These are activities which fill the tax payers – even the compliant with dread due to past practice- unfortunately continued. This article provides some tips/ insights the knowledge of which maybe useful in dealing with such officers in a more confident manner. Adv. MS Nagaraja shared his views. Listed hereunder as per understanding:
1. To start investigation JCC or above needs to have reason to believe a) supressed / undervalued supplies, b) Excess claim of ITC, c) Contravenes Act/ rules with intention to evade & covers those who store good which have escaped tax. Under RTI can get the document authorising investigation. [ could be even at time of SCN reply]
2. Bland allegation may not be enough- specific reasons to believe should be there. However, there is no need to elaborate the suspicion.
3. At time of seizure, copies of all important documents, accounts, if computer/ laptop being seized, RIGHT TO TAKE COPIES. This maybe insisted though tax payer maybe told you can take later- you can apply. It is always a hassle to get copies later. Maybe copies on pen drive before handing over the laptop etc.
4. If good seized and no action in 6 months they can be dealt with. [ Even 1 day delay in extension sufficient- Charan Das- SC- 1983.This period can be extended with permission WITH SUFFICIENT CAUSE by JCC/ Commissioner. Reasons could be non co-operation, inordinate delay in submission of documents, statements etc. Again the copy of extension order this can be applied for under RTI later or at that time.
5. Perishable items special treatment under Notification.
6. Search should have 2 independent witnesses throughout- generally not complied with in 99%!!!. They can be cross examined if mahazar is suspect.
7. Summons is an interrogation to produce documents and answer truthfully. Good cop bad cop techniques used very often.
8. If issue known it is ideal to go with the background as well as answers to the doubt expected or send earlier by RPAD and go with a copy.
9. MD/ VP not necessary to be called. If called they can authorise a capable person to appear and his/ her statement would be binding.[ Circular of 2015 in Central excise equally applicable] This practice is good as
10. Issues relating to interpretation where 2 views are possible- higher officers not to be called as they would normally not be competent to answer legal questions.
11. Advocate/ person to accompany ( will not be allowed to be within hearing distance) to ensure no ill treatment like several hours of waiting, man handling etc.
12. Ideal to only answer what is known. Very important not to confirm what is not known as Officers would provide a number of reasons as to why they are right. In all such cases time maybe taken.
13. If liability being forced, then to say – we will pay if liable.
14. Preparation for summons to be done before going to avoid ending up in giving incorrect evidence.
15. Statement should be given carefully – not dictation signed. May write down in a separate paper all questions asked and answers given. [ There is no law which restrict that.]
16. Copy of statement requested – need not be provided under law. At times given.
17. Retraction is an important right which should be done as soon as possible and no later than 2 days. Otherwise it would be said to be a after thought.
18. If routine then the retraction maybe provided by mail + RPAD. It should have QUESTIONS AND ANSWERS NOT RECORDED AS WELL AS THE CORRECT ANSWER. Additional information which may be useful – not recorded needs to be provided. The waiting time, good cop/ bad cop technique, threats etc may also be intimated in the retraction. It should not be too long. If interpretation differences, no reason for difference needs to be added here. Officer may summon several times in case of retraction.
19. If attitude is poor of investigating officer. Next day retraction to be prepared in the from of an affidavit and got notarised in Court. It is not necessary to send the retraction and it can be produced at the time of reply to SCN.
This being an event which can be applied even to tax compliant, a good commentary on GST maybe kept as reference material and read before / at the time of investigation, summons etc.