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Even
though procedure for registration was simplified, strict
directions were issued to watch the activities of
dealers after registration and to demand adequate
additional security if the situation so warranted. But
once registration is granted, no post facto enquires are
seen conducted either by the assessing authority or by
the Intelligence Wing. Unscrupulous dealers in some
areas have taken advantage of the situation and are
practicing large scale tax evasion and even engaging in
'bill trading' activities.
It
has been brought to notice that some unscrupulous
persons are taking benami/bogus registration, especially
for dealing in plywood and glass and veneers, taking
grant of the liberalized procedure and are disappearing
from the scene after creating substantial tax
liabilities.
Registration
confers on the dealer certain rights and privileges
which unregistered dealer do not possess. So it is
essential that the registration application in respect
of evasion prone commodities shall have to be processed
with more care. The Registering Authority has the added
responsibility to confirm that dealers making
application to deal in goods, which are commercially
important and prone to evasive tendency, are carefully
and faultlessly evaluated and the registrations are
issued only in genuine cases.
Therefore,
in the interest of revenue, the following further
instructions are issued with regard to granting of
registration for dealers in 'plywood and/or glass and
veneers' and for regulating issue of departmental
delivery notes to them:
(i)
Applications for registration in 'plywood and/or glass
and veneers' shall be processed in detail. Identity and
genuineness of the dealer shall be confirmed with
reference to their nativity certificate and other
supporting documents filed. While conducting enquiry the
officer shall satisfy themselves that the applicant
possesses sufficient area with reference to the nature
of business, in the declared place of business to run
the business and the details of areas so possessed shall
be recorded in his report. New registration for veneer
may be issued only if the native place of the dealer and
place of business are in the same District.
(ii)
In case the nativity certificate produced by the
applicant relates to a place outside his jurisdiction
the assessing authority shall forward such application
to the concerned Inspecting Asst commissioner
(Intelligence) having jurisdiction over the area
to which the nativity certificate relates, and he shall
conduct enquiries with regard to the identity of the
applicant and furnish a report in the matter to the
assessing authority, preferably within three days on
receipt of such a request, from the assessing authority.
(iii)
A defective application or an application with
insufficient details does not authorise the Registering
Authority to go beyond the time frame prescribed for the
disposal of registration applications. That is, an
application must be disposed of by issue of Registration
Certificate or it must be rejected, setting out reasons,
after hearing the objections of the applicant, within
the time limit.
(iv)
The Intelligence Wing as well as the Audit Assessment
Wing shall closely monitor the activities of such
dealers and any acts, connivance or collusion for tax
evasion on the part of such dealers noticed shall be
brought to the notice of the assessing authorities,
under intimation to the concerned Deputy Commissioner.
The assessing authorities in turn shall take immediate
remedial steps to protect revenue.
(v)
The assessing authorities shall themselves ensure that
delivery notes are not issued to any dealers who are in
default of filing returns or tax payment. In all such
cases proceedings under section 67 shall be invariably
be initiated.
(vi)
Where the security furnished by the dealer is not
sufficient to protect the interest of revenue
considering his volume of business, additional security
shall be demanded. If he does not furnish sufficient
additional security or give an undertaking to the effect
that he will pay tax in advance, action may be taken to
cancel his RC following the statutory formalities.
(vii)
Assessing authorities should verify all the returns
filed by the plywood / veneer dealers. If the purchase
list is filed by such dealers without complete
identifiable name and address of the purchaser no
Delivery Notes to be issued to such dealer. Plywood /
veneer being an industrial product, assessing
authorities should take all steps to identify and to
register such unregistered dealers.
(viii)
The C form declarations obtained should be verified with
TINXSYS. If it is not possible in an office a copy of
the C form should be forwarded to IAC, Commercial
Investigation, Thiruvananthapuram for further
verification of the C form from TINXSYS and to forward
to the concerned State's enforcement wing to ascertain
genuineness.
(ix)
Check Post Officials should collect security deposit for
veneer consignments not accompanied with Delivery Note.
General
instructions issued earlier regarding of registration
stand modified to the above extent.
All
supervising officers shall ensure that the above
instructions are strictly carried out by all officers
under their control.
Commissioner.
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