8th Floor, Vikrikar Bhavan, Mazgaon, Mumbai-40010.
Trade Cir. No, 5 T of 2013 Mumbai, Dt. 24.07.2013
Sub : Guidelines with regards to the Institution of prosecution and compounding of offences under section 78 of MVAT Act, 2002.
Gentlemen / Sir/ Madam,
Section 74 of the Maharashtra Value Added Tax Act, 2002 provides for the offences and penalties. Clause (f) of sub-section (3) of section 74 provides that if any dealer fails without sufficient cause, to furnish any return as required under section 20 by the prescribed date and manner shall, on conviction, be punished with simple imprisonment for a term which may extend to six months and with fine.
2. In view of the provisions contained in section 74 of the MVAT Act, 2002, departmental authorities have issued show-cause notices to the dealers who have not filed the return at all or who have failed to file return within prescribed time alongwith the requisite payment shown in the return due as payable. Further in some instances, the departmental authorities have also filed complaint with the Judicial Magistrate in order to try the offence as per the provisions contained under section 74 of the MVAT Act, 2002.
3. The dealer under the circumstances may make an application with a request to compound the offence either after receipt of show-cause notice or filing of complaint with the Judicial Magistrate. The offence related to non-filing of return within prescribed time period may be compounded with compounding amount provided under section 78. The section 78 provides that,-
(1) the offence under section 74(3) may be compounded with appropriate amount of compounding fee. For the offences stated under sub- section (3) of section 74 the compounding amount may be fixed at the amount which does not exceed double the amount of the tax involved under that offence.
(2) In order to streamline the process of institution of prosecution and uniformity in fee for compounding the offences the following instructions are issued:Online GST Certification Course by TaxGuru & MSME- Click here to Join
(a) Where a dealer has filed a return late and made the payment of taxes due as per return along with the late fee provided under section 20(6), then, in such case prosecution show-cause notice shall not be issued.
(b) In case, where dealer has failed to file return within prescribed time and the departmental authority has issued a show-cause notice for prosecution, then, the offence may be compounded at the request of the dealer subject to the condition that the dealer has filed the return for the period under default along with payment of tax due as per return and late fee.
(c) In cases, where complaint has already been filed before the Judicial Magistrate, then such offences shall be compounded subject to the grant of permission by the concerned Judicial Magistrate.
(3) The compounding amount for each offence stated above shall be fixed as given in Table below:
Compounding amount for
|Dealers liable to file Six- monthly returns and newly Registered dealers||Double the amount of tax or Rs. 5,000/- whichever is less.|
|Dealers liable to file
Quarterly returns –
|Double the amount of tax or Rs. 15,000/- whichever is less.|
|Dealers liable to file Monthly returns.||Double the amount of tax or Rs. 25,000/- whichever is less.|
4. The Additional Commissioner(s) of Sales Tax may reduce or enhance thp compounding fee stated in the table above.
5. 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.
6. You are requested to bring contents of this circular to the notice of the members of your association.
Commissioner of Sales Tax, Maharashtra State, Mumbai.