MD of Private Firm Arrested for Service Tax Fraud of Rs 1.38 crore

MD of Private Firm Arrested for Service Tax Fraud of Rs 1.38 crore

Mangaluru: As per the press release from the Central Excise and Service Tax Commissionerate it stated, “That a managing director of a private company providing clearing and forwarding services, steamer agency services and custom house agency services has been arrested for service tax evasion of over Rs 1.38 crore. During the detailed investigation carried out by the officers, it has been revealed that the service provider, though had been providing taxable services, failed to discharge the appropriate service tax liability. The service provider has not even been crediting the service tax collected from the customers to the government exchequer. The investigation also revealed that the service provider has not been complying with even the basic provisions of the statute. They have willfully mis-declared the value of taxable services or declared the value as nil in spite of providing taxable services of substantial value. During the investigation, the service provider has admitted to the contraventions and stated that due to financial hardships, they could not discharge their duty liability.

tax-evasion (1) The release further stated that “As the service tax collected but not paid to the exchequer for more than six months exceeded Rs one crore, the acts of omission and commission on the part of the service provider constituted an offence under Section 89(1)(d) of the Finance Act, 1994 thereby attracting imprisonment extending to seven years in terms of Section 89(1)(ii) of the said Act. Further, such offences shall be cognizable as per Section 90 of the Finance Act,”. The service provider was therefore arrested on April 26 under Section 91 of the Finance Act, 1994 and produced before N Sunil Kumar Singh, Principal Senior Civil Judge and Chief Judicial Magistrate, Mangaluru who remanded him to judicial custody for 14 days”.

“The commissionerate equipped with data received from various sources has been proactively analyzing the data base of various service providers, scrutinizing regularly the returns filed by them to detect contraventions, monitoring payment of service tax mainly by habitually defaulting assesses, investigating contraventions noticed and taking appropriate action against such wrong doers in order to further improve tax compliance in the jurisdiction. Due to initiation of inquiries, a few of such defaulters have discharged their liability during the stages of the investigation itself and availed facilities provided in the statute to conclude the proceedings. However, detailed investigations are underway in respect of other defaulters,” stated the release.

tax-evasion (2)

In conclusion, the commissionerate has stated that further investigation is in progress, but has not revealed the identity of the person arrested. But the question is why? Every time a honcho involves in a tax fraud of big amount, his or her name is not revealed. Many readers may question what’s use of publishing a report without mentioning the name of the tax defaulter. It happened last year when an MD of a big ad firm was caught by the tax officials for tax evasion in crores of rupees, but his name was revealed. It is so strange that when a common man involves a small theft, his name is revealed and publicized in the media by the law authorities, but when a rich man or a woman swindles the government in crores of rupees, his name is kept secret. Bah humbug! Oh well- frankly speaking, if the commissionerate starts releasing the names of all the tax defaulters, then these people will stop their act.

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