VAT AUDIT

The latest last date for submission of Form 704 is 30th April, 2007.

We say latest because we do not know what would be the developments in next few days. This editorial is being written on 20th April, 2007.

We were in the Court yesterday. On our request, the High Court had taken up the matter for priority hearing. But to our misfortune, the Court could not proceed with the hearing. The Court could not even look at the petition. Only direction their Lordships gave was to keep the matter continuously on daily board. There are number of other part heard and top priority matters before the Bench. We are afraid, the Court may not be able to look to the petition even in the last week of April. In such circumstances what would be the fate of the petition? Will it become infructuous? No Court shall permit such thing to happen. The only solution we see, at present, would be the further extension of last date of submission of audit report. This time it may be till 30th June, due to vacation.

The further extension of time is going to be fatal for administration. Their entire schedule has already collapsed. Even after the end of second year of VAT, they are not in a position to assess the true and correct results of implementation of VAT. There may be an increase in the revenue. But, whether the increase is temporary or permanent, they do not know. Further, whether the increase is from expected quarters or not, they do not know. If they had undertaken the assessments of the first year of VAT immediately in the next year, by now they would have been ready with the correct data.

But, who is responsible for such unfortunate situation? Government of Maharashtra is solely responsible for such maladministration. They handled this issue of VAT Audit politically. If they did not want to empower the practising community as a whole to prepare this tax compliance report, they should have made it clear at the first instance. Till recently, the Finance Minister and the Commissioner, both, kept on saying that the issue was under consideration. We remember, in one meeting, the Commissioner in the presence of the Finance Minister declared that the VAT Audit is nothing but the outsourcing of assessments and he would rather prefer to give it to all provided those persons are in practice for minimum seven years. But, thereafter, the Finance Minister, informed us that the Commissioner was against giving such assessments/tax compliance to the persons other than Chartered Accountants and therefore he was helpless in the matter. We do not know the truth nor are we now interested to know it, but, had this decision been taken earlier there would not have been so much delay in filing Writ Petition and the difficulties which the administration is now facing could have been avoided.

We suggest that audit for the year 2005-06 be now made optional. The assessments for that year be taken up immediately by making necessary amendments in law. It will also give proper idea of VAT implementation to the Revenue.