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 – email,

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 powerLow Level- Anyone questioning their knowledge,

intelligence, ability, morality or judgment is a threat

04/18/23

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 2002 -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, 1898.

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

E-Mail –Recognized in Information Tech. Act 2005. 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 15 -30 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?

04/18/23

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.

04/18/23

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

04/18/23

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.04/18/23

04/18/23

Open to Questions…