Section 33(9) of the Sales Tax Act, 1990, stipulates that individuals who obstruct officials of Inland Revenue in accessing records may face penalties ranging from Rs5,000 to Rs50,000.
This provision, updated up to June 30, 2021, through the Finance Act, 2021, is designed to ensure compliance with the law and grant authorities the ability to access necessary records for tax-related purposes.
The specific text of Section 33(9) is outlined as follows:
33. Offences and penalties.– Whoever commits any offence shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence: –
9. Where a registered person who, without any reasonable cause, in non-compliance with the provisions of section 25, – –
(a) fails to produce the record on receipt of the first notice; such person shall pay a penalty of five thousand rupees;
(b) fails to produce the record on receipt of the second notice; such person shall pay a penalty of ten thousand rupees; and
(c) fails to produce the record on receipt of the third notice such person shall pay a penalty of fifty thousand rupees.
Key components and implications of Section 33(9) include:
1. Obstruction to Record Access: The section specifically addresses instances where a registered person obstructs officials of Inland Revenue from accessing records as required by Section 25 of the Sales Tax Act, 1990.
2. Graduated Penalties: Penalties for non-compliance are graduated, with the amount increasing for repeated failures to produce the required records. The penalties are set at Rs5,000 for the first notice, Rs10,000 for the second notice, and Rs50,000 for the third notice.
3. Reasonable Cause: The section emphasizes that the failure to comply should be without any reasonable cause. This ensures that penalties are applied in cases where there is no justifiable reason for non-compliance.
4. Enhanced Enforcement Measures: The provision is part of the broader framework for enforcing compliance with tax laws. By establishing penalties, the law aims to deter individuals from obstructing access to records and encourage cooperation with tax authorities.
5. Authority of Inland Revenue Officials: This provision empowers officials of Inland Revenue to request access to records under Section 25 and penalize individuals who obstruct such access without reasonable cause.
Businesses and individuals registered under the Sales Tax Act, 1990, are advised to ensure timely compliance with requests for record access from Inland Revenue officials. Failure to comply without reasonable cause may result in the imposition of penalties as outlined in Section 33(9). Understanding the legal obligations and cooperating with tax authorities is crucial to avoiding financial penalties and ensuring a smooth regulatory process.
