Audit by third time for the same time period

[Mannu Sharma]

Sir

An audit was conduct by service tax department last year for the period from 2014 to 2017 and same audit was conducted by The AG Audit team for same time period also. They both issue me show cause notice to deposit the dues. I submit the same in sab ka Vishwas scheme and it has been approved. Now in Jan 2020, service tax department suddenly search my premises and take all the record of same above mention period (from 2014 to 2017). Now they continuously asked for more dues. I want to know that is there any way out from it because it's the third time issue of same time period and now it's after 30 months also. Pls suggest.

[KASTURI SETHI]

AG Audit is different from the internal audit of the department. AG Audit is wing of CAG and it has more powers than the internal audit of the department.

Secondly, searching premises is the action by Preventive Branch (Hqrs. Office). Search warrants are issued on the basis of some concrete information with the department. If anything is concealed from the department, the department has power to re-open any case notwithstanding filing declaration under Sab Ka Vishwas Amnesty Scheme.

Thirdly, if the department proves that something has been concealed, then extended period is invokable and a period of 30 months (normal) is not relevant.

What appears to me the department has some concrete information on the basis of which they have searched the premises. Statements have been recorded and now you are to wait for SCN after completion of investigation.

If your records are neat and clean, SCN cannot be issued and you are not to worry.

[Mannu Sharma]

Thanks for the reply sir. I just want to know one thing more. Earlier last show cause notice for previous audit was issued by service tax deppt in October 2019. Now After how much time they will issue next show cause notice.?

[KASTURI SETHI]

If the elements of suppression of facts, fraud, collusion etc. with an intent to evade payment of Service Tax are involved, the department can go backward for five years for the purpose of issuance of SCN invoking extended period under Section 73 (1) of the Finance Act.

For example : The demand for the period from 10/14 to 3/15 can be raised by 24.4.2020 as last date of filing ST-3 return was 25.4.15. If the return was filed before 25.4.15 i.e. between 1.4.15 to 25.5.15, the period of five years will be computed accordingly. Similarly, you can calculate for 15-16, 16-17 & 17-18 (up to 30.6.17).

[Rakesh Chitkara]

Highly amusing. Cite Nizam Sugar = 2006 (4) TMI 127 - SUPREME COURT of Supreme Court and tell them to go to Hell

AI Summary

Individual Challenges Repeated Service Tax Audits Despite Settlement; Questions Authority and Extended Action Periods Under Sab Ka Vishwas An individual is concerned about repeated audits by the service tax department for the same period (2014-2017), despite having settled dues under the Sab Ka Vishwas scheme. After a recent search of their premises, the department is demanding more dues. A respondent explains that the AG Audit, distinct from the department's internal audit, has more authority, and searches are based on concrete information. If concealment is proven, an extended period for action is possible. Another respondent notes that if suppression or fraud is involved, the department can issue a show cause notice (SCN) for up to five years retrospectively.