GST Record Handling in Spotlight After Drunk Clerk Sells Files as Scrap
A shocking incident from Rajasthan has put the spotlight on GST record handling. A state tax clerk, allegedly intoxicated, sold key GST files to a scrap dealer for just ₹5,000. The files, reportedly worth crores in tax value, contained crucial documents like registration data, DRC notices, and assessment files.
What Are GST Record Handling Rules?
Under the CGST Act, 2017, both taxpayers and the department have statutory obligations to preserve records.
For Taxpayers, Section 35 mandates:
- Keeping records of invoices, credit notes, debit notes
- Stock accounts, purchase and sale registers
- Records related to input tax credit (ITC)
- Books of accounts (electronic or manual)
Retention Period:
As per Rule 56(17) of CGST Rules, records must be retained for 72 months (6 years) from the due date of filing annual return.
For Tax Officers, internal rules under State GST Acts and public records retention policies apply.
The handling of files, especially in physical form, is governed by:
- Departmental storage protocols
- File movement registers
- Digitisation and backup mandates (under Mission Mode Projects like GSTN backend)
What Went Wrong?
Based on news reports, here’s a summary of the failure:
| Issue | Breakdown |
|---|---|
| Clerk Role | Junior-level staff with no clearance for disposal |
| Security Breach | Physical files removed without approval |
| Audit Trail | Missing or falsified – no gate pass or disposal note |
| Oversight | Weak supervision and no digital backup for many files |
Legal Implications of Mishandling GST Files
Here’s what the law says:
- Section 128A: While this pertains to amnesty for defaulters, it underscores the importance of proper documentation for late filers. If files are missing, appeals may collapse.
- Section 122(1)(x): Any person who “destroys any document required to be maintained under the Act” can be fined up to ₹25,000.
- IPC Sections 409 & 201: Charges for criminal breach of trust by public servant and destruction of evidence can apply.
- Right to Information Act: Citizens can now demand explanation and possibly file PILs seeking a probe on public record mismanagement.
Expert Insight: Why This Should Worry Businesses Too
According to industry reports, over 45% of appeals fail due to missing documentation. If government offices lose files due to negligence, your entire case—especially in legacy disputes or refund claims—can be jeopardised.
“Always preserve a certified digital copy of every notice, reply, and payment proof. Don’t rely on the department alone to retain your case file.”
— CA Arvind V, GST litigation specialist
What Safeguards Should Be in Place?
For Government Departments:
- Mandatory digitisation of all legacy files (CBIC Mission Mode Project Phase 3)
- File Movement Tracking System (FMTS) with real-time approval logs
- Scrap disposal only with Joint Commissioner approval and public auction
For Taxpayers:
- Keep scanned PDFs of all GST filings and notices
- Maintain a case tracker sheet with notice dates, reply status, and officer name
- Use Efiletax dashboard to auto-sync your GSTN records and filing proofs
Summary
A GST clerk in Rajasthan sold tax files as scrap for ₹5,000, triggering outrage. This incident exposes gaps in GST record handling. Taxpayers and officials must follow strict documentation and retention rules to avoid legal and financial risks.
FAQs
Q1. Is the department liable if my GST file is lost by the officer?
Not directly, but you can request a certified copy under Rule 142 and file a grievance via CPGRAMS or High Court.
Q2. Can a scrap dealer be prosecuted in such a case?
Yes, under IPC for dealing with stolen government property.
Q3. How long should I keep GST records?
As per Rule 56(17), at least 6 years from the due date of filing your annual return.
Final Take: Don’t Leave Your GST Records to Luck
In a system still partially reliant on paper, even one careless clerk can derail your years of compliance. Stay vigilant. Digitise your records. And for stress-free GST recordkeeping, switch to Efiletax.