CENTRAL SALES
TAX ACT, 1956
(ACT NO. 74 OF 1956)
CHAPTER I
Preliminary
1
Short
title, extent and Commencement
(1)
This Act
may be called the Central
Sales Tax Act, 1956.
(2)
It extends
to the whole of
(3)
It shall
come into force on such date as the Central Government may, by
notification in the Official Gazette, appoint, and different dates may be appointed
for
different
provisions of this Act.
2
Definitions
In this
Act, unless the context otherwise requires,—
(a)
“appropriate State” means-
(i)
in
relation to a dealer who has one or more places of business situated in
the same
State, that State;
(ii)
in
relation to a dealer who has [***] places of business situated in
different
States, every such State with respect to the place or places of business
situated
within its territory;
[***]
(aa) “business”
includes-
(i)
any
trade, commerce or manufacture, or any adventure or concern in the
nature of
trade, commerce or manufacture, whether or not such trade, commerce,
manufacture,
adventure or concern is carried on with a motive to make gain or profit
and
whether or not any gain or profit accrues from such trade, commerce,
manufacture,
adventure or concern; and
(ii)
any
transaction in connection with, or incidental or ancillary to, such trade,
commerce,
manufacture, adventure or concern;
(ab) “crossing
the customs frontiers of
area of a
customs station in which imported goods or export goods are ordinarily kept
before
clearance by customs authorities.
Explanation- For the purposes of this clause,
“customs station” and
“customs authorities” shall have the same meanings as in the
Customs Act, 1962 (52
1
of 1962);
(b)
“dealer” means any person who carries on (whether regularly or otherwise)
the
business of buying, selling, supplying or distributing goods, directly or
indirectly,
for cash,
or for deferred payment, or for commission, remuneration or other valuable
consideration, and includes-
(i)
a local authority,
a body corporate, a company, any cooperative society or
other
society, club, firm, Hindu undivided family or other association of persons
which
carries on such business;
(ii)
a factor,
broker, commission agent,
agent, by
whatever name called, and whether of the same description as hereinbefore
mentioned
or not, who carries on the business of buying, selling, supplying or
distributing, goods belonging to any principal whether disclosed or not; and
(iii) an auctioneer who carries on the business of selling or
auctioning goods
belonging
to any principal, whether disclosed or not and whether the offer of the
intending
purchaser is accepted by him or by the principal or a nominee of the principal.
Explanation
1 - Every person
who acts as an agent, in any State, of a
dealer
residing outside that State and buys, sells, supplies, or distributes, goods in
the
State or
acts on behalf of such dealer as-
(i)
a
mercantile agent as defined in the Sale of Goods Act, 1930 (3 of
1930), or
(ii)
an agent
for handling of goods or documents of the title relating to
goods, or
(iii) an agent for the collection or the payment of the sale price
of goods
or as a
guarantor for such collection or payment,
and every
local branch or office in a State of a firm registered outside that
State or a
company or other body corporate, the principal office or headquarters whereof
is
outside that State, shall be deemed to be a dealer for the purposes of this Act.
Explanation
2 - A Government
which, whether or not in the course of
business,
buys, sells, supplies or distributes, goods, directly or otherwise, for cash or
for
deferred payment or for commission, remuneration or other valuable
consideration, shall except in relation to any sale, supply or distribution of
surplus,
unserviceable or old stores or materials or waste products or obsolete or discarded
machinery
or parts or accessories thereof, be deemed to be a dealer for the purposes
of this
Act;
(c)
“declared goods” means goods declared under section 14 to be of special
importance
in inter-State trade or commerce.
(d)
“goods” includes all materials, articles, commodities and all other kinds of
movable
property, but does not include newspapers, actionable claims, stocks, shares
and
securities;
(dd) “place of business” includes
-
(i)
in any
case where a dealer carries on business through an agent (by
whatever
name called), the place of business of such agent;
(ii)
a
warehouse, godown or other place where a dealer
stores his goods; and
2
(iii) a place where a dealer keeps his books of account;
(e)
“prescribed” means prescribed by rules made under this Act;
(f)
“registered dealer” means a dealer who is registered under section 7;
(g)
“sale”, with its grammatical variations and cognate expressions, means any
transfer
of property in goods by one person to another for cash or deferred payment
or for
any other valuable consideration, and includes,–
(i)
a
transfer, otherwise than in pursuance of a contract, of property in any
goods for
cash, deferred payment or other valuable consideration;
(ii) a transfer of property in goods (whether as goods or in some
other form)
involved
in the execution of a works contract;
(iii) a delivery of goods on hire-purchase or any system of
payment by
instalments;
(iv) a transfer of the right to use any goods for any purpose
(whether or not for
a
specified period) for cash, deferred payment or other valuable consideration;
(v) a supply of goods by any unincorporated association or body
of persons to
a member
thereof for cash, deferred payment or other valuable consideration;
(vi) a supply, by way of or as part of any service or in any
other manner
whatsoever,
of goods, being food or any other article for human consumption or any
drink
(whether or not intoxicating), where such supply or service, is for cash,
deferred
payment or other valuable consideration,
but does
not include a mortgage or hypothecation of or a charge or pledge
on goods;
(h)
“sale price” means the amount payable to a dealer as consideration for the
sale of
any goods, less any sum allowed as cash discount according to the practice
normally
prevailing in the trade, but inclusive of any sum charged for anything done
by the
dealer in respect of the goods at the time of or before the delivery thereof
other
than the cost of freight or delivery or the cost of installation in cases where
such cost
is separately charged;
PROVIDED
that in the case of a transfer of property in goods (whether as
goods or
in some other form) involved in the execution of a works contract, the sale
price of
such goods shall be determined in the prescribed manner by making such
deduction
from the total consideration for the works contract as may be prescribed
and such
price shall be deemed to be the sale price for the purposes of this clause.;
(i)
“sales tax law” means any law for the time being in
force in any State or
part
thereof which provides for the levy of taxes on the sale or purchase of goods
generally
or on any specified goods expressly mentioned in that behalf and includes
value
added tax law, and
“general sales tax law” means any law for
the time being in
force in
any State or part thereof which provides for the levy of tax on the sale or
purchase
of goods generally and includes value added tax law;
(j)
“turnover” used in relation to any dealer liable to tax under this Act means
the
aggregate of the sale prices received and receivable by him in respect of sales of
any goods
in the course of inter-State trade or commerce made during any prescribed
period
and determined in accordance with the provisions of this Act and the rules
3
made thereunder;
(ja) “works
contract” means a contract for carrying out any work which
includes
assembling, construction, building, altering, manufacturing, processing,
fabricating,
erection, installation, fitting out, improvement, repair or commissioning
of any
movable or immovable property;
(k)
“year”, in relation to a dealer, means the year applicable in relation to him
under the
general sales tax law of the appropriate
State, and where there is no such
year
applicable, the financial year.
CHAPTER
II
Formulation
of Principles for determining when a
Purchase
of goods takes place in the course of inter-State
trade or commerce or outside a State or in the course of
Import
or Export
3
When is
a sale or purchase of goods said to take place in the course of
inter-State trade or commerce
A sale or
purchase of goods shall be deemed to take place in the course of
inter-State
trade or commerce if the sale or purchase-
(a)
occasions
the movement of goods from one State to another; or
(b)
is
effected by a transfer of documents of title to the goods during their
movement
from one State to another.
Explanation
1 - Where goods are
delivered to a carrier or other bailee for
transmission, the movement of the goods shall, for the purposes of clause (b), be
deemed to
commence at the time of such delivery and terminate at the time when
delivery
is taken from such carrier or bailee.
Explanation
2 - Where the
movement of goods commences and terminates
in the
same State it shall not be deemed to be a movement of goods from one State to
another
by reason merely of the fact that in the course of such movement the goods
pass
through the territory of any other State.
4
When is
a sale or purchase of goods said to take place outside a State
(1)
Subject to
the provisions contained in section 3, when a sale or purchase of
goods is
determined in accordance with sub-section (2) to take place inside a State,
such sale
or purchase shall be deemed to have taken place outside all other States.
(2)
A sale or purchase
of goods shall be deemed to take place inside a State, if
the goods
are within the State—
(a)
in the
case of specific or ascertained goods, at the time the contract of sale
is made;
and
(b)
in the
case of unascertained or future goods, at the time of their
4
appropriation to the contract of sale by the seller or by the buyer, whether assent of
the other
party is prior or subsequent to such appropriation.
Explanation
- Where there is a
single contract of sale or purchase of goods
situated
at more places than one, the provisions of this sub-section shall apply as if
there
were separate contracts in respect of the goods at each of such places.
5
When is
a sale or purchase of goods said to take place in the course of
import or export
(1)
A sale or
purchase of goods shall be deemed to take place in the course of
the
export of the goods out of the
occasions
such export or is effected by a transfer of documents of title to the goods
after the
goods have crossed the customs frontiers of
(2)
A sale or
purchase of goods shall be deemed to take place in the course of
the
import of the goods into the
occasions
such import or is effected by a transfer of documents of title to the goods
before
the goods have crossed the customs frontiers of
(3)
Notwithstanding
anything contained in sub-section (1), the last sale or
purchase
of any goods preceding the sale or purchase occasioning the export of those
goods out
of the
export,
if such last sale or purchase took place after, and was for the purpose of
complying
with, the agreement or order for or in relation to such export.
(4)
The
provisions of sub-section (3) shall not apply to any sale or purchase of
goods
unless the dealer selling the goods furnishes to the prescribed authority in the
prescribed
manner a declaration duly filled and signed by the exporter to whom the
goods are
sold in a prescribed form obtained from the prescribed authority.
(5)
Notwithstanding
anything contained in sub-section (1), if any designated
Indian
carrier purchases Aviation Turbine Fuel for the purposes of its international
flight,
such purchase shall be deemed to take place in the course of the export of
goods out
of the
Explanation. – For the purposes of this sub-section, “designated Indian
carrier”
means any carrier which the Central
Government may, by notification in the
Official
Gazette, specify in this behalf.
CHAPTER
III
Inter-State
Sales Tax
6
Liability
to tax on inter-State sales
(1)
Subject to
the other provisions contained in this Act, every dealer shall, with
effect
from such date as the Central
Government may, by notification in the Official
Gazette,
appoint, not being earlier than thirty days from the date of such notification,
be liable
to pay tax under
this Act on all sales
of goods other than electrical energy
effected
by him in the course of inter-State trade or commerce during any year on
and from
the date so notified:
PROVIDED
that a dealer shall not be liable to pay tax under this Act on any
5
sale of
goods which, in accordance with the provisions of sub-section (3) of section
5, is a
sale in the course of export of those goods out of the
(1A) A dealer shall be liable to pay tax under this Act on a sale of any goods
effected
by him in the course of inter-State trade or commerce notwithstanding
that no tax would have been leviable (whether on the seller or the purchaser)
under the
sales tax law of the appropriate
State if that sale had taken place inside
that
State.
(2)
Notwithstanding
anything contained in sub-section (1) or sub-section (1A),
where a
sale of any goods in the course of inter-State trade or commerce has either
occasioned
the movement of such goods from one State to another or has been
effected
by a transfer of documents of title to such goods during their movement
from one
State to another, any subsequent sale during such movement effected by a
transfer
of documents of title to such goods,-
(a)
to the
Government, or
(b) to a registered dealer other than the Government, if the
goods are of the
description
referred to in sub-section (3) of section 8,
shall be
exempt from tax
under this Act :
PROVIDED
that no such subsequent sale shall be exempt from tax under
this
sub-section unless the dealer effecting the sale furnishes to the prescribed
authority
in the prescribed manner and within the prescribed time or within such
further
time as that authority may, for sufficient cause, permit, -
(a)
a
certificate duly filled and signed by the registered dealer from
whom the
goods were purchased containing the prescribed particulars in a prescribed
form
obtained from the prescribed authority; and
(b)
if the
subsequent sale is made—
(i)
to a
registered dealer, a declaration referred to in clause (a) of
sub-section
(4) of section 8, or
(ii)
to the
Government, not being a registered dealer, a certificate
referred
to in clause (b) of sub-section (4) of Section 8:
PROVIDED
FURTHER that it shall not be necessary to furnish the
declaration
or the certificate referred to in clause (b) of the preceding proviso in
respect
of a subsequent sale of goods if, -
(a)
the sale
or purchase of such goods is, under the sales tax
law of the
appropriate
State, exempt from tax
generally or is subject to tax
generally at a rate
which is
lower than four per cent (whether called a tax or fee or by any other name);
and
(b)
the
dealer effecting such subsequent sale proves to the satisfaction
of the
authority referred to in the preceding proviso that such sale is of the nature
referred
to in clause (a) or clause (b) of this sub-section.
(3)
Notwithstanding
anything contained in this Act, no tax
under this Act shall
be
payable by any dealer in respect of sale of any goods made by such dealer, in
the
course of
inter-State trade or commerce, to any official, personnel, consular or
diplomatic
agent of –
6
(i)
any
foreign diplomatic mission or consulate in
(ii)
the
United Nations or any other similar international body,
entitled
to privileges under any convention or agreement to which
is a
party or under any law for the time being in force, if such official, personnel,
consular
or diplomatic agent, as the case may be, has purchased such goods for
himself
or for the purposes of such mission, consulate, United Nations or other
body.
(4)
The
provisions of sub-section (3) shall not apply to the sale of goods made
in the
course of inter-State trade or commerce unless the dealer selling such goods
furnishes
to the prescribed authority a certificate in the prescribed manner on the
prescribed
form duly filled and signed by the official, personnel, consular or
diplomatic
agent, as the case may be.
6A
Burden
of proof, etc., in case of transfer of goods claimed otherwise
than by way of sale
(1)
Where any
dealer claims that he is not liable to pay tax under this Act, in
respect
of any goods, on the ground that the movement of such goods from one State
to
another was occasioned by reason of transfer of such goods by him to any other
place of
his business or to his agent or principal, as the case may be, and not by
reason of
sale, the burden of proving that the movement of those goods was so
occasioned
shall be on that dealer and for this purpose he may furnish to the
assessing
authority, within the prescribed time or within such further time as that
authority
may, for sufficient cause, permit, a declaration, duly filled and signed by
the
principal officer of the other place of business, or his agent or principal, as
the
case may
be, containing the prescribed particulars in the prescribed form obtained
from the
prescribed authority, along with the evidence of despatch
of such goods
and if
the dealer fails to furnish such declaration, then, the movement of such
goods
shall be deemed for all purposes of this Act to have been occasioned as a
result of
sale..
(2)
If the assessing
authority is satisfied after making such inquiry as he may
deem
necessary that the particulars contained in the declaration furnished by a
dealer
under
sub-section (1) are true, he may, at the time of, or at any time before, the
assessment
of the tax payable
by the dealer under this Act, make an order to that
effect
and thereupon the movement of goods to which the declaration relates shall be
deemed
for the purposes of this Act to have been occasioned otherwise than as a
result of
sale.
Explanation
- In this section,
“assessing authority”, in relation to a dealer,
means the
authority for the time being competent to assess the tax payable by the
dealer
under this Act.
7
Registration
of dealers
(1)
Every
dealer liable to pay tax
under this Act shall, within such time as may
be
prescribed for the purpose, make an application for registration under this Act
to
such
authority in the appropriate State as the Central Government may, by general or
7
special
order, specify, and every such application shall contain such particulars as
may be
prescribed.
(2) Any
dealer liable to pay tax
under the sales tax law of the appropriate
State, or
where
there is no such law in force in the appropriate State or any part thereof, any
dealer
having a place of business in that State or part, as the case may be, may,
notwithstanding that he is not liable to pay tax under this Act, apply for registration
under
this Act to the authority referred to in sub-section (1), and every such
application
shall contain such particulars as may be prescribed.
Explanation-
For the purposes of
this sub-section, a dealer shall be deemed
to be
liable to pay tax
under the sales tax law of the appropriate
State
notwithstanding that under such law a sale or purchase made by him is exempt from
tax or a refund or rebate of tax is admissible in respect
thereof.
(2A) Where it appears necessary to the authority to whom an
application is made
under sub-section
(1) or sub-section (2) so to do for the proper realisation
of the tax
payable
under this Act or for the proper custody and use of the forms referred to in
clause
(a) of the first proviso to sub-section (2) of section 6 or sub-section (1) of
section
6A or clause (a) of sub-section (4) of section 8, he may, by an order in
writing
and for reasons to be recorded therein, impose as a condition for the issue of
a
certificate of registration a requirement that the dealer shall furnish in the
prescribed
manner and within such time as may be specified in the order such
security
as may be so specified, for all or any of the aforesaid purposes.
(3)
If the
authority to whom an application under sub-section (1) or sub-section
(2) is made is satisfied that the application is in conformity
with the provisions of this
Act and the
rules made thereunder and the condition, if any,
imposed under sub-
section
(2A), has been complied with, he shall register the applicant and grant to him
a
certificate of registration in the prescribed form which shall specify the
class or
classes
of goods for the purposes of sub-section (1) of section 8.
(3A) Where it appears necessary to the authority granting a
certificate of
registration under this section so to do for the proper realisation
of tax payable under
this Act
or for the proper custody and use of the forms referred to in sub-section
(2A), he
may, at any time while such certificate is in force, by an order in writing and
for
reasons to be recorded therein, require the dealer, to whom the certificate has
been
granted, to furnish within such time as may be specified in the order and in the
prescribed
manner such security, or, if the dealer has already furnished any security
in
pursuance of an order under this sub-section or sub-section (2A), such
additional
security,
as may be specified in the order, for all or any of the aforesaid purposes.
(3B) No
dealer shall be required to furnish any security under sub-section (2A) or
any
security or additional security under sub-section (3A) unless he has been given
an
opportunity of being heard.
(3BB) The amount of security which a dealer may be required to
furnish under
sub-section
(2A) or sub-section (3A) or the aggregate of the amount of such security
and the
amount of additional security which he may be required to furnish under sub-
section
(3A), by the authority referred to therein, shall not exceed-
(a)
in the
case of a dealer other than a dealer who has made an application, or
who has
been registered in pursuance of an application, under sub-section (2), a sum
8
equal to
the tax payable
under this Act, in accordance with the estimate of such
authority,
on the turnover of such dealer for the year in which such security or, as the
case may
be, additional security is required to be furnished; and
(b)
in the
case of a dealer who has made an application, or who has been
registered
in pursuance of an application, under sub-section (2), a sum equal to the
tax leviable
under this Act, in accordance with the estimate of such authority on the
sales to such dealer in the course of
inter-State trade or commerce in the year in
which
such security or, as the case may be, additional security is required to be
furnished,
had such dealer been not registered under this Act.
(3C) Where
the security furnished by a dealer under sub-section (2A) or sub-
section
(3A) is in the form of a surety bond and the surety becomes insolvent or dies,
the
dealer shall, within thirty days of the occurrence of any of the aforesaid events,
inform
the authority granting the certificate of registration and shall within ninety
days of
such occurrence furnish a fresh surety bond or furnish in the prescribed
manner
other security for the amount of the bond.
(3D) The authority granting the certificate of registration may
by order and for
good and
sufficient cause forfeit the whole or any part of the security furnished by a
dealer, -
(a)
for realising any amount of tax or penalty payable by the dealer;
(b)
if the
dealer is found to have misused any of the forms referred to in sub-
section
(2A) or to have failed to keep them in proper custody :
PROVIDED
that no order shall be passed under this sub-section without
giving
the dealer an opportunity of being heard.
(3E) Where by reason of an order under sub-section (3D), the
security furnished
by any
dealer is rendered insufficient, he shall make up the deficiency in such
manner
and within such time as may be prescribed.
(3F) The authority issuing the forms referred to in sub-section
(2A) may refuse to
issue
such forms to a dealer who has failed to comply with an order under that sub-
section
or sub-section (3A), or with the provisions of sub-section (3C) or sub-section
(3E), until
the dealer has complied with such order or such provisions, as the case
may be.
(3G) The authority granting a certificate of registration may, on
application by the
dealer to
whom it has been granted, order the refund of any amount or part thereof
deposited
by the dealer by way of security under this section, if it is not required for
the
purposes of this Act.
(3H) Any person aggrieved by an order passed under sub-section
(2A), sub-
section
(3A), sub-section (3D) or sub-section (3G) may, within thirty days of the
service
of the order on him, but after furnishing the security, prefer, in such form and
manner as
may be prescribed, an appeal against such order to such authority
(hereafter in this section referred to as the “appellate
authority”) as may be
prescribed:
PROVIDED
that the appellate authority may, for sufficient cause, permit
such
person to present the appeal, -
9
(a) after the expiry of the said period of thirty days; or
(b)
without
furnishing the whole or any part of such security.
(3I) The procedure to be followed in hearing any appeal under
sub-section (3H),
and the
fees payable in respect of such appeals shall be such as may be prescribed.
(3J) The order passed by the appellate authority in any appeal
under sub-
section
(3H) shall be final.
(4)
A
certificate of registration granted under this section may-
(a)
either on
the application of the dealer to whom it has been granted or,
where no
such application has been made, after due notice to the dealer, be amended
by the
authority granting it if he is satisfied that by reason of the registered dealer
having
changed the name, place or nature of his business or the class or classes of
goods in
which he carries on business or for any other reason the certificate of
registration granted to him requires to be amended; or
(b)
be
cancelled by the authority granting it where he is satisfied, after due
notice to
the dealer to whom it has been granted, that he has ceased to carry on
business
or has ceased to exist or has failed without sufficient cause, to comply
with an
order under sub-section (3A) or with the provisions of sub-section (3C) or
sub-section
(3E) or has failed to pay any tax
or penalty payable under this Act, or
in the
case of a dealer registered under sub-section (2) has ceased to be liable to
pay tax under the sales tax law of the appropriate
State or for any other sufficient
reason.
(5)
A
registered dealer may apply in the prescribed manner not later than six
months
before the end of a year to the authority which granted his certificate of
registration for the cancellation of such registration, and the authority shall,
unless
the
dealer is liable to pay tax
under this Act, cancel the registration accordingly, and
where he
does so, the cancellation shall take effect from the end of the year.
8
Rates of
tax on sales in the course of
inter-State trade or commerce
(1) Every
dealer, who in the course of inter-State trade or commerce-
(a)
sells to
the Government any goods; or
(b)
sells to
a registered dealer other than the Government goods of the
description
referred to in sub-section (3);
shall be
liable to pay tax
under this Act, with effect from such date as may
be
notified by the Central
Government in the Official Gazette for this purpose, which
shall be
two percent of his turnover or at the rate applicable to the sale or purchase of
such
goods inside the appropriate State under the sales tax law of that State, or, as the
case may
be, under any enactment of that State imposing value added tax, whichever
is lower:
PROVIDED
that the rate of tax
payable under this sub-section by a dealer
shall
continue to be four per cent of his turnover, until the rate of two per cent
takes
effect
under this sub-section.
(2)
The tax payable by any dealer on
his turnover in so far as the turnover or any
part
thereof relates to the sale of goods in the course of inter-State trade or
commerce
10
not
falling within sub-section (1)—
(a)
in the
case of declared goods, shall be calculated at twice the rate
applicable
to the sale or purchase of such goods inside the appropriate State [***];
(b) in the case of goods other than declared goods, shall be
calculated at the
rate of
ten per cent or at the rate applicable to the sale or purchase of such goods
inside
the appropriate State, whichever is higher; and;
(c) in the case of goods, the sale or, as the case may be, the
purchase of which
is, under
the sales tax law of the appropriate
State, exempt from tax
generally shall
be nil,
and for
the purpose of making any such calculation under clause (a) or
clause
(b), any such dealer shall be deemed to be a dealer liable to pay tax under the
sales tax law of the appropriate State,
notwithstanding that he, in fact, may not be so
liable
under that law.
Explanation
- For the purposes
of this sub-section, a sale or purchase of
any goods
shall not be deemed to be exempt from tax generally under the sales tax
law of
the appropriate State if under that law the sale or purchase of such goods is
exempt
only in specified circumstances or under specified conditions or the tax is
levied on
the sale or purchase of such goods at specified stages or otherwise than
with
reference to the turnover of the goods.
[***]
(3)
The goods
referred to in clause (b) of sub-section (1) -
[***]
(b)
[***] are
goods of the class or classes specified in the certificate of
registration of the registered dealer purchasing the goods as being intended for re-
sale by
him or subject to any rules made by the Central Government in this behalf,
for use
by him in the manufacture or processing of goods for sale or in the
telecommunications network or in mining or in the generation or distribution of
electricity
or any other form of power ;
(c)
are
containers or other materials specified in the certificate of registration
of the
registered dealer purchasing the goods, being containers or materials intended
for being
used for the packing of goods for sale ;
(d)
are
containers or other materials used for the packing of any goods or
classes
of goods specified in the certificate of registration referred to in [***]
clause (b)
or for
the packing of any containers or other materials specified in the certificate of
registration referred to in clause (c).
(4)
The
provisions of sub-section (1) shall not apply to any sale in the course of
inter-State
trade or commerce unless the dealer selling the goods furnishes to the
prescribed
authority in the prescribed manner-
(a)
a
declaration duly filled and signed by the registered dealer to whom the
goods are
sold containing the prescribed particulars in a prescribed form obtained
from the
prescribed authority; or
(b)
if the
goods are sold to the Government, not being a registered dealer, a
certificate
in the prescribed form duly filled and signed by a duly authorised
officer
of the
Government:
11
PROVIDED
that the declaration referred to in clause (a) is furnished
within
the prescribed time or within such further time as that authority may, for
sufficient
cause, permit.
(5)
Notwithstanding anything contained in this section, the State Government may
on the
fulfillment of the requirements laid down in sub-section (4) by the dealer if it
is
satisfied that it is necessary so to do in the public interest, by notification
in the
Official
Gazette, and subject to such conditions as may be specified therein, direct,-
(a)
that no tax under this Act shall be
payable by any dealer having his place of
business
in the State in respect of the sales
by him, in the course of inter-State trade or
commerce,
to a registered dealer or the Government from any such place of business of
any such
goods or classes of goods as may be specified in the notification, or that the
tax on such sales shall be calculated at such lower rates
than those specified in sub-
section
(1) or sub-section (2) as may be mentioned in the notification;
(b) that in respect of all sales of goods or sales of such classes of goods as
may be
specified in the notification, which are made, in the course of inter-State
trade or
commerce, to a registered dealer or the Government by any dealer having his
place of
business in the State or by any class of such dealers as may be specified in
the
notification to any person or to such class of persons as may be specified in
the
notification, no tax
under this Act shall be payable or the tax on such sales
shall be
calculated
at such lower rates than those specified in sub-section (1) or sub-section (2)
as
may be
mentioned in the notification.
(6)
Notwithstanding anything contained in this section, no tax under this Act shall
be
payable by any dealer in respect of sale of any goods made by such dealer, in
the
course of
inter-State trade or commerce to a registered dealer for the purpose of
setting
up, operation, maintenance, manufacture, trading, production, processing,
assembling,
repairing, reconditioning, re-engineering, packaging or for use as
packing
material or packing accessories in an unit located in any special economic
zone or
for development, operation and maintenance of special economic zone by the
developer
of the special economic zone, if such registered dealer has been authorised
to
establish such unit or to develop, operate and maintain such special economic
zone
by the
authority specified by the Central
Government in this behalf.
(7)
The goods
referred to in sub-section (6) shall be the goods of such class or
classes
of goods as specified in the certificate of registration of the registered
dealer
referred
to in that sub-section.
(8)
The
provisions of sub-sections (6) and (7) shall not apply to any sale of
goods
made in the course of inter-State trade or commerce unless the dealer selling
such
goods furnishes to the prescribed authority referred to in sub-section (4) a
declaration
in the prescribed manner on the prescribed form obtained from the
authority
specified by the Central
Government under sub-section (6) duly filled in
and
signed by the registered dealer to whom such goods are sold.
Explanation
- For the purposes
of sub-section (6), the expression “special
economic
zone” has the meaning assigned to it in clause (iii) to Explanation 2 to the
proviso
to section 3 of the Central
Excise Act, 1944 (1 of 1944).
12
8A
Determination
of turnover
(1)
In
determining the turnover of a dealer for the purposes of this Act, the
following
deductions shall be made from the aggregate of the sale prices, namely: -
(a) the amount arrived at by applying the following formula-
rate of tax x aggregate of sale prices
100 plus
rate of tax
PROVIDED
that no deduction on the basis of the above formula shall be
made if
the amount by way of tax
collected by a registered dealer, in accordance with
the
provisions of this Act, has been otherwise deducted from the aggregate of sale
prices.
Explanation
- Where the
turnover of a dealer is taxable at different rates,
the
aforesaid formula shall be applied separately in respect of each part of the
turnover
liable to a different rate of tax;
(b)
the sale
price of all goods returned to the dealer by the purchasers of such
goods,-
(i)
within a
period of three months from the date of delivery of the goods,
in the
case of goods returned before the 14th day of May, 1966;
(ii)
within a
period of six months from the date of delivery of the goods, in
the case
of goods returned on or after the 14th day of May, 1966:
PROVIDED
that satisfactory evidence of such return of goods and of
refund or
adjustment in accounts of the sale price thereof is produced before the
authority
competent to assess or, as the case may be, re-assess the tax payable by the
dealer
under this Act; and
(c)
such
other deductions as the Central
Government may, having regard to
the
prevalent market conditions facility of trade and interests of consumers,
prescribe.
(2)
Save as
otherwise provided in sub-section (1), in determining the turnover of
a dealer
for the purposes of this Act, no deduction shall be made from the aggregate
of the
sale prices.
9
Levy and
collection of tax and
penalties
(1)
The tax payable by any dealer
under this Act on sales
of goods effected by
him in
the course of inter-State trade or commerce, whether such sales fall within
clause
(a) or clause (b) of section 3, shall be levied by the Government of India and
the tax so levied shall be
collected by that Government in accordance with the
provisions
of sub-section (2), in the State from which the movement of the goods
commenced:
PROVIDED
that, in the case of a sale of goods during their movement from
one State
to another, being a sale subsequent to the first sale in respect of the same
goods and
being also a sale which does not fall within sub-section (2) of section 6,
the tax shall be levied and
collected-
(a) where such subsequent sale has been effected by a registered
dealer, in the
State from
which the registered dealer obtained or, as the case may be, could have
obtained,
the form prescribed for the purposes of clause (a) of sub-section (4) of
13
section 8
in connection with the purchase of such goods; and
(b) where such subsequent sale has been effected by an
unregistered dealer, in
the State
from which such subsequent sale has been effected.
(2) Subject
to the other provisions of this Act and the rules made thereunder,
the
authorities
for the time being empowered to assess, re-assess, collect and enforce
payment
of any tax under the
general sales tax law of the appropriate
State shall, on
behalf of
the Government of India, assess, re-asses, collect and enforce payment of
tax, including any interest or penalty,
payable by a dealer under this Act as if the tax
or
interest or penalty payable by such a dealer under this Act is a tax or interest or
penalty
payable under the general sales
tax law of the
State; and for this purpose they
may
exercise all or any of the powers they have under the general sales tax law of the
State; and
the provisions of such law, including provisions relating to returns,
provisional
assessment, advance payment of tax,
registration of the transferee of any
business,
imposition of the tax
liability of a person carrying on business on the
transferee
of, or successor to, such business, transfer of liability of any firm or Hindu
undivided
family to pay tax in
the event of the dissolution of such firm or partition of
such
family, recovery of tax
from third parties, appeals, reviews, revisions,
references,
refunds, rebates, penalties, charging or payment of interest, compounding
of
offences and treatment of documents furnished by a dealer as confidential, shall
apply
accordingly:
PROVIDED
that if in any State or part thereof there is no general sales tax
law in
force, the Central
Government may, by rules made in this behalf make
necessary
provision for all or any of the matters specified in this sub-section.
(2A) All
the provisions relating to offences, interest and penalties (including
provisions
relating to penalties in lieu of prosecution for an offence or in addition to
the
penalties or punishment for an offence but excluding the provisions relating to
matters
provided for in sections 10 and 10A) of the general sales tax law of each
State
shall, with necessary modifications, apply in relation to the assessment,
reassessment, collection and the enforcement of payment of any tax required to be
collected
under this Act in such State or in relation to any process connected with
such
assessment, re-assessment, collection or enforcement of payment as if the tax
under
this Act were a tax
under such sales tax law.
(2B) If the tax
payable by any dealer under this Act is not paid in time, the dealer
shall be
liable to pay interest for delayed payment of such tax and all the provisions
for
delayed payment of such tax
and all the provisions relating to due date for
payment
of tax, rate of
interest for delayed payment of tax
and assessment and
collection
of interest for delayed payment of tax,
of the general sales
tax laws of each
State,
shall apply in relation to due date for payment of tax, rate of interest for
delayed
payment of tax, and
assessment and collection of interest for delayed
payment
of tax under this
Act in such States as if the tax
and the interest payable
under
this Act were a tax
and an interest under such sales
tax law.
(3)
The
proceeds in any financial year of any tax, including any interest or
penalty,
levied and collected under this Act in any State (other than a
Territory)
on behalf of the Government of India shall be assigned to that State and
14
shall be
retained by it; and the proceeds attributable to
part of
the Consolidated Fund of India.
9A
Collection
of tax to be only by
registered dealers
No person
who is not a registered dealer shall collect in respect of any sale
by him of
goods in the course of inter-State trade or commerce any amount by way
of tax under this Act, and no
registered dealer shall make any such collection except
in
accordance with this Act and the rules made thereunder.
9B
Rounding off of tax,
etc.
The amount
of tax, interest,
penalty, fine or any other sum payable, and the
amount of
refund due, under the provisions of this Act shall be rounded off to the
nearest
rupee and, for this purpose, where such amount contains a part of a rupee
consisting
of paise, then, if such part is fifty paise or more, it shall be increased to
one rupee
and if such part is less than fifty paise, it shall
be ignored:
PROVIDED
that nothing in this section shall apply for the purpose of
collection
by a dealer of any amount by way of tax under this Act in respect of any
sale by
him of goods in the course of inter-State trade or commerce.
10
Penalties
If any
person—
(a)
furnishes
a certificate or declaration under sub-section (2) of section 6 or
sub-section
(1) of section 6A or sub-section (4) or sub-section (8) of section 8, which
he knows,
or has reason to believe, to be false ; or
(aa) fails to get himself
registered as required by section 7 or fails to comply with
an order
under sub-section (3A) or with the requirements of sub-section (3C) or sub-
section
(3E) of that section ; or
(b)
being a
registered dealer, falsely represents when purchasing any class of
goods
that goods of such class are covered by his certificate of registration ; or
(c)
not being
a registered dealer, falsely represents when purchasing goods in
the
course of inter-State trade or commerce that he is a registered dealer ; or
(d)
after
purchasing any goods for any of the purposes specified in clause (b) or
clause
(c) or clause (d) of sub-section (3) or sub-section (6) of section 8 fails,
without
reasonable
excuse, to make use of the goods for any such purpose; or
(e) has in his possession any form prescribed for the purpose of
sub-section (4)
or
sub-section (8) of section 8 which has not been obtained by him or by his
principal
or by his
agent in accordance with the provisions of this Act or any rules made
thereunder; or
(f)
collects
any amount by way of tax
in contravention of the provisions
contained
in section 9A,
he shall
be punishable with simple imprisonment which may extend to six
months,
or with fine or with both; and when the offence is a continuing offence, with
a daily
fine which may extend to fifty rupees for every day during which the offence
15
continues.
10A
Imposition
of penalty in lieu of prosecution
(1)
If any
person purchasing goods is guilty of an offence under clause (b) or
clause
(c) or clause (d) of section 10, the authority who granted to him or, as the
case may
be, is competent to grant to him a certificate of registration under this
Act may,
after giving him a reasonable opportunity of being heard, by order in
writing,
impose upon him by way of penalty a sum not exceeding one-and-a-half
times the
tax which would have
been levied under sub-section (2) of section 8 in
respect
of the sale to him of the goods, if the sale had been a sale falling within
that
sub-section.:
PROVIDED
that no prosecution for an offence under section 10 shall be
instituted
in respect of the same facts on which a penalty has been imposed under this
section.
(2)
The penalty
imposed upon any dealer under sub-section (1) shall be
collected
by the Government of India in the manner provided in sub-section (2) of
section 9-
(a) in the case of an offence falling under clause (b) or clause
(d) of section
10, in the
State in which the person purchasing the goods obtained the form
prescribed
for the purposes of clause (a) of sub-section (4) of section 8 in connection
with the
purchase of such goods ;
(b) in the case of an offence falling under clause (c) of
section 10, in the State
in which
the person purchasing the goods should have registered himself if the
offence
had not been committed.
11
Cognizance
of offences
(1) No
court shall take cognizance of any offence punishable under this Act or
the rules
made thereunder except with the previous sanction of
the Government
within
the local limits of whose jurisdiction the offence has been committed or of
such
officer of that Government as it may, by general or special order, specify in
this
behalf;
and no court inferior to that of a presidency magistrate or a magistrate of the
first
class shall try any such offence.
(2) All
offences punishable under this Act shall be cognizable and bailable.
12
Indemnity
No suit,
prosecution or other legal proceeding shall lie against any officer of
Government
for anything which is in good faith done or intended to be done under
this Act
or the rules made thereunder.
13
Power to
make rules
(1) The Central Government may, by
notification in the Official Gazette, make
rules
providing for —
(a)
the
manner in which applications for registration may be made under this
16
Act, the particulars
to be contained therein, the procedure for the grant of such
registration, the circumstances in which registration may be refused and the form in
which the
certificate of registration may be given ;
(aa) the manner of determination of
the sale price and the deductions from the
total
consideration for a works contract under the proviso to clause (h) of section 2;
(ab) the form and the manner for
furnishing declaration under sub-section (8) of
section 8
;
(b)
the
period of turnover, the manner in which the turnover in relation to the
sale of
any goods under this Act shall be determined, and the deductions which may
be made
under clause (c) of sub-section (1) of section 8A in the process of such
determination ;
(c) the cases and circumstances in which, and the conditions
subject to which,
any
registration granted under this Act may be cancelled ;
(d)
the form
in which and the particulars to be contained in any declaration or
certificate
to be given under this Act the State of origin of such form or certificate
and the
time within which any such certificate or declaration shall be produced or
furnished;
(e) the enumeration of goods or class of goods used in the
manufacture or
processing
of goods for sale or in mining or in the generation or distribution of
electricity
or any other form of power ;
(f)
the
matters in respect of which provision may be made under the proviso
to
sub-section (2) of section 9 ;
(g) the fees payable in respect of applications under this Act ;
(h)
the
proper functioning of the Authority constituted under section 19;
(i)
the
salaries and allowances payable to, and the terms and conditions of
service
of, the Chairman and Members under sub-section (3) of section 19 ;
(j)
any other
matter as may be prescribed.
(2) Every
rule made by the Central Government under sub-section (1) shall be
laid, as
soon as may be after it is made, before each House of Parliament, while it is
in
session, for a total period of thirty days which may be comprised in one
session or
in two or
more successive sessions, and if, before the expiry of the session
immediately
following the session or the successive session aforesaid, both Houses
agree in
making any modification in the rule or both Houses agree that the rule
should
not be made, the rule shall thereafter have effect only in such modified form
or be of
no effect, as the case may be; so, however, that any such modification or
annulment
shall be without prejudice to the validity of anything previously done
under
that rule.
(3) The
State Government may make rules, not inconsistent with the
provisions
of this Act and the rules made under sub-section (1), to carry out the
purpose
of this Act.
(4) In
particular and without prejudice to the powers conferred by sub-section
(3), the
State Government may make rules for all or any of the following purposes,
namely :-
17
(a) the publication of lists of registered dealers, of the
amendments made in
such
lists from time to time, and the particulars to be contained in such lists;
(aa) the manner in which security
may be furnished under sub-section (2A) or
sub-section
(3A) or sub-section (3C) of section 7 and the manner in which and the time
within
which any deficiency may be made up under sub-section (3E) of that section ;
(b) the form and manner in which accounts relating to sales in
the course of
inter-State
trade or commerce shall be kept by registered dealers ;
(c) the furnishing of any information relating to the stocks of
goods of
purchases,
sales and deliveries of goods by, any dealer or any other information
relating
to his business as may be necessary for the purposes of this Act ;
(d) the inspection of any books, accounts or documents required
to be kept
under
this Act, the entry into any premises at all reasonable times for the purposes
of
searching
for any such books, accounts or documents kept or suspected to be kept in
such
premises and the seizure of such books, accounts or documents ;
(e) the authority from whom, the conditions subject to which and
the fees subject
to
payment of which any form of certificate prescribed under clause (a) of the
first
proviso
to sub-section (2) of section 6 or of declaration prescribed under sub-section
(1) of section 6A or sub-section (4) of section 8 may be
obtained, the manner in
which
such forms shall be kept in custody and records relating thereto maintained
and the
manner in which any such form may be used and any such certificate or
declaration
may be furnished ;
(ee) the form and manner in which,
and the authority to whom, an appeal may
be
preferred under sub-section (3H) of section 7, the procedure to be followed in
hearing
such appeals and the fees payable in respect of such appeals ;
(f)
in the
case of an Undivided Hindu Family, association, club, society, firm or
company
or in the case of a person who carries on business as a guardian or trustee or
otherwise
on behalf of another person, the furnishing of a declaration stating the name
of the
person who shall be deemed to be the manager in relation to the business of the
dealer in
the State and the form in which such declaration may be given ;
(g) the time within which, the manner in which and the
authorities to whom
any
change in the ownership of any business or in the name, place or nature of any
business
carried on by any dealer shall be furnished.
(5) In
making any rule under this section the Central Government or, as the case
may be,
the State Government may direct that a breach thereof shall be punishable
with fine
which may extend to five hundred rupees and when the offence is a
continuing
offence, with a daily fine which may extend to fifty rupees for every day
during
which the offence continues.
CHAPTER
IV
Goods of
special importance in inter-State trade or commerce
14
Certain goods
to be of special importance in inter-State trade or
18
commerce
It is
hereby declared that the following goods are of special importance in
inter-State
trade or commerce:-
(i)
cereals,
that is to say,-
(i)
paddy (Oryza sativa L.);
(ii)
rice (Oryza sativa L.);
(iii) wheat (Triticum vulgare, T. Compactum, T. sphaerococcum, T. durum, T.
aestivum L., T. dicoccum);
(iv) Jowar or milo (Sorghum vulgare Pers);
(v)
bajra (Pennisetum typhoideum L.);
(vi) maize (Zea mays L.);
(vii) ragi (Eleusine coracana Gaertn);
(viii) kodon (Paspalum
scrobiculatum L.);
(ix) kutki (Panicum
miliare L.);
(x)
barley (Hordeum vulgare L.);
(ia) coal, including coke in all
its forms, but excluding charcoal:
PROVIDED
that during the period commencing on the 23rd day of
February,
1967 and ending with the date of commencement of section 11 of the
Central
Sales Tax (Amendment) Act, 1972 (61 of 1972) this clause shall have effect
subject
to the modification that the words “but excluding charcoal” shall be omitted;
(ii)
cotton,
that is to say, all kinds of cotton (indigenous or imported) in its
unmanufactured state, whether ginned or unginned, baled, pressed or otherwise, but
not
including cotton waste;
(iia)
cotton
fabrics covered under heading Nos. 52.05, 52.06, 52.07, 52.08,
52.09,
52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 58.06, 59.01, 59.03,
59.05,
59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of
1986);
(iib)
cotton
yarn, but not including cotton yarn waste;
(iic) crude oil, that is to say,
crude petroleum oils and crude oils obtained from
bituminous
minerals (such as shale, calcareous rock, sand), whatever their
composition,
whether obtained from normal or condensation oil-deposits or by the
destructive
distillation of bituminous minerals and whether or not subjected to all or
any of
the following processes:-
(1) decantation ;
(2) de-salting ;
(3) dehydration ;
(4) stabilisation in order to normalise the vapour pressure ;
(5) elimination of very light fractions with a view to returning
them to the oil
deposits
in order to improve the drainage and maintain the pressure ;
(6) the addition of only those hydrocarbons previously recovered
by physical
methods
during the course of the above mentioned processes ;
19
(7)
any other
minor process (including addition of pour point depressants or
flow
improvers) which does not change the essential character of the substance ;
(iid) Aviation Turbine Fuel sold to
a Turbo-Prop Aircraft ;
Explanation- For the purposes of this clause,
“Turbo-Prop Aircraft” means
an
aircraft deriving thrust, mainly from propeller, which may be driven by either
turbine
engine or piston engine;
(iii) hides and skins, whether in a raw or dressed state;
(iv) iron and steel, that is to say,-
(i)
pig iron,
sponge iron and cast iron including ingot the moulds, bottom
plates,
iron scrap, cast iron scrap, runner scrap and iron skull scrap ;
(ii) steel semis (ingots, slabs, blooms and billets of all
qualities, shapes and
sizes) ;
(iii) skelp bars, tin bars, sheet bars,
hoe-bars and sleeper bars ;
(iv) steel bars (rounds, rods, squares, flats, octagons and
hexagons, plain and
ribbed or
twisted, in coil form as well as straight lengths) ;
(v)
steel structurals (angles, joists, channels, tees, sheet piling
sections, Z
sections
or any other rolled sections) ;
(vi) sheets, hoops, strips and skelp
both black and galvanised, hot and cold
rolled,
plain and corrugated, in all qualities, in straight lengths and in coil form, as
rolled
and in rivetted condition ;
(vii) plates both plain and chequered in
all qualities ;
(viii) discs, rings, forgings and steel castings ;
(ix) tool, alloy and special steels of any of the above
categories ;
(x)
steel
melting scrap in all forms including steel skull, turnings and borings ;
(xi) steel tubes both welded and seamless, of all diameters and
lengths,
including
tube fittings ;
(xii) tin-plates, both hot dipped and electrolytic and tin free
plates ;
(xiii) fish plate bars, bearing plate bars, crossing sleeper bars,
fish plates,
bearing
plates, crossing sleepers and pressed steel sleepers, rails-heavy and light
crane
rails ;
(xiv) wheels, tyres, axles and wheels
sets ;
(xv) wire rods and wires-rolled, drawn, galvanised,
aluminised, tinned or
coated
such as by copper ;
(xvi) defective, rejects, cuttings or end pieces of any of the
above categories ;
(v)
jute,
that is to say, the fibre extracted from plants
belonging to the species
Corchorus capsularis and Corchorus
olitorius and the fibre
known as mesta or bimli
extracted
from plants of the species Hibiscus cannabinus and
Hibscus subdariffa
–
Var altissima and the fibre
known as Sunn or Sunn-hemp
extracted from plants of the
species Crotalaria
juncea whether baled or otherwise ;
(va) Liquefied petroleum gas for
domestic use;
20
(vi) oilseeds, that is to say,-
(i)
Groundnut
or Peanut (Arachis hypogaea);
(ii)
Sesamum
or Til (Sesamum orientale);
(iii)
Cotton seed (Gossypium Spp.);
(iv) Soyabean (Glycine
seja);
(v)
Rapeseed
and Mustard-
(1) Toria (Brassica campestris var toria);
(2) Rai (Brassica juncea);
(3) Jamba-Taramira (Eruca Satiya);
(4) Sarson, yellow and brown (Brassica
campestris var sarson);
(5) Banarsi Rai or True Mustard (Brassica nigra);
(vi) Linseed (Linum usitatissimum);
(vii)
Castor (Ricinus communis);
(viii)
Coconut (i.e., Copra excluding tender coconuts) (cocosnucifera);
(ix)
Sunflower (Helianthus annus);
(x) Nigar seed (Guizotia abyssinica);
(xi) Neem, vepa (Azadirachta indica);
(xii) Mahua, Illupai, Ippe (Madhuca indica M.
Latifolia, Bassia, Latifolia and
Madhuca longifolia syn. M. Longifolia) ;
(xiii) Karanja, Pongam, Honga (Pongamia pinnata syn. P.
Glabra);
(xiv) Kusum (Schleichera oleosa, syn. S. Trijuga) ;
(xv) Punna, Undi (Calophyllum inophyllum) ;
(xvi) Kokum
(Carcinia indica);
(xvii) Sal (Shorea robusta);
(xviii) Tung (Aleurites fordii and A.
(xix) Red
palm (Elaeis guinensis);
(xx)
Safflower (Carthanus tinctorius);
(via) pulses, that is to say,-
(i)
gram or gulab gram (Cicerarietinum
L.) ;
(ii)
tur or arhar (Cajanus cajan) ;
(iii) moong or green gram (Phaseolus aureus) ;
(iv) masur or lentil (Lens
esculenta Moench, Lens culinaris Medic) ;
(v)
urad or black gram (Phaseolus
mungo) ;
(vi) moth (Phaseolus aconitifolius Jacq) ;
(vii) lakh or khesari (Lathyrus sativus L.) ;
(vii) man made fabrics covered under heading Nos. 54.08, 54.09,
54.10, 54.11,
54.12,
55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05,
58.06,
59.01, 59.02, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the Central
Excise
Tariff Act, 1985 (5 of 1986);
(viii) sugar, covered under sub-heading Nos. 1701.20, 1701.31,
1701.39 and
1702.11 of the Schedule to the Central Excise Tariff Act, 1985 (5 of
1986);
21
(ix) unmanufactured tobacco and tobacco
refuse covered under the sub-
heading
No. 2401.00 cigars and cheroots of tobacco covered under heading No.
24.02,
cigarettes and cigarillos of tobacco covered under sub-heading Nos.
2403.11 and 2403.21 and other manufactured tobacco covered under
sub-heading
Nos.
2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39,
2404.41,
2404.50 and 2404.60 of the Schedule to the Central Excise Tariff Act,
1985 (5 of
1986);
(x)
woven
fabrics of wool covered under heading Nos. 51.06, 51.07, 58.01, 58.02,
58.03 and 58.05 of the Schedule to the Central Excise Tariff Act,
1985 (5 of 1986);
(xi) [omitted]
15
Restrictions
and conditions in regard to tax on sale or purchase of
declared goods within a State
Every sales
tax law of a State shall, in so far as it imposes or authorises
the
imposition
of a tax on the sale or purchase of declared goods, be subject to the
following
restrictions and conditions, namely:
(a)
the tax
payable under that law in respect of any sale or purchase of such
goods
inside the State shall not exceed four percent of the sale or purchase price
thereof,
[***] ;
(b)
where a
tax has been levied under that law in respect of the sale or purchase
inside
the State of any declared goods and such goods are sold in the course of inter-
State trade
or commerce, and tax has been paid under this Act in respect of the sale
of such
goods in the course of inter-State trade or commerce, the tax levied under
such law
shall be reimbursed to the person making such sale in the course of inter-
State trade
or commerce in such manner and subject to such conditions as may be
provided
in any law in force in that State;
(c) where a tax has been levied under that law in respect of the
sale or purchase
inside
the State of any paddy referred to in sub-clause (i)
of clause (i) of section 14,
the tax leviable on rice procured out of such paddy shall be
reduced by the amount of
tax
levied on such paddy ;
(ca) where
a tax on sale or purchase of paddy referred to in sub-clause (i) of
clause (i) of section 14 is leviable
under that law and the rice procured out of such
paddy is
exported out of
the paddy
and rice shall be treated as a single commodity ;
(d)
each of
the pulses referred to in clause (vi-a) of section 14, whether whole or
separated,
and whether with or without husk, shall be treated as a single commodity
for the
purposes of levy of tax under that law.
CHAPTER V
Liability
in Special Cases
22
16
Definitions
In this
Chapter, —
(a)
“appropriate authority”, in relation to a company, means the authority
competent
to assess tax on the company;
(b)
“company” and “private company” have the meanings respectively
assigned
to them by clauses (i) and (iii) of sub-section (1)
of section 3 of the
Companies Act, 1956 (1 of 1956).
17
Company
in liquidation
(1)
Every
person —
(a)
who is
the liquidator of any company which is being wound up, whether
under the
orders of a court or otherwise; or
(b)
who has
been appointed the receiver of any assets of a company,
(hereinafter referred to as the liquidator) shall, within
thirty days after he has become
such
liquidator, give notice of his appointment as such to the appropriate authority.
(2) The
appropriate authority shall, after making such inquiry or calling for such
information
as it may deem fit, notify to the liquidator within three months from the
date on
which he receives notice of the appointment of the liquidator the amount
which, in
the opinion of the appropriate authority would be sufficient to provide for
any tax
which is then, or is likely thereafter to become, payable by the company.
(3) The
liquidator shall not part with any of the assets of the company or the
properties
in his hands until he has been notified by the appropriate authority under
sub-section
(2) and on being so notified, shall set aside an amount equal to the
amount
notified and, until he so sets aside such amount, shall not part with any of the
assets of
the company or the properties in his hands :
PROVIDED
that nothing contained in this sub-section shall debar the
liquidator
from parting with such assets or properties in compliance with any order of
a court
or for the purpose of the payment of the tax payable by the company under
this Act
or for making any payment to secured creditors whose debts are entitled
under law
to priority of payment over debts due to Government on the date of
liquidation
or for meeting such costs and expenses of the winding up of the company
as are in
the opinion of the appropriate authority reasonable.
(4) If the
liquidator fails to give the notice in accordance with sub-section (1) or
fails to
set aside the amount as required by, or parts with any of the assets of the
company
or the properties in his hands in contravention of the provisions of sub-
section
(3), he shall be personally liable for the payment of the tax which the
company
would be liable to pay:
PROVIDED
that if the amount of any tax payable by the company is
notified
under sub-section (2), the personal liability of the liquidator under this sub-
section
shall be to the extent of such amount.
(5) Where
there are more liquidators than one, the obligations and liabilities
attached
to the liquidator under this section shall attach to all the liquidators jointly
and
severally.
23
(6) The
provisions of this section shall have effect notwithstanding anything to
the
contrary contained in any other law for the time being in force.
18
Liability
of directors of private company in liquidation
Notwithstanding
anything contained in the Companies Act, 1956 (1 of
1956), when
any private Company is wound up after the commencement of this
Act, and
any tax assessed on the company under this Act for any period, whether
before or
in the course of or after its liquidation, cannot be recovered, then, every
person
who was a director of the private company at any time during the period
for which
the tax is due shall be jointly and severally liable for the payment of
such tax
unless he proves that the non-recovery cannot be attributed to any gross
neglect,
misfeasance or breach of duty on his part in relation to the affairs of the
company.
CHAPTER
VI
Authority
to settle disputes in course of inter-State
trade or commerce
19
Central
Sales Tax Appellate Authority
(1) The
Central Government shall constitute by notification in the Official
Gazette, an
Authority to settle inter-State disputes falling under section 6A read with
section 9
of this Act, to be known as “the Central Sales Tax Appellate Authority
(hereinafter referred to as the Authority)”.
(2) The
Authority shall consist of the following Members appointed by the
Central
Government, namely:-
(a) a Chairman, who is a retired Judge of the Supreme Court, or
a retired
Chief
Justice of a High Court;
(b) an officer of the Indian Legal Service who is, or is
qualified to be, an
Additional
Secretary to the Government of
(c) an officer of a State Government not below the rank of
Secretary or an
officer
of the Central Government not below the rank of Additional Secretary, who is
an expert
in sales tax matters.
(2A) Notwithstanding anything contained in sub-section (2), the
Chairman or a
Member
holding a post as such in the authority for Advance Rulings appointed under
clause
(a) or clause (c), as the case may be, of sub-section (2) of section 245-O of
the
Income-tax
Act, 1961 (43 of 1961) may, in addition to his being the Chairman or a
Member of
that authority, be appointed as the Chairman or a Member, as the case
may be,
of the authority under this Act.
(3) The
salaries and allowances payable to, and the terms and conditions of
24
service
of the Chairman and Members shall be such as may be prescribed.
(4) The
Central Government shall provide the Authority with such officers and
staff as
may be necessary for the efficient exercise of the powers of the Authority
under
this Act.
19A
Vacancies,
etc., not to invalidate proceedings
No
proceeding before the authority shall be questioned or shall be invalid on
the
ground merely of the existent of any vacancy or defect in the constitution of
the
authority.
20
Appeals
(1) The
provisions of this chapter shall apply to appeals filed by any aggrieved
person
against any order of the highest appellate authority of a State, made under
section
6A read with section 9.
Explanation. — For the purposes of this section and sections 21, 22 and 25
“highest appellate authority of a State” means any authority
or Tribunal or court
(except the High Court) established or constituted under the
General Sales Tax Law
of a
State, by whatever name called.
(2)
Notwithstanding
anything contained in the general sales tax law of a State,
the
authority shall adjudicate an appeal filed under sub-section (1).
(3)
An appeal
under sub-section (1) may be filed within ninety days from the date
on which
the order referred to in that sub-section is served on any aggrieved person :
PROVIDED
that the authority may entertain any appeal after the expiry of
the said
period of ninety days, but not later than one hundred and fifty days from the
date of
such service, if it is satisfied that the appellant was prevented by sufficient
cause from
filing the appeal in time :
PROVIDED
FURTHER that the authority may entertain any appeal from an
aggrieved
person within sixty days from the commencement of the Central Sales Tax
(Amendment)
Act, 2005, where such aggrieved person had the right to file an appeal
against
the order of the highest appellate authority of the State under sub-section (1)
as it
stood immediately before the commencement of the said Act, but has not
availed
of the right to file the appeal during the period commencing on and from the
3rd day of
December, 2001 and ending with the 16th day of March, 2005.
(4)
The
application shall be made in quadruplicate and be accompanied by a fee
of five
thousand rupees.
21
Procedure
on receipt of application
(1) On
receipt of an appeal, the Authority shall cause a copy thereof to be
forwarded
to the assessing authority concerned as well as to each State Government
concerned
with the appeal and to call upon them to furnish the relevant records:
PROVIDED
that such records shall, as soon as possible, be returned to the
assessing
authority or such State Government concerned, as the case may be.
(2) The
Authority shall adjudicate and decide upon the appeal filed against an
25
order of
the highest appellate authority.
(3) The
Authority, after examining the appeal and the records called for, by
order,
either allow or reject the appeal :
PROVIDED
that no appeal shall be rejected unless an opportunity has been
given to
the appellant of being heard in person or through a duly authorised
representative, and also to each State Government concerned with the appeal of
being
heard.:
PROVIDED
FURTHER that whether an appeal is rejected or accepted,
reasons
for such rejection or acceptance shall be given in the order.
(4) The
Authority shall make an endeavour to pronounce its
order in writing
within
six months of the receipt of the appeal.
(5) A copy
of every order made under sub-section (3) shall be sent to the
appellant,
assessing authority, respondent and highest appellate authority of the State
Government
concerned.
22
Powers
of the Authority
(1) The
Authority shall have the same powers as are vested in a court under the
Code of
Civil Procedure, 1908 (5 of 1908), while trying a suit in respect of the
following
matters, namely:-
(a) enforcing the attendance of any person, examining him on
oath or
affirmation;
(b) compelling the production of accounts and documents;
(c) issuing commission for the examination of witnesses;
(d) the reception of evidence on affidavits;
(e) any other matter which may be prescribed.
(1A)
The
authority may grant stay of the operation of the order of the highest
appellate
authority against which the appeal is filed before it or order the pre-deposit
of the tax
before entertaining the appeal and while granting such stay or making such
order for
the pre-deposit of the tax, the authority shall have regard, if the assessee has
made
pre-deposit of the tax under the General Sales Tax Law of the State concerned,
to
such
pre-deposit or pass such appropriate order as it may deem fit.
(2) Every
proceeding before the Authority shall be deemed to be a judicial
proceeding
within the meaning of sections 193 and 228 of the Indian Penal Code (45
of 1860)
and the Authority shall be deemed to be a civil court for the purposes of
section
195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).
23
Procedure
of Authority
The
Authority shall, subject to the provisions of this Chapter, have power to
regulate
its own procedure in all matters, including stay of recovery of any demand
arising
out of the exercise of powers under this Act.
26
24
Authority
for advance rulings to function as Authority under this Act
(1)
Notwithstanding
anything contained in any other law for the time being
in force
and in section 19 of this Act, the Authority for Advance Rulings
constituted
under section 245-O of the Income-Tax Act, 1961 (43 of 1961) shall
be
notified by the Central Government in the Official Gazette, with such
modifications as may be necessary, to make its composition in conformity with
section
19 of this Act, as the Authority under this Act till such time an Authority
is
constituted under that section.
(2) On and
from the date of the constitution of the Authority in accordance with
the
provisions of section 19 of this Act, the proceedings pending with the Authority
for
Advance Rulings shall stand transferred to the Authority constituted under that
section
from the stage at which such proceedings stood before the date of
constitution of the said Authority.
25
Transfer
of pending proceedings
(1)
On and from
the commencement of the Central Sales Tax (Amendment)
Act, 2005,
all appeals (except appeals against orders of the highest appellate
authority
of the State) pending before the authority notified under sub-section (1) of
section
24 shall stand transferred together with the records thereof to the highest
appellate
authority of the concerned State.
(2)
Such
highest appellate authority of the State to which such appeal has been
transferred
under sub-section (1) on receipt of such records shall proceed to deal with
such
appeal so far as may be in the same manner as in the case of an appeal filed
before
such highest appellate authority of the State according to the general sales tax
law of
the appropriate State, from the stage which was reached before such transfer
or from
any earlier stage or de novo as such highest appellate authority of the State
may deem
fit :
PROVIDED
that where the highest appellate authority finds that the
appellant
has not availed of the opportunity of filing first appeal before appellate
authority,
such case shall be forwarded to such authority.
26
Applicability
of order passed
An order
passed by the Authority under this Chapter shall be binding on
each
State Government concerned, the assessing authorities and other authorities
created
by or under any law relating to general sales tax, in force for the time being
in any
State {***}.
27
28