“Pronouncement issued by ETC not within four corners of law”; Punjab Pradesh Beopar Mandal

Author(s): 

Ludhiana/Amritsar, August 16, 2012: Leaders of Punjab Pradesh Beopar Mandal including state president Amrit Lal Jain, state general secretary Sunil Mehra and state secretary Mohinder Aggarwal alongwith others have started a special campaign of submitting memorandums to CM, Deputy CM, MLAs and MPs, in connection with resentment regarding recent pronouncements of ETC.

The memorandum, a copy of which in possession of City Air News, reads; “The spate of recent pronouncements issued by the Excise and Taxation Commissioner has led to chaos and fury amongst the business community of the Punjab. All the constructive suggestions and recommendations are being brushed aside and have taken a seat aback and directions which will mar the already ailing trade and industry are being shot one after another. ETC’s efforts for increasing Vat revenue are targeted at making the dealers’ life more and more miserable instead of doing internal cleaning and wiping off corrupt officer and practices off the scene.

The recent pronouncements of ETC of implementing E-TRIP system w.ef. 10-08-2012 has sent the shock waves amongst trading community. It says information regarding intra state movement of goods (with in Punjab) shall be furnished by persons making sales of Rs. 3 lakhs or above in a single transaction except in case of iron and steel where this threshold shall be Rs. 2 lakhs.

The pronouncement made by ETC says that section 51(2) stipulates that every movement of goods shall be accompanied by documents mentioned in section 51(2) and contravention shall attract penalty u/s 51.

As per Section 51(2) of Punjab Vat Act 2005; “51(2)       The owner or person Incharge of a goods vehicle shall carry with him a goods vehicle record, goods receipt, a trip sheet or a log-book, as the case may be, and a sale invoice or bill or cash memo, or delivery challan containing such particulars, as may be prescribed, in respect of such goods meant for the purpose of business, as are being carried in the goods vehicle and produce a copy each of the aforesaid documents to an officer Incharge of a check post or information collection centre, or any other officer not below the rank of an Excise and Taxation Officer checking the vehicle at any place:

Provided that a person selling goods from within or outside the State in the course of inter-State trade or commerce, shall also furnish or cause to be furnished a declaration with such particulars, as may be prescribed:

Provided further that a taxable person, who sells or despatches any goods from within the State to a place outside the State or imports or brings any goods or otherwise receives goods from outside the State, shall furnish particulars of the goods in a specified form obtained from the designated officer, duly filled in and signed “

So one thing is loud and clear that section 51(2) no where stipulates that goods shall accompany such or such like document as mentioned in notification issued by ETC.

Hence the pronouncement issued by the ETC is not with in the four corners of the law. Such and similar notifications are being issued to diminish the powers vested with our legislative assembely. Without making appropriate amendmend in law , the ETC is clearly crossing the powers vested in  his office. The intentions appears to be that making and inviting law shall involve discussions going into pros and cons of the issue which will not suite the designs of Excise and taxation department.

Further the situation of power in the state of Punjab is already facing a grim situation. The power problem in the state of Punjab led to delaying the time for filing of returns for quarter ending 30-06-2012. Further the Central government extended the time of filing of returns from 31st July to 31st August and reasons were sheer power problem in some parts of the country including Punjab. Many a times it has been declared by people sitting atop that it will yet take one to one and half year to make Punjab non deficit state in power.

Now our question to honorable ETC is that whether the generation of acknowledgement accompanying the goods is conceivable without availability of power or there are any plans to fund the cost of invertors and generators that dealers will have to purchase to make the dreams of ETC a reality.

Further, we want to know from ETC whether he has got conducted any survey on availability of internet connection with dealers in Punjab installed at their office/ shop / factory premises.  Not even 5% dealers have internet availability at their premises. They have to depend upon their accountants and other people for such like works, It implies that the return filing password of the dealer that is issued after taking all safeguards by the department  so that it reaches the right hands and there are no unauthorized accesses shall travel in the hands of unprofessional people and shall be prone to be exchanged with people professing tax evasion. These unauthorized people can file fake returns, can make fake entries in the return of dealer, can create any kind of evidence that suites them and endanger the business and financial health of the dealer. It can not be over emphasized that it can lead to multi-faceted cyber crimes.

Already the fact that entries at ICC barriers are made in fake Tin Numbers and the department is having tough times in facing the issue is known to all and sundry. 

Further E-TRIP requires information on traveling distance and acknowledgement generated shall be time stamped. It means if dealer’s goods do not reach the destined place with time period which definitely is going to be decided according to fancies of officer on duty and as per vehicle of his choice which will definitely be fastest moving vehicle on this planet, the dealer shall be liable to pay penalty under section 51, one of the most draconian and litigative section under Punjab Vat Act.

Further while on one hand the notification pronounces that it is applicable to selling persons only, the E-trip requires information regarding consignment, branch transfer, Job work, return goods. Hence there is conflict in the instructions of ETC and implementation part there of also which also speaks of sense of care and caution being taken care of while issuing notifications at the esteemed office of ETC. 

Further whether ETC has sufficient faith in website developed by Corbus India Ltd that it will manage the load of entries that will come its way when all the dealers shall over the Punjab make their entries or it will hang as it often does during filing of returns.

Our considered opinion after this notification is that excise and taxation department should  no longer use the words “Simple, Transparent , Convnient” which it loves to append at every place including its web site, advertisements, public notices and  press notes.

In light of above discussion, we strongly demand that this notification being outside the purview of law  and not being practically implementable be withdrawn with immediate effect.

Adding to the misries of dealers in Punab, ETC has issued following direction on 31-05-2012 to its subordinates :

  • Surveys be got conducted
  • Scrutiny and assessment of all the returns
  • Authenticate all the bill books of dealers
  • Especially terrorise the dealers dealing in goods fetching rate of 12.5%
  • Visit the shops on regular basis
  • Note down numbers of running bills
  • Check customers for issue of invoice by dealers
  • All the dealers to be visited  in next two months.

The above directions issued by learned ETC are non judicious, suppressive and in complete contravention of Punjab Vat as under :

  1. Section 29 of the Punjab Vat Act 2005 does not mandate assessment of all the returns and requires assessment on certain serious  grounds only.
  2. Self assessment structure of Vat law over entire country which is in alignment with whiter paper issued by the Government is not in connosance with directions of ETC
  3. Under S.46 permission of ETC /AETC required specifically in each case to conduct inspection of any place. By issuing general orders regarding inspections to which the provisions of Code of Criminal Procedures 1973 applies, ETC has contravened the letter and spirit of Punjab Vat law.

The ETC is generalising the powers vested with officers, which are required to be used sparingly and selectively. The vesting of unbridled powers with officers shall lead to chaos and unrest amongst dealers and already burgeoning corruption will scale new heights. Conducting unauthorized and illegal surveys at dealers premises is a serious issue and tantamounts to obilterating constitutional rights of dealers to conduct the business. Further what powers are conferred on the officers of the department to check the bags and purse of customers who have gathered only to purchase retail goods. Never ever we have witnessed such unmindful directions being issued by the department.

On the other hand the sensible demands of dealers like online issue of C-Forms have fallen flat on the ears of Excise and Taxation department.

While making it applicable, ETC finds his infrastructure insufficient and unripe and while implementing E-Trip system the genuine infrastructure problems of dealers are not taken care of. So many other states in India have implemented the online issue of C-Forms long back but ETC wants the dealers of Punjab  to run from door to door of department involving chain of staff and officers and then finally collapse when C-Forms are declared out of stock  by disbursing office staff.

Over the five decades, Excise and taxation department, had  built and justified its special position in the beaurocracy over protecting the revenue of government of loss of revenue. Times and again they always try to unleash notifications in the name of curbing evasion of revenue but it is their intention to tighten the grip over neck of trading community, so that they have no time to see their lavish way of living and posing themselves not less than a general who always wishes that his orders are obeyed without any hue and cry.

Last year collection of Rs. 12200 crore by excise and taxation department is not attributable to any toll or effort taken by department but is result of self compliance by business community, rise in petroleum products, increase in prices of all the raw materials and inflation in general which increases the revenue by 15 to 20%  per annum.

From the attitude of ETC towards the dealers of the state it appears that ETC is having prejudiced opinion towards dealers of Punjab and presumes that all the dealers in Punjab are evading tax. The pronouncements of ETC are adding insult to the injuries of people in Punjab who have witnessed and worked as bulwark in long battle against terrorism and there after have faced the problem of empty coffers and acute power shortage.

We on behalf on trade and industry of Punjab request all the well wishers of Punjab to join hands and strongly oppose policies, framework and mindsets embarked in ruining the business of Punjab so that old lost glory of Punjab may be restored and rejuvenated.”

Date: 
Thursday, August 16, 2012