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(a) VKM, a VAT dealer filed a return for tax period declaring input tax as Rs.10000/- and output tax as Rs.5000/- and the net excess tax of Rs.5000/- was carried over to the next tax period. On verification by the authority prescribed after 6 months, the eligible input tax credit is found to be Rs.8000/-. There was no variation in output tax. The tax under declared in respect of input tax is Rs.2000/- (Rs.10000 – Rs.8000)/-. The percentage of under declaration of tax is twenty five percent (25%) (2000X100/8000). Accordingly under declared tax of Rs.2000/- along with penalty of Rs.500/- i.e. twenty five percent (25%) and interest at the rate of 1% for the period i.e. six months of delay is payable.

(b) NKC, a VAT dealer filing a return declared input tax as Rs.23000/- and out put tax as Rs.77000/- and net tax of Rs.54000/- was paid along with return. On verification by the authority prescribed after four months it was found that there is no variation in the eligible input tax declared in the return. However, the output tax chargeable for that tax period was found to be Rs.80,000/- as against the declared out put tax of Rs.77,000/-. The tax under declared in respect of out put tax is Rs.3000/- (i.e. Rs.80000-Rs.77000). The percentage of under declaration is 3.8% (3000X100/80000). Now the dealer is liable to pay the under declared tax of Rs.3000/- along with penalty of Rs.300/- i.e. 10% and interest at the rate of 1% for the delayed period of 4 months.

(10) Every VAT dealer shall furnish, for every financial year, to the prescribed authority, the statements of Manufacturing/Trading Account, Profit and Loss Account, Balance Sheet, and annual Report, duly certified by a Chartered Accountant within the meaning of the Chartered Accountant Act, 1949 (Central Act, 38 of 1949), on or before the 31st day of December subsequent to the financial year to which the statements are related.

Provided that the VAT dealers, whose turnover is less than Rs.50.00 Lakhs and who are not liable for statutory audit under the provisions of the Income Tax Act, may opt to submit the statements prescribed in this Rule, by self certification or certification by the Sales Tax Practitioners, enrolled with the Commercial Taxes Department.”