It is rather unbelievable that after recovering huge amount of arrears of commercial/sales tax to the tune of rupees 111.48 crore from April 1, 2011 up to June 24, 2013, still nearly thrice this amount— to be precise over 300 crore rupees—- is outstanding against the defaulters. Actually a PIL case has been filed before the Division Bench of J&K High Court seeking recovery of Sales Tax arrears from the defaulters. The Division Bench has come down with a heavy hand on the matter and the Commissioner Sales Tax and the IGP of J&K have been directed to tell the court what action plan they would be framing including lodging of FIR against the defaulters.
It has to be noted that the amount of 111.48 crore rupees recovered so far has been recovered as a result of raids conducted by the Sales Tax Department. There are no or negligible voluntary disclosures. In other words it means if the raids were not conducted, these recoveries would not have been made. It speaks of cheating characteristics on the part of defaulters. What normally happens is that the defaulters are imposed some fine in addition to the amount that they have to pay as sales tax and let off the hook. This does not prove an exemplary punishment and leaves the person free to indulge in tax evading activity. Normally the sales tax department issues warnings and notices in time for paying the arrears. The defaulting persons or organizations ignore these notices and thus pave the way for the department to take strict action. This shows that tax evasion is resorted to with full intention. As such, the person or organization does not deserve to be given any compassionate treatment. Punishment for deliberate evading of commercial/sales taxes should be made more stringent which actually debilitates the defaulter from repeating his evasive tactics.
Secondly, the Sales Tax Department shall have to devise a mechanism that will arrest evading tactics on the part of the defaulters without loss of time. Why should tax payment be deferred for years at end why not recovered within short time? Take the case of electricity department. If the payment of outstanding electric bill is put off beyond the stipulated time, the defaulter loses power connection. This system should be modified in a manner that non-payment of commercial and sales tax within the stipulated time is treated in the same manner.
A curious thing has come to notice in the course of hearing of the case at the level of Divisional Bench. Many defaulters are reported non-traceable. According to the status report submitted by the Commissioner of Sales Tax, a sum of Rs 113.75 crore remains outstanding against non-traceable defaulters. The Court has ordered the IGP to trace the defaulters and also lodge FIRs against them if not traceable. The question is that this category of defaulters is already on the records of Sale Tax Department. Why does not the department maintain a complete record of the dealer(s), his full address and contact address etc? Does the Sales Tax Department conduct verification exercise about the business and home address of the dealers? Obviously there is no exercise of this sort and therefore the onus should come to the department for the discrepancy in sight. Equally surprising is the fact that according to the status report, Rs 67.22 crore are to be recovered from Government/Semi Government Departments. These do not fall under the category of non-traceable dealers. Why has the department failed to take proper action against them for non-payment of tax arrears? Does it mean that if the PIL had not been filed, the amount would have gone on lingering arrear with the concerned Government/Semi-Government organizations? On the face of it, there is no reason that sales tax money should remain in arrears with the Government organization. This also shows slackness and lethargy on the part of the Sales Tax Department.
In final analysis one will say that the status report of the Commissioner of Sales Tax Department is a sad commentary on the sense of civic responsibility of the defaulting dealers. But it is no less disappointing to know that the Commercial/Sales Tax Department has not been innovative and energetic in its duty and functioning. It could have improved its tax collection process in a manner that there was no need to bring the entire matter to the notice of the court and seek its intervention. The court order should be an eye opener to the department that it needs streamlining its rules and functionality.
Trending Now
E-Paper
Follow our WhatsApp channel