Office of the, Commissioner of Sales Tax, 8th floor, Vikrikar Bhavan, Mazgaon, Mumbai-400010.
Trade Circular No. 9T of 2013, Dated:11.12.2013
Sub: Grant of refund -ITC denied due to purchases from non-filer supplier
Ref: 1.Trade Circular No. 22T of 2010 Dated 05/10/2010.
2.Trade Circular No.8T of 2012 Dated 21/06/2012.
3. Bombay High Court judgment in M/s. Mahalaxmi Cotton (writ petition 33 of 2012)
BACKGROUND:
The Hon’ble Bombay High Court has delivered a judgment in the case of M/s. Mahalaxmi Cotton Ginning Pressing and Oil Industries Ltd., Kolhapur in Writ Petition No. 33 of 2012. In the said petition, the Constitutional validity of section 48(5) of MVAT Act 2002 was challenged. The Hon Bombay Court has upheld the constitutional validity of section 48 (5) of MVAT Act.
During the course of hearing in the said case, the Department had assured the Court that “refunds will be given by the Sales Tax Department even without any refund application having been filed by the dealers, since the Sales Tax Department will reconcile the payments, inform the dealer of the recovery from the non filer concerned and grant the refund.”
2. Measures taken by the department: To comply with the assurance given by the Department before the Court, the Department has taken the following steps:-
(1) The department has uploaded the list of non-filers on the web-site. The said list is being updated periodically.
(ii) Non-filers are being pursued rigorously.
(iii) The Department has now decided to grant the refunds to those dealers, who were denied refund on account of purchases from non-filers of returns and in whose cases, the supplier has filed the returns and paid the due tax. The procedure for the grant of such refund is being detailed, hereunder.
3. Procedure for grant of refund
(a) Refund application not required: A dealer, who has become eligible for refund, due to the filing of returns and tax payment by his supplier (who was a non-filer earlier), need not apply for the refund. The refund shall be granted to the claimant dealer without any refund application after due verification on Mahavikas. The list of the dealers, who are eligible for the refund shall be displayed on the department’s web site.
(b) No verification of books of accounts: The claimant dealer shall not be called for verification of his books of accounts for this purpose.
(c) Role of Economic Intelligence Unit (EIU): The EIU shall furnish the lists of the dealers, who have become eligible for refund on account of the supplier filing returns later and paying tax. The EIU has already provided the list of dealers, who are eligible for refund for the years 2008-09, 2009-10 and 2010-11 to the respective Joint Commissioners of Sales Tax as on 2nd September 2013. The lists contain the names of the eligible refund claimants as well as the suppliers, who have filed returns subsequently for the respective periods and paid the taxes due shown as per their returns.
(d) Procedure in the office of the Joint Commissioner:
(i) Entry of the cases informed by EIU shall be taken in the register in the office of the concerned Joint Commissioner.
(ii) The concerned Joint Commissioner shall allot these cases to the respective assessing/ audit officer to whom the case was earlier allotted for the purpose of audit /assessment.
(e) Role of the Audit/Assessing Officer:
i. The audit/assessing officer shall also confirm on MAHAVIKAS whether the supplier has indeed filed returns and paid taxes (as informed by EIU), in respect of the period for which refund is to be granted to the claimant dealer.
ii. After due verification, the audit/assessing officer shall modify the liability /refund of the dealer accordingly and take the necessary entry in prescribed registers.
iii. If the dealer is eligible for refund then the audit/assessing officer shall send the report along with the respective file through his supervisory officer to the refund branch or to the concerned refund officer.
iv. The assessing /audit officer should clearly mention in his report the total amount of refund due specifying the tax, interest and penalty, as the case may be, separately.
v. In case of a dealer, whose case had not been allotted to any branch but being a refund case, had been processed by the Refund officer, then such additional refund claim shall be processed by the concerned refund officer himself.
(f) Role of the Refund Authority:
i. In Mumbai, specific officer is designated in each Refund Division to process such refund claims received through different functional branches.
ii. In rest of Maharashtra, for each location, one officer shall be designated for the purpose of processing such refunds.
iii. In case of a LTU dealer, the refund shall be processed by the respective LTU officer.
iv. The refund authority in the refund branch shall take entry of such cases received from various functional branches in the prescribed registers.
v. The concerned refund officer shall grant refund of an amount recommended by the concerned audit/ assessing officer by issuing Refund Payment Order in Form-502. Entry of such refund shall be taken in RPO register.
vi. In the RPO register, the refund officer shall record a cross entry of the said assessing officer’s DBA register.
vii.The refund application shall invariably be processed expeditiously through MAHAVIKAS.
viii. Where the earlier assessment has resulted in dues, the assessing officer shall pass the rectification order and modify the dues. If the claimant dealer had paid the dues, as per the earlier audit/assessment, then the claimant dealer may now become eligible for refund. If such refund is due, then the same may be forwarded to the concerned refund officer. On the other hand, if the dealer has not paid the dues, as per the earlier assessment order, then there would not be any question of any refund, however, the dues shall be modified accordingly in the respective register.
ix. Where the dealer has preferred an appeal against any assessment order, then the assessing authority shall communicate the facts to concerned appellate authority. The appellate authority shall give appropriate consequential effect in the appeal order.
4. It is being made clear that the refund of ITC ,which was disallowed shall not be allowed if the purchases have been effected from non-genuine dealer, as declared by the Department even if such a dealer has filed returns and paid tax (either partly or fully).
5. The instructions given above shall be scrupulously followed. In case of any clarifications, the matter may be referred to the Additional Commissioner of Sales Tax (VAT) 2.
Yours faithfully,
(NITIN KAREER)
Commissioner of Sales Tax,
Maharashtra State,
Mumbai.
what decides a non genuine dealer ? What is the Law ?
If R.C. cancelled for Technical Reasons , can it be Non – Genuine Dealer ?
Is there a list of Non- Genuine Dealer ?