Lawyers can't take up sales tax audit...CAs can

Posted on    14 May 2008

Sub Heading : Apex court says only chartered/ cost accountants are eligible
Author : Rakesh Bhatnagar/DNA
Content : In a major set back to a large number of lawyers who also perform the job of auditing and verifying sales tax returns, the Supreme Court on Tuesday said lawyers can't do this job which is highly specialised in nature.

Similarly, sales tax officers, who were also allowed to audit and certify sales tax returns, can't take up the tax matters.

Upholding a Bombay High Court judgment that held that only chartered or cost accountants would be eligible to audit and certify sales tax returns, a bench of Justices H K Sema and Markandey Katju dismissed the petitions filed by the Sales Tax Practitioners Association of Maharashtra and the Bar Council of Maharashtra.

"There must be judicial restraint. We will not interfere. Tell legislature to amend the law," the court said.

The HC upheld an amendment to Maharashtra Value Added Tax Act and noted that its 'objective is to facilitate prevention of evasion of tax'.

The Maharashtra Act makes it mandatory for traders - with annual sales of over Rs 40 lakh - to file sales tax returns verified only by chartered or cost accountants.

Earlier, traders had to hire only sales tax lawyers or former sales tax officers as advisers in tax matters. However, the petitioner organisations said that the restraint imposed on them by the amendment violated their right to equality enshrined in the Constitution. It would force traders to cough up extra money for engaging CAs or cost accountants, they argued.

The HC had also said that "auditing is a specialised job which can be undertaken by the persons who are professionally competent and trained for it".

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