Liability of Duty for unaccounted income

[NAVIN SINGHAL]

CAN EXCISE / SALES TAX DEPARTMENT ASK FOR DUTY / TAX ON THE UNACCOUNTED INCOME DISCLOSED AT THE TIME OF SEARCH PROCEEDINGS U/S 132 OF INCOME TAX. AND ALSO CAN THEY RESUME / IMPOUND DOCUMENTS RELATED TO OTHER GROUP ASSOCIATES EVEN IF THEY ARE NOT REGISTERED WITH EXCISE/SALES TAX AUTHORITY AND THE PRODUCT NOT COVERED UNDER EXCISE/SALES TAX

[Rama Krishana]

At the time of search or after receiving information from other department, excise / sales department insist the assessee to deposit duty / tax on the basis of information and estimated evasion. However, an assessee may insist upon to issue proper show cause notice before forcing him to deposit the duty / tax. All these depend upon the facts / nature / circumstances / evidence etc.

AI Summary

Duty demand on unaccounted income may be sought by indirect tax authorities after searches, subject to procedural safeguards. Indirect tax authorities may seek duty or sales tax on income disclosed as unaccounted during income tax searches or from information received from other departments, and may impound documents related to group associates not registered with excise/sales tax if considered relevant. Taxpayers can insist on a proper show cause notice before being forced to deposit duty or tax; the legitimacy of demands or seizures depends on the facts, nature of evidence, and circumstances of each case.