Sub.: Withdrawal of notices of audit assessment under the CST Act for F.Y. 2016-17 and F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017).

Ref.: (1) Government Resolution No. APB/102020/108/195224/K dated 5th June, 2020.

(2) Government Resolution No. GST-102019-1006-TH dated 6th December, 2019.

The Commissioner of Commercial Tax and any officer authorized in this behalf, is empowered to undertake audit assessment under sub-section (2) of section 9 of the Central Sales Tax Act, 1956 (hereinafter referred to as "the Act") read with sub-section (2) of section 34 of the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the VAT Act") for F.Y. 2016-2017 and F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017). The time limit for completion for such audit assessment ends on 31st march, 2021 and 31st march, 2022 respectively.

2. Notices for audit assessment have been issued by the concerned assessing officers under sub-section (2) of section 9 of the Act requiring the dealers to appear with books of account and all evidences in support of the returns or such other evidences as specified in the notices. The notices for the above period have already been served in all such cases.

3. The COVID-19 pandemic has spread across the globe including India causing immense loss to lives and health of people, adversely impacting business and causing disruption in supply chain. Now, there is also necessity to comply with the norms of social distancing. Further, the Department is implementing the Goods and Services Tax and therefore, the pending work under the Act and the VAT Act needs to be disposed expeditiously.

4. The Gujarat Chamber of Commerce and Industries, other trade associations and tax practitioners have represented to the Government to accept the liability as per the return furnished under the Act and not to undertake the detailed process of assessment in case of small dealers to avoid inconvenience and remove uncertainty in the mind of dealers.

5. The Government of Gujarat having considered the above, accepted the suggestion made by the Committee constituted under the chairmanship of Shri Hashmukh Adhia and has issued the resolution referred to at Sr. No (1) above in this regard.

6. Accordingly, it has been decided to withdraw the notices of audit assessment issued under sub-section (2) of section 9 of the Act read with sub-section (2) of section 34 of the VAT Act for F.Y. 2016-2017 and F.Y. 2017-18 for the following category of registered dealers:

A registered dealer:-

(i) for F.Y. 2016-2017, having gross total turnover less than Rs. 10 crore during F.Y. 2016-17;

(ii) for F.Y. 2017-2018, having gross total turnover less than Rs. 2.5 crore during F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017).

7. However, the withdrawal of notices given at para (6) above shall not be applicable to the following dealers:-

(a) A registered dealer who has claimed inter-State transaction covered under section 3, section 5 (4) or section 6A of the Act against the declaration (i.e. Form C, Form H or Form F, respectively) in his returns for F.Y. 2016-2017 and F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017) and the difference between the amount of the said inter-State transactions claimed in the returns and the amount of inter-State transactions for the said period, being reflected on Tax Information Exchange System (TINXSYS) exceeds rupees ten thousand;

(b) A registered dealer who has claimed inter-State transaction covered under section 6 (2) or section 8 (8) or section 6 (4) of the Act against the declaration i.e. Form E-I/Form E-II, Form I or Form J respectively, in his returns for F.Y. 2016-2017 and / or F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017);

(c) A registered dealer in whose case assessment is initiated as a result of proceedings under section 67 of the VAT Act or under sub-section (2) of section 9 of the Act read with section 67 of the VAT Act, commonly known as enforcement case, before the issuance of this circular;

(d) A registered dealer who has availed the facility of reimbursement, exemption or deferment of payment of tax under any industrial incentive scheme implemented through a notification or a resolution issued by the Government of Gujarat;

(e) A registered dealer who has applied under "Vera Samadhan Yojana -2019" referred to at Sr. No. (2) above, in the category of "self-declaration of liability" and has admitted the tax liability under the Act for F.Y. 2016-2017 and / or F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017);

(f) A registered dealer in whose case assessment proceeding is undertaken so as to give effect to the directions of any appellate authority including Tribunal or the Court;

(g) A registered dealer in whose case aggregate demand raised at the end of audit assessment under section 9 of the Act read with section 34 of the VAT Act and under the VAT Act for the financial year 2015-16 exceeds Rs. 10 lakh;

(h) A registered dealer who has transferred the amount of credit of value added tax (VAT) exceeding Rs. 10 lakh under the provision of section 140 of the Gujarat Goods and Services Tax Act, 2017;

(i) A registered dealer who has claimed refund (including the claim for provisional refund) of an amount exceeding Rs. 1 lakh under the Act or under the VAT Act; or

(j) A registered dealer who has failed to file return in respect of any period during the said year unless he has filed annual return, for the said year.

8. Notwithstanding anything contained in para (6), the notices of audit assessment issued under sub-section (2) of section 9 of the Act read with sub-section (2) of section 34 of the VAT Act for F.Y. 2017-18 shall not be withdrawn in case of a registered dealer who was engaged in the business of sales of goods specified in Schedule III of the Act during the financial year 2017-18.

9. The provision of this circular shall not be applicable to the cases where assessment orders are already issued under sub-section (2) of section 9 of the Act before the date of issue of this circular.

10. Notwithstanding the decision to withdraw the assessment notice, if any registered dealer prefers his assessment to be carried out under the Act in order to seek refund, he shall intimate electronically regarding it to the assessing authority on or before 31st August, 2020.

11. The dealer in whose case notice of audit assessment is withdrawn for F.Y. 2016-2017 and / or F.Y. 2017-18 shall be required to preserve and furnish physical copy of his declarations i.e. Form C, Form F or Form H, if any, relating to inter-State transactions covered under section 3, section 6A or section 5 (4) of the Act, within fifteen days from the date of receipt of intimation in this regard.

12. All assessment officers are hereby directed to withdraw notices for audit assessment issued to the dealers as mentioned above after verifying necessary details and intimate them accordingly.

13. Withdrawal of cases for audit assessment under the Act shall not affect the assessment proceedings under the VAT Act.

(J. P. Gupta)

Commissioner of Commercial Tax,

Gujarat State, Ahmadabad.