Caught in a sales tax raid

AMRITA TEJASVI New Delhi, Jan 25

As a reporter for The DQ Week, I looked forward to meeting
people from the IT industry, getting to see the latest products, finding out
about the channel structures of companies and knowing about some of the issues
that partners face. Never in my wildest dream did I imagine that one day I would
be locked up in a partner's office for over four hours, due to a sales tax
raid. But here is my experience in first hand.

It was 2.30pm when I went to meet a channel partner in Nehru
Place, New Delhi. Despite his busy schedule, our discussion was going smoothly
till he got a phone call. During his conversation on the phone, he waved his
hand to one of the staff members who nodded back at him.

The staff person silently went outside the shop and pulled down
the shutters, locking all of us inside. I could not understand what was going on
when the partner finally said that someone has informed him on the phone that
sales tax officers were coming.

The
store was locked from outside and I was inside, along with the owner, four staff
members and two customers. That was not all. The partner smartly switched off
all the lights in the store and we were engulfed in complete darkness, except
for the light coming from the computers screen. Other than that, there were five
to six telephones that were ringing continuously on full volume.

The partner was busy doing several things and I could see the
panic on his face. He, along with his staff members were busy clearing all the
racks, and were tearing piles of pages one after the other. But they were not
content in merely tearing up the papers. They mulled over how to dispose these
torn papers in the right fashion so that they would not be found. Some how, they
managed to keep it neatly in an empty packet.

While few employees were busy in disposing files and papers,
others were engaged in manipulating data on the computer, and the speed with
which they were doing it was astounding. It was like they were used to this
routine.

This was the scene inside the office premises. Outside there was
a completely different scenario. I could not see it, but could almost sense it.
I believe sales tax officers are very well aware of the tactics of businessmen
and know how to tackle them. They had been tipped off that few people, along
with the owner, were inside the room and they were just not convinced by the
downed shutters and absolute silence. They kept on calling the owner but nobody
picked the phones.

The sales tax officers waited outside the store until they found
the person with the keys and compelled him to unlock the store. Hence, after
four hours of tug of war, the store was finally opened and the officers carried
out their examination procedure. It also signaled the end of my imprisonment and
I left quickly.

But this incident raised several questions in my mind. How do
partners get advance notification of impending sales tax raids? Do they know
people in the system who drop them a hint when this raid is about to take place?

On one hand, the channel partner in this episode vociferously
denied that he was involved in any wrongdoing. But on the other hand, he was
systematically tearing up papers. And the ease with which he and his people were
destroying data, showed that they were used to such acts.

I asked several people about such raids, but most did not want
to talk about it on record. Some said that since they maintained clean books of
accounts, they never had problems with tax officials scrutinizing their business
dealings. One partner revealed that there were many units where business is done
without billing, and random checking by sales tax department kept a measure on
these kinds of activities.

All said and done, this is one episode I am personally not going
to forget in a hurry.