of Sales Tax in the following way: (a) The confirming Authority should, verify the auction procedure and if found in order he shall fix the hearing to confirm auction. He should issue the letters to the bidders present at the date of auction, the defaulting dealer and any other Authority which may be related to the auctioned asset, such as M.I.D.C., Bank, etc. (b) On the date of hearing the confirming authority should bring on the record, any objection raised by persons concerned, and if no objection is raised by anybody, same should be brought on the record. The confirming Authority should pass the confirmation Order under section 38 (b) read with section 208 of M.L.R.C, 1966 within 30 days in case of immovable assets and 7 days in case of movable Page 25 of 127

26 assets. (See annexure 18). The copy of said order should be served on the defaulting dealer and another copy should be displayed on notice board. The Confirming Authority in his confirmation order should direct the Recovery officer as well as the Purchasing bidder to pay balance 75 % of the bid amount in cash or D.D, within 15 days from the date of receipt of the confirming order or within two months from the date of purchase i.e. date of auction and if the said amount is not paid within prescribed date, then amount paid should be forfeited u/s 203 of M.L.R.C., 1966 and auction proceeding shall be initiated again AFTER CONFIRMATION OF AUCTION SALE: On receiving the confirmation order, the Recovery Officer should recover the amount in cash or D.D. within 15 days from the confirmation order or within two months from the date of auction sale and report the same to the confirming Authority through his immediate higher authority. If the due date falls on Sunday or Public Holiday then amount should be paid on next working day. The net amount of sales proceeds after defraying expenses of publicity, process, etc. are to be appropriated & credited to Government Treasury. After approval of confirming Authority, the Recovery Officer should pass on receipt / Certificate of purchases u/s 212 of M.L.R.C and hand over peaceful possession of the auctioned asset (see annexure 19). After handing over possession of asset/s, liability of payment of any kind of taxes, duties is of the purchaser. In order to transfer the title of asset in the name of purchaser the order of confirmation should be sent to concerned authority.(i.e. to Tahsildar/Talathi in order to make pher phar in 7/12 format) If auction can not be held on the date mentioned in notice, then Page 26 of 127

27 auction can be postponed with the approval of appropriate authority. If auction is required to be postponed beyond 30 days then NOC of the defaulter is necessary. If defaulter is not ready to give NOC then as per section 195 auction should be initiated from the start. Auction should not be taken on the day of public holidays or other weekly holidays. Auction should start between sunrise & sunset. Sale can be held if minimum two bidders participate. However if there are two or more bidders then care is to be taken that there is no collusion or formation of syndicate of bidders. It will be the discretion of confirming officer to confirm the sale although the highest bid derived at the sale is slightly less than valuation. The confirming officer should examine whether there is possibility of deriving better or higher bid if a fresh auction is held and whether it would be worthwhile to spend time & energy plus the expenditure on publication of the fresh notice in the Government Gazette. During the statutory period in respect of confirmation of sale, in case the defaulter pays equivalent or more than the highest bid, it would be expedient to set aside the sale because the attached property will still be available to proceed against. While handing over peaceful possession, Panchnama is required to be drawn as well as receipt from the purchasing bidder is required to be brought on the record Purchase on nominal bid u/s. 220 of Code: This provision is applicable to the entire State of Maharashtra & can be availed in respect of movable as well as immovable properties. When there is no bidder or where bids are inadequate or nominal, property is sold on nominal bid. In such cases nominal bid of Rs. 1/- is to be offered on behalf of the State Government. Page 27 of 127

28 Powers of Recovery officer: - Recovery officer can issue summons u/s 14 of MVAT Act, 2002 (See annexure 20) for requiring personal attendance of defaulters and those who owes money to the defaulter or any person who knows details of property, whereabouts of the defaulter or any other person relating to the proceedings under the Act. If any person fails to attend without reasonable cause then action under CRPC Act may be initiated in suitable cases i.e. issue of bailable arrest warrant against the defaulter or the person. Sections 183 & 184 of MLRC, 1966 provides arrest and imprisonment of the defaulters. 6.4 Grant of instalments: - Grant of instalments is one of the jobs assigned to the Recovery branch. Powers under proviso of section 32(4)(v) of the MVAT Act, 2002, have been delegated up to the level of Sales Tax Officer vide order dated 23 rd November, 2006.(One of the order No. SR.D.C.(A&R)PWR/1006/3/Adm-3, for delegation of powers to all Sr. Dy. Commissioners and Dy. Commissioners is given in annexure-21. By order No. SR.D.C.(A&R)PWR/1006/1/Adm-3 powers are delegated to all Additional Commissioners, by order No. SR.D.C.(A&R)PWR/1006/2/Adm-3 powers are delegated to all Joint Commissioners, by order No. SR.D.C.(A&R)PWR/1006/1/Adm-3 powers are delegated to all Assistant Commissioners and Sales Tax Officers). While granting the instalments, authorities are required to follow the circular no. 1 of 1992 dated 24/01/1992, issued by Hon CST (See annexure-22) as general guidelines. No instalment to be granted to the Liquor dealer. (See circular no. 9T of 2002 dated 18 April, 2002 as an annexure no. 23) Page 28 of 127

29 All the applications for instalments of dealers will be received by the concerned Recovery Officer. As per delegation of powers the Recovery Officer shall submit/forward/propose/approve these applications. The Instalment Granting Officer, hereinafter called IGO, while considering the said applications will see that in granting the instalment facility in deserving cases, the instalment schedule shall not go beyond period of twelve months, under any circumstances. At the same time, the IGO shall also see that the recovery target will not fall short of the annual target. IGO should further, take care of the recovery target of his own charge/range, for which he will be held responsible in case of failure to reach the same. The proforma of order sanctioning instalments is as per Annexure- 4. The instalment application should be accompanied by following documents. 1. Copy of return/ A.O. for which instalment is sought. 2. Up to date debtors list. 3. Reasons for instalment such as natural calamities, disallowances of claims. Monitory Limits: Mumbai: Designation of Officer Additional Commissioner of Sales Tax Amount (In Rs.) 50,00,001/- & above Joint Commissioner of Sales Tax 10,00,001/- to 50,00,000/- Deputy Commissioner of Sales Tax Up to rupees 10,00,000/- Mofussil: Designation of Officer Additional Commissioner of Sales Tax Amount (In Rs.) 50,00,001/- & above Joint Commissioner of Sales Tax 10,00,001/- to 50,00,000/- Page 29 of 127

30 Designation of Officer Amount (In Rs.) Deputy Commissioner of Sales Tax 5,00,001/- to 10,00,000/- Asst. Commissioner of Sales Tax 1,00,001/- to 5,00,000/- Sales Tax Officer Up 1,00,000/- 6.5 Write off: - This is last job to be done by the recovery officer, after all the efforts are made for recovery of dues. The monetary limits for write off of dues are governed by circular No. REC- 2/1292/WRO/1, circular No. 2 of 1992, issued by Hon CST (See annexure-24), Government resolution No. Write off-1095/c.r. 119/Taxation-4, dated January 24, 1996 (See annexure-25) and letter of Hon CST bearing No. Adm.17-18/Write off/95-96/b-2188, Mumbai, dated 14/02/1996 (See annexure-26). As per above circulars write off powers are delegated as below. Sr. Post No Power in general Cases ( R.C. is not canceled before and asset is available ) Power as per G.R (R.C. is canceled before and no asset is available ) 1 C.S.T Rs. 50,000 /- to Rs.1,00,000/- All powers 2 Additional C.S.T Rs.30,000/- to Rs.50,000/- 3 J.C. Rs.10,000/- to Rs.30,000/- (for each assessment order ) 4 D.C. Up to Rs.10,000/- (for each assessment order) All Powers Rs.50,001/- to Rs.1,00,000/- (For each assessment order ) Up to Rs.50,000/- (For each assessment order) Care to be taken while submitting the write off proposal. 1. Recovery is not pending due to the negligence on the part of the Recovery Officer/ Assessment Officer. Page 30 of 127

31 2. Defaulter does not possess any movable or immovable asset should be certified by the concerned officer. 3. Police enquiry have been conducted where dues are exceeding Rs. 10,000/-. Police report is not necessary in the case where dues are less than Rs. 10,000/- as per the memorandum dated 1/10/1985, No.STA-1085/271/RES Certificate should be given that, the defaulter dealer has not started new business any where in the state under new registration. 5. All the necessary documents are verified and scrutinized. 6. The write off proposal should be approved by the D.C./J.C./Additional CST. 7. After following the above formalities completed proposal should be submitted to concerned immediate higher authority. The entire write off proposals are to be entered in a write off register, as shown in annexure Unavailable Recovery: - Unavailable recovery is the recovery which is not available for recovery action. The unavailable recovery may be classified as follows Stay by DC(Appeal)/JC(Appeal)/MSTT:- When dealer prefers an appeal before DC(Appeal)/JC(Appeal)/MSTT/or any appropriate appellate authority, against any statutory order passed by an authority, raising any demand and if the appellate authority passes stay order against the order, then the recovery is stayed. The Recovery Officer should not stop recovery actions till he gets copy of stay order from the appellate authority. The recovery amount as per row no. 9 in form no. 311, should be treated as "available for recovery".( See enclosure of form no. 311 as an Annexure 47) Stayed by courts:- When dealer prefers an appeal before Page 31 of 127

32 court and if the court passes stay order against the order, then the recovery is stayed. The Recovery Officer should not stop recovery actions till he gets copy of stay order from the court R.R.C.:- In case of RRC, there are two categories of RRC, one is within state and another is out of state. RRC within state: - In this case the Recovery Officer has to issue RRC to himself as seen in above paragraph. If the dealer is possessing asset in another district then RRC is required to be sent to the Recovery Officer of other district. The format of RRC is given at annexure-6. RRC outside state: - If the dealer possesses asset outside the State of Maharashtra, then proposal for RRC is required to be sent to the Recovery Officer of other state under the Revenue Recovery Act 1890 through Joint Commissioner Dealer not traceable: - When dealer doesn t exist at all the known places i.e. place of business, place of residence, any other place last known to department then dealer is said to be not traceable. In these circumstances all possible efforts should be made to trace out the dealer. In order to trace out the dealer his bank details should be checked inquiries to be conducted with introducer of the bank account. If dealer has sold the property and shifted to any another place, then agreement of sale shall be obtained, from the person who has purchased it. Inquiry should be conducted with registration branch as to whether dealer has obtained new TIN on same PAN. Case shall be given to Police for further action and police report shall be obtained. In the mean time Registration Authority should be informed to initiate cancellation of TIN certificate Official Liquidator: - The official liquidator is appointed by the court. The Recovery Officer shall not stop his recovery actions till the officer gets the copy of court order. He should file debt affidavit along with assessment order and demand notice to the liquidator. He Page 32 of 127

33 should obtain the acceptance of claim with claim number. As and when investigation by official liquidator completes, amount may be recovered in certain amount of percentage. Therefore it is utmost necessary to assess such defaulting dealer for concerned periods & to raise statutory demand immediately & to communicate the same to official liquidator. Detail note will be inserted at the time of next update Court receiver: - A person appointed by a court to administer the property of a bankrupt or insane person or property under litigation is called as Court Receiver. The Recovery officer should lodge all the claims before the court receiver. The Recovery Officer shall not stop his recovery actions till the officer gets the copy of plaint Due date not over as per demand notice under MVAT Act 2002, MLRC & allied acts:- When statutory order is passed demand notice is served, raising demand, to pay dues, if any. Such demand notice permits some time limit to pay the dues, this period is called as due date not over. The Recovery Officer should start his recovery actions as soon as due date is over, if dealer has not paid the dues Stay by Government:- In some cases government stays recovery proceedings. The Recovery Officer should act as per instruction received from higher authority in such cases Recovery stayed u/s. 23(8) proviso /24(1) second proviso /u/s. 25(3) of MVAT:- In some cases recovery is stayed u/s. 23(8) proviso /24(1) second proviso /u/s. 25(3) of MVAT. The Recovery Officer should not initiate the recovery proceedings until the Page 33 of 127

34 decision by appropriate forum Insolvency: - In some cases dealer becomes insolvent. The Recovery Officer should not stop his recovery actions until he gets insolvency order from the court. Detail note will be inserted at the time of next update Debt Recovery Tribunal: - In some cases dealer prefers an appeal before Debt Recovery Tribunal (DRT) against the recovery of dues. The Recovery Officer should not stop his recovery actions until he gets stay order from the DRT. Detail note will be inserted at the time of next update BIFR/SICK UNIT: - The unit is not said to be sick until it is declared to be so by BIFR. BIFR meaning Board for Industrial Financial Reconstruction is constituted under the SICA Act (Sick Industrial Companies {Special Provisions} Act, 1985). Until Recovery Officer does not posses a copy of order passed by BIFR specifying where in that the company is sick and the order is against the recovery of sales tax dues the Recovery Officer shall not stop his recovery actions Procedure under BIFR: On receipt of reference, Registrar of B.I.F.R. on scrutiny, if it is found to be in order, registers & assigns serial number & submits it to the Chairman for further proceedings. Thereafter the Board may determine the measures which shall be adopted with respect to the company u/s 15 of the SICA. The B.I.F.R. may make such inquiry as it may deem fit for determining whether any Industrial Company has become the Sick Industrial Company. If the B.I.F.R. Deemed fit that the company has become a Sick Industrial Unit then it may make an order to that effect and declare a Page 34 of 127

35 cut off date. It may also further order an inquiry as to how the rehabilitation of the Sick Company is to be effected. After completion of the inquiry the Board shall pass an order as to how rehabilitation of the Sick Company is to be done. Once the Company is registered as a Sick Industrial Company, protection is available from all legal proceedings etc. against the Company u/s 22(1). Once the dealer has intimated that he is registered with the BIFR as Sick Industrial Company, a letter along with the registration number & copy of proceedings of BIFR be obtained from the dealer. The dealer is required to furnish an application in prescribed form to the Board to register him as a Sick Industrial Unit. The copy of the said application may also be obtained and it is to be seen that whether correct arrears of sales tax and allied Acts administered by the department have been communicated by the dealer to the BIFR. If no correct dues position has been mentioned in the prescribed application, the same may be communicated to the Board in writing. The office address of the Board is as under: 22 nd floor, Kalahari Vyapar Bhavan, 1, Tolstoy Marg, New Delhi Fax no The Board is functioning as a Court. Therefore it will not reply to any correspondence made with it. The Board is having its meeting from time to time. Representative of Industrial unit & also of financial institutions/banks which have provided loans to said unit attend said meeting. Board asks one of the financial institutions/banks to prepare rehabilitation scheme as an operating agency. The summery records of the proceedings of the meetings/hearing are recorded. Summery record of the proceedings may also be obtained from the dealer. For obtaining summary record proceedings an application can also be made directly to the Board under regulation 38(5). The Board does not take on its own any cognizance regarding Page 35 of 127

36 payment of sales tax dues. Therefore the assessing authority can apply u/s 13(2) of SICA requesting it to make a party to the proceedings as it is an interested party as considerable amount is due & payable by the Sick Company. If the Board thinks fit, it may make the Department party to the proceedings. The proceedings can be attended by representative also. Office of the BIFR being located at Delhi it is not possible for the assessing authority to attend the meeting, therefore, after getting sanction from the Law & Judiciary Department through the Joint Commissioner of Sales Tax (Legal), Private Council stationed at New Delhi, can be engaged so that he can attend the matter easily from time to time and pursue the claim of sales tax department. As per the provisions of Section 22 of the SICA the dealer is having protection from any coercive recovery action against the dealer till the finalization of rehabilitation scheme. However, once the rehabilitation scheme is sanctioned the recovery of arrears up to the cut off date can be made as per the directions in the scheme and after cut off date the recovery can be made as per the normal dealer. During the pendency of the inquiry before the Board, recovery can also be made with the consent of the Board. For that purpose an application in 4 copies is required to be sent to the Board giving all details of the arrears and whether the arrears are out of collected tax or otherwise. The matter of persuasion of BIFR cases is entrusted to the Secretary, Industry Department, Mantralaya, Mumbai-32. Up to date position of the BIFR cases are maintained by them. As per Letter of Desk officer of Industries department No. BIF- 1089(1111)/IND-10, dated (Please see annexure no.27) State Government floated a standard Package of Relief/ Concessions for revival of Sick Industrial Units referred to BIFR, subject to terms and conditions specified in the government Page 36 of 127