Chartered Accountants Association, Jalandhar has made a representation to FM regarding Misuse of Official Position by making roving enquiries & issuing illegal Show Cause Notices by Central Excise (Service Tax) Department. Central GST Department has been issuing Show Cause Notices (SCNs) for FY 14-15 for difference in Receipts as per Service Tax Return and Income Tax Return in bulk without going into the legality and without fulfilling the mandate given by the law for issue of such Show Cause Notices. Notices have been issued even to professionals like Doctors (Corona Warriors) who were not even liable to service tax levy. Full text of the Representation is as follows:-

January 04, 2020

To,
Honorable Minister for Finance Govt. of India
New Delhi.

Respected Madam,

Sub:- Misuse of Official Position by making roving enquiries & issuing illegal Show Cause Notices by Central Excise (Service Tax) Department .

We would like to bring to your kind notice that The Chartered Accountants Association is representing Chartered Accountants and is a constituent body under the societies act. The functions of the Association include holding of talks, workshops, seminars and conferences on topics of professional interest with a view to help the members keep themselves abreast of the developments in the fast changing scenario, to represent members before various authorities etc.

You will appreciate the fact that in these times of COVID-19 pandemic, the Government is taking all measure to make life easy for all citizens by relaxing the compliance burden and also by giving other incentives. H wever these efforts are being negated by high headed and irresponsible working by some officers of the Central GST (Service Tax) Department in defiance of the fulfillment of four corners of law.

Central GST Department has been issuing Show Cause Notices (SCNs) for FY 14-15 for difference in Receipts as per Service Tax Return and Income Tax Return in bulk without going into the legality and without fulfilling the mandate given by the law for issue of such Show Cause Notices. Notices have been issued even to professionals like Doctors (Corona Warriors) who were not even liable to service tax levy.

Notices have been issued solely on the ground that receipts shown as per ITR are different as compared to receipts shown in service tax return. Further in case of persons, who were not liable to service tax, notices have been issued to make roving enquires on basis of their ITR. Notices are asking for plethora of information for 3-5 years. Assesses are being harassed by such vague notices making roving enquiries.

The notices have been issued on basis of discrepancies in Income Tax and Service tax data even in cases where Departmental audit has already been done. It is clear that notices have been issued blankety and without any due diligence leading to creation of unnecessary hardship for assesses. An attempt is being made by departmental officers to create disputes and demands for the reasons best known to them.

The Show Cause Notices (SCNs) have been issued with a pre- determined state of mind and in a prejudiced manner and have been issued with arbitrariness and vagueness. It is pertinent to mention here that the SCNs have been issued in an illegal manner as extended period of limitation cannot be invoked in the cases where no facts have been suppressed from the department with an intention to evade the payment of service tax. Accordingly, the entire period covered under the issued SCNs from April, 2014 to March, 2015 is barred by limitation.

Difference in receipts as per ITR and Service Tax or non-application of Service tax number does tantamount to any fraud leading to notices asking for 5 years old information. Enquiry up to 5 year can be made only if service tax has not been paid due to fraud, collusion, willful statement or suppression of facts. If receipts as per I. are no tallying, it does not mean there is fraud, collusion, willful statement or suppression of facts. There can be a number of reasons for the mismatch like cash or mercantile basis of the system, professionals, Other Persons not liable to service tax and so on.

Officers cannot make roving enquiries and issue notices beyond the limitation period of 1 year. However notices have been issued its bulk in defiance of law. Without recording any reason which indicates any fraud or misstatement, notices are being issued to one and all. Extended period of 5 years can be availed by Service Tax Officer only if he is satisfied that there if fraud or willful statement. However blanket notices have been issued to all without any satisfaction.

The officers dealing with notices are harassing the Assessee’s and asking for documents which they are not entitled to call for.

The SCNs issued mention various enquiry letters, which were never received by any assesses and have been wrongly mentioned in the SCNs, which also shows the arbitrary working of the department.

The extension in time limit till 31/12/2020 was provided for completion of pending proceedings or tiling of appeals etc and not to make roving enquiries and harass the assessees. Sending notices, calling for information more than 5 year old, is uncalled for. In many cases even when replies have been sent by mail or post, again notices are being sent and a situation is being created that assessee has to contact the relevant officer personally or through an authorized representative making mockery of the claims of the government for faceless resolution of issues.

In view of above submissions, the SCNs issued without force of law may kindly be filed without asking the Assesses to comply with the same as it would tantamount to their harassment and outflow of funds for compliance in this COVID period. It is also requested that a proper enquiry may also be made with regard to issue of these illegal show cause notices.

Thanking you

Yours faithfully,

CA Ahwani Kumar Jindal)
General Secretary
M — 9876063350

Copy to

1. The Honorable Prime Minster of India
2. The Revenue Secretary
3. The Chairman, CBIC
4. The Principal Chief Commissioner, Chandigarh
5. The Principal Commissioner, Ludhiana
6. The Deputy/Assistant Commissioners at Jalandhar

Download Representation in PDF Format

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Disclaimer: The contents of this article are for information purposes only and do not constitute an advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up.  The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.

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14 Comments

  1. Tridib says:

    Thanks for pursuing the illegal service tax notices being served on doctors and other professionals who are exempted. Hope you will take this up with the courts also as such gross incompetence of regulator and injustice meted out to citizens are firmly dealt with.

  2. BIBHUTI BHUSAN PATTANAIK says:

    Thank u for ur letter to FM. proper legal step should be taken against the corrupt officer those who are unnecessarily harass to the doctor (Covid warrior) as well a as Tax practitioner.sir, frequent SCN has been issued to my client and begging 1 lakh to drop the case openly. BIBHUTI B PATTANAIK FROM CUTTACK, ORISSA

  3. Prakash Jhunjhunwala says:

    The authorities are issuing the show cause exparte without considering the submission and reconciliation which is ultra vires

  4. Azam says:

    Similar SCN was issued to my client who is not liable to service tax.When I tried to give my written representation the concerned officer was not willing to accept my letter and refused to acknowledge it .I’m glad the matter has been taken up to higher level.

  5. Maunish Vyas says:

    This SCN are insisting on personal meetings to officials and as we all know personal interaction may encourage quarrel or corruption. Such a situation is disastrous to the government’s claims of good governance.

    1. Rahul Unadkat says:

      Very True , The Whole Purpose of Govt Get Defeated , Govt on 1 Hand Says Ease of Doing Business and other Hand They Compel their Officers to Do this By Giving Unreasonable Tax Collection Targets from 3 % Tax Payer Community What is The Use Of PM Doing the Talks Is it All Nonsense ????

      1. T kumar says:

        Ease of doing business dosent imply self certification by the assessee that they are honest..it is for the department to ascertain.Non compliance..non submission of documents is ample enough to invoke suppression.

  6. રાજેશ says:

    Even given all documents and sending details also on mail still dept issued. Scn this is clearly harrasment , person not registered under service tax and not filing I tax return that people are tension free it seems that u have to do business without any license on cash basis (me sab ye hi bolna chahunga ki jisko bhi scn aaya hai wo sab person milkar Sarkar k khilaf aawaj uthao like Punjab farmer

  7. KN Murli says:

    I am also a victim of this SCN, inspite of responding to all the query, still SCN issued mentioning that due to no response to noticed SCN is being issued. Major issue is difference between ITR and ST3 return. In my case client did not pay service tax and I had to absorbe the same. Hence ST3 total income computed will not be same as ITR.

      1. T kumar says:

        Slvdrs Act itself extends a time frame of one year from the date of filing svldrs application to ascertain the veracity of the voluntary disclosures made by the apllicant.

      2. Narasimham says:

        I also received and demanded one lakh to drop the case even after submitting necessary documents. They didn’t even saw the documents and acknowledged the reply.
        Time and again called me and harassed me saying that it will be a legal case for longer duration and it is better settle at his end.
        His name is Chandrashekher from ST office from Hyderabad zone office at Himayatnagar

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