Service tax Audit

[Haresh Raithatha]

Dear sir

During the year 2016-17 preventive Department of Service tax has seized books of acccount and relevsnt records and issued show cause notice. We have preffered appeal on receipt of OIO from the Department. The appel is pending with the Authority. Now A.C. Service tax Audit has issued notice to carry out Service tax Audit for the same period...Can He do so?

Pl advise

Regard

[KASTURI SETHI]

Audit and Preventive are different wings of the department. Both have differrent functions assigned to them. Since your books of account and other Service Tax records are in the custody of Preventive Branch of the department, audit cannot be conducted. If the siezed records have been released, the audit will be conducted. Though goal of both is to unearth evasion, yet approach is different.

[DR.MARIAPPAN GOVINDARAJAN]

You may inform the audit party that the books of account have been seized by the preventive wing and seek their advice of the audit party in this regard.

AI Summary

Service Tax Audit Notice Issued Despite Seized Records from 2016-17; Potential Conflict Between Audit and Preventive Branches During the 2016-17 fiscal year, the Service Tax Department's Preventive Branch seized financial records and issued a show cause notice, leading to an appeal that is still pending. A notice for a Service Tax Audit for the same period has now been issued. One respondent clarified that the Audit and Preventive branches have different roles, and an audit cannot proceed while records are seized. Another suggested informing the audit team about the seizure and seeking their guidance.