One of my client have registered under Service Tax Business Auxulury catagory being a service provider in the year 2004.
He has filled returns for the year 2007-2008 and paid the dues for this period only on 6/5/2009. But not filled the returns and not paid the dues for rest of the period till date.
He has never billed service tax in invoice and not collected the service tax from his clients. He is totally unaware that the service tax has to be collected and to be paid to the department, nor the client had informed him to do so.
Form the date of registration till June 2009 department has not issued any letters notice to pay the dues or file the returns.
The department has issued several letters and reminders asking for information of the business in the month of June 2009. To this he have not replied, hence the department issued Summons u/s 14 of the Central Excise.
He then provided the details required the department. On receipt of these information the department verbally demanded the settlement amount from the period 2007-2008 till 2009-2010.
Now my query is;
1. I want to know for how many earlier years the department can demand for clearance of dues.
2. Secondly, if he pays off the dues in full, whether the department has powers to re-open the case and demand for more?
3. How to be ensure that the case is closed once the payment is done. Is there any procedure / documentations / forms so that the case will not be re-open again.
4. In case the department can demand verbally to pay off the dues?
5. Is filling of return for these years (2007-2008 to 2009-2010) is required?
6. Whether ther are powers to waive off the dues for earlier period and allow to pay only for last one year only.
7. Please give some link of such law case.
8.What is the time limit to issue showcaue notice.
9. He was totally unaware of collecting and payment of dues. He came to know only when he received the letter from the department. In this case whether what deparmtent can do in the benefit of the client.
26 January 2011
The activity has not been described. First whether liable or not. if liable then consequences will follow. you may contact a local expert in ST. demand can be for past 5 years. Once registered tax payer expected to know / ascertain whether liable.
SCN would be issued once the information is available seeking to charge interest for the past period as well as penalty.
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