Can you get out of LTU?
LARGE Taxpayer Unit (LTU) welcomes you with promises of a single window of woes instead of multiple ones. But can you go out of the LTU?
In India ‘exit' is often more difficult than entry - look at the lakhs of Service Tax Registrants who are afraid to approach the Department for cancellation of their registrations!
Here is a classic case of a mega corporate entity like IBM trying to get out of the LTU.
On 28.2.2013, they sent a notice to the LTU authorities that they would opt out of the LTU with effect from 1.4.2013. Instead of acting on the request, the authorities called upon the assessees to disclose the reasons for opting out of the LTU.
The assessee approached the Karnataka High Court and a single judge of the High Court gave an interim order, "All proceedings pending before the LTU and all proceedings that may be initiated and processed before the Officer having jurisdiction other than LTU will be subject to the result of this petition.”
Against this, the assessee approached a Division Bench of the High Court in writ appeal. The Division Bench was not inclined to entertain the writ appeal only for the purpose of granting interim order. So it dismissed the writ appeal leaving the appellant option to move the Single Judge for disposal of the writ petition expeditiously.
IBM is again before the Single Judge seeking for a direction to the authorities to allow the petitioner to exit from the LTU Scheme with effect from 1.4.2013 and to notify to it of the new/regular jurisdiction to which records, pending proceedings under Income Tax Act, Customs Act, and Service Tax would be transferred.
This time the Single Judge of the High Court directed the Chief Commissioner, LTU to pass appropriate orders within three weeks. The High Court order was delivered on 10.9.2013 and most probably, the LTU Chief Commissioner is yet to get a copy of the order. It will take some more time before IBM gets to know whether they can get out of the LTU. After six months and three writs, they are not sure when they can get out of the LTU!
Government should seriously ponder over why assessees want to get out of LTU.