INDIA BUSINESS WORLD - July 1st - July 31st - 2008
COMMERCIAL PROPERTY OF TAX EVADERS TO BE ATTACHED: CBEC
WITH a view to curb rising tax evasion, especially by exporters, big manufacturers and service providers, the government would now be able to provisionally attach the property of evaders to recover dues.
The property of the manufacturers and service providers evading taxes could be attached for two years to recover dues, according to a circular issued by the Central Board of Excise and Customs (CBEC). The move is aimed at curbing rampant evasion, particularly in excise duty. It would ensure that the government which was unable to collect tax even when a case was adjudicated in its favour, as fly-by-night operators had by then run away and sold off their property, will be able to do so now. The provisional attachment of property will, however, be resorted to only in a case where the service tax or Cenvat credit alleged to be involved is more than Rs 25 lakh. The action would be taken only after issuing show cause notice and would be subject to the approval of the commissioner of Central Excise.
The property could be attached for indulging in sale of taxable services without payment of tax, under-voicing of goods, taking cenvat credit without receipt of goods or services or through fake invoices in a fraudulent manner. Only immovable property which is used for commercial purpose may be provisionally attached and personal property will be spared. Movable property could also be attached if the immovable property available for attachment is not sufficient to recover due taxes.
The CBEC, which has issued detailed guidelines for field officers on how to proceed, has made it very clear that action could be taken against those officials who decide to attach property on frivolous grounds.
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