• Sales tax matter

I am suffering from sales tax department mumbai. some business man collected the sales tax amount from other me, but did not deposited the collected tax amount to sales tax department, and also didn't give sale-purchase detail to department. and declare themselves as hawala. now sales tax authority are forcing me to accept liability of hawala dealers and pay the payment, which i already pay to declare hawala dealers. 

example : "A" sold to "B" and submitted his statement to department. 
"B" sold to "C" but did not made tax payment to sales tax department and also did not give his J1, J2.
"C" purchase from "B" and "C" made bill payment with tax to "B" and "C" submit his J1, J2 to department.

On what ground "C" is liable to pay to department, as he already pay the tax amount.

Kindly help, i am in great trouble.
Asked 3 years ago in GST from Kalyan, Maharashtra

The C should prove the genuineness of the transaction and present the evidence for this like invoice , challan , GRN , Bank payment detail etc . If C has acted bonafide , and prove the related evidence , then he may be out of the tax net .

Any such demand can be challenged before the appellate authority as per MVAT Act or in suitable case file a writ and get a suitable order restraining the dept not to take any coercive action .

Prakash Sinha
CA, New Delhi Area, India
120 Answers
17 Consultations

4.9 on 5.0

Dear Sir,

You have to provide all the details regarding the genuineness of the transaction to the department and have to give proof of the payment.

And As I suggest take the help of CA for solving the issue because now a days many are facing this issue in Maharashtra with the sales Tax department and then Income tax department as they share the information with them.

Kavit Dilip Gadhia
CA, Mumbai
35 Answers

4.6 on 5.0

Dear Sir,

This is a case which is very much IN these days. Everyone is talking about harassment by the Sales Tax Authorities in hawala cases where the party has acted genuinely and in good faith but still has got into trouble.

In your case the onus of proving that the transaction was genuine and not a hawala is upto C.

Now how can C prove that the transaction is genuine.

C can try start with the following evidences.

1. Sales Invoice.

2. Challan/ Lorry Receipt.

3. GRN

4. Bank Payment/ Entry in Statement.

5. Subsequent Sale to a party of the goods purchased by Hawala Dealer.

6. Receipt of Money from Subsequent Sale.

This is a basic procedure by which you can start with. There are a number of ways in which you can take a suitable stance against the Department or file an appeal in tribunal.

It is Highly advised to take the help of a Qualified Professional in such cases.

Thanking You.


CA Rohit R Sharma


Rohit R Sharma
CA, Mumbai
2104 Answers
92 Consultations

5.0 on 5.0

Ask a Chartered Accountant

Get tax answers from top-rated CAs in 1 hour. It's quick, easy, and anonymous!
  Ask a CA