8th floor,Vikrikar Bhavan,
No. DC(A&A)/Adm Relief/ADM-8
Internal Circular No. 4A of 2015
Mumbai, dated 24th March 2015
Sub: Grant of Administrative Relief to Developers and Assessment of refund claim in return
The taxation of Developer was subject matter of court proceedings. The Hon. Bombay High Court upheld the levy while disposing the writ petition No. 2022 of 2007. As a result of the judgment a large number registration application by the developers were expected. As the levy had been upheld from the inception i.e. 20.06.2006, it was expected that the developers would seek the administrative relief for delayed application for registration. In order to deal with the situation the Trade Circular No. 14T of 2012 was issued which provided for:
a. Levy of compounding fees of Rs.5000/-where a developer applies for registration before 16/08/2012 and makes an application on or before 31/08/2012 for administrative relief along with the proof of filing of returns and payment of taxes for unregistered period.
b. In the case of delay in making application for registration the compounding amount to be charged as per the office order No. IMC-1007/Adm Relief/URD/Adm-4/B-1020, Dt. 18/04/2007.
c. In the event of a developer submitting application for administrative relief along with proof of payment of compounding fee and taxes with returns for the un-registered period, the order of granting the administrative relief to be passed by the concerned Joint Commissioner within two days without calling the developers for hearing.
Directions in respect to Hon’ Supreme Court interim order – Subsequently to give effect to the interim order dt.28/08/12 passed by the Hon. Supreme Court, the Trade Circular No. 17T of 2012 dt. 25/09/12 was issued, which provided that –
(a) The developers who have not obtained the registration under MVAT Act,2002 shall obtain the same on or before 15th October 2012.
(b) The time for filing of return and payment of tax stands extended up to 31St October 2012.”
In the said trade circular it was also mentioned that –
(d) The developers fulfilling above two conditions will be eligible for grant of administrative relief provided the application is made on or before 31st October 2012.
Administrative relief in case of non statutory method of tax liability – In Circular No.WC.2012/9/ADM-8/B-15 dated 14/01/2015, it is further stated that if the developers has merely filed ‘NIL’ returns or has disposed the liability other than by way of statutory method, the administrative relief should not be granted. This was in view of the fact that writ petitions were filed before Hon. Bombay High Court against the Circular no.18T of 2012 wherein High Court categorically ruled that no other method than the statutory prescribed methods for discharging tax liability was allowed.
2. Issues representated by Trade – The Trade mainly represented two issues causing hardship viz, pending administrative relief application and assessment of brought forward refunds.
(a) Pending administrative relief application – Trade represented that although- the Trade Circular No. 14T of 2012 provides for passing of administrative relief order within two days of application, majority of the adm-relief applications are pending. The departmental officers are seeking various documents especially with respect to calculation of tax liability while disposing their application for grant of adm-relief.
(b) Assessment in case of brought forward refund – It has also been pointed out that where the developers cases have been selected for assessment and there is brought forward refund from the period not selected for assessment, the officers are insisting on audit /assessment of the periods showing carry forward of refunds.
3. Action to be taken – In this regards following directions are given on the above mentioned issues.
a. Administrative relief :-
The administrative relief shall be granted to the developers, who have
(i) applied for registration on or before 15/10/2012, who have filed the returns in time and paid taxes on or before 31/10/2012. The method of computation of the tax liability shall not be examined at the time of granting administrative relief but the same shall be examined in the cases selected for assessment.
(ii) Filed most of the returns in time, but some of the returns are missing or not filed and in such cases if the developers have filed 704 for the periods under application for administrative relief.
The composition fee in the cases covered by (i) and (ii) above will be charged at Rs 5000/- as per para (f) of Trade Circular No. 14T of 2012.
b. Assessment in case of brought forward refund :-
The developers were allowed to carry forward refund from year to year while filing returns. Their cases for assessment have been selected on the basis of risk parameters applied to the returns filed by them. In view of the same it will not be necessary for the assessing officer to go into the audit /assessment of earlier period from which set off/refund is brought forward.
4. These instructions should be strictly followed and cases allotted for assessment and pending applications for administrative relief be disposed off expeditiously.
Commissioner of Sales Tax,
Maharashtra State, Mumbai.