Maharashtra Value Added Tax

ASSESSMENT, RECTIFICATION AND APPEALS

Assessment (section 23)

Sr. No.	Section	Description	Notice Form	Time Limit for Passing Order	Post Assessment Remedy	Time Limit for Remedy	Form for Remedy
1.	23(1)	Ex-Parte Assessment, where return is not filed by dealer. Order is passed without giving reasonable opportunity of being heard to dealer.	NA	3 years from the end of F.Y., containing assessment period.	- Pay taxes - File return - Automatically Asst. Order gets cancelled.	Refer Circular 12T of 2012. No time limit specified.	Normal return Forms.
2.	23(2)	Return filed on time but Commissioner needs to check the claims of return so submit all details as asked in notice.	301	4 years from the end of F.Y. containing assessment period.	-Apply for cancellation as explained in Section 23(11) below. OR -Rectification application u/s 24, if any mistake apparent from records. OR -If aggrieved file appeal u/s 26, AND -Apply for stay AND, -Intimate Assessing Officer for stay & appeal.	30 days of the date of service of the Asst. Order. 2 years from the end of F.Y. in which any order passed has been served. 60 days of service of order. 30 days of service of order.	316 307 310 311 314
3.	23(2A)	Summary Assessment to be done on the basis of returns filed applicable from 1st April, 2012 New provision, inserted vide Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016 (refer Circular No. 14T of 2016 dated 7-5-2016)	No Notice re-quired	4 years from the end of F.Y. containing assessment period. If no order is passed within aforesaid period than returns filed shall be deemed to have been accepted.	Conditions: 1) Only Regd. Dealer eligble. 2) All Return to be filed within time provided for revised return. 3) Tax payable as per returns should be paid. 4) AO to be satisfied about correctness, completeness of returns.
4.	23(3)	Return not filed by the prescribed date by the dealer.	301	5 years from the end of F.Y. containing assessment period.	-Apply for cancellation as explained in Sec. 23(11) below. OR -Rectification application u/s. 24, if any mistake apparent from records OR -If aggrieved file appeal u/s. 26, AND -Apply for stay, AND -Intimate officer for stay & appeal.	30 days of the date of service of the Asst. Order. 2 years from the end of F.Y. in which any order passed has been served.' 60 days of service of order 30 days of service of order.	316 307 310 311 314
5.	23(3A)	Returns filed on time or returns not filed on or before prescribed date (Assessment for period ending on or up to 31-3.2008)	301	7 Years from the end of F.Y. containing the assessment Period.	-Apply for cancellation as explained in Sec 23(11) below. OR - Rectification application u/s. 24, if any mistake apparent from records. OR - If aggrieved file appeal u/s. 26, AND - Apply for stay, AND - Intimate officer about stay & appeal	30 days of the date of service of the Asst. Order 2 years from the end of F.Y. in which any order passed has been served 60 days of service of order 30 days of service of order.	316 307 310 311 314
6.	23(4)	Failed to apply for registration within prescribed period or not registered at all though liable i.e. URD Asst.	301	8 years from the end of F.Y. containing the assessment period.	-Apply for cancellation as explained in Sec . 23(11) below. OR -Rectification application u/s 24, if any mistake apparent from records. OR -If aggrieved file appeal u/s. 26, AND -Apply for stay, AND -Intimate officer about stay & appeal	30 days of the date of service of the Asst. Order 2 years from the end of F.Y. in which any order passed has been served. 60 days of service of order. 30 days of service of order.	316 307 310 311 314
7.	23(5)	Issued based/Transaction based Audit/ Asst. or during the course of any proceedings if the Commissioner is satisfied that there is tax evasion in any manner.	302	6 years from end of FY containing the said assessment period.	-Apply for cancellation as explained in Sec 23(11) below. OR -Rectification application u/s 24, if any mistake apparent from records. OR -If aggrieved file appeal u/s 26, AND -Apply for stay, AND -Intimate officer about stay and appeal	30 days of the date of service of the Asst. Order 2 years from the end of F.Y. in which any order passed has been served. 60 days of service of order. 30 days of service of order.	316 307 310 311 314
8.	23(5A)	Closure of Assessment proceedings u/ss. 23(2), 23(3), 23(4), 23(5). New provision, inserted vide Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016 (refer Circular No. 14T of 2016 dated 7-5-2016). Sub-section 5B states that the provisions of sub-section (5A) shall also be applicable to the assessment proceedings under sub-sections (2), (3), (4) or, as the case may be, (5) pending on the 1st April, 2016	No pres-cribed form. Only inti-mation.	Intimation to be sent for closure of proceedings without passing of order, at least 6 months prior to expiry of limitation period for said assessment proceeding.	Dealer should agree, pay tax with interest & file revised return u/s. 20(4)(c) within 30 days from date of receipt of intimation.	30 days from date of receipt of intimation
9.	23(6)	Commissioner of opinion that any turnover of sales or of purchase has not been disclosed or sales suppression or tax paid at lesser rate or wrongly set-off/ deduction claimed.	315	6 years from the end of the year containing assessment period.	Rectification application u/s 24, if any mistake apparent from records. OR -If aggrieved file appeal u/s 26, AND -Apply for stay, AND -Intimate officer about stay & appeal.	2 years from the end of F.Y. in which any order passed by him has been served. 60 days of service of order. 30 days of service of order.	307 310 311 314
10.	23(7)	Fresh Assessment for giving effect to direction/findings of any order made under this Act or by Tribunal/ High Court/ Supreme Court.	Nil	36 months from date intimating the said findings or directions.	Nil	Nil	Nil
11.	23(8)	Calls for all records & pass order though in similar matter Tribunal has given decision against Commissioner/ State Government & S.G. has filed appeal.	Nil	No order of recovery till final decision.	Nil	Nil	Nil
12.	23(9)	Cancelled w.e.f. 26-6-2014
13.	23(10)	Dealer may be assessed under single notice & by single order, if assessed for more than one period covered by return so long all periods are comprised in one year.	Nil	Nil	Nil	Nil	Nil
14.	23(11)	Cancellation of Asst. Order passed u/s 23(2), 23(3), 23(3A), 23(4), 23(5).	NA	18 months from date/deemed date of serving cancellation order in Form 317.	Apply in Form 316 for cancellation of order Ô Cancellation order within 3 months, if not cancelled than deemed to be cancelled at end of 3 months, Ô Complete fresh Asst. within 18 months from the date / deemed date of service of the cancellation order.	30 Days from service of assessment order, 3 months from the end of the month in which application in Form 316 received from dealer.	316 317
15.	23(12)	Fresh order in place of order cancelled on application u/s. 23(11).			Complete Asst. within 18 months from the date / deemed date of service of the cancellation order.

Rectification of Mistakes (Section 24)

The Commissioner may, at any time within two years from the end of a financial year in which any order passed by him has been served, on his own motion, rectify any mistake apparent on the record, and shall within the said period or thereafter rectify any such mistake which has been brought to his notice within the said period (two years), by any person affected by such order.

A dealer seeking rectification shall file an application in Form 307 within two years from the end of financial year in which the said order has been served.

Provided that, no such rectification shall be made if it has the effect of enhancing the tax or reducing the amount of a refund or interest payable on refund, unless the Commissioner has given notice in writing in the prescribed form to such person of his intention to do so and has allowed such person a reasonable opportunity of being heard. An application for rectification shall not be rejected on the ground that there is no mistake apparent on record unless the person concerned has been given a reasonable opportunity of being heard.

In cases, where dues have arisen due to non-production of Declaration Forms, due to any reason, at the time of passing an order, such orders can also be rectified on bringing an application made by the dealer within the aforesaid period of two years from the end of financial year in which the said order was served. Provided that an appeal has not been preferred and only one such application can be entertained against such an order.

Appeals (Section 26)

Section 26 permits a dealer to prefer appeal against any order passed under MVAT Act, Rules and/or notifications (except as provided in section 85).

All such appeals have to be submitted, in the prescribed manner, in prescribed form (Form 310), after paying prescribed fees and within the permitted time limit of 60 days from the date of receipt of the order appealed against.

The First Appeal against an order passed by Sales Tax Officer or Assistant Commissioner of Sales Tax shall lie to the Deputy Commissioner of Sales Tax (Appeals).

The First Appeal against an order passed by a Deputy Commissioner or Sr. Deputy Commissioner of Sales Tax shall lie to the Joint Commissioner of Sales Tax (Appeals). The First Appeal against an order passed by a Joint Commissioner or Sr. Additional Commissioner or the Commissioner of Sales Tax shall lie to the Tribunal.

In the case of an order passed, in appeal, by a Deputy Commissioner or a Joint Commissioner of Sales Tax, the Second Appeal shall lie to the Tribunal.

A dealer seeking stay against the order, shall submit an application, in Form 311, for grant of stay by the Appellate Authority. The Appellate Authority, after examining the matter and circumstances may stay the order appealed against either in full or part with such conditions or restrictions as it may deem necessary including a direction for depositing of a part or whole of the disputed amount by the appellant.

Fees Payable

(a)	Where the quantum of relief sought is less than rupees one lakh	₹ 100/-
(b)	Where the quantum of relief sought is rupees one lakh or more	1/10th per cent of the amount in dispute (subject to maximum ₹ 1,000/-)
(c)	In case of appeal not covered by (a) or (b)	₹ 100/-
(d)	Application for grant of stay (Form 311)	₹ 25/-

Note: Wherever the amount of fees payable is up to ₹ 100/- only, the same can be paid by affixing court fee stamps of same value. Otherwise all such fees so payable shall be paid into the Government Treasury in the same manner as taxes are being paid. (In challan Form No. 210/MTR-6 to be paid through authorised banks).

INTEREST AND PENALTIES

Interest Payable (Section 30)

On non-payment or late payment of tax by an unregistered dealer or dealer who has failed to apply for registration in time: Simple interest at prescribed rate/s for each month or part thereof from 1st day of April of respective year till the date of payment.
Late payment of tax by registered dealer: Simple interest at prescribed rate/s for each month or part thereof from due date till the date of payment. In case of fresh or revised return, for any period, due date of original return shall be considered for differential dues if any.
Interest on differential dues on assessment of a registered dealer: Simple interest at prescribed rate/s for each month or part thereof from the next date following the last date of the period/s covered by assessment order till the date of assessment order.

The rate of interest payable under sub-sections (1), (2) and (3) of section 30 as prescribed in Rule 88(1) are as follows (w.e.f.
1st December, 2015):

Period liable for Interest

Period of Delay	Rate of Interest
Delay up to one month from payment due date	1.25% p.m. or part thereof
Delay more than one month but up to three months	1.25% for 1st Month + 1.50% pm for remaining period of delay
Delay more than three months	1.25% for 1st Month + 1.50% pm for next 2 months + 2% pm for remaining period of delay

Interest on Additional Dues: A penal rate of interest @ 25% of the additional amount of tax payable on filing a revised return for any particular period (whether by a registered dealer or unregistered dealer), under any of the following circumstances:

Additional dues arising in a revised return filed:

After the commencement of: (i) Audit of the business of the dealer in respect of any period, or (ii) Inspection of the accounts, registers and documents pertaining to any period, kept at any place of business of the dealer, or (iii) Entry and search of any place of business or any other place where the dealer has kept his accounts, registers, documents pertaining to any period or stock of goods,
In consequence of any intimation issued under sub-section (7) of section 63.

Concession in additional interest u/s. 30(4): (Refer Trade Circular 15T of 2014 dated 6th August, 2014)

Wherever the additional tax liability paid as per revised returns on account of audit or investigation proceedings is less than 10% of the tax paid with original returns,
then the additional interest of 25% u/s. 30(4) shall not be payable.
Interest u/s. 30(4) shall not apply, where the additional tax liability arises on account of non-production of declarations. [New proviso inserted in section 30(4)]

Although, there is no bar on filing appeal against order levying interest u/ss. 30(1) and 30(3), the specific power of appellate authority, to either confirm or cancel or modify such order of levying interest, has been removed w.e.f. 1st May, 2011.

There is no provision for remission of interest, and, no appeal
shall lie against orders levying interest under sections 30(2) and 30(4).

Interest Receivable (Sections 52 and 53, Rule 88)

A dealer is entitled to receive interest on refunds due to him @ 0.5%, for each month or part thereof, for the period commencing from the next day of the end of the period to which refund relates till the date of sanctioning refund or for a period of 24 months whichever is less.

Such interest is to be granted on the net amount of refund (after adjustment of any dues under the earlier laws, under the MVAT Act and under the CST Act). The interest shall not be granted on any refund/s u/s. 51.

The dealer is also entitled to receive interest @ 0.5%, for each month or part thereof, on delayed refunds for the period commencing the next day after expiry of 90 days from the date of order granting refund till the date of refund.

It has further been provided that the decision of Commissioner of Sales Tax for exclusion of any period, while working out such refund, shall be final.

Penalties (Section 29)

Section	Offence	Conditions/Particulars	Penalties
29(2A)	Failure to apply for registration or carrying on business as a dealer without being registered in contravention of the provisions of this Act.	Can be imposed on a dealer while or after passing any order under MVAT Act.	Up to 100% of Tax payable by the dealer for the URD period.
29(3)	Concealment OR Knowingly furnishing inaccurate particulars of transaction liable to tax OR Knowingly misclassified any transaction liable to tax OR Knowingly claiming excess set-off.	Can be imposed on a person or dealer while or after passing any order on Noticing or being brought to Notice. Presence of Guilty Mind, necessary. Offences can be of Commission or Omission. Written order is must.	Up to 100% of Tax Due because of the given Acts. (Minimum 25% of tax dues).
29(4)	Person/Dealer knowingly issues/produces any document which results in tax being not levied/reducing the tax liability or claiming of incorrect set-off relating to any Sale/Purchase transaction effected by him/any other person/ dealer.	Document includes a false bill, cash memorandum, voucher, declaration or certificate. Offences can be of Commission or Omission. Written order is must.	Up to 100% of Tax Due because of the given Acts.
29(5)	Purchaser fails to comply with conditions/ restrictions subject to which exemption was granted & Sale was exempt (fully/partly) from tax due to any provisions of Section 8(3)/(3A)/(3B)/(5).	Written order is must.	Up to 150% of tax which would become due, if exemption was not available on said sale.
29(6)	Person/Dealer contravenes the provision of section 86 (issuing tax invoice/bill/cash memorandum) to have tax payable by him underassessed.	Written order is must. (Note – It is not necessary to issue a tax invoice/bill or cash memorandum if value of goods sold in single transaction is ₹ 50/- or less.)	Greater of 50% of tax that would have been underassessed OR ₹ 1,000/-
29(7)	Person/Dealer failed without reasonable cause to comply with any notice in respect of any proceedings.	Written order is must.	₹ 5,000/-
29(9)(c)	Dealer has filed a return which is not complete and self-consistent.	This penalty shall be without prejudice to any other penalty imposed under this Act. Written order is must.	₹ 1,000/-
29(10)	Person/dealer has collected any sum by way of tax in contravention of the provisions of section 60.	Commissioner shall hold an enquiry. Written order is must. Notice of forfeiture shall be published for the information of the persons concerned.	Not exceeding ₹ 2,000/- (+) forfeiture of sum collected in contravention of section 60.
31(12)	Failure to obtain sales tax deduction account number.	New provision, inserted vide Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016	To the extent of tax deductible during the period
31(13)	Failure to file return of TDS within prescribed time.	New provision, inserted vide Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 2016	Not exceeding ₹ 5,000/-

Notes:

No Order of Penalty under above provisions shall be passed in respect of any period after 8 years from the end of the year containing the said period.
However, if due to some reasons, assessment is done after 8 years, penalty may be imposed while passing such assessment order. (as per amended provision w.e.f. 26th June, 2014)
Prior approval of the Deputy Commissioner needed by a Sales Tax Officer or an Assistant Commissioner for issuing order for imposing a penalty under any of the above sub-sections if penalty exceeds ₹ 5 lakh (This requirement of prior approval is deleted w.e.f. 26th June, 2014).
Prior approval of the Joint Commissioner needed by a Deputy Commissioner or a Senior Deputy Commissioner for issuing order for imposing a penalty under any of the above sub-sections if penalty exceeds ₹ 10 lakhs. (This requirement of prior approval is deleted w.e.f. 26th June, 2014).

Audit of Accounts

Section 61 of MVAT Act requires certain dealers/persons to get their accounts audited by an accountant, within the prescribed period from the end of the year. The report of such audit is required to be furnished in a prescribed format. The provisions contained in the Act and Rules in this regard are reproduced below for the attention of members.

"61(1) every dealer liable to pay tax shall; For the periods

For periods commencing on or after 1st April, 2013:

If the
1. Aggregate of his turnover of sales and the value of goods transferred to any of his place of business or of his agent or principal situated outside the State, not by reason of sale, or
2. Turnover of purchases exceeds rupees one crore in any year
3. iii. For dealers having migrated to GST w.e.f.
  1-7-2017, the turnover limit is proposed in budget 2018 to be ₹ 25 lakhs for April to June 2017. (The budget was tabled on 9th March 2018)
(deleted)
If he holds an Entitlement Certificate in respect of any Package Scheme of Incentives, granted under this Act or, as the case may be, under the Bombay Sales Tax Act, 1959.

Get his accounts in respect of such year audited by an accountant, within the prescribed period from the end of that year, and furnish within that period a complete report of such audit, in the prescribed form, duly signed and verified by such accountant and setting forth such particulars and certificates as may be prescribed.

Explanation: For the purposes of this section, "Accountant" means a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 or (w.e.f. 15-8-2007) a Cost Accountant within the meaning of Cost & Works Accountants Act, 1959).

(2) If any dealer liable to get his accounts audited under sub- section (1) fails to furnish a complete report of such audit within the time as aforesaid, the Commissioner may, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, a sum by way of penalty equal to one-tenth per cent of the total sales.

Provided that the dealer fails to furnish such report within the aforesaid period but files it within one month of the end of the aforesaid period and the dealer proves to the satisfaction of the Commissioner that the delay was on account of factors beyond his control, then the Commissioner may condone the delay. (This proviso is deleted w.e.f. 26th June, 2014).

Explanation: Explanation-II (W.e.f. 1st May, 2011) provides that for the purposes of section 61, an audit report shall be deemed to be "complete audit report" only if all the items, certification, tables, schedules and annexure are filled appropriately and are arithmetically self-consistent.

Sub-section 2A (inserted w.e.f. 1st May, 2011) further provides that where a dealer, liable to file audit report u/s. 61, knowingly furnished the audit report which is not complete, then the Commissioner may, after giving a reasonable opportunity of being heard, impose on him, in addition to any tax payable or any other penalty leviable under section 61, a sum by way of penalty equal to one-tenth per cent of the total sales.

(3) Nothing in sub-sections (1) and (2) shall apply to Departments of Union Government, any department of any State Government, local authorities, the railway administration as defined under the Indian Railways Act, 1989, the Konkan Railway Corporation Limited and the Maharashtra State Road Transport Corporation constituted under the Road Transport Corporation Act, 1950."

"Rule 65. The report of audit under section 61 shall be in Form 704." The auditor is required to download latest version of Form 704 from the website.

"Rule 66. The report of the audit under section 61 shall be submitted electronically within nine months and fifteen days from the end of the year to which the report relates." The due date for uploading audit report, in Form 704, for the financial year 2017-18 shall be 15th January, 2019.

Submission of Form 704

The dealer is required to submit "Statement of submission of Audit Report in Form 704" along with this statement,
the dealer is also required to submit the following documents:
1. A copy duly signed by VAT auditor as well as dealer, of an acknowledgment generated after uploading of Form 704.
  (Copy of Balance Sheet, Profit & Loss Account, Trial Balance, other Audit Reports, Part I of 704 Audit Report etc. not required to be submitted).
The aforesaid documents shall be submitted:
1. To the concerned LTU officer, if the dealer is large taxpayer
2. To the "Desk Audit Cell" in the Office of the Joint Commissioner of Sales Tax (Business Audit) in Mumbai if the dealer is not large taxpayer. For & from FY 2015-16, it has to be submitted to jurisdictional nodal officers.
3. In the rest of the State to the concerned LTU officer, if the dealer is large taxpayer, and in any other
  case to the Joint Commissioner of Sales Tax, VAT (ADM).