For a taxpayer, his relationship with his tax consultant is very much close. When the consultant fails to do his job correctly, it may definitely affect the client. It is the duty of the tax consultant to inform the updates happening on his tax portal without any delay as the limitation period always plays a keen role in the legal issues or filings.
This is a situation where the clients protect themselves from harsh GST proceedings for not responding to the proceedings. The taxpayers file writ petitions before the High Court when they receive an ex-parte order. That is if the GST demand order was passed without providing any hearing opportunity, then they file a petition before the high court seeking to direct the department to take up the matter for reconsideration.
Get a Copy of The Future of Tax and Finance: Upskill with Us, Click here
In both Income tax and GST matters, one of the reasons submitted by the taxpayer for not responding to the proceedings or the notices is the ‘Failure of tax consultant to inform the proceedings’ to the taxpayer.
As the taxpayers in the GST matters are basically businesses, due to lack of time, they hire a tax consultant to look into their GST returns and other adjudication matters. They entrust the consultants to monitor the GST portal. However, the consultants mostly forget to monitor the portal and all the notices issued by the department may go unnoticed until the bank account is attached.
Thus, this is the one of the grounds submitted by the taxpayer before the High Court using it as a shield, where even the court finds it genuine.
Even though using this, the taxpayer/client may get another opportunity from the concerned authorities for non-participating in the proceedings, the consultants will lose the client’s trust and the reputation.
Word of mouth is very critical in the world of taxation. The negative reviews may affect the consultants very badly. Also there will be a breach of fiduciary duty. Tax consultants are fiduciaries, meaning they are legally required to act in their clients’ interests. Failing to do the duty is breach of fiduciary duty. The Clients have a right to know if their portal is being monitored, and failure to inform them could expose the consultant to lawsuits for damages resulting from inadequate service.
Get a Copy of The Future of Tax and Finance: Upskill with Us, Click here
Due to the negligent and irresponsible behaviour of the consultants, the client is deprived of the opportunity to address the discrepancies or issues raised in the notice or order. The client’s bank account may eventually be attached by the GST department, leading to financial issues. Thus, failing to inform with the most important details of the tax may act as a sword against the consultant himself.
In the matter of Rishab Industries vs The Assistant Commissioner (ST), the Madras High Court remanded the matter to the department on 10% pre deposit in which the assessee failed to respond to the notices or appear for the personal hearing as the GST consultant failed to inform about the same.
The Petitioner in the case claimed unfamiliarity with GST compliances and had relied on a consultant for such matters. Due to the consultant’s failure to inform the petitioner about the proceedings leading to the impugned order, the petitioner was unaware of the situation.
Further there is another case ofEssel Kitchenware Limited vs The Joint Commissioner of State Tax, the Calcutta High Court set aside the GST Section 73 demand order as the consultant failed to inform the petitioner of the SCN on the portal. In this matter, the consultant left the job without proper communication.
Get a Copy of The Future of Tax and Finance: Upskill with Us, Click here
The above mentioned situation is that the consultant left his job. This shows that a consultant’s job did not end when he left his job. As a responsible consultant, he should communicate those to his clients properly leaving his job. There are many other cases where the miscommunication of the consultant resulted in financial loss to the clients.
This should be raised because the taxpayers are facing huge trouble due to the behaviour of the consultants. The ways you can solve this issue are:
Regular Communication : The consultants should maintain regular communication with the clients or vice-versa. At Least in whatsapp consultants should update your clients with the new updates. If your client doesn’t have social media, then you should contact them through call and make him aware about the changes that may affect him.
Client Managing Technologies: As a consultant for many, it is difficult to handle everyone equally or you miss to monitor the updates for the clients. Thus, to avoid that you can manage your client and what service you are providing to them through a software which may remind you to do the work.
Get a Copy of The Future of Tax and Finance: Upskill with Us, Click here
Delegate your work: If you are a senior tax consultant, delegation of tasks can alleviate your workload and reduce stress. By delegating routine or less sensitive matters to junior team members or subordinates, you can focus your attention on high-priority cases.
This not only guarantees that sensitive issues receive your expertise but also allows juniors to gain valuable experience. Proper delegation ensures consistent service to all clients, reducing the risk of delays, and maintaining the quality of your practice on all matters. There is a huge accountability for the tax consultants which could be a CA or non-CA. A minor negligent action from your part may put your client into a financial dilemma. You should be responsible and loyal to your clients unless and until they violate the law. Even if you are le
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
