investigation manual
TRANSCRIPT
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Investigation Manual
21/09/2013 Commissioner of Sales Tax, Maharashtra
Investigation Manual
Investigation Branch procedures for achieving effective deterrence among tax evaders
2015
Commissioner of Sales Tax, Maharashtra Govt of Maharashtra
23/10/2015
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Table of Contents
CHAPTER-I ..................................................................................................................................................... 5
1. OBJECTIVES OF INVESTIGATION BRANCH ............................................................................... 6
2. ORGANISATIONAL STRUCTURE ................................................................................................... 6
2.1 STAFFING PATTERN ................................................................................................................................... 7
2.2 INV DIVISION IN MUMBAI ........................................................................................................................ 7
2.3 OTHER THAN MUMBAI .............................................................................................................................. 7
2.4 TARGETS ...................................................................................................................................................... 8
3. INVESTIGATION PROCESS OVERVIEW ....................................................................................... 8
4. CONTROLS & AUTHORITIES .......................................................................................................... 9
4.1 VISIT APPROVAL.............................................................................................................................................. 9
4.2 VISIT INTIMATION ............................................................................................................................................ 9
4.3 VISIT SUPERVISION .......................................................................................................................................... 9
5. INFORMATION EXCHANGE AND CO-ORDINATION ................................................................ 10
5.1 INTERNAL COORDINATION............................................................................................................................. 10
5.2 EXTERNAL COORDINATION ........................................................................................................................... 10
CHAPTER-II ................................................................................................................................................. 11
1. RIGHTS & DUTIES ........................................................................................................................... 12
1.1 OF DEALER VISITED ................................................................................................................................. 12
1.2 OF MSTD OFFICIALS ................................................................................................................................. 14
2. FUNCTION: ....................................................................................................................................... 15
2.1 COMPLAINT/INFORMATION/ INTELLIGENCE ................................................................................................... 15
CHAPTER-III ................................................................................................................................................ 21
1. SCOPE OF WORK OF INV OFFICER ............................................................................................ 22
1.1 EXTENT OF WORK: ......................................................................................................................................... 22
1.2 ASSESSMENT OF INV CASES: ......................................................................................................................... 23
1.3 PROSECUTION: .................................................................................................................................................. 24
1.4 RECOVERY: ....................................................................................................................................................... 24
1.5 CLOSURE OF INV PROCEEDINGS: ........................................................................................................................... 25
CHAPTER-IV ................................................................................................................................................ 26
1. INVESTIGATION BRANCH WORKING PROCEDURE ............................................................... 27
1.1 PRE-VISIT PREPARATION ....................................................................................................................... 27
1.2 PROPOSAL SOURCES ............................................................................................................................... 27
1.2.1 TAX-EVASION COMPLAINTS .......................................................................................................................27
1.2.2 OWN INTERNAL SOURCES ..........................................................................................................................27
1.3 PREREQUISITE FOR VISIT PROPOSAL - ................................................................................................ 27
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INVESTIGATION PROCEEDINGS NEEDS TO HAVE REASON TO BELIEVE. SECTION 64(3) PROVIDES THAT IF THE
COMMISSIONER ................................................................................................................................................... 27
1.4 VISIT PROPOSAL PREPARATION- .......................................................................................................... 28
1.5 VISIT APPROVAL ...................................................................................................................................... 28
1.6 PLANNING .................................................................................................................................................. 29
1.6.1 MANPOWER PLANNING ..............................................................................................................................29
1.6.2 LOGISTIC PLANNING...................................................................................................................................29
1.6.3 PRECAUTIONS TO BE TAKEN BEFORE THE ENTRY ...............................................................................29
1.7 INV PROCESS ...................................................................................................................................................31
1.7.1 ISSUING WARRANT OF SEARCH AND SEIZURE .......................................................................................31
1.7.2 VISIT PROCEDURE.......................................................................................................................................32
1.8 POST SEARCH INV WORK ....................................................................................................................... 40
1.8.1 ENTRY INV REGISTER ..................................................................................................................................40
1.8.2 DEPOSITING THE BOOKS OF ACCOUNTS IN THE CUSTODY ...............................................................40
1.8.3 PREPARATIONS OF THE BOOKS OF A/CS, REGISTERS & DOCUMENTS FOR DEPOSITING IN THE
CUSTODY .............................................................................................................................................................40
1.8.4 VERIFICATION & QUANTIFICATION OF LIABILITY ...............................................................................41
1.9 INV CLOSURE PROCESS .......................................................................................................................... 43
1.9.1 SUMMARY OF ACTIONS & RESULT ...........................................................................................................43
1.9.2 CLOSURE PROPOSAL ..................................................................................................................................43
CHAPTER-V .................................................................................................................................................. 44
1. MISCELLANEOUS ........................................................................................................................... 45
1.1 SOURCE OF INTELLIGENCE .................................................................................................................... 45
1.1.1 INTERNAL SOURCES (EIU Section) .............................................................................................................45
1.1.2 EXTERNAL SOURCES (Other than MSTD) ..................................................................................................45
1.2 PROSECUTION PROCEDURES ................................................................................................................ 46 1.2.1 LODGING OF COMPLAINT; PROSECUTION BEFORE COURT OF LAW AND INVESTIGATION OF
AN OFFENCE .................................................................................................................................................... 47
1.2.2 SELECTION OF CASES FOR PROSECUTION ............................................................................................49
1.2.3 PROVISIONS FOR OFFENCES AND PENALTIES UNDER MVAT ACT 2002: ....................................... 51
1.2.4 PROVISIONS FOR OFFENCES UNDER IPC 1860 ......................................................................................54 1.2.5 LIST OF BASIC DOCUMENTS REQUIRED FOR FILING A COMPLAINT & LAUNCHING
PROSECUTION ....................................................................................................................................................55 1.2.6 FOR DEALER WHO ISSUES NON GENUINE BILLS (non-genuine dealer’s commonly referred as hawala
dealers) or DEALERS INVOLVED IN SUPPRESSION OF TURNOVER / MISCLASSIFICATION OF
COMMODITIES & TAX RATES...........................................................................................................................55
1.3 CUSTODY SECTION PROCEDURES & VERIFICATION BY CUSTODY SECTION ............................ 56
1.3.1 RECORDING OF BOOKS DEPOSITED TO BE MAINTAINED BY CUSTODY ..........................................56
1.3.2 PROCEDURE TO ISSUE THE BOOKS TO THE INVESTIGATION OFFICER: ..........................................57
1.3.3 PROCEDURE FOR RETURNING THE BOOKS OF ACCOUNTS, REGISTERS & FILES: .........................57
1.3.4 TO TRANSFER THE BOOKS OF ACCOUNTS & DOCUMENTS TO THE ANOTHER OFFICER: ............58
1.3.5 TO RETURN THE BOOKS OF ACCOUNT TO THE DEALER: ....................................................................58
1.3.6 IF THE DEALER DOES NOT CLAIM THE BOOKS OF ACCOUNTS ..........................................................59
1.3.7 PROCEDURE OF DESTROYING THE BOOKS OF ACCOUNTS ................................................................59
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1.4 REPORTING FORMATS OF INVESTIGATION BRANCH ...................................................................... 60
1.5 INSPECTION PROCEDURE AND FREQUENCY ..................................................................................... 61
1.6 RECORD FILING SYSTEM ........................................................................................................................ 61
1.7 DISPOSAL OF OLD RECORD NOT REQUIRED ...................................................................................... 61
1.8 EXPANSE; EFFECT & ITERATIONS ........................................................................................................ 62
1.9 DISCLAIMER .............................................................................................................................................. 62
2.0 VARIOUS FORMATS ............................................................................................................................. 63
CHAPTER-VI ................................................................................................................................................ 82
CONTROL REGISTERS AND OTHER FORMATS FOR THE INVESTIGATION BRANCH................ 83
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CHAPTER-I
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1. OBJECTIVES OF INVESTIGATION BRANCH
I. Collect intelligence about tax evasion/suppression/fraud.
II. Create deterrence among tax evaders
III. Investigate specific cases allotted
IV. Collect and Provide evidence/information about evasion of tax to audit divisions
2. ORGANISATIONAL STRUCTURE
Organizational structure and hierarchy of investigation branch
Investigation
In Mumbai
JC Investigation (A&B Division)
DC Ranges - 6
(3 at each Division)
AC - 42
(7 at each Range)
STI (3 for each Investigating
Officer)
Clerk (1) / Tax Assistant
Outside Mumbai
ACST (Zonal)
JC ( Admin.)
DC - 14 (Investigation)
AC -38
STIs (2 for each Investigating
Officer)
Clerk (1) / Tax Assistant
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2.1 STAFFING PATTERN
2.2 INV DIVISION IN MUMBAI
Sr. No Division No. of JC No. of DC’s No. of AC’s 1 Investigation - A 1 3 21
2 Investigation -B 1 3 21
Total 2 6 42
2.3 OTHER THAN MUMBAI
Sr.
No. Division No. of DC’s No. of AC’s
Total No. of
AC’s & DC’s 1 Raigad 1 3 4
2 Thane City 2 6 8
3 Thane Rural 1 2 3
4 Pune 2 8 10
5 Solapur 1 2 3
6 Kolhapur 1 3 4
7 Nashik 1 3 4
8 Dhule 1 2 3
9 Aurangabad 1 2 3
10 Nanded 1 2 3
11 Nagpur 1 3 4
12 Amravati 1 2 3
Total 14 38 52
In Mumbai there are two separate Divisions, each headed by a Joint Commissioner of
Sales Tax. Officials working as JC_INV in Mumbai are normally from IAS cadre. The
other officials deployed in Mumbai INV are exclusively for investigation function. Each
JC_INV supervises & administers 3 (three) ranges headed by DC_INV as first level
supervisory officers. AC_INV are the field officers.
In locations other than Mumbai, concerned JC_VAT_Adm of respective Division supervise the
Investigation work along with other responsibilities through DC_INV at each divisional location.
The DC_INV at other than Mumbai locations works as first level supervisory officer as well as
field officer. When DC_INV at other than Mumbai location works as field officer, JC_VAT_Adm
is the first level Supervisory officer, All AC_INV are the field officers.
Assistance from other officers and STIs not posted at Investigation Branch can be
obtained as and when required with permission from concerned JC.
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2.4 TARGETS
FINANCIAL AND PHYSICAL TARGETS FOR THE FIELD OFFICERs
DIVISION
Monthly Target Annual Target
INV
Visits
Closure of INV Revenue Closure of
INV Visits INV
Mumbai, Pune 2 2 24 10 Cr 24
Thane & Raigad, 2 2 24 7.5 Cr 24
Other Divisions 2 2 24 5 Cr 24
Other than Mumbai (DC Level) 1 1 10 3 Cr 10
3. INVESTIGATION PROCESS OVERVIEW INV Branch Officials work flow with major responsibilities in brief
Pre-INV preparat
ion
•Gathering Intelligence about tax evasion/supression
•Collecting & analyzing data/information
• Issues for reason to believe
•Proposal preparation & submission for approval
•Strategy; Timing & Manpower Planning
INV process
• Issue of warrant of search & seisure
• intimation to CST
• Initiation of INV & conducting search operation
•Collection of evidences including electronic data evidences
•Statement of dealer
•Submission of prelIminary & subsequent report
Result of INV
• Intimation to deaelr of the findings of INV
• If accepted, dealer files revised return with payment
• If not accepted, proceed as per provisions of Act
• Initiation of assessments/transaction-wise assessment wherever required, recovery & / or prosecution for offences
Review by CST
•Monthly Review meeting by CST on day fixed by CST office
•Monthly Review of INVs carried out previously & performance
•Feedback on Learnings & take-aways for MSTD from INV cases by JC-INVs & JC-VAT-Adms
Closure
•Completion of all actions within 12 months from the date of visit
•Submission for closure of Investigation within 12 month
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4. CONTROLS & AUTHORITIES
4.1 Visit Approval
Visit proposals will be approved by JC-INV in Mumbai & JC,VAT_Adm at other
divisional places. As far as practicable JC_INV or JC_VAT_Adm would take decision
on Visit Proposal within seven working days and communicate the decision to the
concerned Subordinate officer. As far as practicable visit shall be fixed within seven
working days from the approval by JC. Time of visit is to be fixed by DC_INV in
consultation with JC. After the approval Warrant of Search and Seizure (also referred as
assignment) should be issued by DC_INV.
4.2 Visit intimation
JC_INV or JC_VAT_Adm to send intimation of visit arranged to CST on mail one day
in advance i.e. before the closure of the office hours on the previous day of visit.
4.3 Visit Supervision
No officer can visit without proper Warrant of Search and Seizure (also referred as
assignment) from his/her immediate superior. Visit is to be conducted by AC_INV along
with staff & supervised by DC_INV. After entry visiting officer should inform it to
his/her superior immediately. AC_INV should brief the DC_INV who in turn shall brief
JC from time to time till the visit is completed. Necessary receipt of the books of accounts
brought (may be handed over voluntarily or seized by passing a seizure order) should be issued
on the spot to the dealer. Normally DC_INV should supervise search & seizure part of
visits. JC_INV should exercise overall supervision & control. If visit is to be continued
late night or to be continued for next/subsequent day, intimation is to be given on
telephone to JC through DC_INV & with his/her approval visit be continued. Visiting
officer shall put his/her signature and seal on the books of accounts while depositing the
books of accounts in custody. In case of delay in depositing the books of accounts in
custody, permission of immediate superior is to be obtained for depositing the books up
to three days and if the delay is beyond 3 (three) days, then permission of JC is to be
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obtained. Custody staff also puts their own sign and seal on the books of accounts kept
in custody. Custody shall continue to be under the control of JC.
Preliminary visit report is to be submitted to JC through DC-INV within 3 (three)
working days of the date of the conclusion of visit. Brief report of cases visited should
be sent to the CST fortnightly in prescribed format No. 4. Periodic reporting is to be
made by AC_INV to supervisory officers from time to time. Investigations are to be
closed after approval of JC.
As far as possible investigation lifecycle shall be completed within a period of twelve
months from the date of visit. If investigation cannot be completed within a period of
year then it shall be reported to the JC seeking additional time for completion of
investigation. Power to provisionally attach bank accounts and debtors’ u/s 35 of MVAT
Act are delegated to Joint Commissioners.
5. INFORMATION EXCHANGE AND CO-ORDINATION
5.1 Internal Coordination
JC_INV or JC_VAT_Adm shall coordinate with JC-EIU for supporting data and for
analysis of the data to which only EIU has an access and capability of analysis.
JC-EIU would be the single point of contact from EIU in case any back reference is
required to be made for discrepancies in supporting data & facts observed
5.2 External Coordination
The cases discussed in REIC meetings’ may require investigation. JC_EIU shall refer
such cases to JC_INV or JC_VAT_Adms. THE feedback about the outcome shall be sent
by the concerned JC_VAT_Adm or JC_INV to JC_EIU to report the same to the REIC.
If any trends that are observed by INV officials in a particular Trade, then additional
cases with such trends, details of data from MSTD & the expanse of those can be worked
by concerned JC_INV or JC_VAT_Adm in close coordination with JC_EIU to give
inputs for corrective measures at the Commissioners’ Level in the monthly review
meetings.
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CHAPTER-II
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1. RIGHTS & DUTIES
1.1 OF DEALER VISITED
RIGHTs
1. To see warrant of search (assignment letter) duly signed and sealed by the issuing
authority.
2. To verify identity of each member of the search party.
3. To obtain copy of the list of books of accounts, documents, note-books, diaries or
any other paper seized by the party.
4. To put his/her own seal / signature on the list. If the dealer refuses to do so, the
officer should note this fact.
5. Women occupants of an apartment, which has to be searched, to have a right to
withdraw before the search party enters if, according to custom, they do not appear
in public.
6. To call medical practitioner if necessary.
7. To have children permitted to go to school after the examination of their bags.
8. To contact lawyer or C.A. or tax practitioner dealing with his/her tax matters to
assist him to explain the facts and materials to the members of the search party
with intimation of the INV officer & only after completion of the search.
9. To continue his/her normal household and business activities with the knowledge
of the INV officer.
10. To receive messages and send messages with knowledge of the INV officer.
11. To allow any other person present during the raids to leave only with the
permission of the INV officer and if necessary, after his/her physical search.
12. To seek entry of outsiders or family members of employee of the dealer, except
that of his/her medical practitioner and C.A./Lawyer, but at the discretion of the
officer.
13. To offer prayers.
14. To report any indecent, inappropriate behavior of any member of the investigation
team to the concerned DC/JC.
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DUTIES
1. To render all assistance to the raiding party and in no way, hamper the proceedings.
2. To see the assignment for search and put his/her signatures on the same.
3. To identify all receptacles in which cash, books of accounts or documents are kept
and handover the keys to the INV officer.
4. To identify and explain the ownership of cash, books of accounts, other documents
and papers.
5. Not to remove any cash, stock of goods, books of accounts, documents note-books,
without the knowledge and permission of the INV officer.
6. Allow the investigation officer to take inventory of cash & other articles and be
signed by the dealer or the authorized Person.
7. To identify every individual in the premises and to explain their relationship to the
dealer being searched.
8. Not to mislead by impersonation. If he/she cheats by pretending to be some other
person or knowingly substitutes one person for another, it is an offence punishable
u/s. 416 of the Indian Penal Code.
9. Not to allow or encourage the entry of any unauthorized person into the premises.
10. Not to remove any article from its place without the notice or knowledge of the
INV officer.
11. Not to conceal or destroy any documents with the intention of preventing the same
from being produced or used as an evidence before the court or public servant.
Such act would be punished with imprisonment or fine or both in accordance with
section 204 of the Indian Penal Code.
12. To answer all queries truthfully and to the best of his/her knowledge.
13. Not to allow any third party to either interfere or prompt, while his/her statement
is being recorded by the INV officer. In doing so, he should keep in mind that –
a. If he/she refuses to answer a question on a subject relevant to the search
operation, he/she shall be punishable with imprisonment or fine or both U/s.
179 of the Indian Penal Code.
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b. Being legally bound by an oath or affirmation to state the truth, if he/she makes
a false statement, he/she shall be punishable by imprisonment or fine or both
u/s. 181 of the Indian Penal Code.
c. Similarly, if he/she provides evidence which is false and which he/she knows
or believes to be false, he/she is liable to be punished u/s. 191 of the Indian
Penal code.
14. Similar co-operation should be extended even after the search action is over, so as
to enable the INV officer to complete necessary follow-up investigation at the
earliest.
15. Co-operate with the investigation office for legitimate conclusion of investigation.
1.2 OF MSTD OFFICIALS
RIGHTs
1. To act as an authority on behalf of MSTD as representative of Commissioner of Sales
Tax & to exercise the powers delegated by Commissioner of Sales Tax u/s 10 (6) of
MVAT Act 2002, and Rule 69 of MVAT Rules 2005.
2. To take personal search of the people available in the premises under search with full
regard to decency. Cause search of a female member only by a female member of
the search team.
3. To take search of any place of business of dealer or any other place where dealer
keeps or there is reason to believe that the books of accounts are likely to be kept.
4. To invoke the relevant provisions of the MVAT Act & other allied Acts implemented
by MSTD along with the relevant Rules in vogue from time to time.
DUTIES
1. To show copy of Warrant of search & seizure to the dealer prior to start of the search
& obtain signature of the dealer or the persons present in the premises
2. To offer his/her and the other team members search to the dealer before starting and
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on completion of the search operation. And to note down in the proceedings & in
concluding statement that the search of the search team members was offered &
whether dealer has taken it or denied it.
3. To take inventory of cash & get it signed by the dealer or the authorized person
4. To record the proceedings of the search & post search operations with the
observation of the facts along with the details as per the legal procedures & as per
the provisions of law
2. FUNCTION:
2.1 Complaint/Information/ Intelligence
The functions of the officials associated with the investigation work are illustrative. All the
officials are bound to carry out all the functions and responsibilities as mentioned by the Law.
Designation Powers and Duties Clerk / Tax Assistant NIL
Sales Tax Inspector
Intelligence collection from the data available from the Dept. and from
market by confidential inquiries.
Collection of information from other Govt. Depts.
Make confidential observations of modus operandi and business activities
of the dealer
Verify genuineness of complaints and revenue implications involved by
collecting information and data
AC To collect Intelligence and information for investigation visits.
Analysis of internal data and intelligence data
To verify the complaints and put up reports.
DC To collate & analyze the intelligence.
To scrutinize the complaint and allot to officer.
JC To scrutinize the complaints.
To give approval for filing police complaints.
To approve visits.
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2.2 Preparation / Search / Verification /Post search
Designation Powers and Duties
Clerk / Tax Assistant
Assist in preparation of INV file.
Assisting in stamping and paging of books for depositing in Custody.
Paging, indexing and organizing the files
Maintenance of all office registers
Sales Tax Inspector
To assist AC at the time of visit.
Take necessary entry in INV Register and Alphabetical INV Register.
Make confidential observation of the business activity and modus
operandi used by dealer to evade taxes.
Pre visit Address verification of the dealer.
Assisting in pre visit preparation and data collection.
Collect previous history of the dealer.
Preparing receipts of books of accounts at the time of visit.
Paging of books of accounts documents in stipulated time.
Assisting in verification of the books of accounts and documents and
working out tax liability of the dealer.
Cross checking transactions within state/outside the state as directed by
superiors.
Services of notices, reminders, summons and warrants if necessary.
Guide clerk in Paging, indexing and organizing the files.
To serve notice of attachment of bank/debtors on the concern.
AC
To analyze internal and external data, collate and draw
conclusion/observations
Make confidential observation of the business activity and modus
operandi used by dealer to evade taxes before paying visits.
To propose visits.
To submit visit proposal.
To conduct visits after approval from concerned JC & obtaining Search
Warrant
from JC / DC
To intimate the DC about entry in the premises of visit immediately, and
progress of investigation visit till it is concluded.
To propose cross check and off shoot visits.
To take permission from JC / DC to continue visits at late night or on
subsequent day.
To submit visit report.
To submit interim and final reports.
To deposit books of account in the custody.
To verify the books of accounts.
Return the books of accounts and documents to dealer after approval
from higher authorities.
Dispose and destroy old records and books as per procedure.
Carry out investigation speedily and expeditiously and take timely action
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Designation Powers and Duties against tax evader in order to protect and recover the revenue.
To issue cross check memos.
To collect the evidence of tax evasion.
To submit closure report after completion of investigation.
Check Paging, indexing and organization of the files.
Propose attachment of money due to tax evader.
Any other function as per instructions of supervisory officer
DC
To examine & submit visit proposal received from investigation officer
to Joint Commissioner for approval.
Issue search warrant/assignment letter for investigation visits.
To monitor, guide and supervise investigation visit.
Condone delay for depositing books of accounts up to three days.
Give necessary additional directions in investigation.
To decide the main investigation officer when more than one officer are
deployed for visits.
Transfer investigation proceeding from one officer to another within
range.
Approval for initiation and closure of proceedings of notice in form 603
and summons.
Submit investigation files received from investigation officer to Joint
Commissioner with observation, direction and remarks if any.
Submit proposals of attachment of money due to tax evader.
JC
To issue search warrants/assignments to DC in Mofussil area (if required
& decides to send DC for search).
To monitor, guide and supervise visits.
Co-ordinate visits.
Condone delay for depositing books of accounts beyond three days.
To monitor, guide and supervise investigation and take review as and
when required.
To approve/disapprove the preliminary/ interim/final investigation
reports.
To direct further investigation in the case.
To give approval//disapproval for closure of investigation cases.
Pass orders of attachment of money due to tax evader u/s. 35 of MVAT
Act.
2.3 Reporting
Designation Powers and Duties
Clerk / Tax Assistant Assist in preparation of file
Paging, indexing and organizing the files
Sales Tax Inspector
Assist in preparing visit reports, interim reports, final Reports and closure
reports.
Guide clerk in Paging, indexing and organizing the files.
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Designation Powers and Duties Timely deposing the books of account in the custody.
KKPI preparations & all other periodic information preparations in
absence of Clerk / Tax Assistant
AC
Submit preliminary visit report immediately after visit.
Submit reports of visits conducted during a week to the superior in next
week.
Submit interim reports, final reports and closure reports.
Check Paging, indexing and organization of the files.
If there is delay up to three days in depositing books of account in custody
permission from DC and for delay more than 3 (three) days permission
from JC should be obtained.
DC
To submit various visit report with observations and remarks to JC
Submit reports of visits conducted during a fortnight to the superior in next
fortnight.
Approve and sign issue note for return of books.
JC
To peruse and approve preliminary/interim/final investigation reports.
Submit reports of visits conducted during a fortnight in next fortnight to
the CST.
Supervise and control the work of custody.
2.4 Assessment & Recovery
Designation Powers and Duties Clerk / Tax Assistant Prepare and dispatch reminders, show cause notices, summons warrants.
Paging, indexing and organizing the files
Sales Tax Inspector To assist in assessment/ reassessment and transaction wise assessment.
Guide clerk in Paging, indexing and organizing the files.
Attachment of property.
AC To pass assessment/re-assessment or transaction wise assessment orders
if necessary as per results of investigation.
Check Paging, indexing and organization of the files.
Transfer all recovery papers with cross entries of the statutory
orders/notices like F-213
DC Recommend the action of assessment or transaction wise assessment or
transfer of details to other officer for assessment or audit
Supervise and monitor recovery transfer process.
In mofussil area, take necessary actions of recovery transfer.
JC Approve or disapprove & modify the decision of assessment (either
comprehensive or transaction wise) or transfer of facts or call for transfer of
proceedings from other officer before whom the proceedings are in vogue
Supervise and guide recovery transfer process.
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2.5 Prosecution
Designation Powers and Duties Clerk / Tax Assistant Paging, indexing and organizing the files
Sales Tax Inspector
To file a complaint as directed at police station or at Sales Tax Police Cell,
Mumbai as the case may be.
Guide clerk in Paging, indexing and organizing the files.
AC
To propose prosecutions and file a complaint at police station or at EOW
Police Cell at Mazgaon, Mumbai as the case may be.
Check Paging, indexing and organization of the files.
DC Perusal; supervision & coordination of complaints filed for prosecutions.
JC Compounding prosecution offences by accepting composition money.
2.6 Administration / Reporting / Appraisal
Designation Powers and Duties
Clerk / Tax Assistant
To prepare compliance reports of various inspections and audit memos.
To keep all office record and registers, and update them periodically.
Keep in safe custody all record and files of the charge handed over to
him.
Prepare and submit monthly, quarterly, half yearly, annual statements
and any other information statements as and when required (like KKPI
preparations & reconciliation statements of recovery)
To maintain work sheet of day to day work done.
Sales Tax Inspector
To put up drafts of letter, U.O.Rs and other office correspondence.
Verify monthly, quarterly, half yearly, annual statements and any other
information statements as and when required (like KKPI preparations &
reconciliation statements of recovery) prepared by Clerk / Tax Assistant &
in absence of those, even prepare those
To maintain time diary of day to day work done.
AC
In charge of the investigation charge and has to carry out overall
functions of the charge.
Supervise, control, guide, monitor and assign work to inspectors and
clerk.
To have control on record and files of his/her office and books of
accounts brought from custody.
Submit various periodical as well as other reports and information to
higher authorities within time.
Comply various audit / inspection report expeditiously.
To review work allotted to STI and clerk.
To write confidential report of STI & clerk.
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Designation Powers and Duties
DC
Being head of the subordinate investigation officers, has to supervise,
control, inspect, guide and co-ordinate function of the subordinate
officers.
Assist the Joint Commissioner in administrative work.
To propose reward and appreciation letters to officer and staff.
To submit periodical report to JC
To review work allotted to AC
To write and review confidential report of officer and staff.
JC
Being administrative head of the investigation division he has to
supervise, inspect, control, and guide and co-ordinate functioning of the
division.
Propose rewards and appreciation letters to officers and staff for
outstanding investigation work.
To submit periodical report to CST
To review work allotted to DC
To write and review confidential report of officer and staff.
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CHAPTER-III
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1. SCOPE OF WORK OF INV OFFICER
1.1 Extent of work:
Investigation visits are conducted in order to scrutinize the transactions leading to tax
evasion/ to find out the modus operandi of tax evasion. The proposal for investigation visit
mentions the purpose of Investigation Visit. The investigating officer shall conduct a detailed
scrutiny in respect of the reasons for which the investigation Proposal had been approved.
In addition he shall conduct detailed scrutiny of the books of accounts for the
immediately preceding year and also for the year in which the investigation visit is conducted.
If the investigating officer finds any discrepancy in the scrutiny then he shall extend the said
scrutiny to the earlier periods, for which the case is live for assessment or for any remedial
actions, in terms of the discrepancy found.
The investigation officer shall ,
i) Scrutinize the return/audit reports filed by the dealer
ii) He shall verify whether the dealer has evaded any sales/purchases, claimed wrong
deductions from both the sales & purchases claimed the input tax credit which is not
due, camouflaged the local sales as interstate sales, exports & stock transfers, is
paying taxes at a lesser rate etc.
iii) Lay special emphasis over the investigation of the facts which formed the purpose of
investigation
iv) Check whether the dealer is in default of paying the due taxes, is a non-filer of return,
audit reports etc.
v) Build the case on facts & collect evidences to support this findings of investigation.
Once the investigation officer completes his investigation he shall prepare a comprehensive
report with year wise details of his findings. He shall further inform the dealer about the tax
liability/discrepancies’, if any through issue of intimation in Form 604, for each period
investigated.
The cases in which the dealer agrees with the investigation findings, the investigation officer
shall ask the dealer to file the returns/revised returns under section 20(4)(c) of MVAT Act
2002 & to discharge the entire tax liability with due interest.
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The cases in which the dealer does not agree with the content of the notice in Form 604 &
the cases in which the dealer has exhausted the option of filing the revised return, shall be
assessed. The comprehensive report of investigation in these cases shall be sent to the
concerned assessing officer for appropriate action.
1.2 Assessment of INV cases:
The assessment in these cases shall be completed by the
i) LTU officer, in case of an LTU dealer
ii) The business audit, refund audit, issue based audit officer to whom the dealer has
been allotted for assessment/audit/issue based audit
iii) Where the dealer has not been allotted to any of the branches mentioned at i) & ii)
the assessment shall be done by BA-1 in case of JC-INV-A & by BA-2 in case of JC-
INV-B. In areas other than Mumbai, the concerned JC (VAT Adm) shall distribute
such cases for assessment to the appropriate officer from the LTU, Refund, BA &
IBA branches
iv) The cases in which the investigation officer desires to complete the assessment, he
will obtain the approval for the same from his Joint Commissioner. In such cases the
assessments for all the periods prior to the year of visit shall be completed by the
concerned INV officer. However, in the LTU cases the INV officer may assess the
dealer for any unassessed period/periods with prior approval of his JC, under
intimation to the concerned LTU officers.
v) In the cases where the assessments have already been completed and corrective
action is required to be taken on the basis of INV report, then such corrective action
will be initiated & completed by the appropriate authority as per the provisions of
law.
vi) The investigation officer shall seek approval of his supervisory Deputy
Commissioner and the Joint Commissioner in respect of all his findings. The Joint
Commissioner of Investigation shall communicate the findings of the Investigation
to other Divisions.
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vii) The case shall be closed for investigation once the investigation report prepared by
the investigation officer is approved by the concerned supervisory Joint
Commissioner.
1.3 Prosecution:
If any offence is committed by the dealer it should be clearly spelt out in report. After
initiation of coercive actions, like prosecution, dealer may come forward; accept &
discharge the liability with interest or dealer may apply for compounding the offence. In
that case, investigation officer should submit dealer’s proposal through DC_INV to JC for
approval with the facts & reasoning. If the compounding of offence is approved, then the
amount of composition money fixed as per the powers delegated (vide respective notifications
for the corresponding of those offences and the relevant circulars) be recovered as per the relevant
orders issued in the prescribed formats as per the Act & Rules.
1.4 Recovery:
Recovery of the Return Dues (viz. a result of notice in Form-213), assessed dues or any
amount payable under the MVAT Act or other allied Acts administered by Sales Tax
Department and not paid by the dealer is to be made by Recovery Branch. The various
actions for recovery of the aforesaid dues including actions under Maharashtra Land
Revenue Code 1966 and the Revenue Recovery Act 1890 (Central Act) is to be made by
Recovery Branch of respective locations. Recovery of sales tax dues assessed is to be made
by the concerned recovery officer from recovery branch as per the provision of section 37
of the MVAT Act 2002.
After raising statutory demand and serving the demand notice on the dealer, investigating
officer should transfer all the recovery papers to respective LTU branch in case of LTU
cases & to recovery branch in case of other cases for recovery actions.
For this the procedures adopted in the Recovery manual need to be followed. The recovery
before INV officer shall stand transferred only after the cross entry of the relevant recovery
register are obtained.
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1.5 Closure of INV proceedings:
Normally the investigation should be completed within 6 months from date of visit.
JC_INV or JC_VAT_Adm shall ensure that the INV file be closed within 12 months from the
date of Visit.
In case the concerned JC_INV or JC_VAT_Adm is of the view that further extension of time
for investigation is required, then he shall record reasons for the same in the INV file.
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CHAPTER-IV
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1. INVESTIGATION BRANCH WORKING PROCEDURE
1.1 PRE-VISIT PREPARATION
1.2 PROPOSAL SOURCES
1.2.1 TAX-EVASION COMPLAINTS
For the tax evasion complaints received by various authorities, an independent procedure
has been prescribed wherein all the tax evasion complaints are sent to EIU. EIU after
analysis, may recommend the case for investigation to the respective Investigation heads,
JC_INV or JC_VAT_Adm as the case may be.
JC_INV or JC_VAT_Adm shall decide whether or not to go for investigation in a particular
case. They shall maintain proper reasons for both, i.e. the selection of the case for
investigation or non-selection of any case for investigation.
1.2.2 OWN INTERNAL SOURCES
AC_INVs or DC_INVs or JC_INV/JC_VAT_Adm may on his/her own initiate a proposal
for investigation. This may include complaints received by him or the proposal moved by
his/her subordinate officer. A complaint which requires with immediate action of
investigation, can be subsequently referred to EIU for analysis or additional information
depending on gravity of the issue.
1.3 PREREQUISITE FOR VISIT PROPOSAL -
Investigation proceedings needs to have reason to believe. Section 64(3) provides that if the
Commissioner has reason to believe that any dealer has evaded or is attempting to evade the
payment of any tax due from him, he may, for reasons to be recorded in writing, seize such
accounts, registers or documents as may be necessary. He should grant receipt for the same
and shall retain the same so long as may be necessary in connection with any proceedings
under the various Acts implemented by the Sales Tax Department or for any prosecution.
Sub section (4) of Section 64 empowers the Commissioner to enter and search any place of
business of any dealer or any person engaged in or in connection with or incidental to or in
the course of business of buying or selling goods or any other place where the commissioner
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has reason to believe that the dealer keeps or is for the time being keeping any accounts
register or documents of his/her business or stock of goods relating to his/her business.
Sub section (18) of section 2 states that place of business includes a warehouse, godown or
other place where a dealer stores his/her goods and any place where the dealer keeps his/her
books of accounts.
1.4 VISIT PROPOSAL PREPARATION-
Visit proposal shall normally come from the field officers. Officer proposing visit shall
assess the intelligence properly and form his/her concrete opinion about the visit and submit
visit proposal to DC_INV. If DC_INV considers the proposal for visit & recommends it
favorably, then with his/her remarks it should be submitted to JC through confidential file.
Visit proposal can also be initiated by DC_INV or JC_INV/JC_VAT_Adm.
In case the proposal is initiated by DC_INV, it shall be marked to JC_INV/JC_VAT_Adm
And if the proposal is initiated by JC_INV or JC_VAT_Adm, it shall be directly marked to
DC_INV as approved proposal which shall be acted upon on priority with preparation.
JC_INV or JC_VAT_Adm may refer any information to DC_INV for analysis or
preparation to ascertain the potential of Visit which should be re-submitted within 15 days
with concrete proposal of either conducting the Visit or closing the information received as
filed (daptari dakhal karne)
Record of proposals received and approved/rejected should be kept in the prescribed
registers.
1.5 VISIT APPROVAL
JC should consider the visit proposals and take his/her decision on the same. He should
communicate his/her decision to the concerned DC_INV within seven working days. Visit
proposal should be returned with decision to the concerned DC_INV Original copy of this
visit proposal shall be a part of investigation file and must be submitted along with
preliminary visit report.
For investigation authorities working in Mofussil divisions, concerned Additional
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Commissioners viz. ACST (Zonal) will approve visit proposal by following the same
procedure as in Mumbai.
1.6 PLANNING
1.6.1 MANPOWER PLANNING
Exact number of staff required at the premises approved to be covered during the Visit
should be done by the field officer in consultation with the warrant issuing authority viz.
normally DC_INV. Strategy of the officials deployment should be decided before
initiation of Visit in close coordination with DC_INV.
1.6.2 LOGISTIC PLANNING
For Investigation visits and return journey the staff and officers are allowed to travel by
taxies if the government Vehicles are not available. Taxi fare bills should be claimed by
staff and officers. In case of outstation Visits, all expenses incurred are liable to be
reimbursed as per the rules of government. For those either an advance or post facto
reimbursement may be claimed by forwarding it to the Establishment Officer. EO should
ensure timely disbursements lest the field officers are not put to inconveniences.
1.6.3 PRECAUTIONS TO BE TAKEN BEFORE THE ENTRY
Following precautions should be taken by Investigating Officer before entering the place
of business.
1. Observe the time limit.
2. Not to disclose the destination & reason of leaving the office except to the
controlling superior authority.
3. Not to carry the vehicle up to the place of visit so as not to disclose the identity.
4. Ensure that the Books of accounts and other important documents are not
destroyed, carried out from back door or thrown out of windows. Depute the staff
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at all such possible strategic places to keep a vigilant eye so as to avoid such
instances.
5. If the place of business of the dealer is found closed, then try to gather the
information without disclosing the identity and contact the Deputy
Commissioner (Investigation) or concerned Joint Commissioner (Investigation)
to seek further orders. If no such contact is possible, visiting officer should take
independent conscious decision.
6. If residence is visited, the party should invariably have a female member of the
rank of Sales Tax Inspector/ Sales Tax Officer or Assistant Commissioner.
1.6.4 CONTENT OF INVESTIGATING OFFICERS KIT
1. Identity Card
2. Copy of Warrant empowering the Search & Seizure.
3. Certified copy of the letter of CST informing Rights and duties of the dealer /
person visited
4. Updated copy of The MVAT Act, 2002, with Maharashtra Value Added Tax
Rules, 2005.
5. Updated copy of The CST Act, 1956 with CST Rules1957.
6. Updated copy of all the other Acts administered by Sales Tax Department.
7. Copy of Notice in Form 603 & copy of Summons & all the other required forms
8. Stamp & Authorized rubber Seal.
9. Required stationery viz. Paper, pencil, ink pad, pins, carbons, ribbon, tags etc.
10. Brass Seal.
11. Sealing wax, candle, match box, thread etc. required for sealing.
12. All other relevant material required for Search & Seizure
1.6.5 GROUP VISITS
1) The investigation which involves more than one INV divisions, JC_VAT_Adms
shall be supervised by the JC in whose jurisdiction the main INV lies.
2) Whenever many dealers dealing in the same commodity or many dealers of a
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specified area, are to be visited jointly by several officers, the concerned
controlling Joint Commissioner and Deputy Commissioner (INV) should decide
the time of such visit in advance. The concerned Deputy Commissioner (INV)
should have complete control over such group visits.
1.7 INV PROCESS
1.7.1 ISSUING WARRANT OF SEARCH AND SEIZURE
The powers of Commissioner to enter the place of business and search and seizure are
delegated to the Deputy Commissioners (INV) & to Assistant Commissioner (INV) by
notification published in the Official Gazette. . The Deputy Commissioner of Sales Tax
should submit visit proposal(s) for approval of JC. After JC`s approval, visit shall be
arranged within 7 (seven) working days. If for valid reasons visit could not be arranged
within 7 (seven) working days then same shall be brought to the notice of the JC and after
his/her permission visit should be arranged within extended permitted days.
As an administrative measure, it is mandatory for every field officer [AC (INV) or DC
(INV)] to obtain requisite Warrant of Search and Seizure / Assignment in the prescribed
format. Warrant of search & Seizure is to be issued by the first level Supervisory officer or
JC_VAT_Adm for areas other than Mumbai.
After confirming from the INV register with DC_1A office that the same dealer or POB had
not been visited by any other investigation authority of the Department in the last/previous
2 (two) FYs.
Warrant issuing Authority should keep office copy of Warrant of Search and Seizure/
Assignment along with Visit Proposal in his/her file.
The Search Warrant/Assignment should mention name and address of the dealer to be
visited. Date & time of visit, seal & signature of the warrant issuing authority. Signature of
the officer authorized to visit and enter the place of business and search and seize the books
of accounts, registers and documents. Search warrant should be shown to the person present
and his/her signature should be obtained on the same. Along with the Search & Seizure
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Warrant, a certified copy of the letter from Commissioner about his/her Rights & Duties
addressed to the dealer be issued by the authority authorized to issue Warrant.
If the same dealer has been visited earlier, the investigation officer shall check whether the
said investigation is closed. In case of the closed investigations, he shall thoroughly
scrutinize the new evidences at hand & come to conclusion about necessity of the new
investigation.
The concerned DC_INV shall submit the proposal to the JC about carrying out new
investigation wherever necessary. The JC shall decide over the approval of the proposal.
In case of investigations which are open, the investigation officer shall share the said facts
to the concerned investigation officer through JC.
1.7.2 VISIT PROCEDURE
1.7.2.1 AFTER ENTRY
It is necessary that during the investigation visits behavior of the officers and staff should
be polite but firm. Visiting officer should disclose the identity only after the confirmation
that the person present is a responsible person & explain the purpose of visit. If the Place is
managed by the servants only, then efforts should be made to know when the owner or any
responsible person is expected. Inquiry should be made without disclosing the identity and
without creating any doubt about identity of the visiting team. DC_INV or JC_INV should
be informed immediately after the entry, during the visit and before concluding the visit.
After entry and disclosure of identity, a copy of letter of CST regarding Rights and duties
of the dealer/ person visited is to be handed over to the dealer/ person present and he should
be requested to sign the office copy of the same. (Letter is enclosed in Manual). If he refuses
to sign the fact should be informed to the superior officer on telephone immediately & the
future course of action may be undertaken as per instructions of the Supervisory officer..
1.7.2.2 SEARCH OF PLACE OF BUSINESS
Visiting officers and staff must work within the four corners of Law. The search should be
conducted with total regard to decency without hurting any religious or social feelings of
the dealer and occupants or hurting self-respect of the dealer.
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Visiting team should respect and observe the rights of the persons/occupants at the time of
search.
Place of business as defined Under Section 2 of MVAT Act, 2002, has comprehensive
meaning. The place of business is the place, where the dealer keeps his/her Books of
Accounts or stock of goods.
The place/s visited should be thoroughly searched for collecting evidence and books of
account and records.
Only the relevant Books and the other relevant evidences, on the basis of which the evasion
of tax is proved and the dealer may be prosecuted should be taken into possession, and not
all the Books found during the search should be taken in possession. Many a time the
unaccounted Books or other relevant books of account and documents are not found at the
place/s mentioned in Warrant of Search and Seizure/ Assignment. In such case the officer
should communicate the fact on telephone to DC_INV / JC and with his/her permission
proceed to any other place disclosed to him, enter and conduct search.
1.7.2.3 PERSONAL SEARCH
In case personal search of the dealer is required it should be done with full regard to decency.
The person must be informed about personal search before starting the search. The person
should be requested to co-operate. Personal search of a female member if necessary, should
be taken by female member of the visiting party with strict regard to her decency and privacy
by observing politeness, proper manners & etiquette. The dignity of the person searched
should be maintained. Search should be carried without disturbing the religious sentiments,
feelings and emotion.
The inventory of articles/ documents obtained during personal search should be made with
signature of the person searched thereon in the prescribed format.
Sometimes search of prayer room is inevitable. Search of such places should be carried out
without disturbing religious sentiments. The female members of the house should be
informed before taking the search of the bedroom.
1.7.2.4 COLLECTTION AND COLLATING OF EVIDENCES
Crucial documents, interoffice communications, loose documents like personal diaries,
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secret accounting items like pen drives or registers need to be collected & collated for
further scrutiny.
Also documents related to dispatches, processes adopted for the business indicating the
lifecycle of the transaction of sale or purchase starting from the point of time when the sale
is commencing to the point of time when sale is concluded needs to be obtained.
1.7.2.5 PANCHANAMA PROCEDURES FOR STOCK; CASH & LOOSE
DOCUMENTS
Verification of stock is necessary in some cases considering the nature of investigation.
Visiting officer should take decision in this connection in consultation with his/her
supervisory officer. Whenever necessary, stock inventory be prepared.
Cash found should be counted in the presence of the person present and inventory of the
same be prepared. Cash should be handed over to the dealer or the person present obtaining
his/her signature in token of receipt of cash and as a proof of having found the cash.
The inventory of cash and stock should be taken along with certificate by the dealer with
date, time and stamp mentioning Rs. (__________/-) in cash and stock as per inventory is
found at his/her place, and it is left in his/her possession.
The investigating authority is not entitled to seize the cash found and stock in trade.
1.7.2.6 STRUCTURING THE INTERVIEW AND RECORDING THE STATEMENTS
Summons should be issued u/s 14 of the VAT Act 2002 for recording the statement on oath
or on affirmation u/s 14 OF THE MVAT ACT 2002. Any other person should not be
allowed to either interfere or prompt, while statement is being recorded by the INV officer.
The officer not below the rank of Sales Tax Officer should administer the oath and record
the statement of the concerned person u/s 14 of VAT Act.
It should be clearly mentioned in the statement that oath is administered to the deponent. It
is also to be written in the statement that, “The deponent agrees to answer all queries
truthfully and to the best of his/her knowledge”.
If the deponent refuses to answer a question on a subject relevant to the search operation,
he shall be punishable with imprisonment or fine or both U/s 179 of the India Penal Code.
Being legally bound by an oath or affirmation to state the truth, if the deponent makes a
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false statement, he shall be punishable by imprisonment or fine or both u/s 181 of the Indian
Penal Code.
Similarly, if the deponent provides evidence which is false and which he knows or believes
to be false, he is liable to be punished u/s. 191 of the Indian Penal code.
It should be in question and answer form. In between, some questions put to him should be
about his/her routine activities so as to prove he was fully aware and conscious while
answering the questions put to him. As far as practicable it should be type written so as to
be readable. The statement should conclude with “the above statement is read over to me
and it is explained to me in ________ (specify the language that is normally understood by the person).
I have understood the same and it is recorded correctly.”
The interview with the VAT dealer should flow logically through the following headings:
Personal details of the interviewee and his/her business
Accounting structure
Knowledge of VAT/CST/Allied Acts
Knowledge about statutory obligations under the VAT/CST/Allied Acts
It is also important to avoid asking VAT dealer “closed” questions.
For example, officer is trying to establish which bank accounts the dealer is using for the
business, the following examples of questions would produce different answers:
How many bank accounts do you use for the business?
Do you have a bank account for the business?
The first question is asking the VAT dealer how many accounts he has for the business. In
answer to the second question, that he has a bank account for the business and he will
probably say “yes”. The latter does not establish what the correct position is in relation to
the business bank accounts. If other bank accounts are subsequently found, it might lead
to believe that the VAT dealer has been evasive with his/her answer. This would not be
the case in the first example as the officer has asked the correct question. The second
example would leave the VAT dealer in the position that he could correctly say that the
officer never asked him how many bank accounts he used for the business. He has said
that he has a bank account, but he has not been asked how many.
The questions should be structured to gain information. It is therefore better to begin the
questions with an “open” style: Who; Why; When; what; Where; How
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Questions started in this way will encourage the VAT dealer to talk and the officers will
probably get answers to other questions when he gives his/her answers.
“Closed” questions are usually answered with a “yes” or “no” and do not further the
interview.
If there are two officers at the interview, the officer writing the notes of the interview
should listen carefully to the questions and answers and ensure that he records them
correctly.
Questioning should not be rushed as more can be gained by talking to the VAT dealer than
looking at the records.
The accounts will only show what the VAT dealer wants to show and what has been
declared, any abnormalities will be highlighted from the interview.
The following are examples of basic questions that should be used as a template for
interviews with dealers:
a. What are the dealer`s contact details?
b. What are his/her responsibilities in the business?
c. Who is the accountant?
d. What is the accounting system (in full)?
e. What books and records are kept (in full)?
f. Other records kept (for additional credibility checks)
g. Who completes the records?
h. What are the main business activities?
i. What are the other business activities?
j. What are the principal outputs?
k. What are the principal inputs?
l. Who are the main customers?
m. Who are the main suppliers?
n. Who puts the figures on the returns?
o. If not the dealer, does that person receive the information from the dealer?
p. Does he understand VAT; CST & allied Act’s as it applies to his/her business?
q. Does the dealer understand that all sales must be declared in the return?
r. Does the dealer understand that all purchases must be genuine?
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s. Are all sales and purchases correctly declared in the Tax returns?
t. Are all the returns correct?
u. Does he understand that it is an offence to file false returns?
1.7.2.7 RECORDING OF STATEMENT OF DEALER
After preparing the receipt, concluding statement of the dealer should be obtained in
respect of overall visit stating that, ‘It was conducted in orderly and peaceful manner having
complete regard with decency & no untoward incident took place (or otherwise). If the dealer
/ person refuses to sign receipt and/or statement, the fact should be noted in the note sheet
and books of accounts may be seized under the panchanama calling the two panchas from
the locality.
Any abnormal incident should be immediately brought to the notice of the DC_INV or
JC as the case may be. DC_INV & respective JC should also pay visits to the place of
business to guide, direct and supervise the visiting party as and when required.
1.7.2.8 CONTINUATION OF VISITS
Many a time, visit may be required to be continued on the next/ subsequent date. In such
cases the concerned AC / DC should inform to DC_INV / JC immediately and further
directions should be sought on telephone.
When a visit is to be continued on subsequent day the books of account /records required
should be kept in some room or cupboard and the same be properly locked and sealed
under signature of the officer in the presence of the dealer / responsible person present.
He should be informed about the date and time when the seal will be opened and
requested to be present. Under-taking from him should be obtained to protect the seal.
On the given date and time if the concerned person is present then seal should be opened
in his/her presence. If he is not present he should be informed on telephone that seal is
going to be opened in his/her absence. Seal should be opened in the presence of two
panchas. The premises should be again locked and sealed after completing search and
seizure. Necessary panchanama should be drawn and signatures of the panchas should
be obtained on receipt of the books and documents taken charge.
It the seal in found to the broken, a police complaint should be filed immediately.
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1.7.2.9 SEIZURE PROCEDURE
Necessary Books of accounts/ documents/papers collected from various places are to be
brought at one convenient place. Normally the dealer/person present voluntarily hands
over books of accounts/ documents/papers. Receipt should be given to the dealer in the
prescribed format. The place at which books found should be mentioned in the receipt.
In case the dealer/person present fails to hand over the books of accounts/ documents/
papers voluntarily then necessary seizure order is required to be passed u/s. 64 (3) of the
MVAT Act. Seizure order should clearly record the facts and circumstances on the basis
of which the officer formed the opinion that the dealer has evaded or attempted to evade
payment of tax due from him. In this case also visiting officer should pass on receipt of
the books of accounts seized to the concerned.
1.7.2.10 PRELIMINARY REPORTING
All INV officers in the field will report the facts starting from time of entry to the
immediate Supervisory officer orally or through mail communication within 3 days.
Immediate Supervisory officer viz. normally DC INV will guide the INV officer from
time to time & take feedback of the situation.
A preliminary reporting of the INV officer should incorporate,
1. prima-facie confirmation of the issues for which the initiation of search was taken
up in the firms for which visit was assigned for
2. the additional firms found at the premises & taken up or not required to be
covered
3. the observations at the premises visited
The preliminary visit report must be made within 3 (three) working days to concerned
JC_INV or JC_VAT_Adm through DC_INV in writing. In case the Visit continuous
beyond 3 (three) days, then the said feedback should reach DC_INV on mail which in
turn can be forwarded to JC_INV or JC_VAT_Adm
1.7.2.11 ISSUE OF NOTICE IN FORM 603 / SUMMONS TO WITNESS
For the regular books of accounts not found at the time of search or not taken charge but
required for further verification at office, necessary notice in Form-603 u/s 64 (2) of VAT
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Act 2002 should be given on the spot to the dealer calling him with the same at office. If
the Visiting officer has reason to call some other person with documents, he may call by
issuing summons to witness u/s 14 of MVAT Act, 2002. However efforts should be made
to seize all the relevant & necessary documents or books of accounts which INV officer
feels may not be reproduced at a later stage after concluding the Visit.
1.7.2.12 CONCLUDING OF SEARCH & SEIZURE OPERATION
Every INV officer must record the concluding statement from the dealer with the
following details, ‘The Search & seizure operation was concluded with proper details &
procedures and in cordial manner’. All the books or the material that is required for further
detailed scrutiny is listed out in prescribed formats with proper panchanamas & is either
voluntarily handed over by the dealer to the INV officer or is seized by the INV officer
with a seizure order that is required to be passed.
All the proceedings from time to time are recorded & which are duly countersigned by
the dealer or his/her authorized representative.
1.7.2.13 HANDLING CRITICAL SITUATIONS
The job assigned to the investigation branch is of vital importance. Due to the powers &
duties u/s. 64(3) and (4) of Search & Seizure the responsibility of the visiting party is
increased manifold. They have to face baseless allegations or sometimes dealers can
make issue out of small and petty matters of the visiting party to divert their attention
from the important work of collection of evidence. The officer & staff working in this
branch have to be vigilant, polite and tactful to defuse the tension. They should always
be vigilant and alert about safety of the visiting team as sometimes the dealers, on-
lookers, local community or trade leaders try to put pressure or use physical force to
withdraw investigation visits. Under such circumstances, help from local police may be
called for. Till the necessary protection and safety is ensured, situations giving rise to
confrontation be avoided. Senior officers should always be informed about such situation
so that they can take necessary decisions & guide the visiting party.
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1.8 POST SEARCH INV WORK
1.8.1 ENTRY INV REGISTER
Immediately on the next day of completion of visit, names of the companies / firms (may
be RD or URD) which were decided to be covered during search (as per intimation &
approval in preliminary reporting) should be entered in the INV register. INV number
should be obtained for all companies/firms that are covered. INV number be obtained
from the concerned JC office in the format for example “MUM-INV-F-001/2013-14/001”
or “AMR-VAT-F-001/2013-14/001” which should be entered in the prescribed Register
No. 4 for sanction/visited/covered cases.
1.8.2 DEPOSITING THE BOOKS OF ACCOUNTS IN THE CUSTODY
The books of accounts, registers, documents obtained at the time of visit should be
immediately deposited in the custody maintained for the depositing of the books of
accounts as far as practicable next working day after the concluding of the visit. Delay
in depositing the books of accounts into the custody up to three working days should be
brought to the notice of DC and his/her permission should be obtained to deposit the
books of accounts in the custody. For delay of more than three working days permission
of JC should be obtained.
Overall supervision over the inspectors and clerks working at the custody will be directly
under the control of the respective Joint Commissioners.
1.8.3 PREPARATIONS OF THE BOOKS OF A/CS, REGISTERS & DOCUMENTS
FOR DEPOSITING IN THE CUSTODY
The books of accounts, registers documents along with receipts should be presented to
the concerned Assistant Commissioner or Dy. Commissioner, as the case may be, to
obtain his/her initials on the same by putting necessary flags on the pages for initials.
The AC or DC concerned should verify and put his/her initials and then sign the
certificate after completing these formalities the books of accounts, registers and
documents should be sent to the custody along with responsible staff. Necessary receipt
should be obtained from the staff working at custody. Before depositing the books the
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IV officer should,
1. Check the books of accounts, registers documents and their number once again,
2. They should be properly numbered.
3. To tie up the loose papers properly.
4. Torn papers should be pasted properly.
5. The STI and staff should put up seal of office on,
a) Inside of front cover.
b) First written page.
c) Any middle page.
d) Last written page.
e) Inside of last cover.
The concerned STI should put his/her initials and date at all the above five pages. Later
on he should prepare the certificate in the prescribed format (preferable at back side of the
Receipts) and sign the same.
1.8.4 VERIFICATION & QUANTIFICATION OF LIABILITY
After the books are obtained from the Custody section for detailed scrutiny &
verification, AC INV will, scrutinize the details of the claims made in the returns vis-à-
vis the evidences found during the search with reference to the details of the facts
recorded in the books (which are procured from the dealer), the facts observed during the
search operations & inferences drawn from the statements recorded during the Visit &
post Visit.
Explore the correctness of the same with reference to the documents, books & the
business procedures observed.
Issue cross verification memos & determine the line of action on the scrutiny of the
claims
Work out the tentative tax liability on the strength of the same.
1.8.5 FIRST VISIT REPORT
As far as practicable, the first visit report should be submitted to supervisory officer
within 7 (seven) working days after the conclusion of Visit.
The first report should invariably include,
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i. The purpose of visit
ii. Brief description of dealer‘s business activities
iii. Observations made about the business processes & dealers activities
iv. Discrepancies noticed in the books of accounts.
v. The modus operandi adopted for tax evasion
vi. Issues found & analysis thereof vis-a-vis issues raised in proposal
vii. Probable amount of tax evasion, may be with tentative quantification (if
noticed)
viii. Proposed line of actions
1.8.6 SUBSEQUENT VISIT REPORT’s
Subsequent reporting about the progress of the investigation & result of the compliances
of the actions approved by JC should be made periodically. The periodicity of reporting
may vary from case to case depending on the gravity & substance of the facts reported
& the approved line of action.
The progress of investigation should be reported to adhere to the stipulated timelines of
completion of all investigation work leading to the logical end.
After verification of books of accounts or depending on the situation or on case to case
basis, if it is necessary to invoke the provisions of S-35 or S-38, then these actions should
be immediately proposed to JC through DC_INV. Actions can be initiated in all those
cases in which the officer has reason to believe from the investigation that tax liability
or any other sum payable is likely to be in excess of Rs. 25,000/- or the dealer is likely
to be not traceable thereafter, if any.
During the post search period, as provided under rule 69 of MVAT Rules 2005, when
the officer below the rank of JC has seized the books of accounts, registers and
documents seized u/s 64 of MVAT Act, the same cannot be retained by him/her for more
than 21 days. AC_INV should propose the extension to JC through DC_INV. All relevant
entries in the prescribed register should be maintained for the books (whether seized or
handed over by dealer voluntarily).
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1.8.7 FINAL VISIT REPORTING
Final report of investigation findings & the resultant amount of taxes evaded if any
should be reported for each FY separately. All the issues covered, claims & evidences in
support of the evasion or incorrectness should be properly reported in the form of a
worksheet (may be in the format of F-604).
Report should also state, whether the findings/outcome of the investigation is conveyed
to the concerned dealer. And if there is any additional tax liability that is accrued, then
whether the same is acceptable to the dealer or not.
The resultant actions on account of the dealer in case of acceptance of investigation
findings or on account of MSTD official in case of not acceptance of investigation
findings should be taken as prescribed in the scope of INV work.
1.9 INV CLOSURE PROCESS
1.9.1 SUMMARY OF ACTIONS & RESULT
All the actions that were taken up with the relevant details & the resultant compliances
at the dealers end (may be filing of revised return or not acceptance of the findings of
investigations) or the resultant output of the AC_INVs actions (may be an AO or reporting
of the facts to other official) should be clearly reported for each FY
1.9.2 CLOSURE PROPOSAL
After all the actionable for the relevant FYs covered in the INV file are complete a
proposal for closure of the INV should be submitted to JC_INV or JC_VAT_Adm
through DC_INV.
The closure proposal must encompass among other things,
Purpose of Visit / reasons
Issues covered in the Visit
Actionable with result & status there of
JC_INV or JC_VAT_Adm must ensure that the complete INV lifecycle is completed in
the stipulated timeline of 12 months from the date of Visit.
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CHAPTER-V
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1. MISCELLANEOUS
1.1 SOURCE OF INTELLIGENCE
1.1.1 INTERNAL SOURCES (EIU Section)
1. MAHAVIKAS data & its analysis
2. EIU data & its analysis
3. Supporting data
4. Returns consolidation (with latest & unique return & details of non-filer
period with reference to periodicity)
5. F-704 data & 360 analysis details of data taken as on date
6. Single point of contact from EIU in case any back reference required to be
made for discrepancies in supporting data & facts observed (methodology of
reconciliation & communication)
7. Analysis of given data
1.1.2 EXTERNAL SOURCES (Other than MSTD)
1. Information & data of other State departments like Transport, Excise, IGR,
Municipal Corporations etc.
2. Information of Central Agencies like Central Excise, Customs, Income Tax
etc.
3. Information received orally, on telephonic conversation, or in writing from
social worker, well-wishers, competitors in business.
4. From the written complaints received from citizens, trade rivals, accountants
or from partners, directors.
5. Information received from professional registered informants with expectation
of reward.
6. From the news obtained from trade circle.
7. From the references obtained from the seized documents while analyzing
them.
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8. Information obtained from Toll Nakas, Check Posts, Income Tax, C.B. I., State
Excise Department, Railway, Bank, Government, Airport authority, Post
offices, Central Excise Department, customs department, Port Trusts,
Industrial Estate, traders’ organization, Transport companies, Transporters,
Godown keepers, from Exhibitions, Trade Mark and Patent registration office,
statistical institute, Industrial economic survey reports
9. Customs Clearing House Agents (CHA’s)
10. Information of cross checks received from sales tax departments of other
states.
11. Information collected from newspapers and other business related periodicals
12. Information received from the verification of cross checks issued by officers.
13. Officers and staff of sales tax department dealing with dealer and their cases.
14. From internet
15. From various media such as newspapers, T.V. channels, Hoardings etc.
16. All the above available information should be properly filtered and studied
systematically and compared with available record then only action should be
taken.
JC_INV or concerned JC_VAT_Adm shall coordinate with JC_EIU to obtain the
information from EIU necessary for investigation whenever required.
1.2 PROSECUTION PROCEDURES
The MVAT Act, 2002, the CST Act, 1956 and the allied Acts provide for the
prosecution of dealers in specific circumstances. Powers have been delegated to
the officers to lodge prosecutions against the dealers committing some offence
under the various Acts administered. Although the departmental officers have
successfully conducted prosecutions, there is a consistent requirement of proper
guidelines to effectively prosecute the offenders. The following note is prepared
to guide the officers so that the prosecutions are effectively conducted in
appropriate cases.
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1.2.1 LODGING OF COMPLAINT; PROSECUTION BEFORE COURT OF LAW AND
INVESTIGATION OF AN OFFENCE
1. All the offences under the MVAT Act 2002 and the CST Act 1956 are
cognizable and bail-able. The difference between a cognizable and non-
cognizable offence is that in case of a cognizable offence the police
officer may arrest the accused without a warrant from the Magistrate.
Thus it can be seen by making them cognizable due seriousness has been
accorded to the offences under the Acts governed by the department.
Hence due care should be taken while booking the persons / dealers under
I.P.C., as it works against the personal liberty of a person.
2. Notice to show cause as to why the prosecution should not be initiated
should be issued and served on the offender. The notice should explicitly
mention the offence and allow the offender appropriate time to respond
to the said notice. Opportunity may be given to the dealer to prove his/her
claims/bonafides or make good the default.
3. If the dealer does not comply with the requirements of the prosecution
show cause notice then the complaint may be lodged with the police
station in the form of an FIR (FIR’s are governed by Section 154 of the Cr
PC). FIR should be the information of facts disclosing the commission of
a cognizable offence and it should not be vague or indefinite. It is
necessary that the FIR is lodged in the police station having jurisdiction
over the site of commissioning of offence. The address of the principal
place of business of the dealer should be considered to decide the police
station of jurisdiction.
4. Prosecution sanction from the Government or from the authority
empowered is required to prosecute a dealer for the offences committed
under the CST, Act 1956. While sanctioning prosecution, the sanctioning
authority needs to apply mind and get satisfied about the necessity of
prosecution on the basis of available document/material.
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5. In order to avoid any short coming/lacunae in the complaint to be lodged,
discussion with the police prosecutor should be held.
6. The term “FIR i.e. First Information Report” is a technical description of
the report made out u/s. 154 of CrPC, giving the first information of a
cognizable crime to the police. This report is usually made by the
complainant or some other person on his/her behalf.
7. The principle object of the FIR from the stand point of the informant, is
to set the criminal law in motion, and from the view point of the
investigation authorities, is to obtain information about the alleged
criminal activities so as to be able to take the appropriate steps for tracing
and bringing the guilty person behind the bars.
8. The FIR should include all the details of the offence committed by the
dealer or person in a chronological order. The FIR should also mention
the Sections of the MVAT and the allied Acts (as may be applicable) under
which the offence has been committed. If the offence is to be lodged with
the mention of Sections of the Indian Penal Code (IPC), the same may be
done with due advise from the supervisory officer. The attested
photocopies of the documents used as evidences should be attached with
the FIR and the original documents should be preserved for production in
the court of law.
9. When the offence is committed by the partnership firm, “Partners as well
as the Firm” should be named as “Accused” and in case of a “Company”,
“the Company as well as its Directors and the Managing Director
responsible for the day to day affairs of the company” should be named
as the “Accused”.
10. Sufficient evidences should be gathered to establish the offence beyond
reasonable doubt. Due care should be taken for collection of the evidences
such as documents, books of accounts, dispatch proofs, returns filed by
the dealer or the persons etc., depending upon the nature of complaint.
11. The Joint Commissioner may compound the offence under the MVAT,
Act, 2002 and certain offences under the CST, Act, 1956 after the
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offender has made good for the default for which he is prosecuted and has
paid the composition money as decided.
12. Offences under the IPC are of serious kind and the sales tax authorities
have no powers to compound these offences or withdraw the prosecution
in spite of the dealer making payment of tax, interest and penalty.
13. Powers to withdraw the prosecutions under the IPC lie with the State
Government. Therefore, due care should be taken to file an FIR under the
IPC
14. Section 200 and 203 of the Cr PC Act, 1973 provide for lodging of
complaint with the Magistrate and dismissal of the same by the
Magistrate.
15. The police station in-charge investigates the offence reported in the FIR
and after completion of investigation sends the final report to the
Magistrate.
1.2.2 SELECTION OF CASES FOR PROSECUTION
Some dealers/persons evade taxes intentionally or willfully by adopting
malpractices and by manipulating the record or habitually delaying the payment
of taxes, give, take and use forged documents and make bogus claims of reduced
rate of tax applicable to them, knowingly claim bogus input tax credit (set-off)
based on forged or manipulated documents. This necessitates stern and coercive
actions against the offenders. The actions of imposition of penalty or prosecution
under the various Acts administered by the Sales Tax Department need to be
explored. In some of the cases the offences are of grave nature and need to be
lodged under the provisions of Indian Penal Code (IPC).
The possibility of initiating the prosecution proceedings may be explored by the
concerned authorities in some of the following instances –
The cases wherein taxes evaded are significant
For offences under IPC of cheating with forgery, cheating by
impersonating, criminal breach of trust or obstructing officers and staff
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during the course of official work
Habitual defaulters in filing returns and paying taxes
Non genuine dealers & their beneficiaries
Non-attendance or delaying proceedings u/s. 64 without sufficient
reasons
Non-payment of taxes assessed after 60 days where no stay is granted by
any authority or no appeal is filed or appeal filed but rejected and tax
quantum involved is significant
Non traceable and absconding dealers/persons wherein significant tax
recovery is pending
Non filing of returns, Nonpayment of taxes admitted in returns etc.
Offences enlisted in section 74 of MVAT Act, 2002
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1.2.3 PROVISIONS FOR OFFENCES AND PENALTIES UNDER MVAT ACT 2002:
Section Nature of offences Punishment on conviction
74(1)(a) Knowingly, not being registered dealer under this Act,
represents that he is or was registered dealer at the time
when he sales or buys goods
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(b) Knowingly furnishes a false return Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(c) Knowingly produces before the Commissioner or
Tribunal, a false bill, cash memorandum, voucher,
declaration, certificate or other document referred to in
sub-section (4) of section 29
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(d) Knowingly keeps false account of the value of goods
bought or sold by him in contravention of sub-section (1)
of section 63
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(e) Knowingly produces false accounts, registers or
documents or knowingly furnishes false information
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(f) Knowingly issues to any person any certificate or
declaration, under the Act, Rules or notifications, or a bill,
cash memorandum, voucher, delivery Chalan, lorry
receipt or other document which he knows or has reason
to believe to be false
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1)(g) Knowingly falsely represents that he is authorized under
section 82 to appear before any authority in any
proceeding
Rigorous imprisonment for
min 1 month and maximum 1
year and with fine.
74(1A) knowingly with the intention to defraud revenue, issues or
produces a false tax invoice and thereby makes a false
claim in respect of the set-off or the refund, or claims any
other deduction that results into reduced tax liability or
enhances the amount of refund
(ii) abets any of the aforesaid offences
Rigorous imprisonment for
min of 1 year and maximum
up to 2 year and with fine.
74(2) Whoever wilfully attempts in any manner whatsoever to
evade any tax liable under this Act or payment of any tax,
penalty or interest under this Act
Rigorous imprisonment for
min 3 months and maximum 1
year and with fine.
74 (3)(a) Fails, without sufficient cause, to comply with the
requirements of sub section (3) of section 14.
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(b) Engaged in business as a dealer without being registered
under section 16 of MVAT Act, 2002
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(c) Fails, without sufficient cause, to obtain, in lieu of existing
certificate of registration, a fresh certificate of registration
when required to do so as provided in sub-section 1 of
Simple imprisonment which
may extend to six month and
with fine.
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Section Nature of offences Punishment on conviction
section 17 of MVAT Act.
74 (3)(d) Fails, without sufficient cause, to furnish any information
required by section 18 of MVAT Act, 2002
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(e) Failure to furnish a declaration/revised declaration as
provided in sub-section (1) of section 19 i.e. information
regarding the manager of the business or fails to
communicate the permanent account number of the
business or information regarding having applied for the
same as provided in sub-section (2) of section 19
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(f) Failure without sufficient cause, to furnish any return or
complete and self-consistent return as required by section
20 by the date and in the manner prescribed,
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(g) Failure without sufficient cause in paying tax deductible at
source by the employer, in deducting deduct at source or
to file TDS return as required under the provisions of
section 31
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(h) Failure without sufficient cause, to comply with the
requirements of the notice issued under sub-section (1) of
section 33 i.e. provision of special mode of recovery -
garnishee provisions
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(i) Failure without sufficient cause, to comply with the
requirements of any order issued under sub-section (1) of
section 35 i.e. provisional attachment-garnishee
provisions
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(j) Failure without sufficient cause, to comply with the
requirements of any order issued under sub-section (3) of
section 38 i.e. order declaring transfer/ charge to be void
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(k) Failure without sufficient cause, to comply with the
requirements of section 42 i.e. relating to composition
scheme
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(l) contravening, without reasonable cause, the provision of
section 60 i.e. provision of prohibition against collection
of amounts by way of tax or in lieu of tax in certain cases
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(m) Fails, without sufficient cause, to get accounts audited or
furnish the report of the audit, as required under section 61
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(n) Failure without sufficient cause, to comply with the
requirements of section 63 (liability to produce accounts,
etc.)
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(o) Failure without sufficient cause, to comply with the
requirements of section 64 (production and inspection of
account and document and search of premises)
Simple imprisonment which
may extend to six month and
with fine.
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Section Nature of offences Punishment on conviction
74 (3)(p) Failure without sufficient cause, to comply with the
requirements of section 65 (cross checking of transaction)
Simple imprisonment which
may extend to six month and
with fine.
74 (3)(q) Failure, without sufficient cause, to furnish any
information or return required by section 70 (relating to
power to collect statistics)
Simple imprisonment which
may extend to six month and
with fine.
74(3)(r) Failure, without sufficient cause, to issue a tax invoice, bill
or cash memorandum as required u/s 86
simple imprisonment which
may extend to six months and
with fine
74(3)(s) contravening without reasonable cause, any of the
conditions, subjects to which the Certificate of Entitlement
is granted
simple imprisonment which
may extend to six months and
with fine
74(3)(t) Failure, without sufficient cause, to comply with any
notice in respect of any proceedings
simple imprisonment which
may extend to six months and
with fine
74(4) Whoever aids or abets or induces any person in
commissioning of any offence enumerated under sub
section (1) and (2)
simple imprisonment for
minimum of one month and
maximum of one year with
fine
Whoever aids or abets or induces any person in
commissioning of any offence enumerated under sub
section (3)
simple imprisonment which
may extend to one month and
with fine
74(5) Offences specified under sub- section (1) to (4) and if it is
a continuing one
Rs. 100/- per day during the
continuation of the offence in
addition to punishment
provided under this section.
74(6) Person who is deemed to be manager as provided U/s 19
of the dealer accused of an offence specified in sub section
(1) to (3)of section 74
Same punishment as provided
under the relevant sub-
sections.
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1.2.4 PROVISIONS FOR OFFENCES UNDER IPC 1860
Sr
No Offences Section Punishment
Cognizable/
Non Cognizable
Bailable/Non
Bailable
1 Common Intension
34
2 Criminal Conspiracy
120 (B) 2 year imprisonment or
Fine or both Cognizable Bailable
3 Criminal Breach of trust
406 3 year imprisonment
or Fine or both Cognizable Non-Bailable
4 Cheating
417 1 year imprisonment or
Fine or Both
Non
Cognizable Bailable
5
Cheating with knowledge that
wrongful loss may insure to
person whose interest offender
is bound to protect.
418 3 year imprisonment or
Fine or Both
Non
Cognizable Bailable
6 Cheating of personation
419 3 year imprisonment or
Fine or Both Cognizable Bailable
7 Cheating & Dishonestly
Inducing delivery of Property 420 Up to 7 Year
imprisonment and Fine Cognizable Non Bailable
8 Forgery of document
465 2 year imprisonment or
Fine or Both
Non
Cognizable Bailable
9 Forgery of valuable security
467 Life Imprisonment or
10 Year and Fine
Non
Cognizable Non Bailable
10 Forgery for the purpose of
cheating 468 7 Year imprisonment
and Fine Cognizable Non Bailable
11 Using Forged documents as
genuine 471 7 Year imprisonment
and Fine Cognizable Bailable
12
Making or Possessing
Counterfeit Seal etc. with
intent to commit forgery
punishable u/s 467 of IPC
472 Life Imprisonment or 7
Year and Fine Cognizable Bailable
13
Making or Possessing
Counterfeit Seal etc. with
intent to commit forgery
punishable other than section
467 of IPC
473 7 year imprisonment
and Fine Cognizable Bailable
14
Having Possession of
Document described in sec.
466 or 467, knowing it to be
forged & intending to use it as
genuine
474 Life imprisonment or 7
Year and Fine Cognizable Bailable
Section 76 to 106 of IPC are about general exceptions which are not amounting to offence
and of right of private defense of person and property and hence are useful.
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1.2.5 LIST OF BASIC DOCUMENTS REQUIRED FOR FILING A COMPLAINT &
LAUNCHING PROSECUTION
(a sample list viz. indicative & may vary depending upon nature of offence committed &
availability of documents).
1.2.6 FOR DEALER WHO ISSUES NON GENUINE BILLS (non-genuine dealer’s commonly
referred as hawala dealers) or DEALERS INVOLVED IN SUPPRESSION OF
TURNOVER / MISCLASSIFICATION OF COMMODITIES & TAX RATES
1. Complaint letter containing
a. Details of the complainant with his/her official designation
b. Registration details viz.
i. Name,
ii. All addresses as per record
iii. Names with addresses of the firms proprietor, partners, authorized
signatories & Directors or as the case may be
iv. The persons involved or committed offence.
v. the details of Certified copies of statutory Record like F-105
2. Details of -
a. Offence committed with breach of MVAT provisions
b. Names of the person involved (directly or indirectly as responsible
for the firms activities).
c. Name and address of operator, (if any).
3. Available evidences in support of the offences like,
a. Summary of returns, Form-704, actual turnover and deposits Bank
statement.
b. Sample bill copies of sales and purchases (if available).
c. Copy of deposition/Statement.
d. Affidavit of facts submitted
e. Name and address of sample beneficiary dealers along with their
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statement/deposition (maximum 3 to 5 if available).
f. Copy of notice/show cause issued (if any).
4. Corroborative evidence such as actual photograph of the places, antecedence
of the dealer.
1.3 CUSTODY SECTION PROCEDURES & VERIFICATION BY CUSTODY
SECTION
Custody section shall be under direct control of JC_INV & JC_VAT_Adm
The staff at custody should verify -
a) Whether the books of accounts, registers & documents tallies with the
receipts.
b) Whether the receipt has signature of the dealer / person concerned or
certificate of the AC or DC as the case may be to the effect that the dealer
refused to sign the receipt and the books of A/c’s are seized under
panchanama.
c) Necessary seals are put at five pages mentioned above & initialed by STI
and concerned AC or DC (as the case may be).
1.3.1 RECORDING OF BOOKS DEPOSITED TO BE MAINTAINED BY CUSTODY
1. After completing the above formalities the necessary entry of the books of
accounts, registers and documents should be taken in the Register of seized
books maintained at the Custody manually or on Computer.
2. The Clerk working in the Custody Section should also put a stamp of the
Sales Tax Inspector of Custody Section on Inside front cover; First written
page; any 3 written pages in between; last written page & inside last cover.
(This stamping is over & above the stamping done by the concerned STI
working under AC_INV or DC_INV) Total stamp and signature has to be done
at seven places. However on files containing loose papers stamps should be put on
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each & every page and they should be serially paginated (in case no printed paging
is already on the pages).
3. The STI working at custody should check the stamping & paging & put
his/her initial on all the seven pages. He should note those page numbers on
a chit and pin up the said chit on first inside page of the books of accounts
register or file.
4. After completing the above formalities necessary entry of the books of
accounts should be taken in the Issue Register of books of accounts. Serial
number of the said entry should be written on the first page of the books of
accounts, registers and files. When books are ready the concerned
investigation officer should be informed to take charge of the books of
accounts, registers and files.
1.3.2 PROCEDURE TO ISSUE THE BOOKS TO THE INVESTIGATION OFFICER:
After receipt of intimation from the custody section that books of accounts,
registers & documents are ready, immediately the same should be collected by
sending Issue note for the books with signature of investigation officer. The said
Issue note should contain reference no of receipt, INV. No. and name of the dealer.
After verification of books & documents, the INV officer should invariably deposit
the books & documents back into Custody.
1.3.3 PROCEDURE FOR RETURNING THE BOOKS OF ACCOUNTS,
REGISTERS & FILES:
Staff working at custody should note reference number of Issue note, in issue
register and return the books of accounts, Register & files to the concerned STI
working with investigation officer by obtaining his/her signature in the register in
token of receipt of the books of accounts.
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1.3.4 TO TRANSFER THE BOOKS OF ACCOUNTS & DOCUMENTS TO THE
ANOTHER OFFICER:
To transfer the books of accounts & documents to the officer separate format of
issue note is to be used (format enclosed). Necessary signature should be obtained
from Dy. Commissioner or the Joint Commissioner concern on the issue note.
Custody section should make necessary entry in their register about transfer.
1.3.5 TO RETURN THE BOOKS OF ACCOUNT TO THE DEALER:
After closure of the case, the Assistant Commissioner shall inform the dealer to
collect the books of accounts from the custody. Assistant Commissioner (INV)
shall prepare issue note and it shall be signed by Deputy Commissioner (INV) or
Jt. Commissioner. Issue Note shall mention the following particulars.
1. Serial Number in outward register and date,
2. Reference Number,
3. Name of the dealer,
4. Registration Certificate Number,
5. INV Number,
6. Description of books, total number of books and period,
7. Date of order of Joint Commissioner regarding closure of file and release
of books.
The issue note along with INV file of the dealer should be sent to the in-charge of
custody. The custody section shall take following action after receiving the issue
note. The content of issue note shall be verified for their correctness. The
correctness of closure of investigation shall be verified by referring to the remarks
of Joint Commissioner in the file.
The dealer or the authorized person appointed by the dealer should be identified by
the STI of the investigation officer. To return the books of A/c’s to the dealer, issue
note is to be prepared (format given). Signature of Dy. Commissioner or Joint
Commissioner, as the case may be, obtained on issue note for returning the books
of accounts; registers and documents to the dealer, and sent to the custody. Issue
59 | P a g e
note should have reference to the order of returning the books of accounts.
The Sales Tax Inspector of custody section shall also sign the receipt by mentioning
remark that the books of accounts have been returned to the dealer and entries shall
be closed in the related registers.
Sales Tax Inspector working at custody should verify and note reference no. of
issue note in the register. He should obtain signature of concerned Sales Tax
Inspector in the said register as well as that of the dealer or person accepting the
books on behalf of the dealer. Investigation officers should also maintain control
register for transfer/ return of the books and draw monthly abstract of the same.
1.3.6 IF THE DEALER DOES NOT CLAIM THE BOOKS OF ACCOUNTS
If after many attempts, the dealer is not traceable or does not turn up to claim the
books of accounts lying in the custody when the same are not required for any
proceedings at all, then Investigation officer shall propose to destroy the books of
accounts in such cases and he shall send a proposal to the Joint Commissioner
through Deputy Commissioner. After receiving the proposal Joint Commissioner
shall publish the details in the Official Gazette. The details of the dealer should at
least be published giving 30 days’ time to collect the books of accounts and after
such publication; action of destroying such unclaimed books of accounts shall be
initiated. The books of accounts shall be destroyed after 30 days plus 15 days more
of publication of such information in the Official Gazette.
1.3.7 PROCEDURE OF DESTROYING THE BOOKS OF ACCOUNTS
The Sales Tax Inspector of custody section shall verify the proposal of destroying
of unclaimed books of accounts. After verification of the record and ascertaining
the fact that dealer or his/her representative is not coming forward to claim the
books of account then a list of such books of account is to be prepared which shall
contain Name of the Dealer or person , TIN if any, INV number, date of Visit, No.
of books. The said list after due approval of the respective Joint Commissioner of
Sales Tax is to be sent to the Government Press for its publication in the Official
60 | P a g e
Gazette. After publication of the said list in the Official Gazette a wide publicity is
to be given. For this, the copy of the Official Gazette may be placed on the notice
board or displayed on the Web-site of the Department. After due date mentioned
in the Official Gazette the unclaimed books of account may be destroyed as per
procedure given herein below: as it is necessary to check that the books of account
belonging to the same dealer who does not turn up to claim the same, be destroyed
and not of others
After proper verification, the entry shall be made in the register which is maintained
for the purpose of destroying the books of accounts. AC_INV shall also enter the
information in the registers regarding the books of accounts to be destroyed. The
entry shall be taken in the related register mentioning that the “books of accounts
have been destroyed by burning”. The date and time shall be mentioned.
The custody branch shall fix a date for destroying the books of accounts and
representative of fire brigade, concerned AC_INV, DC_INV shall be informed
accordingly. Such date fixed shall be after 15 days from the date given in the
official gazette to collect the books.
On the date and time fixed the books of account shall be destroyed by burning in
the presence of Sales Tax Inspector (Custody section), AC_INV & DC_INV and a
representative of Fire Brigade.
The Sales Tax Inspector of custody section, AC_INV & DC_INV should sign the
register. Then entries pertaining to such books shall be closed in the related
registers.
1.4 REPORTING FORMATS OF INVESTIGATION BRANCH
All reporting formats of KKPI prescribed by CST office from time to time be a part
of the reporting formats. Along with that, during the transition phase from manual
functioning to working with MAHAVIKAS module, both physical copies of KKPI
& MIS reports of MAHAVIKAS be used.
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1.5 INSPECTION PROCEDURE AND FREQUENCY
DC_INV
1. To carry out at least one complete inspection of the charge of AC_INV in a FY
2. Issue inspection note and send it to the concern officer for compliance with
intimation to JC
3. After receiving satisfactory compliance inspection note should be closed.
AC_INV
1. To take necessary action and correct defect and error
2. Submit compliance report within a month to DC_INV.
(Inspection Register is to be maintained by DC_INV office & AC_INV office in the format
prescribed).
1.6 RECORD FILING SYSTEM
Investigation files must be divided into two parts. First Part should contain the proposal
approval sheets followed by assignment / Warrant of Search and Seizure, Preliminary,
first & subsequent reports thereafter. Reports and note sheets should contain name of the
dealer in brief, INV No. and page no’s so that they can be identified even if detached
from file by passage of time. The second part should contain proceeding sheets in
sufficient number to record attendance and hearing to the dealer, all supporting
documents in the proposal file followed by notices / summons issued, documents
obtained for verification and verification report and working of the tax liability, penalty
and interest, if any. Assessment and prosecution files should be separate. All files should
be indexed and front side of page paginated giving alternate numbers.
1.7 DISPOSAL OF OLD RECORD NOT REQUIRED Old investigation files and record not required for any proceedings under any of the Acts
administered by the sales tax Dept. or for any departmental inquiry, prosecution or other
proceedings before any tribunal or any court or for recovery or reward to informants
should be sent to record section after completion of three years from the end of the last
action in the matter.
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1.8 EXPANSE; EFFECT & ITERATIONS
This investigation manual is in supersession of all the earlier instructions given vide
Circulars & administrative guidelines through other means.
It is for internal use in the nature of procedural guidelines and aims at providing
clarifications to achieve the objectives of Investigation Branch.
This manual is applicable to all the officers to whom powers of search and seizure are
granted for investigation under the respective acts implemented by Maharashtra Sales
Tax Department. And shall come in force from 15-11-2014.
It is subject to iterations as & when the need arises which will be carried out by JC-INV-
A & JC-INV-B with approval of The Commissioner of Sales Tax from time to time.
1.9 DISCLAIMER
The contents of this manual should not be used for any legal interpretation of provisions
of any law or rules made there under.
All the details are procedural guidelines for the officials to whom the powers of search
and seizure are delegated by The Commissioner of Sales Tax
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2.0 VARIOUS FORMATS
Certain formats to be used for the procedures while working for the INV are prescribed.
A list of the formats that are prescribed for various function is as under.
Note: The formats given under are for internal guideline and are intended to provide
clarifications. They may be modified suitably. The said formats should not be used for any legal
interpretation of provisions of law.
Format
No. Purpose
1 INV Visit proposal
2 Warrant of Search & Seizure / Assignment
3 Format for intimation of investigation visits
4 Format for fortnightly Statements of investigation visits
5 Communication from CST addressed to dealer for his/her Rights & Duties
6 Receipt of books
7 Seizure order
8 Certificate to be used while depositing books in Custody
9 Issue note for retrieving books from Custody
10 Issue note for returning books from Custody
11 Issue note for transferring books from Custody
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Format for INV proposal Format No. 1
INV Visit proposal
1 Proposal No and Date
2 Name of the dealer to be
visited M/s
3 TIN of the dealer to be visited
(if any) :
4
Nature of
Business (Tick
the relevant
fields)
Manufacture
r
Importer
Reseller
Other
(specify)
5 Commodity Dealt in:-
6 Reference INV No (if any)
7 Reference Complaint No and
date (if any)
8 Purpose/Reasons of Visit
Description (Tick the
relevant fields) Description
(Tick
the
relev
ant
fields)
Suppression of Sales/Purchase Wrong Set-off
Claims
Non-issuance of Invoices Misclassification
of Commodity
Hawala Transactions Wrong 6(2) Sale
Cross-Check of Declarations Collection of
Information
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INV Visit proposal
Cross-Check of
Transaction/Claims Unregistered
Dealer
Incorrect incentive
Deferral/Exemption Claim Market
Intelligence
Other (Specify)
9 Source of Intelligence / Information
Description (Tick the
relevant
fields)
Description (Tick
the
relev
ant
fields)
Economic Intelligence Unit Other Govt. Dept.
(specify)
Advisory Visit Br Pending
Complaint
Business Audit Br. REIC
Large Tax Payers' Unit Market Source
Referred from CST office Own Information
Other Branch of MSTD (specify)
Any Other (specify)
10 Available Address/es to be Visited:-
POB:
POR:
11 No of Officers Required for Visit
12 No of STI’s Required for Visit
13
Logistics required for (in brief
specifying vehicles & other
arrangements in case of
outstation Visits)
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INV Visit proposal
14
Approximate tax potential in the
proposal with other
observations of Officer
proposing Visit
(specify in brief with issues &
relevant prima-facie evidences
on record leading towards
reason to believe)
15
Signature & Designation of
AC_INV/DC_INV proposing
Visit
Asst. Commissioner of Sales Tax (D - )
16
Remarks of DC_INV
(specify the recommendations
in brief)
17 Signature & Designation of
DC_INV
Dy. Commissioner of Sales Tax ( E - )
18 Remarks of JC
19 Signature & Designation of JC
Jt. Commissioner of Sales Tax
Investigation Branch-B, Mumbai.
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Format of Assignment /Warrant of Search & Seizure Format No. 2
SALES TAX DEPARTMENT Government of Maharashtra
Office of the Dy. Commissioner of Sales
Tax
MUM-INV-E- , Vikrikar Bhavan,
Mazgaon,
Mumbai - 400 010.
Assignment No: /2013-14 Date :
WARRANT OF SEARCH & SEIZURE
(u/s 64 of the Maharashtra Value Added Act -2002)
Date of visit: - -2013 Time of visit: Hrs.
In the case of M/s .________________________holding TIN 27 V & 27 C, having
its places of business at,
1) _______________________________________________
2) _______________________________________________
& the place of residence at __________________________________________
Mr. _______________, Assistant Commissioner of Sales Tax INV-D- , Mumbai is hereby,
assigned and authorized to visit, enter, inspect and verify the books of accounts and documents
of the said dealer and other concerns found in the business premises, godown and any other place
where books of a/c are kept.
The officer is further authorized to search the place of business, which includes,
warehouse, godown, and any other place where the dealer is likely to store his/her goods or keep
his/her books of accounts. If necessary, the officer may seize the books of accounts, registers,
documents, and other papers relating to sales, purchases, stock of goods and other documents
found at the place of business, warehouse, godown and any other place as may be necessary.
The officer/s may take inventory of the goods and cash found at the place of business as may be
necessary U/s. 64 of MVAT Act, 2002. The dealer is requested to assist the officer in discharging
the duty.
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Any attempt to mislead, tamper with the evidence, refusal to answer the questions
relevant to search operations, making of false statement or providing false evidence is punishable
with IMPRISONMENT and/or FINE under section 179, 181, 191 and 418 of the Indian Penal
Code and/or section 74 of the MVAT ACT, 2002.
Seal ( )
Dy. Commissioner of Sales Tax_INV_ ,
Place: Mumbai Investigation_Div_B, Mumbai
Signatures of Investigation Officer:
1) Asstt. Commissioner of Sales Tax_INV_ , Mumbai __________________
2) Asstt. Commissioner of Sales Tax_INV_ , Mumbai __________________
Read & Signed
(Signature of the person present at the time of visit)
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Format for intimation of investigation visits Format No. 3
CONFIDENTIAL
Office of the Jt. Commissioner of Sales
Tax
MUM-INV-F- , Vikrikar Bhavan,
Mazgaon,
Mumbai - 400 010.
No: MUM-VAT-F-002/Visit Intimation/FY 2013-14/B- Mumbai, dated
Sr No TIN
Name
&Addresses
to be visited
Date of
sanction
of Visit
proposal
Name of
INV
officer
Name of
the
controlling
DC_INV
with
designation
& contact
No.
Purpose
of Visit in
detail
Joint Commissioner of Sales Tax,
MUM_INV_F_ ,INV Branch, Mumbai
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Format for fortnightly Statements of investigation visits Format No. 4
CONFIDENTIAL
Office of the Jt. Commissioner of Sales
Tax
MUM-INV-F- , Vikrikar Bhavan,
Mazgaon,
Mumbai - 400 010.
No: MUM-VAT-F-002/Fortnightly Report/FY 2013-14/B- Mumbai, dated
Sr
N
o
Main
INV
Officer
Date
of
Visit
INV
No.
TIN Name
Purpose
of visit Evidences
found
about
purpose of
Visit
Amount of
Tax
expected
(approx.)
(in Rs.
Lacs)
Amount of
Tax paid
after INV
(in Rs.
Lacs)
(Hawala dealer,
Genuine dealer,
Not traceable
dealer) Brief
Details of the
Visit
Summary Total Tax Detected: Lacs Total Tax Recovered: Lacs Total Visits Hawala dealers found Genuine dealers found Not traceable dealers
Joint Commissioner of Sales Tax,
MUM_INV_F_ ,INV Branch, Mumbai
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Format for Communication from CST addressed to dealer for Rights & Duties Format No. 5
Office of the, Commissioner of Sales Tax, 8th Floor
Vikrikar Bhavan, Mazgaon, Mumbai -10 Tel: 23760866
To,
M/s
------------------------------
------------------------------
------------------------------
Section 64 of the Maharashtra Value Added Tax Act, 2002 authorizes the Commissioner to
inspect and search the premises of the dealer/person who has evaded or is attempting to evade
the payment of tax. The section also authorizes seizure of the documents obtained during such
search operations.
The provisions of section 64 are not to harass anyone but to unearth the true and correct
information from the tax evaders.
Therefore, some guidelines are provided herewith in regard to rights and duties of the
dealer/person visited. Rights of the dealer/person visited:
1. To see warrant of search (assignment letter) duly signed and sealed by the issuing
authority.
2. To verify identity of each member of the search party.
3. To obtain copy of the list of books of accounts, documents, note-books, diaries or
any other paper seized by the party.
4. To put his/her own seal / signature on the list. If the dealer refuses to do so, the officer
should note this fact.
5. Women occupants of an apartment, which has to be searched, to have a right to
withdraw before the search party enters if, according to custom, they do not appear
in public.
6. To call medical practitioner if necessary.
7. To have children permitted to go to school after the examination of their bags.
8. To contact lawyer or C.A. or tax practitioner dealing with his/her tax matters to assist
him to explain the facts and materials to the members of the search party with
72 | P a g e
intimation of the INV officer & only after completion of the search.
9. To continue his/her normal household and business activities with the knowledge of
the INV officer.
10. To receive message and send messages with knowledge of the INV officer.
11. To have any other person present during the raids & to leave only with the permission
of the INV officer and if necessary, after his/her physical search.
12. To seek entry of outsiders or family members of employee of the dealer, except that
of his/her medical practitioner and C.A./Lawyer, but at the discretion of the officer.
13. To offer prayers.
14. To report any indecent, inappropriate behavior of any member of the investigation
team to the concerned DC/JC.
The duties of the dealer:
The duties of the dealer during the searches are broadly defined U/s. 64(2), (3) and (4). They
can be summarized as under:-
1. To render all assistance to the raiding party and in no way, hamper the proceedings.
2. To see the assignment for search and put his/her signatures on the same.
3. To identify all receptacles in which cash, books of accounts or documents are kept
and handover the keys to the INV officer.
4. To identify and explain the ownership of cash, books of accounts, other documents
and papers.
5. Not to remove any cash, stock of goods, books of accounts, documents note-books,
without the knowledge and permission of the INV officer.
6. Allow the investigation officer to take inventory of cash & other articles and be
signed by the dealer or the authorized Person.
7. To identify every individual in the premises and to explain their relationship to the
person being searched.
8. Not to mislead by impersonation. If he cheats by pretending to be some other person
or knowingly substitutes one person for another, it is an offence punishable u/s. 416
of the Indian Penal Code.
9. Not to allow or encourage the entry of any unauthorized person into the premises.
10. Not to remove any article from its place without notice or knowledge of INV officer.
73 | P a g e
11. Not to conceal or destroy any documents with the intention of preventing the same
from being produced or used as an evidence before the court or public servant. Such
act would be punished with imprisonment or fine or both in accordance with section
204 of the Indian Penal Code.
12. To answer all queries truthfully and to the best of his/her knowledge.
13. Not to allow any third party to either interfere or prompt, while his/her statement is
being recorded by the INV officer. In doing so, he should keep in mind that –
a. If he/she refuses to answer a question on a subject relevant to the search
operation, he/she shall be punishable with imprisonment or fine or both U/s.
179 of the Indian Penal Code.
b. Being legally bound by an oath or affirmation to state the truth, if he/she
makes a false statement, he/she shall be punishable by imprisonment or fine
or both u/s. 181 of the Indian Penal Code.
c. Similarly, if he/she provides evidence which is false and which he/she knows
or believes to be false, he/she is liable to be punished u/s. 191 of the Indian
Penal code.
14. Similar co-operation should be extended even after the search action is over, so as
to enable the INV officer to complete necessary follow-up investigation at the
earliest.
15. Co-operate with the investigation office for legitimate conclusion of investigation.
Similar Co-operation should be extended even after the search action is over, so as to enable
the INV officer to complete necessary follow-up investigation at the earliest.
This letter cannot be made use of for legal interpretation of provisions of law.
Yours faithfully,
Sd/-
(Dr Nitin Kareer)
Commissioner of Sales Tax
Maharashtra State, Mumbai.
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Format for Receipt Format No. 6 Office of the,
Asstt. Commissioner of Sales Tax_
INV_ ,
3rd Floor, Vikrikar Bhavan, Mazgaon,
Mumbai -400 010 Tel:
RECEIPT
The following books of accounts are received from Shri ____________________of M/s.
_______________________situated at____________________________
_____________________________________________holding TIN
No.__________________________.as they are handed over to me voluntarily for the purpose
of further scrutiny.
Item No. Description Period No. of books Address of place where the
books found
In all _________items, containing _______________ books
Place: Date: Assistant Commissioner of Sales Tax (INV- ),
Seal Investigation - (Place)
Copy to: Shri__________________________________________
Proprietor / Partner of M/s.______________________________
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Format for Seizure Order Format No. 7
SEIZURE ORDER
[U/S. 64 (3) and 64 (4) of The Maharashtra Value Added Tax Act, 2002]
(See Rule 69)
I, Mr.________________________ Assistant Commissioner of Sales Tax (INV-D-__),
Investigation Branch, (Place) visited on______ (date) ________ at (_time) the place of
business of Mr./Mrs./M/s_______________________ situated at(Place/s__________holding
TIN __________under MVAT Act, 2002 & TIN __________ under C.S. T. Act 1956.
Mr. __________________________________ Partner / Proprietor / .Director & the
Employee Mr. __________ was present at the time of my visit. The Search of the place of
business was taken in presence of him/her. On scrutiny of the books of accounts, Registers,
documents and papers found during the search, I have reason to believe that the dealer has evaded
the tax or attempted to evade the tax due to the Government of Maharashtra
Therefore, I ( name of the officer ) , Deputy/Assistant Commissioner of Sales Tax (INV-
--), Investigation, (Place), in exercise of the powers delegated to me u/s. 64(3) and 64(4) of
MVAT Act,2002 seize the following books of accounts for further scrutiny and verification.
Details of the same as under.
Item No. Description of the Books Period
Period To
No. of
books
Address of place where the
books found
From To
In all _________items, containing _______________ books
Place: Date: Assistant Commissioner of Sales Tax (INV- ),
Seal Investigation - (Place) Copy to: Shri__________________________________________
Proprietor / Partner of M/s.______________________________ Format for Visit Report
76 | P a g e
Financial Year of Visit: 01-04-20 to 31-03-20
Ref. Assignment No. _______________________________Date
________________________________
INV. No.:________________________________________ Date
________________________________
1) Name of the dealer:
_________________________________________________________________
________________________________________________________________________________
_
2) Address: ______________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3) TIN: _______________________________________ W.E.F. ____________________________
4) BST: _______________________________________ CST: _____________________________
PT: __________________________________________WCT:______________________________
LEASE:_______________________________________PAN:_______________________________
5) Date of visit:__________________________________ Time of Visit:________________________
6) Staff Present: a) Officers:_________________________________________________________
________________________________________________________________________________
b) STIs__________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
7) Nature of Business:______________________________________________________________
8) Commodity dealt in:_____________________________________________________________
9) Name of the Proprietor/Partners/Directors:____________________________________________
10) Person Present & his/her
designation:___________________________________________________
11) Name of the Bank:___________________________ Account No.__________________________
12) Return filed position:_____________________________________________________________
13) Return defaults if any (specify period):_______________________________________________
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14) Other dues outstanding if any:______________________________________________________
15) No. of books brought:____________________________________________________________
16) Purpose of Visit:________________________________________________________________
________________________________________________________________________________
17) Nature of Evasion/Modus Operandi:_________________________________________________
________________________________________________________________________________
________________________________________________________________________________
17) Discrepancies noticed in stock of goods:______________________________________________
________________________________________________________________________________
________________________________________________________________________________
18) Discrepancies noticed in cash:______________________________________________________
________________________________________________________________________________
19) Other discrepancy noticed:________________________________________________________
________________________________________________________________________________
20) Further actions proposed:__________________________________________________________
________________________________________________________________________________
21) Brief facts and other observations:
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
__________________________________________________________________________________
_________________________
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Format for Certificate while depositing books in Custody Format No. 8
C E R T I F I C A T E
It is to certify that on the following books of a/cs, registers and documents the
office seal is put up and they are initialed by (name of officer) and by (name of sales tax
inspector)
Signature of STI Signature of STI
Sr
No
Inside Front
Cover Page
First written
page
Middle
page
Last written
page
Inside last
Cover page
Total no.
of pages
1
2
3
(Tick marks put, indicate that entries are found proper)
Place:- Date: - (signature) Officer
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Format for Issue Note for retrieving books from Custody Format No. 9
ISSUE NOTE (in duplicate)
Serial No. of Note: ______________________
Ref No: _______________________________
INV/ CC/ RC No. :______________________
Date: _________________________________
To,
The Sales Tax Inspector, Custody Section, (Place) Please issue the following books of accounts to the Sales Tax Inspector
Mr./Mrs._____________________________________.
(1) Names and Address of the dealer with TIN & INV No. :
___________________________________________
__________________________
(2) Total No. of Books (Including Items):____________________________.
Assistant Commissioner of Sales Tax (I- ),
Investigation- (Place).
Received______________________________ books only. Signature of STI_______________________. Dated: _______________.
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Format for Issue Note for returning books to dealer from Custody Format No.10
Issue Note for Returning the Books to the dealer
(in duplicate)
Serial No. of Note: ______________________
Ref No: _______________________________
INV/ CC/ RC No. :______________________
Date: _________________________________ Please return the following books of accounts to Shri ________________
Proprietor/ Partner/ Employee/ Accountant of M/s._______________________________ ________________________________________________________________________
The Joint Commissioner of Sales Tax, ___________ has approved the return of the books on
_____-2013 at page no. ____ of the INV file in Part-A bearing File No. _____.
(1) Names and Address of the dealer with TIN & INV No. :
___________________________________________ ____________________________ 2) Total No. of Books (Including Items):____________________________. Assistant Commissioner of Sales Tax (I- ),
Investigation- (Pace)
Deputy Commissioner of Sales Tax (I- )
Investigation- (Pace)
To
The Sales Tax Inspector,
Custody Section, (Place)
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Format for Issue Note for transferring books from one officer to other Format No.11
Issue Note to transfer the Books of A/cs from one officer to the other
Serial No. of Note: ______________________
Ref No: _______________________________
INV/ CC/ RC No. :______________________
Date: _________________________________
To,
The Sales Tax Inspector, Custody Section, (Place) Please issue the following books of accounts deposited by the undersigned office to the Sales
Tax Inspector of AC_INV_ .
The Joint Commissioner of Sales Tax, ___________ has approved the return of the books on
_____-2013 at page no. ____ of the INV file in Part-A bearing File No. _____.
Mr./Mrs._____________________________________.
(1) Names and Address of the dealer with TIN & INV No.:
___________________________________________
____________________________
(2) Total No. of Books (Including Items):____________________________.
Assistant Commissioner of Sales Tax (I- ),
Investigation- (Place). Received______________________________ books only.
Signature of STI_______________________.
Dated: _______________.
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CHAPTER-VI
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CONTROL REGISTERS AND OTHER FORMATS FOR THE INVESTIGATION
BRANCH
In order to have comprehensive compilation of the progress & pendency of the work and
supervision of an INV officer, the following Control Registers are prescribed which need to be
maintained.
The details of these are as given in the table below.
Sr
No.
Register
No. Purpose To be maintained by
1 1 Register of Visits proposals &
Sanctioned
AC Office
2 2 Register of Visits proposals &
sanctioned
JC & DC Office
3 3 Assignment Register JC_VAT_Adm if INV officer is working
under him directly / DC_INV as per FY
4 4 Investigation Register JC_INV & JC_VAT_Adm Offices as
per FY
5 5 (A) Register of Summons AC_INV Office as per FY
6 5 (B) Register of Form N0. 603 AC_INV Office as per FY
7 5 (C) Register of Cross- Check AC_INV Office as per FY
8 6 PROSECUTION REGISTER Every INV officer who undertakes Visit
either AC or DC as per FY
9 7
Register of Retention of Books
Every INV officer who undertakes Visit
either AC or DC as per FY. Month wise
& Date wise Index of dealers should be
maintained so that extension orders
should be passed before expiry date of
84 | P a g e
Sr
No.
Register
No. Purpose To be maintained by
earlier order. Necessary proposal for
extension orders should be sent to JC in
time
10 18 Complaint Register JC_INV & JC_VAT_Adm
11 9 Reward Register JC_INV & JC_VAT_Adm
12 10 (A) Register of Notice of Provisional
Attachment u/s 35
JC_INV & JC_VAT_Adm
13 10(B) Register of Notice of Provisional
Attachment u/s 38
JC_INV & JC_VAT_Adm
14 11 Register of the books collected/seized
by Investigation Branch
Office of INV Officer
15 12 Register for assessments in INV
Branch
Custody & AC_INV
16 13 Register of unofficial references JC / DC/ AC
17 14 (A) Register for movement of INV files JC / DC/ AC
18 14 (B) Register for movement of files other
than INV files
JC / DC/ AC
19 15 Register for payments made as a result
of INV officers’ actions viz. Scroll
AC_INV
20 16 Installment Register JC office DC & AC
21 17 Inspection Register JC office & DC
22 18 Custody Register Custody in charge in JC office for each
AC_INV
Index of Register no. 18
Abstract of each officer month wise in
Register No. 18
85 | P a g e
ANNEXURE for REGISTER formats
86 | P a g e
REGISTER OF VISITS PROPOSALS & SANCTIONED - REGISTER NO. INV -1
Sr
No TIN
Name
of
dealer
Category
(suppression/miscla
ssification/ hawala
/beneficiary)
Refere
nce
from
/by
Date of
submission
Sanctioned/rejecte
d/pending for
additional
information
Date of
approval /
rejection /
rework
Assignment
Register
No.
Date of
Visit (in
case of
sanctioned
cases)
Remark
REGISTER OF VISITS PROPOSALS & SANCTIONED - REGISTER NO INV – 2
Sr
No TIN
Name of
dealer
Category
(suppression/misclassifi
cation/ hawala
/beneficiary etc)
Referen
ce from
/by
Receive
d From
Date of
receipt
Sanctioned/rejecte
d/pending for
additional
information /
rework
Date of
approval /
Rejection /
Rework
Date of Visit
(in case of
sanctioned
cases)
87 | P a g e
ASSIGNMENT REGISTER – REGISTER NO. INV - 3
INVESTIGATION REGISTER – REGISTER NO. INV - 4
INV
No. Date
TIN
Dealer’s
Name
Address
visited
Name & Designation of
Investigation Officer
No.& Designation of
Supervisory officer
Date of
visit
Date of
concluding
of Visit
No. of
books
brough
t
Closure of
INV Remarks
1 2 3 4 5 6 7 8 9 10 11 12
Sr.
No. Assignment
Visit Sanction
Register TIN Address
Officers assigned for
Investigation
Signature of
AC_INV
Visit
Date
Visit
Time Remarks
No. Date No Date DESK Main/Co-INV
Officer
1 2 3 4 5 6 7 8 9 10 11 12 13
88 | P a g e
REGISTER OF SUMMONS - REGISTER NO. INV – 5 (A)
REGISTER OF FORM N0.603 - REGISTER NO. INV-5 (B)
Sr
No
Reference /
INV No.
Date of
Receipt of
Reference
Name &
Designation,
from whom
the reference
is received
Reason
for
starting
action
Date of
issue of
summons
Name of
the
person/
dealer &
TIN.
Address
of
the
person /
dealer
Perio
d
Date of
calling
Person /
dealer
Result of
action in
brief
Date
of
closur
e of
action
Signatu
re of
officer
Remarks
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Sr
No
Reference /
INV No.
Date of
Receipt of
Reference
Name &
Designatio
n, from
whom the
reference
is received
Reason
for
starting
action
Date of
issue F-
603
Name
of the
person/
dealer
&
RC No.
Addres
s of
the
person /
dealer
Peri
od
Date of
calling
Person /
dealer
Result
of
action
in brief
Date of
closure
of
action
Amount
Signatu
re of
officer
Remark
1 2 3 4 5 6 7 8 9 10 11 12(a) 12(b) 13 14
89 | P a g e
REGISTER OF CROSS- CHECK REGISTER NO. INV-5 (C)
PROSECUTION REGISTER- REGISTER No. INV-6
Sr
No TIN
Name of
the
dealer
INV
No
Prosecution
Complaint
Letter No
Date Police
Station
Accused
persons &
firms/Co
mpanies
Offences
u/s
Facts
in
brief
FIR
No
with
date
Details of composition if
offence is compounded
Court
Case No
& Court
No
Remark
Order No
& Date
Amount paid,
date, Bank &
Branch
1 2 3 4 5 6 7 8 9 10 11 12 13 14 16
Sr
No
Reference
Received
&
Concerned
INV No.
Date of
Receipt of
Reference
Full Name &
Designation,
from whom
the reference
is received
Reason
for
starting
action
Date of
Issue of
Cross
check
Name of
the person/
dealer &
RC No.
Address
of
the
person /
dealer
Peri
od
Date of
calling
Person /
dealer
Result
of
action
in brief
Date of
closure
of
action
Signat
ure of
officer
Remark
s
1 2 3 4 5 6 7 8 9 10 11 12 13 14
90 | P a g e
REGISTER OF RETENTION OF BOOKS – REGISTER NO. INV- 7
(To be maintained by every INV officer who undertakes Visit either AC or DC as per FY. Month wise & Date wise Index of dealers should be maintained
so that extension orders should be passed before expiry date of earlier order. Necessary proposal for extension orders should be sent to JC in time).
Sr
No
INV No
& Date
TIN Name Date of
Visit
No. & Date of order for
retention of Books
Date of expiry
of order
No. & Date of
extension order
Date of expiry of
extension
Remark
1 2 3 4 5 6 7 8 9 10
COMPLAINT REGISTER- REGISTER NO INV-8
Sr.
No.
Date of
receipt of
Complaint
Name
of
Complainant
Source of
complaint-
Informant/writt
en/other-wise
Nature of
Complaint
(Brief
Summery)
TIN
Name
of the
Dealer
Address
Actions/Proced
ure adopted for
disposal of
Complaint
Date of
disposal of
complaint Remark
1 2 3 4 5 6 7 8 9 10
91 | P a g e
REWARD REGISTER- REGISTER NO. INV- 9
Sr
No
Source of
complaint
& name of
the person
TIN Name of
dealer
INV
No. &
Date
Sr No of
complaint
Register of
JC office
Revenue
evaded
reported by
Complainant
Revenue
detected &
demand
raised after
INV action
Revenue
realized in
Treasury
Date of
proposal
for Reward
Amount
of
Reward
propose
d
1 2 3 4 5 6 7 8 9 10 11
Reward
Order No.
Date of
Reward
Order
Type of
Reward
(Interim /
final)
Amoun
t of
Reward
paid
Bill No of
Reward
amount
reimbursed
Date of Bill
Reward
handed over
to
Signature of the
Complainant /
receiver of
Reward
Remark
s
12 13 14 15 16 17 18 19 20
REGISTER OF NOTICE OF PROVISIONAL ATTACHMENT U/S 35 REGISTER NO. INV-10 (A)
AC
INV
INV
No.
TIN Name
No. &
Date of
Order u/s
35 (1)
Date up
to Which
order
effective
No. & Date
of extension
order u/s
35(2)
Date up to
which order
is extended
Names of the
debtors / banks &
branch to which
order is issued
Appeal filed
and result
thereof if any
Remar
ks
1 2 3 4 5 6 7 8 9 10 11
92 | P a g e
REGISTER OF NOTICE OF PROVISIONAL ATTACHMENT U/S 38 REGISTER NO. INV-10(B)
AC
INV
INV
No.
TIN Name No. & Date
of notice u/s
38
Date up to which
order effective
Names of the debtors / banks
& branch to which order is
issued
Appeal filed and
result thereof if
any
Remarks
1 2 3 4 5 6 9 10 11
REGISTER OF THE BOOKS COLLECTED/SEIZED BY INVESTIGATION BRANCH REGISTER NO. INV-11
Date & signature of inspector, after
books received back from the officer
Date of destruction
of books
Signature of
Inspector & Date
Signature of
the AC & Date
Rem
arks
Sr No of
the book
No of Pages
book
FY of the
books
Rem
ark
11 12 13 14 15 16 17 18 19
Sr.
No
Name
address &
Registration
No. of the
Dealer
If books are brought from
person other than Dealer (Full
Name, Name of Business,
address, Registration No., other
reference of the same)
Name &
Designation on
of the officer
Who collected
/seized books.
Date
of
visit
INV No.
/ TIN/
other
reference
Date of
receipt
of
seized
books
No. of
books,
name,
pages,
year etc.
Date &
Signature of
the Officer
taking back
the books.
No. & Date
of
Retention
Order of JC
to keep The
books.
1 2 3 4 5 6 7 8 9 10
93 | P a g e
REGISTER FOR ASSESSMENTS IN INV BRANCH REGISTER NO. INV-12
Additional Demand as
per AO (Tax; Interest;
Penalty & Total)
Refund
as per
AO
Recovery /Payment
details (Chalan No.
& date)
Reduction of
dues by other
reasons
Additional Demand over
& above AO dues (Post
Assessment Penalty)
Recovery
Transfer Cross
entry
Remark (details
of Stay orders &
its particulars)
12 13 14 15 16 17 18
REGISTER OF UNOFFICIAL REFERENCES - REGISTER NO. INV-13
Sr.
No.
INV
No.
TIN Name Section of
assessment /
notice
Period of
assessment
(From – To)
Date of
assessment
order / notice
Date of service
of assessment
order
Due date
of
Recovery
GTO of
Sales as
per AO
Payment of
Taxes as per F-
704 / Returns
1 2 3 4 5 6 7 8 9 10 11
Sr.
No.
Referen
ce No.
Referenc
e
received
from
Concerne
d INV.
No.
Date of
receipt of
Reference
TIN Name
Brief subject of
reference/file
(INV/complaint/G
ovt. reference etc.)
UOR No. & date of
entry in Register
from whose office it
is received
Date of
Sending the
reference
back
Remar
ks
1 2 3 4 5 6 7 8 9 10 11
94 | P a g e
REGISTER FOR MOVEMENT OF INV FILES - REGISTER NO. INV-14 (A)
REGISTER FOR MOVEMENT OF FILES OTHER THAN INV FILES - REGISTER NO. INV-14 (B)
Sr.
No.
TIN Name Concerned
INV. No.
File
receive
d from
Date of
receipt of
the file
Brief subject of file
(viz. RC record/AO
file/Advisory record)
File sent
back to
DESK
Date of
sending the
file
Covering
letter No. (or
signature of
the recipient
staff member)
Remark
1 2 3 4 5 6 7 8 9 10 11
Sr.
No.
TIN Name Concerned
INV. No.
File
receive
d from
Date of
receipt of
the file
Brief subject of file
(viz. RC record/AO
file/Advisory
record)
File sent
back to
DESK
Date of
sending the
file
Covering letter
No. ( or signature
of the recipient
staff member )
Remarks
1 2 3 4 5 6 7 8 9 10 11
95 | P a g e
REGISTER FOR PAYMENTS MADE DUE TO INV OFFICERS’ ACTIONS VIZ. SCROLL - REGISTER NO. INV- 15
INSTALMENT REGISTER - REGISTER NO. INV-16
Sr.
No. TIN
Name of
the dealer
INV
No
FY
Total
outstanding
Dues
No. of
Install
ments
Amount as
per
Installment
Due
on
Installment
amount paid
Date of
payment
Details of
Chalan as in
MAHAVIKAS
Cross
entry in
DBA
Remarks
Date Amount
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sr.
No.
INV
No.
TIN Name
Period
Recover
y (Old /
New)
Tax Interest Penalty Total Form
Type
Details of
Chalan as in
MAHAVIKAS
Cross
entry
No. in
DBA
Signat
ure of
officer
Rem
arks
From To Date Amount
1 2 3 4 5 6 7 8 9 10 11 12(a) 12(b) 13 14 15
96 | P a g e
INSPECTION REGISTER - REGISTER NO. INV-17
Sr.
No.
Date of
inspection
Type of
Inspection
Inspection
memo No
Memo issue
date
Compliance
Report No
Date of
Compliance
Date of
Closure
Remarks
1 2 3 4 5 6 7 8 9
CUSTODY REGISTER - REGISTER NO. INV-18
Sr.
No.
AC
INV
INV
No.
Date of
Visit
Date of
submission
of books /
items
TIN Name of
dealer
No of books /
items deposited
Brief Description
of items/books
Category of
books brought
(seized
/voluntarily)
Cross
entry of
Register
No. 11
Remarks
1 2 3 4 5 6 7 8 9 10 11 12
INDEX OF REGISTER NO. 18
Sr.
No. TIN Name of dealer Folio No / page No.
No. of books / items deposited Remarks
1 2 3 4 5 6
97 | P a g e
ABSTRACT OF EACH OFFICER MONTH WISE IN REGISTER NO. 18
Sr.
No.
AC INV
Opening Balance at
the beginning of the
month
Addition
during the
month
Total
Less books / items
returned during the
month
Less books / items
destroyed
Closing balance at the
end of the month
1 2 3 4 5 6 7 8
.
98 | P a g e