Tax body moves to check coercion
Gireesh Chandra Prasad
NEW DELHI: Troubled by complaints about alleged coercive action by tax inspectors, the Central Board of Indirect Taxes and Customs (CBIC) has warned of disciplinary action against officials facing complaints of highhanded behaviour.
In an instruction issued to officials on Wednesday, CBIC clarified that recovery of tax dues can be made only after issuing a notice and an adjudication order. The tax authority said that no recovery can be made unless the amount becomes payable as per an order issued by the adjudicating authority or otherwise as per law. That is, there may not be any situation where the “recovery” of tax dues has to be made by the tax officer during a search or investigation on account of any issue detected during the process.
CBIC advised senior field officers such as principal chief commissioners and Directorate General of GST Intelligence (DGGI) to inquire into any taxpayer complaint about the use of force or coercion by any of their officers at the earliest. “In case of any wrongdoing on the part of any tax officer, strict disciplinary action as per law may be taken against defaulting officers,” the tax authority said in the instruction. Mint has seen a copy of the communication.
An email sent to CBIC on Thursday seeking comments for the story remained unanswered at the time of publishing. CBIC also explained in the instruction that the law does not prevent taxpayers from making a voluntary payment of any liability and the tax officer needs to inform taxpayers of provisions regarding voluntary tax payments.
Tax professionals said the
CBIC instruction to officials will reassure taxpayers and comes as a relief. “CBIC has clarified that no tax officer has a right to coerce a taxpayer to pay taxes during the course of inspection or investigations. This instruction would go a long way in easing the investigations if followed in letter and spirit,” said Rajat Mohan, a partner at AMRG Associates, an accounting firm.
The move comes in the context of complaints by taxpayers who have voiced protest against alleged coercion by tax inspectors during searches, some of which have reached court. The government has been stepping up tax compliance drive by using technology to match the information reported by different entities in the supply chain, prefilling tax return forms and restricting tax credits where reporting obligations are not met. It has also conducted several searches in the recent past in cases where irregularities in tax credit usage have been suspected. This, along with economic recovery from the pandemic, has helped GST collections to touch a record high of ₹1.68 lakh crore in April.