Trade Cir. No.34T of 2009, Date: 02/12/2009
Sub : Penalty u/s 29(8) of MVAT Act, 2002.
Ref. : 1. Maharashtra Act No. XVII of 2009 dated 27th June 2009.
2. Trade Circular No. 26T 2009 dated 1st October 2009.
You are aware that the provisions of section 29(8) and section 85 of MVAT Act, 2002 related to levy of penalty for non filing of returns within prescribed time limit were amended with effect from 1st July 2009. The amended provision provides for imposition of mandatory penalty to the defaulting dealer. The provision of section 29(8) attracts if the dealer fails to file the return as per the periodicity prescribed in the rule 17(4) of the MVAT rules. The penalty shall be levied immediately if dealer fails to file return within the time prescribed under rule 17(4).
2. The Trade Circular cited at Ref.-2 explains the principles for determining the periodicity for filing returns. Further, the Department has also displayed the periodicity of each dealer for the year 2009-10 on the Departments web-site www.mahavat.gov.in In case, if dealer feels that the periodicity displayed on the web-site is not correct, then he is requested to approach the concerned Departmental authorities and get the same corrected.
3. After issuance of the aforesaid Trade Circular, the representations have been received from various Trades and Associations. In the said representations it is pointed out that, in some cases the periodicity, determined and displayed on the web-site does not match with periodicity of the returns filed by the dealers. As a result of this, the system has shown such dealers as non-filers with the possibility of levy of penalty. This may cause unnecessary hardship to the dealers.
4. The issue has been examined. The Department while determining the periodicity of a dealer has taken into consideration (if dealer is a monthly filer), the payment of tax made for the period starting from 1st day of March to last day of the February. This is as per the interpretation of the Rule 17(4) of the MVAT Rules, 2005. After the issuance of the Trade Circular 26T 2009 dated 1st October 2009 representations have been received wherein it was requested that the some dealers while determining their periodicity of filing returns have considered the payment of tax made during 1st April to 31st March of the previous year. As a result of this, the periodicity determined by the Department and the dealer in some cases is not in consonance with each other.
5. On the aforesaid background it is hereby made clear that the department will display the periodicity of filing of return on the web-site by 15th December 2009. The dealers are requested to verify the same. If it is noticed that there is a difference in the periodicity determined by the department and periodicity at which the dealer has filed the return then the said dealer/s shall file revised returns for the said periods as per the periodicity determined by the department by 31st January, 2010. If the dealer files the revised returns by 31st January 2010 then such dealer shall not be subjected to the penalty. However, only those dealers who have had a genuine misunderstanding with respect to the periodicity vis-a-vis the periodicity determined by the department and have otherwise filed the returns as per the periodicity determined by themselves, will be eligible for relief in penalty under this Trade Circular. If the penalty proceedings have already been initiated then such proceedings will be dropped. In the cases, where the penalty orders have already been passed then the necessary corrective actions will be taken by the concerned authorities.
6. Further, where penalties have been already levied for non-filing of return as per periodicity shown by the system and according to the dealer the periodicity shown is incorrect, he may approach the authority for correcting the periodicity. The authority, after verifying the claim of the dealer shall rectify such penalty order where dealer’s claim is found to be correct and reduce the penalty to Nil.
7. Needless to state that no request for relief in the penalty in this respect shall be entertained after 31st January 2010.
8. This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.
9. You are requested to bring the contents of this circular to the notice of all the members of your association.
Commissioner of Sales Tax
Maharashtra State, Mumbai,