HI,
Following is the query i got from my Friends Client:
My Client A (Based in Mumbai) is a Supplier to a leading Food Processing Firm B (Based in Palghar).
A has done business with B from 2009 to 2014.
A has not shown any turnover of B during his Vat Returns/Vat Audits, he has shown his total sales as tax free sales, to eat up all Tax received. Hence he has not paid MVAT Tax to Government.
Now B has been receiving notices from Maharashtra Sales Tax in form of 604A, that A has not paid his MVAT tax to government. B has also paid his MVAT tax that A had to pay of year 2009-10, without which his assessment could not be done.
Now the funny part is that A had changed his Tin no due to changes in Partners since 2010-11, but has issued invoices to B mentioning the old tin number.
Now B, has filed a criminal case on A & police complain citing fraud 420 & 156.
The amount goes to Lakhs of rupees.
What should A do to save all the money, and not pay the amount to B. B has to compulsaryly pay the amount without which his assessment will be pending.
What all can A do legally to show Tax credit in B's Tin Number, even if he bribes the officer/ or any other way.
In what ways can B get the Tax Money from A.
If there is no other option, how can A pay the money to B. If A pays cash, there will be no proof of payment, and B can again file police complain. If A pays by cheque/DD, the source of Income will be questioned, as from where did the money come, because A has not shown that income legally.
You can also PM me/ reply me as to what should be done so that A can save money/ or if he has to pay and not get in trouble.
CAclubindia
