Kerala value added tax assessed escaped sales turnover.
Gopakumar Vadelil
(Querist) 29 November 2013
This query is : Resolved
1. Kerala Value Added Tax assessed escaped sales turnover. Reason suspected unaccounted purchases from registered dealers only. Detected electronically on cross checking with the e filed returns of the suppliers of the goods. No other documentary or material evidence. The dealer denied these purchases. My doubt is that weather the dealer is liable merely on the basis of the information given by others. Looking for opinion with supporting information.
2. In the same case no input tax credit has been allowed for the assessed escaped sales turnover. Since corresponding purchases from the registered dealers has been certified by the Assessing authority in its assessment order, the dealer thinks that he is eligible for the corresponding input tax credit in the assessment. According to the Assessing Authority these purchases are already tax suffered in the hands of the suppliers. All purchases and sales are within the state.
The dealer availed the ITC in the return. But now I am asking about the ITC for the assessed escaped turnover. It is not possible to claim the ITC by the dealer since he denied these purchases. But regarding the Assessing authority he assessed the escaped purchases from the registered suppliers and the corresponding sales. Since he certifies this he is bound to give the corresponding credit. Otherwise these goods will suffer tax two times.
R K JAIN
(Expert) 29 November 2013
Cross examination with seller is to be allowed before adding the sale in your turnover. You can ask for cross examination of the seller before the Assessing Authority.
Gopakumar Vadelil
(Querist) 29 November 2013
Thank you Sir. Now the case is pending before the first Appellate Authority. A personnel enquiry revealed that a former staff of the dealer, who started the same business, purchased giving this registration. Before the assessment the dealer submitted this before the Assessing Authority and it is recorded in the assessment order. So the cross examination may not bring much favorable results. That is why I am pursuing the method of assessment also.
C. SANJEEVA RAO
(Expert) 30 November 2013
Normally in the VAT regime,to avail the ITC, the original TAX invoices has to be produced before either audit or assessment by the department. The ITC is eligible only on the basis of the original TAX invoices. In respect of your query, the alleged unaccounted purchases (which was purchased by the former employee of ur client)is denied of ITC, it is correct. But, u can challenge the same before the First Appellate Authority with whom the matter now came for adjudication)with documentary evidence, such as any enquiry report like confirmation of the purchases from the seller/consignor, transport document (who has taken the delivery of the goods), if possible from the check post where from the vehicle passes. Method of audit and assessment is to be completed as contemplated and enunciated in the provisions of the Act or Rules, you have to go thru such provisions first, then u can argue your case before the Appellate Authority legally.
