Letter No: Q3/4325/2010, Dated 02/09/2010
Sir,
Sub: Complaint – Enforcement officers collecting Rs. 2000/- from Electrical retail and wholesale dealer – without any notice – for non maintenance of stock book – remarks called for – regarding.
Ref: 1) Telegram received from Thiru Chanchalraj Khimsura.
2) The Madras Electric Traders Association, Letter No: F-13/150/2010, Dated 09.02.2010.
3) Joint Commissioner (CT) Enforcement –II, Chennai Rc. 354/2010/A5, Dated 09.02.2010.
4) Joint Commissioner (CT) Enforcement – I, Letter.No.638/2010/B1, Dated 09.02.2010.
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The representation received in the reference 1st and 2nd cited has been considered in this office. In thi9s connection, it is informed that u/s 64 read with the Rules 6(1), 6(3) (a) and 6 (9) of Tamil Nadu VAT Rules, 2007 every registered dealer shall maintain true, correct and complete accounts. Under Rule 6(1), every registered dealer should show goods produced or manufactured, bought sold, delivered or supplied. As per Rule 6(3) (a), every registered dealer who manufactures of produces shall maintain a production cum-stock account in Form-H. As per the Rule 6(9) “Every registered dealer, who claims input tax credit shall maintain an input tax adjustment account with the following particulars, namely:-
(c) Month: (b) Input tax credit brought forwarded: (c) Input Tax paid during the month: (i) at 1%: (ii) at 4%: (iii) at 12.5%:
(d) Reversal input tax credit: (e) Total input tax credit: (h) Output tax: (i) Advance tax adjusted including entry tax: (j) Tax payable”.
According to the rule 6 (1) every registered dealer under the Act shall maintain true, correct and complete account in ink or electronic records. Therefore, the accounts of a dealer are incomplete if there is no stock account.
Rule 6 (3) (a) explicitly provided for the maintenance of production cum stock account for a manufacturer of producer.
Under Rule 6(9), every dealer shall maintain an Input Tax Credit adjustment accounts if the dealer claims Input Tax Credit. Correctness of the same could only be verified with respect to the stock available in the place of the business. In the absence of stock account, the Input Tax Credit claimed, Input Tax Credit adjusted and balance Input Tax Credit available are not reliable and is to be reversed. Therefore, as per the provisions of the Act and Rules, if any lapses or deviation in maintenance of accounts as mentioned above, are offences under section 71 of the Act and compoundable under section 72, by levy of the ‘C’ fees not exceeding Rs. 2000.00 or double the amount of tax payable whichever is greater. Therefore, ‘C’ fees of Rs. 2000 or double the amount of tax taxable are being levied as per the provisions of the Tamil Naud Value Added Tax Act’06.
In view of the above, the booking of offence under Section 71 of the TNVAT Act for non maintenance of stock account book by a dealer for claiming Input tax credit adjustment and compounding of offence by the dealer under Section 72 of the Act by levy of ‘C’ fees not exceeding Rs. 2000 is in order.
Sd/-
A. Rajaraman,
For Principal Secretary
Commissioner of Commercial Taxes
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