The Bombay High Court on Friday extended the deadline for filing of sales tax returns from January 31 to March 31 on a petition filed by Sales Tax Practitioners Association of Maharashtra (STPAM) challenging provisions of the Maharashtra Value Added Tax (MVAT).
According to Section 61 of the MVAT only chartered accountants (CA) can file the yearly VAT Audit. Earlier, the Sales Act, 1946 practice in the field of sales tax was open to a class of persons called 'Sales Tax Practitioners' which consisted of advocates, CAs, other persons who held qualification prescribed under sales tax act and also government servants of sales tax department after leaving or retiring from service.
Since the last 56 years, the advocates and other sales tax practitioners have been enjoying equal level field for practice with other class of practitioners. There are more than 30,000 sales tax practitioners in Maharashtra who are affected by this provision.
Rule 74 of the MVAT Rules, 2005 provides for enrollment as practitioners with the Commissioner of Sales Tax which allows advocates, CAs and other practitioners to appear before the competent authority. Also, Rule 75 provides for a common form to be filled by the practitioners.
Tushar Joshi, President of the STPAM said that earlier the yearly return which was to be filed was termed as 'Annual Return' for Sales Tax, and hence any of the practitioners was able to file the returns.
"In the MVAT the same return is termed as 'VAT Audit' and hence now it is stated that only CAs can file the return," he said.
The word 'audit' in the context of VAT laws means verification of due compliance of provisions and procedures relating to VAT laws and certification and declaration to this effect.
Based on the tax liability, a firm has to file monthly or quarterly or half yearly reports plus the annual return. As per the MVAT, only the yearly return has to be filed by the CA, the intermediary reports can be filed by other sales tax practitioners. "If the annual return can be filed only by CAs then no one would come to advocates and other practitioners for intermediary reports," said Joshi.
"To ascertain compliance of VAT laws it is imperative to have expertise and specialised knowledge of VAT laws which cannot be said to be the exclusive domain of CAs. In fact to verify legality of a claim is the domain of advocates under the Advocates Act, 1961," added Joshi.
STPAM, having 3,500 practitioner members, had filed the petition in December 2006 and the state government was to file its reply on Friday. However, as the government failed to do so and sought further time, the counsel for STPAM sought that the deadline for filing returns be extended.