The director of a private company was arrested on Wednesday for tax evasion as over Rs 3 crore collected as service tax by the company from its clients was not deposited with the government exchequer.
The arrest was made by officers of Central Goods and Services Tax’s (CGST) Delhi North Commissionerate, an official statement said which did not name the director or the company.It said that the director was produced in the Patiala House Court and was sent to judicial custody for 15 days.
“Further investigations are being conducted and the amount of service tax evaded is bound to increase,” it added.
In the statement, the government assured taxpayers that compliant taxpayers do not run the risk of facing such punitive action in carrying out their day to day operations.
“The power to arrest is to be exercised where there is deliberate fraud of sizeable magnitude with intent to evade tax. It is meant to serve as a deterrent to unscrupulous elements in trade who may try to defraud the system,” it said.
“There are sufficient checks built into the law to ensure that inadvertent or procedural lapses do not attract severe punitive measures,” it added.