CHAPTER VI AUDIT, ASSESSMENT, RECOVERY OF TAX AND REFUND

Transcription

1 CHAPTER VI AUDIT, ASSESSMENT, RECOVERY OF TAX AND REFUND 41. Selection of dealers for tax audit. (1) The Commissioner shall, under the provision of section 41, select by the 31 st of January or by any date before the close of every year, commencing from the appointed day, not less than twenty per cent of registered dealers for audit during the following year, by random selection with or without the use of computers: Provided that for the year commencing with the appointed day, the selection of dealers for audit under this sub-rule shall be made by the 30 th of September of that year. (2) The Commissioner, where considers it necessary to safeguard the interest of revenue or where any enquiry is required to be conducted on any specific issue or issues relating to any dealer, or class or classes of dealers, on being referred by an officer appointed under sub-section (2) of section 3, may direct audit to be taken up. (3) The Commissioner may, on the basis of apparent revenue risk of the individual dealers, make selection of dealers for special or investigation audit. The revenue risk may be determined on objective analysis of the risk parameters or on receipt of intelligence or information, regarding evasion of tax. (4) For the control of large taxpayers, the Commissioner may, plan audit checks across the totality of the business of such dealers, within an audit cycle of two years. 42. Notice for audit. All audits except those provided under sub-rule (3) of rule 41 shall be with prior notice to the dealer: Provided that the Commissioner, for good and sufficient reasons may, dispense with prior notice for tax audit under rule 41 in respect of any specific dealer or class or classes of dealers. 43. The tax audit to be conducted by an audit team. The tax audit under rule 41 shall be undertaken by a team constituted for the purpose and such audit team may consist of one or more Assistant Commissioner, Sales Tax Officer and Assistant Sales Tax Officer, as the Commissioner may deem fit.

2 44. Place of tax audit. (1) The audit shall ordinarily be taken up in the place of business of the dealer and the dealer shall render all necessary assistance, produce all accounts, documents, records and also allow access to the accounts, if any, maintained electronically, as may be required by the officers conducting audit. (2) Subject to the provisions of rule 42, where tax audit is conducted under subrules (1), (2) and (4) of rule 41, the dealer shall be given prior notice in Form VAT -301, intimating the date and time, when the audit is proposed to be conducted, and the dealer shall be required to produce all accounts and records, as may be required, and extend all cooperation to the audit team for smooth conduct of audit. (3) Where audit of a dealer is proposed to be taken up under sub-rule (3) of rule 41, prior approval of the next higher authority shall be taken: Provided that when the audit visit is required to be made in course of an investigation or where there is reasonable apprehension that delay may lead to the disposal of the stock-in-trade or removal or destruction of books of account, records and documents, the approval of next higher authority shall be taken post-facto, within twentyfour hours of the completion of such visit or return to headquarters, after completion of the audit, whichever is later. 45. Scope of tax audit. (1) Tax audit shall comprise verification of all records, documents, books of account including electronic record, relating or incidental to the business of the dealer, computation of input tax credit as admissible, calculation of output tax charged, physical verification of stock-in-trade, collection of sample of goods and examination of such other records and documents, as may be required, to determine the actual tax liability of the dealer. (2) A dealer, who fails to produce any account, record or document in course of the audit, shall if the officer-in-charge of the audit team so requires by notice in Form VAT-302, produce such accounts, records and documents in the office on the date and time specified in that notice.

3 (3) Audit visit report in Form VAT -303 shall be submitted by the officer-incharge of the audit team conducting audit to the assessing authority within seven days of the completion of the audit. 46. Audit to facilitate voluntary tax compliance. The audit team, during any audit visit, shall explain the provisions of the Act and these rules so that the dealer does not face any difficulty in maintenance of books of account and due discharge of tax liability. 47. Provisional assessment. (1) Where a dealer fails to file return or files return not accompanied by proof of payment of full amount of tax, for any tax period, within such period as specified in rule 34, the assessing authority may assess the dealer provisionally under section 40. (2) Where a provisional assessment under sub-rule (1) is made, the assessing authority shall serve upon the dealer a notice in Form VAT -304 showing the amount of tax assessed, interest levied and penalty imposed, which such dealer shall be required to pay within thirty days from the date of receipt of the notice and produce evidence thereof within seven days from the date of payment. 48. Self assessment. (1) Where a dealer files return for a tax period within the period specified in rule 34 and the return is found to be correctly and completely filled in, and there is no arithmetical mistake apparent on the face of such return, the said return shall be accepted as self-assessed. (2) Where there is any arithmetical mistake apparent on the face of such return and such mistake can be reconciled without any reference to the dealer to whom the return relates, such return may accordingly be rectified and the rectification so made may be intimated to that dealer in Form VAT-305 for information. (3) If the rectification as intimated to the dealer under sub-rule (2) is not accepted by the dealer, he may, within seven days from the date of receipt of such intimation, file an application stating therein the correct position along with reasons for occurrence of such mistake, to the assessing authority, and if such authority is satisfied, the return referred to in sub-rule (2) shall be accepted as self-assessed.

4 (4) Where the arithmetical mistake apparent on the face of the return furnished for a tax period remains un-reconciled, such mistakes shall be intimated to the dealer to whom the return relates in Form VAT-305 for necessary rectifications within fourteen days from the date of receipt of the intimation and if the assessing authority of the circle or range, as the case may be, is satisfied that the mistake is bona fide and not deliberate, such authority shall accept the return as self-assessed. (5) Where the dealer fails to rectify the mistake as intimated under sub-rule(4) within the time specified in that sub-rule or the mistakes are found to be deliberate with an intention to evade tax or attempt to evade tax, the return, wherein the mistakes are found, shall be referred to audit under section Audit assessment. (1) If the tax audit conducted under section 41 results in findings, which the assessing authority considers to be affecting the tax liability of a dealer for a tax period or tax periods, such authority shall serve a notice in Form VAT- 306 along with a copy of the audit visit report, upon such dealer, directing him to appear in person or through his authorized representative on such date, time and place, as specified in the said notice for compliance of the requirements of sub-rules (2) and (3). (2) The assessing authority may, in the notice referred to in sub-rule (1), require the dealer- (a) to produce the books of account maintained under the provisions of the Act and these rules; (b) to furnish records and documents required to be maintained under the Act and these rules claiming exemption or concession in the payment of input tax, output tax and input tax credit, as may be applicable; (c) to furnish any other information relating to assessment of tax, levy of interest, imposition of penalty, and (d) to explain the books of account, other accounts, records, documents or information referred to in clauses (a), (b) and (c), on the date and at the time specified in the notice.

5 (3) In addition to the accounts and documents referred to in sub-rule (2), a dealer, if so desires, may produce such other evidence and document in support of his claim preferred in his returns or any objection he wishes to raise. (4) The assessing authority, while hearing the dealer on the date specified in the notice referred to in sub-rule (1) or on any date to which the hearing is adjourned, for making an assessment of tax payable by him, shall (a) consider the objection, if any, preferred by such dealer and examine the evidence in support thereof; and (b) examine the accounts, documents, records or any other evidence furnished under sub-rule (2): Provided that not more than three adjournments shall be granted to a dealer for hearing his case. may, - (5) In course of hearing of the assessment proceeding, the assessing authority (a) examine such records, registers or documents, which are required to be maintained by the dealer by or under the Act and the rules; or (b) call for such information or evidence from the dealer or any person as deemed necessary; or (c) make such enquiry, as is deemed necessary, for the purpose of such assessment. (6)The assessing authority shall, after hearing the dealer in the manner specified in sub-rules (2), (3), (4) and (5), assess to the best of judgment, the amount of tax payable by a dealer in respect of a tax period or tax periods for which the assessment proceeding has been initiated, and impose penalty under sub-section (5) of section 42. (7)In the event of default by a dealer to comply with the requirement of the notice referred to in sub-rule (1), the assessing authority may make to the best of judgment, an exparte assessment of the tax payable by such dealer in respect of such tax period or tax periods and pass an order of assessment, in writing, recording the reasons therein.

6 50. Assessment of escaped turnover. (1) Where a dealer has already been assessed under section 39, 40 or 42 and it is required to reopen the assessment under subsection (1) of section 43 for occurrence of any or more of the events specified in that subsection, the assessing authority shall serve a notice in Form VAT -307 upon the dealer. (2) The hearing of the dealer shall be concluded in accordance with the provisions of sub-rules (2), (3), (4) and (5) of rule 49. (3) The assessing authority shall, after hearing the dealer in the manner specified in sub-rule (2), assess to the best of judgment, the amount of tax payable by the dealer in respect of a tax period or tax periods, for which assessment proceeding has been initiated, and impose penalty under sub-section (2) of section 43. (4) In the event of default by a dealer to comply with the requirements of the notice referred to in sub-rule (1), the assessing authority may make, to the best of judgment, an exparte assessment of the tax payable by such dealer in respect of such tax period or tax periods and pass an order of assessment in writing, after recording the reasons therein. 51. Assessment of dealers liable to pay tax under the Act but fails to get registered. (1) Where a dealer is liable to pay tax under the Act, but fails to get himself registered, the assessing authority shall serve a notice in Form VAT-308 upon such dealer directing him to appear in person or through his authorised representative on such date, time and place, as may be specified in that notice, and produce or make available, the books of account, evidence, documents, as may be required for assessment of such dealer under sub-section (1) of section 44. (2) The assessing authority shall, after hearing the dealer, examine such books of account, evidence and records produced or made available and cause such enquiry as he deems necessary, pass order in writing, recording the reasons therein and: (a) determine the date from which the dealer is liable to pay tax under the Act; (b) assess to the best of judgment, the tax payable by the dealer in respect of the tax period or tax periods or part thereof, as the case may be, from the date of commencement of such liability; and (c) impose penalty under sub-section (1)of section 44.

7 (3) In the event of default by a dealer to comply with the requirements of the notice referred to in sub-rule (1), the assessing authority may make to the best of judgment, an exparte assessment of the tax payable and penalty thereon by such dealer in respect of such tax period or tax periods or part thereof, as the case may be, and pass an order of assessment in writing, recording the reasons therein. 52. Assessment of casual dealer. (1) A casual dealer shall furnish to the assessing authority of the circle or range, as the case may be, including the officer-incharge of check post or barrier referred to in section 74, a return of estimated turnover in Form VAT -309: (a) either on his own motion; or (b) when called upon to do so by notice, immediately. (2) The assessing authority referred to in sub-rule (1) or the officer-in-charge of check post or barrier, if he is satisfied, after scrutiny of the accounts of such casual dealer and after making such enquiry, as he may consider necessary, that the return furnished under sub-rule (1), is correct and complete, shall provisionally assess the amount of tax due from him on the basis of such return. (3) If a casual dealer does not furnish the return as required by the notice referred to in clause (b) of sub-rule (1) or if the return furnished by him appears to the assessing authority of the circle or range, as the case may be, or the officer-in-charge of the checkpost or barrier to be incorrect or incomplete, such authority or the officer-in-charge of check-post or barrier shall, after giving the casual dealer a reasonable opportunity of being heard, assess the tax payable by him to the best of judgment. (4) Every casual dealer shall, within twenty four hours, of arrival in the State, intimate the assessing authority of the circle or range, as the case may be, the address of his residence in the State, the nature of goods in which he intends to deal in, the period during which he intends to carry on business and the date by which, he intends to leave the place in the State in Form VAT (5) The casual dealer shall furnish a return to the assessing authority of the circle or range, as the case may be, in Form VAT -311, accompanied by a receipted treasury

8 challan for the tax or taxes payable on the basis of the return on or before the last day, on which he intends to leave the place, where he has been carrying on business and the said assessing authority shall, thereupon, assess the tax or taxes payable by such dealer, after being satisfied that the return furnished is correct and complete and after making such enquiries, as he deems necessary. (6) Where, no return is filed by a casual dealer as required by sub-rule (5) or if the return furnished by him, appears to the assessing authority to be incorrect and incomplete, the said assessing authority shall, assess the tax payable to the best of judgment and issue a notice of demand in Form VAT -313 for the tax due and payable. (7) For the purpose of this rule, the assessing authority shall mean the assessing authority of the circle or range, under whose jurisdiction, the casual dealer intends to carry on or has carried on business. 53. Order of assessment. The assessing authority shall issue the order of assessment in Form VAT Notice of demand. (1) In respect of any amount found payable by a dealer under sub-section (4) of section 50, the assessing authority shall serve on the dealer a notice of demand in Form VAT -313 directing the dealer to pay the amount, within thirty days from the date of service of the notice and to produce the proof of payment of such amount within seven days from the date of payment. (2) If the dealer fails to pay the amount due or has failed to produce the evidence of payment by the due date in accordance with the notice in Form VAT -313, the assessing authority may impose a penalty under sub-section (5) of section 50 and serve a notice in Form VAT-314 directing the dealer to pay the penalty within thirty days from the date of service of the notice the outstanding tax, penalty, interest or any other due under the Act immediately and to produce the receipted challan as proof of payment of such amount within seven days from the date of such payment. (3) Where the collection of the amount referred to in sub-rule (1) or any part thereof has been stayed on appeal or revision, penalty under sub-section (5) of section 50

9 may be levied if the amount is not paid and proof of such payment is not produced within a fortnight after the expiry of the period for which, such amount was covered under stay. (4) Where stay on collection until disposal of appeal or revision has been ordered, the stay period shall be deemed to have expired on the date of disposal of such appeal or revision and where in such cases, the appeal or revision results in a reduction or enhancement in the amount of demand, a revised notice of demand in Form VAT -315 shall be issued directing the dealer to make payment in accordance with such revised notice within fourteen days from the date of service of the notice and to produce the proof of payment thereof within seven days from the date of payment. (5) No penalty under sub-section (5) of section 50 shall be imposed until the expiry of the time limit specified in the revised notice referred to in sub-rule (4). 55. Notice for special mode of recovery. The notice referred to in sub-section (1) of section 51 shall be in Form VAT Assessment case record. (1) All the papers relevant to the making of any assessment in respect of any particular dealer shall be kept together and shall form an assessment case record. (2) Assessment case records shall be preserved for a period of six years or until the assessment reaches its finality, whichever is later. 57. Payment of tax, penalty, interest and any other amount under the Act. (1) The amount of, (a) tax due, where the returns are furnished without receipt showing full payment thereof; or (b) tax assessed under sub-section (2) of section 40, sub-section (3) or (4) of section 42, sub-section (1) of section 43 and sub-section (1) of section 44, less any sum paid by the dealer in respect of the tax period; or (c) composition money paid under rule 8; or (d) the amount of interest levied; or

10 (e) penalty under sub-section (1) of section 28, sub-section (5) of section 42, sub-section (2) of section 43, sub-section (1) of section 44, subsection (5) of section 50, sub-section (1) of section 52, sub-section (5) of section 61 and sub-section (13) of section 73; or (f) interest under sub-section (1) of section 34; or (g) any other amount due under the Act, shall be paid by the dealer into the Government Treasury or through a crossed demand draft or banker s cheque drawn in favour of the Assistant Commissioner or the Sales Tax Officer of the circle or range, as the case may be, on any branch of a scheduled bank of that place, where the Government Treasury is situated, within thirty days from the date of service of the notice of demand. (2) The amount of tax due under section 45 shall be paid in cash to the assessing authority including the officer-in-charge of the check-post or barrier referred to in section 74. (3) For the purpose of calculating interest and penalty under the Act and these rules, the date of receipt of the crossed demand draft by the Assistant Commissioner or the Sales Tax Officer, as the case may be, shall ordinarily be deemed to be the date of payment by a dealer save in the case of a crossed demand draft is dishonoured. (4) No payment of any tax, composition money or penalty or interest save as specified in sub-rules (2) and (5), shall be accepted in the office of the Assistant Commissioner or Sales Tax Officer: Provided that where payment made by a crossed demand draft or Banker s cheque is furnished along with return in Form-201 or Form -002 for a tax period, such crossed demand draft or banker s cheque shall be accepted. (5) The amount of tax and penalty levied under sub-sections (5), (7) and (11) of section 74 and sub-rule (16) of rule 84, shall be paid in cash to the Assistant Sales Tax Officer or the Sales Tax Officer of the R.R. Unit or the officer- in- charge of the checkpost or barrier or the Sales Tax Officer, as the case may be. (6) Any payment into the treasury shall be accompanied by a challan in Form- VAT-317

11 (7) The challan shall be filled up in quadruplicate and one part of the challan shall be retained in the treasury, one part of the challan shall be sent by the treasury to the Assistant Commissioner or the Sales Tax Officer, as the case may be, and the other two parts shall be returned to the dealer, as a proof of payment. 58. Deposit of the amount of tax deducted from the bills or invoices of the works contractors into the Government Treasury. (1) The amount of tax deducted from the bills or invoices of the works contractors, shall be deposited by the person, hereinafter referred to as the deducting authority, into the Government Treasury, within one week from the date of deduction by a challan in Form VAT-317: Provided that, the deducting authority, at his option, may deposit the amount of tax so deducted from the bill or invoice of the works contractor by crossed demand draft on any scheduled bank in favour of the Sales Tax Officer or Assistant Commissioner of the circle or range, as the case may be. (2) The challan in Form VAT-317 shall be filled up in quadruplicate, one part of the challan shall be retained by the treasury, one part of the challan shall be sent by the Treasury to the concerned Assistant Commissioner or the Sales Tax Officer, as the case may be, and the remaining two parts shall be returned to the deducting authority. (3) The deducting authority shall retain one part of the challan and send the other part of the challan to the Assistant Commissioner or the Sales Tax Officer, as the case may be, within whose jurisdiction the work is being executed: Provided that, if the works contractor concerned is a registered dealer, the receipted challan or crossed demand draft received from the deducting authority shall be taken into account in the circle or range where it is received and, then forwarded to the circle or range under whose jurisdiction such works contractor is registered. 59. Grant of certificate by the deducting authority to the works contractor. While making deduction of tax from the bills or invoices of the works contractors, the deducting authority shall grant a certificate to that works contractor in Form VAT-605 and shall send a copy thereof to the Assistant Commissioner or the Sales Tax Officer, as the case may be, within whose jurisdiction the works contract is executed:

12 Provided that if the works contractor concerned is a registered dealer, the certificate as referred to above shall be forwarded to the circle or range where such works contractor is registered: Provided further that the deducting authority shall furnish a consolidated statement of deductions made during a month in Form VAT-605-A within fourteen days of the expiry of the month to the Assistant Commissioner or Sales Tax Officer, as the case may be, within whose jurisdiction the works contract is executed. 60. Grant of certificate of no deduction/deduction of tax at source, by the Commissioner to the works contractor. (1) The application for grant of certificate of no deduction or deduction of tax under sub-section (5) of section 54, shall be made in duplicate in Part I of Form VAT (2) The application shall be accompanied by copies of the relevant contract, tender or quotation and other documents on the basis of which the contractor makes his claim for no deduction or deduction of tax at source, as the case may be. (3) If the particulars and documents furnished by the contractor are correct and complete in all respects and after making such other enquiries, as deemed necessary, the assessing authority is satisfied that the works contract concerned involves both transfer of property in goods and labour or services, or involves only labour and services and justifies deduction of tax or no deduction of tax, as the case may be, he may, after giving the applicant a reasonable opportunity of being heard, grant a certificate in Part II of Form VAT -606, within a period of thirty days from the date of receipt of the application and, shall forward a copy of such certificate to the deducting authority, under whom the work is executed. 61. Intimation for recovery of enhanced tax, penalty and interest. If, on the occurrence of any of the events specified in sub-section (8) of section 50, there is enhancement or reduction in the amount of tax, penalty, interest or any other due under the Act, and such enhancement or reduction occurs after the commencement of recovery proceeding under sub-section (7) of section 50, the assessing authority of the circle or range, as the case may be, shall intimate the authority effecting such recovery, the actual

13 amount to be recovered consequent upon such enhancement or reduction, within thirty days from the date of receipt of the order giving rise to the enhancement or reduction. 62. Penalty and forfeiture of unauthorised and excess collection of tax. (1) Where any person collects any sum by way of tax under circumstances as specified under clause (a) or (b) of sub-section (1) of section 52, the assessing authority shall serve a notice in Form VAT-615 upon such person. (2) If there is no response to the notice issued under sub-rule (1) within the date as specified in that notice or the explanation is not found satisfactory the assessing authority shall impose penalty as provided under sub-section (1) of section 52. (3) When the amount of tax collected under section 35 is forfeited, the assessing authority shall publish a notice in the Commercial Tax Gazette in the following format. Sl. No. NOTICE [See rule 62(3)] Name, address, Registration Number of the person/dealer, making the sale. Name & address of the buyer from whom tax has been collected Sale Bill No/Date /Date of Sale Description of goods Quant ity Value Tax charged The buyers as mentioned under column 2 of the above notice are hereby requested to produce evidence in support of the purchases made by them as per details mentioned against their names and claim refund of the tax so collected on the sales within sixty days from the date of publication of this notice. Assessing Authority, circle/ range. 63. Credit of unauthorised and excess collection of tax to Consumer Welfare Fund. All amounts forfeited under sub-section (4) of section 52 shall be credited to the Consumer Welfare Fund by way of transfer credit to the Head of account, 1456-Civil Supplies-800-Other receipts civil Supplies - Contribution to State Consumer Welfare Fund. Remar ks