Office of the
Commissioner of Commercial Taxes
Andhra Pradesh, Hyderabad.
Circular No. C.C. No. 28 CCT's Ref. No.B-V(3)/37/2010. Dated 10th October, 2012
Sri Suresh Chanda, I.A.S., Commissioner of Commercial Taxes,
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Sub: APVAT Act, 2005 –Certain instructions issued on calling of books of accounts of the dealers by the CTOs outside Audit process - reconsidered in certain cases - further instructions– Regarding.
Ref: 1. CCT's Ref. No. BV (3)/ 37/ 2010, dt. 30.8.2012 (Circular No-21).
2. Representation of APCTGOs Association on 7.9.2012
3. e-mail from DC(CT), Nellore Division on 24.9.2012
The attention of all the Deputy Commissioners (CT) in the State is invited to the reference 1st cited, wherein certain instructions were issued to the effect that the assessing authorities/ territorial officers shall not call for the books of account from the dealers outside audit process. Certain situations were also listed therein where such calling of books of account was restricted. In the reference 2nd cited certain instances have been brought to the notice of the Commissioner (CT) where calling of the books of account of the dealer will be sufficient instead of taking up 'audit'. These issues have been examined, and in partial modification, following further instructions are issued which shall be followed with immediate effect:-
1. With regard to the verification of books of accounts (outside audit) it is informed that as per Section 63 of APVAT Act, 2005 any officer not below the rank of ACTO can call for to witness records, documents, books of account by issue of Form-555, which require prior authorization from the Commissioner (CT) or from any officer authorized by the Commissioner (CT), as per Rule 61 of APVAT Rules, 2005, but not on own account of any territorial assessing authority.
2. Cross Check References: In case of 'Cross check references' received from other circles/ LTUs for the purpose of refunds/audit/assessments, and also those requiring verification within the same circle/LTU, the ACs/ CTOs shall first try whether the same can be verified from the purchase/ sale details submitted by the dealers through way bill utilization process and available in CTD computer system. If the details like Invoice No., Invoice Date, Invoice Value, Nature of Goods, other dealer details can be verified in Way Bill data and selling dealer has filed Return and Turnover in his Return is sufficient enough to account for these invoices (Verify in Return Data) and selling dealer has made tax payment for the relevant tax period (Verify in Payment module and dealer ledger), then the result can be intimated to the concerned based on this information.
In case the available details as per this database do not indicate movement of goods from seller to the buyer, or not tallied with the turnover reported in the monthly returns of the seller, then on prima-facie suspicion that the transaction(s) may be bogus, the said officer may bring it to the notice of the Dy. Commissioner for further action like audit.
If the data is not available/ not sufficient, then a notice may be issued by the territorial officer-AC/ CTO to the dealer calling for production of the relevant records for the said tax period only in which that transaction (cross check references) are to be verified, taking care that the transactions are not disclosed to the dealer before hand, and after verification of the relevant record and dealer Return for the relevant period (verify whether relevant transaction forms part of dealer Return or not) certify the result to the concerned.
3. In case of alert notes received from V&E department, if the alert notes relate to specific dealers/ on specific instances of omission/ commission by specific dealers, then by referring to the Dy. Commissioner for issue of authorization for assessment, and as per authorization issued by DC for 'Assessment' further action shall be taken by the said authorized officer for initiating assessment procedure. If the alert notes are general in nature and require further verification with the books of account of the dealer, then authorization for audit may be issued by the Dy. Commissioner as per instructions in this regard.
4. In cases of omissions/ commissions noticed on AG/ Internal audit, which is primarily based on available record, there may not be any need to call for the books of account from the dealers; and in all such cases the issues shall be brought to the notice of the Dy. Commissioner, who may after considering the facts may authorize assessment(s) to any officer(s) as per instructions in this regard.
5. In all other cases, the instructions issued in this office ref. 1st cited hold good.
The above instructions shall be brought to the notice of all Assessing / Audit Authorities for strict compliance.
Sd/- Suresh Chanda