C.A Madhukar N Hiregange

Understanding the bureaucrat Provisions applicable for non – compliance with law? Obligations of tax payers? Obligations of department officials? Powers & duties of department officials? How to interact with dept. appropriately – , telephone- letters- summons- statement..? Questions

 Rule based enforcement w/o considering- -> what lies behind the rule -> what happens as consequence -> what methods are used to enforce “ just doing ones job” High level- surrender of personal power Low Level- Anyone questioning their knowledge, intelligence, ability, morality or judgment is a threat 5/23/2015

 Under Service Tax law Section 75 – Interest for not depositing tax amount in time Section 76 – Penalty for non payment of ST Section 77 - General penalty Section 78 – Penalty for suppression, fraud & collusion

 Under Central Excise law Section 11AA - Interest for non payment of tax amount. Section 11AC – Penalty for short/ non payment.. Rule 25 of CER– Confiscation & Penalty Rule 26 of CER – Personal Penalty Rule 27 of CER - General Penalty Rule 28 of CER –Confiscated property to vest in Central Govt.

 Under Service tax law Section 82 - Power to search premises Section 91 – Power to arrest (r/w section 89)  Under Central Excise law Rule 22 & 23 of CER Power to access to regd. premises & power to stop and search Section 22 – Vexatious search, seizure, etc. Rule 24 – Power to detain or seize goods

Section 13 & 18 – Section 13 gives power to arrest and section 18 provides that, arrest shall be carried out according to Code of Criminal Procedure, Section 9 & 9AA – Prosecution against responsible persons.

 Obligation to be honest – fundamental requirement for operation of tax system.  Obligation to be co–operative – voluntary compliance  Obligation to provide accurate information and documents on time  Obligation to keep adequate records to verify tax / credits  Obligation to pay taxes/ file returns on time

 Shall not disclose any of the sensitive information learned in his official capacity  Officers to issue SCN before imposing penalty, demand & arrest  Officers to visit in business hours only

 Search, seizure, prosecute and arrest under commissioner’s instructions  Issue summons to authorized persons of the company  Detain & give evidences as per CPC  Commissioner has power to appoint CA,CWA, CS for conducting an audit

–Recognized in Information Tech. Act Only if official ID. Maybe used as additional mode or where time short Telephone - Use this mode as additional as no trace or evidence of what transpired. Record by way of written communication what was discussed/ understood. Letters /notices from dept. - Reply to letters within days under RPAD.

Letters to dept - Communicate at appropriate time at appropriate levels including giving voluntary initial declarations. – Period of Limitation Visits by dept. – Official or Unofficial? Should be handled by a knowledgeable persons. Put on record what happened by way of written communication. Visits to dept. - Record in register kept. Record by way of written communication with explanations & evidences provided.

 How & when does the summon process begin?  Summons should not be vague/justify the purpose.  Can Summon be avoided?  Can someone be authorized to appear on behalf of summoned person?  Ask for time if duration is short and take legal advice.  Must give correct information.  Give a written statement.  Is summons being misused? 5/23/2015

 It is a statement of tax payer & not that of department.  Be polite, calm but firm.  Statement should be voluntary & not under threat.  No vague statement/ rough figures be given.  Use of words “I have no idea” or “I will check & let you know”.  Making note of the questions & answers given(recorded and not recorded).  Right to ask copy of statement recorded. 5/23/2015

 Proper study of Show cause notice.  Note the date of receipt & date of SCN.  Prepare an appropriate reply (Facts, Submissions containing relevant legal provisions, decided case laws, circulars and notifications if any)  Only Relevant information (Precise and Concise)  Ensure all the allegations were noted & answered  Supporting Documents (Agreements/work orders/bills/GAR 7 challans/certificates etc)  Filing of reply including annexures in time.  Acknowledgement 5/23/2015

 When to appeal? & Whom to appeal ?  Prescribed form should be used (E.A-1/3, S.T - 4/5)  Contain facts, grounds of appeal, verification & prayer.  Can Additional facts be submitted at this stage?  All the findings of the impugned order should be countered specifically  Additional grounds/documentation if any required should be submitted.  Filing of appeal within due date.  C.O.D with reasonable cause.  Acknowledgement. 5/23/2015

Open to Questions…