11 December 2013
My friend had started a reail textile business in partnership with his wife from 1.4.2007 to 30/9/2007(Financial year 2007-08).The firm was registered under Karnataka VAT ACT.The firm had filed monthly Vat return within 20th of subsequent month.Paid the the applicable taxes. As they suffered huge losses,they have closed the business in Oct'2007.They have also surrendered the VAT REGISTRATION CERTIFICATE IN Oct,2007.They started new partnership with another two partners who are wellversed in textile business in the same premises where the previous firm was functioning. The old records were shifted to their residence which was rented.Subsequently they shifted their residence to their own house from the rented house. while shifting they have misplaced the records and books of the old firm.Now, on 9/12/2013, On reminder from commercial tax officer,one of the erstwhile partnership firm met the CTO.She handed over a notice directing the assessee to furnish the records,returns and books of accounts for the year 2007-08 within seven days from the date of receipt of notice. My friend is i quandary. He sought my help in solving the problem.Pl guide us in this regard. we are trying to locate the records.If we are unable to trace the recoreds,what is the remedy.
11 December 2013
You are required to keep the accounting records for a period of five years after the end of the financial year.Here,you have closed your business w.e.f.Oct 2007.From 1st April,2008 till 31st Mar,2013,you were required to keep the records.Now as the time limit has expired you can not be asked to furnish such old records under VAT Act.You can quote Sec 32 of Karnataka VAT Act 2003 and declare that you have even destroyed them as no case was pending with the department or court.t best you may show a copy of bank record taking from your banker or a ledger account of yours maintained by the suppliers.Such belated notices should generally be based some intelligence report.Otherwise it may not be valid....mjk
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