Hon’ble Shri Sanjay Bhatia………….

Namaskar,

I am in receipt of your letter on the first day of the New Year wherein you have requested us to circulate the New Year message enclosed thereto to all our members. Accordingly we have published the same in this Review.

In the said message you have congratulated us for our co-operation and support to the department in various issues in last one year and at the end you have assured for more proactive and responsive tax administration in the coming year.

As an important part of our co-operation and support to the department, it is our duty to point out fearlessly, hundreds of lapses on the part of department in setting the things in order for which the pages in this Review would be insufficient. As such we have made a serious attempt to write here only few such lapses with the expectation from you to spare more time for the meetings with us on daily basis to understand many more. We are sure this only will be helpful for the department to fulfil your assurance of a more proactive and responsive tax administration in the coming year.

You have stated that to become a responsive tax administration, a new Grievance Cell and a Vigilance branch is opened in the department. The Grievance Cell is expected to resolve the dealers’ grievances in a guided and a time bound manner. Also, vigilance branch is expected to keep a watch on the employees to reduce corrupt practices, if any.

In this regard we are happy to mention and appreciate that you are the first Commissioner of Sales Tax to openly talk about the corrupt employees and also to take steps to reduce corrupt practices. However, we also mention that there are many good officers in the department who are interested to set the things in order, but the present practices followed by the department may tend such good officers to corrupt practice if they are forced to follow what they themselves are not convinced as correct.

The best example in support of our above statement is your hasty drive of prosecution for non filing or late filing of returns under the circumstance which you are fully aware that the returns furnished by the dealers are not properly recorded by the return branch for many difficulties of scanning, automation etc.. Instead of taking labour on your part to prepare a dealer wise file containing all the returns filed, you have instructed or allowed to issue letters to almost all the dealers to furnish the proof of returns filed. This is nothing but the basic non compliance on your part as the departmental head. We suggest you to take all efforts to publish the year wise list of dealers who have not filed the returns, before issuing the blanket courtesy letters to furnish the copies of returns filed.

If the dealer who has filed all the returns do not respond to such courtesy letter for genuine difficulty or otherwise, he is being served with the notice to show cause, why he should not be prosecuted. Only because the huge number of dealers have not filed the returns, it is unjustifiable, irresponsible and improper act on the part of the department to show unnecessary enthusiasm to sanction prosecution which an administrator should adopt only against the civic or criminal offenders. Kindly note that the prosecution is a serious business and it is our humble suggestion that it should not be adopted unless the officer make it sure that the dealer has not filed the return even after the follow up and grant of sufficient time, and under no circumstance prosecution be initiated in case of returns filed only because they are late. If the prosecutions are initiated with the intention to create threat amongst the dealer, it would lead only to corruption which the person like you would definitely have not thought of.

We make it clear that we do not wish to protect the late filers, but what we wish to point out is that instead of launching the prosecution against such late filers, the same energy and time should be utilized against those dealers who are not filing the returns at all or those who have remained URD for number of years. However unnecessary enthusiasm is being shown in issuing the orders for the levy of interest and penalty even in cases where the return is filed late by a day, because the due date was Sunday or holiday. Furthermore monthly ex parte assessment orders under section 23(1) are being passed instead of one order for the year, where none of the return for the entire year is available with the return branch. In such case dealer is required to file 12 applications in Form 304 for cancellation of such orders and again the officer is also required to pass 12 orders of cancellation. Sir, will you please stop this wastage of energy, time and what not.

On one side you are asking the dealers to furnish the copies of returns filed under the sweet word co-operation and on the other side there is no assurance that the copies of such returns furnished will be handed over to the business audit officer. Therefore the dealer is again required to prepare the copies of all returns in order to co-operate with the business audit officer. This is nothing but the wastage of paper, energy and time and an attitude to take the dealers for granted.

One more lapse on your part is a move to change the focus from assessment to business audit under the expectation that the officers will have more insight to understand the dealer’s affairs which will improve the tax compliance. We fail to understand how the understanding of the dealer’s affairs is possible if the notice for business audit directs the dealer to prepare details from April 2005 to till date. Kindly keep in mind that the officer is not a superman to grasp the details of three years just by a cursory look. In fact to understand the business affairs what is needed is thorough verification of the transactions for the entire year or at the most of a particular month. We as sales tax practitioners with great authority on the subject tell you "only by naming the system as business audit (instead of assessment) it will not change the purpose of verification which is nothing but assessment of tax liability and satisfaction of the officer as regards maintenance of sufficient records by the dealer". Therefore it is must to conduct business audit for the year at a time and it must be followed by an assessment order. Unfortunately the audit officers are not bold enough to tell you this factual truth.

We have section 61 audit, refund audit and business audit. Over and above this you have introduced Desk Audit for which the concerned dealer is instructed to furnish many details of sales and purchases along with the quantity of goods consumed and/or sold. Can we ask the purpose behind the Desk audit. One of my clients has been warned that no refund in his case would be granted unless the details for Desk audit are furnished. May we point out to you sir, under the BST Act also commodity wise information was being collected which no one from the department can tell you what they did with that information. In short the officers are following every new concept without asking their superiors the use and purpose thereof. Even under presumption that such information gathered in the name of all such audits is usefull to the department, you should have collected it once by doing the assessment instead of asking it again and again through various departments of yours. We are asking for assessment order because the assessment gives the finality and it fix the responsibility on the concerned officer which otherwise is not at all being taken by any of the auditing officer.

This is our feedback in short as is expected by you and now we are anxiously waiting for immediate steps on your part to arrange series of meetings with us to suggest necessary changes in the process as assured by you.

Regards