04 November 2013
CTO Enforcement visited our shop and found shortage of stock collected tax on the (shortage stock + GP10% ) now the audit wing of the Commercial Tax Department has again sent a notice proposing to levy penalty equal to tax on (3 times enhanced turnover on the difference in stock + 15% GP) As I went through the KVAT Act 2003 I did not find any such rule under any section of the act. please advice weather the officer has the power to levy penalty in this particular case
04 November 2013
The enforcement authorities can inspect a business premises,do search seizure,and also collect tax tentatively if any tax evasion is noticed.This is not a levy of tax as per the vat laws. The enforcement officer makes a report to his higher authority regarding the lapses noticed in your accounts and offences.Based on this information a reassessment is ordered to make a detailed scrutiny of all related documents and give you a hearing on this matter.After this procedure an audit officer(reassessing) passes an order U/s 39 of KVAT Act 2003 to confirm or change the tax already collected by the intelligence men.If any tax evasion is observed 10% penalty and interest due will also be charged. This includes the amount already paid by you,including penalty and interest.If any further levy is made by the audit officer that will be collected from you again. Or if the audit officer finds the report of the enforcement officer not satisfactory,he may consider your explaination and reduce the levy,due to which a refund may arise(See Sec39,sec52,sec72).....mjk
CAclubindia
