Draft

Date : 26-07-2014

To,The Principal Accountant General( Audit-1),Maharashtra, Maharshi Karve Road,Mumbai 400 001.

Sub : Irregularities committed by Sales Tax Department of the Government of Maharashtra.

Respected Sir,

Sales Tax Receipt Audit ( S.T.R.A) wing of your office,

functioning in Vikrikar Bhavan, Mazgoan, Mumbai, must be

aware of the provisions of Section 48(5) the MVAT Act, which

allows the “set off” claim to a subsequent dealer, only if the

previous dealer/ manufacturer has already credited that

amount of Sales Tax in the Government Treasury. It is true that

the provision of claiming “set off” has been made by the

Government to save the ultimate customer from the cascading

effect of Sales Tax and at the same time provisions of Section

48(5) ibid ensure the guarantee of revenue to the State

Government.

2. Unfortunately, while implementing the MVAT Act, the

Sales Tax Department has been adopting, since many years, a

practice of recognizing “Havalla” (now being termed as

“suspicious”) dealers. Further, in many cases, Sales Tax

Department has been canceling registrations “ retrospectively” ,

which is very serious and illegal. We are enclosing a copy of

an article by Shri Baheti, a C.A., for your information. It

indicates some of the irregularities of Sales Tax Department, as

mentioned therein, the information of which has been obtained

through the R.T.I. Act. In this process the Sales Tax

Department is inflicting undue, unwarranted, heavy financial

burden on the honest dealers.

3. Since your office can have direct access to the official

record of that department, it might have noticed / reported

many such irregularities. If so, kindly communicate to us those

details / page no.s, para no.s of your reports, so that we will try

to download that information, to ascertain from the State

Government remedial measures, if any, taken up by the State

Government. To facilitate quick communication, we are

authorizing our Cluster Advisor ( Shri. S.G Wad) to liaison with

your office.

Thanking you,

Yours faithfully,

Chairman,L.A Akiwate Industrial Co-operative Esate Ltd, Jaysingpur