Sub: Audit assessment in respect of proposal for refund.

It has been observed that some dealers have applied for refund of tax paid under the Assam Value Added Tax Act, 2003/Central Sales Tax Act, 1956. As per the provision of rule 29 of the Assam Value Added Tax Rules, 2005, the Prescribed Authority can sanction refund upto Rs. 1 lakh. When the amount to be refunded is more than Rs. 1 lakh, the Prescribed Authority has to take prior approval of Deputy Commissioner of Taxes before sanctioning such refund. Again Deputy Commissioner of Taxes cannot approve the refund, if the amount to be refund exceeds Rs. 3 lakhs but forward such cases to the Commissioner of Taxes for approval. Where the amount to be refunded is more than Rs. 15 lakhs, the Commissioner of Taxes has to take prior approval of Government before sanctioning such refund.

It is necessary that the refund proposal is examined properly. Therefore, all concerned Assistant Commissioner of Taxes/ Superintendent of Taxes are directed that before processing any proposal for refund upto Rs. 3 lakh they shall conduct audit assessment and satisfy himself with the genuineness of the claim. If the claim is within Rs. 1 lakh he shall sanction the amount as per norms. If the amount is beyond Rs. 1 lakh he shall send the proposal to Deputy Commissioner of Taxes alongwith the audit assessment. If the refund amount exceeds Rs. 3 lakh, the Deputy Commissioner of Taxes concerned shall make the audit assessment to satisfy himself about the genuineness of claim of refund and thereafter send the proposal to Commissioner of Taxes alongwith the order of audit assessment.

These instructions should be followed strictly,

(Sanjay Lohia)

Commissioner of Taxes, Assam,

Guwahati.