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CMA Final · Indirect Tax Laws and Practice · Accounts and Records

Meera Textiles failed to account for certain goods as required by section 35(1). Subject to section 17(5)(h), what does section 35(6) empower the proper officer to do?

The proper officer determines the tax on the unaccounted goods as if the registered person had supplied them, using the determination procedure of section 73, 74 or 74A, as applicable, with necessary changes. It is subject to section 17(5)(h).

  1. ACancel the registration immediately without any notice
  2. BDetermine tax on the unaccounted goods as if supplied by the person, applying sections 73 or 74 or 74A as the case may be, mutatis mutandisCorrect
  3. COnly impose a fixed penalty without determining any tax
  4. DRequire the person to pay tax only on the goods actually sold after a subsequent audit

Explanation

Section 35(6) says that where goods are not accounted for under section 35(1), the proper officer determines tax payable on them as if they had been supplied by that person, and the provisions of section 73 or 74 or 74A apply mutatis mutandis. It does not provide for immediate cancellation or a penalty alone.

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