HYDERABAD GENERAL SALES TAX ACT, 1950

Act No. 14 of 1950

12th April, 1950

Whereas it is expedient to provide for the levy of a general tax on the sale of goods in the hyderabad state; It is hereby enacted as follows:-* * Published in the Extraordinary Jarida No. (45) dated 12th April, 1950.

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S.1 Short title, extent and commencement

(1) This Act may be called the Hyderabad General Sales Tax Act, 1950.

(2) It extends to the whole of the Hyderabad State and shall come into force from the date of its publication in the Jarida.

S.2-A Appointment of Tribunal

‡[(1) The Government shall appoint a Tribunal consisting of three members to exercise the functions conferred on the Tribunal by or under this Act. Of the three Members, one shall be a judicial Officer not below the rank of District Judge. He shall be the Chairman of the Tribunal. The other two members shall possess such qualifications as may be prescribed.

(2) Any vacancy in the membership of the Tribunal shall be filled up by the Government.

(3) (a) The functions of the Tribunal may be exercised by a Bench consisting of all the members of the Tribunal or by a Bench consisting of two members constituted by the Chairman or, in the event of the office of a member other than the Chairman being vacant, by a Bench consisting of the Chairman and the other members:

Provided that, if any case which comes up before a Bench (of which the Chairman is not a member) involves a question of law, the Bench may, in its discretion, reserve such for decision by a Benc

S.3 Tax for the year 1950-51

For the year opening on the 1st day of April, 1950, every dealer whose total turnover for the period from the 1st day of May 1950 to the 31st day of March 1951, is not less than Rs. 6,875, and every casual trader whatever be his total turnover for the said period, shall, save as otherwise provided in this Act, pay--

• (1) a tax at the rate of two pies in the rupee on so much of his turnover for the said period as is attributable to transactions (excluding transactions performed in execution of a contract entered into before the commencement of this Act) in goods other than exempted goods;
• (2) an additional tax at the rate of six pies in the rupee on so much of his turnover for the said period as is attributable to transactions (excluding such transactions as aforesaid) in goods specified in Schedule II.

S.4 Tax for subsequent years

For every subsequent year every dealer whose turnover for the year is not less than Rs. 7,500, and every casual trader whatever be his turnover for the year, shall, save as otherwise provided in this Act, pay--

• (1) a tax at the rate of *[three pies in the rupee in I.G. currency] on so much of his turnover for the year as is attributable to transactions in goods other than exempted goods;
• (2) an additional tax at the rate of six pies in the rupee *[in I.G. currency] on so much of his turnover for the year as is attributable to transactions in goods specified in Schedule II.

* Amended by Act. No. X of 1953, published in Gazette Extraordinary No. (59), dated 1st May, 1953.

S.4-A

*[The Assessing Authority of the area may in such circumstances and subject to such conditions as may be prescribed, accept from any dealer in lieu of the amount of the tax payable during any period under this Act a lumpsum by way of composition determined in the prescribed manner.]

* Amended by Act No. X of 1953, published in Gazette Extraordinary No. (59), dated 1st May, 1953.

S.5 Points of sale at which tax to be leviable

(1) The tax payable under clause (1) of section 3 or clause (1) of section 4 shall, save as provided in section 6, be leviable in respect of every point in a series of sales by successive dealers or casual dealers:

Provided that--

• (i) the buyer and the seller shall not both be taxed in respect of the same transaction of sale;
• (ii) where a dealer or casual trader is taxed as the buyer of any goods he shall not be taxed in respect of a subsequent sale by him of the same goods.

(2) The tax payable under clause (2) of section 3 and clause (2) of section 4 shall be leviable at such one point only in a series of sales by successive dealers or casual traders as may be prescribed.

S.6 Special Provisions for bullion, etc.

*[Notwithstanding anything contained in this Act,

• (i) so much of the turnover as is attributable to transactions in gold or silver bullion shall be liable to tax at the rate of four annas in one hundred rupees at one point only and the tax shall be leviable on the first dealer or casual trader who is not exempt under this Act;
• (ii) so much of the turnover as is attributable to transactions in precious stones including unset precious stones, pearls, real and cultured, imitation precious stones and gold or silver gota, lace and salma shall be liable to tax at the rate of two rupees in one hundred rupees at one point only and the tax shall be leviable on the first dealer or casual trader who is not exempt under this Act;
• (iii) so much of the turnover as is attributable to transactions in cigarettes costing annas two or less per packet of ten cigarettes shall be liable to tax at the rate of †[one anna and three pies] in a rupee at on
  

S.7 Power to make exemptions, etc

(1) Government may by notification in the Jarida make an exemption, reduction in rate or other modification in respect of any tax payable under section 3 or section 4 in favour of--

• (a) any specified class of goods at all points or at any specified point or points in a series of sales by successive dealers or casual traders, or
• (b) the whole or any part of the turnover of any specified class of persons.

†[(2) Any exemption, reduction in rate or other modification made under sub-section (1) may be made either unconditionally or subject to such restrictions and conditions as may be specified in the notification.

† Amended by Act No. XXXII of 1950, published in Gazette Extraordinary No. 50, dated 11th September, 1950.

S.8 Licensing of dealers in exempted goods

†[(1) A dealer who deals in exempted goods (including goods exempted by notification under section 7) and whose total probable turnover from such goods in the period of assessment referred to in section 3, or in any year of assessment referred to in section 4, is not less than Rs. 6,875 or 7,500 as the case may be, shall not continue after such date as may be prescribed to deal in such goods otherwise than under, and in accordance with the conditions of, a licence to be obtained before that date and from time to time renewed before the expiration of the period for which it is for the time being valid.

(2) A dealer who deals in goods in contravention of sub-section (1) or who commits any breach of the conditions of a licence obtained under sub-section (1) shall be liable to the prescribed penalties and in respect of goods exempted by notification under section 7 shall in the discretion of the assessing authority be liable to pay the tax to which he would have been

S.9 Licensing and exemption of agents

The Government may, on application and on payment of such fee as may be prescribed in that behalf, licence under this section any person who for an agreed commission or brokerage buys or sells on behalf of known principals specified in his accounts in respect of each transaction and may exempt from the tax or taxes payable under section 3, 4 or 6 such of his transaction as are carried out in accordance with the terms and condition of his licence:

Provided that--

• (i) in the case of an agent who carries on such business in the Hyderabad State on behalf of a principal who is a resident of the Hyderabad State, the agent shall be assessed to the tax or taxes leviable under this Act, in respect of the transaction. Without prejudice to his other rights to recover from his principal the tax or taxes paid by him on behalf of the principal such agent may retain out of any moneys payable to the principal by the agent, a sum equal to the amount of the tax or taxes assessed
  

S.10 Registration of dealers

(1) Every dealer whose probable turnover for the period of assessment referred to in section 3, or for any year of assessment referred to in section 4 is not less than Rs. 4,583 or Rs. 5,000 as the case may be, shall be registered under this Act and for that purpose shall submit an application for registration to such person, in such manner, within such period and accompanied by such fee, as may be prescribed.

(2) A dealer who has been registered in pursuance of sub-section (1) shall be entitled to have his registration cancelled if he establishes to the satisfaction of the prescribed authority--

• (a) that his turnover for the period of assessment referred to in section 3 was less than Rs. 4,583 and that his turnover for the year 1951-52 was less than Rs. 5,000, or
• (b) that his turnover in each of two consecutive years, the first of which was a year not earlier than 1951-52, was less than Rs. 5,000.

(3) A dealer shall, until his registratio

S.11 Collection of tax by dealers

(1) No person who is not registered as a dealer shall collect any amount by way of tax under this Act nor shall a registered dealer make any such collection before the 1st day of May, 1950, except in accordance with such conditions and restrictions, if any, as may be prescribed:

Provided that Government may exempt persons who are not registered dealers from the provisions of this sub-section until such date, not being later than the 1st day of June, 1950, as Government may direct.

†[(2) Notwithstanding anything to the contrary contained in any order of an officer or tribunal or the judgment, decree or order of a Court, every person who has collected or collects on or after 1st May, 1950 any amount by way of tax otherwise than in accordance with the provisions of this Act shall pay over to the Government within such time and in such manner as may be prescribed the amount so collected by him, and in default of such payment the said amount shall be recovered f

S.12 Procedure to be followed by assessing authority

(1) Every dealer whose turnover in the period of assessment referred to in section 3 is six thousand eight hundred and seventy-five rupees or more or whose turnover in any year of assessment referred to in section 4, is seven thousand five hundred rupees or more in a year shall submit, such return or returns relating to his turnover in such manner, and within such periods as may be prescribed.

(2) If the assessing authority is satisfied that any return submitted under sub-section (1) is correct and complete, he shall assess the dealer on the basis thereof.

(3) If no return is submitted by the dealer under sub-section (1) within the period prescribed in that behalf or if the return submitted by him appears to the assessing authority to be incorrect or incomplete, the assessing authority shall assess the dealer to the best of his judgment:

Provided that before action is taken under this sub-section the dealer shall be given a reasonable opportunity of proving the

S.13 Payment and recovery of tax and other dues payable under the Act

(1) The tax assessed under this Act shall be paid in such manner, in such instalments, if any, and within such time, not being less than fifteen days from the date of service of the notice of assessment, as may be specified in such notice.

(2) In default of such payment a penalty not exceeding the tax remaining unpaid may be imposed and the total amount due, including the penalty, if any, may be recovered as if it were an arrear of land revenue.

*[(3) All other dues payable under this Act such as licence fees, registration fees and compounding fees remaining unpaid may, without prejudice to any other modes of recovery, be recoverable as arrears of land revenue.]

* Substituted by Act No. XLVII of 1952, published in Extraordinary Gazette No. 198, dated 31st December, 1952.

S.13-A Refunds

**[The assessing or the licensing authority, as the case may be, shall refund the tax or the licence fees, if any, paid provisionally by an assessee or licensee for a particular period, if it is found to be in excess of the tax or licence fees payable by him for the said period, either by cash payment, or, at the option of the assessee or licensee, by deduction of such excess from the amount of tax or licence fees due in respect of any other period:

Provided that the assessing or the licensing authority, as the case may be, shall first apply the excess paid in respect of any period towards the recovery of any amount in respect of which a notice of demand may have been issued, and shall then refund the balance remaining, if any.

** Added by Act No. VII of 1955, published in Gazette Extraordinary No. 56, dated 14th May, 1955.

S.13-B Remission of Tax

**The Commissioner may, subject to such condition as may be prescribed, remit the whole or part of the amount of the tax payable in respect of any period by any dealer or casual trader who has suffered financially, on account of riots or through natural calamities:

Provided that if the amount to be remitted exceeds Rs. 2,000 the remission shall not be made without the previous sanction of the Government.]

** Added by Act No. VII of 1955, published in Gazette Extraordinary No. 56, dated 14th May, 1955.

S.14 Appeals

(1) Any assessee objecting to an assessment made or a penalty imposed on him may, within thirty days from the date on which he was served with notice of the assessment or penalty, appeal to such authority as may be prescribed:

†[Provided that the Appellate Authority may for sufficient cause condone the delay in submission of the appeal if the reasons for doing so are shown to his satisfaction:]

Provided †[further] that no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the appellant to be due or of such instalments thereof as have become payable as the case may be.

(2) The appeal shall be in the prescribed form and shall be verified in the prescribed manner.

(3) The appellate authority may after giving the appellant a reasonable opportunity of being heard, pass such orders on the appeal as such authority may think fit.

(4) Every order pass

S.15 Revision

(1) The Commissioner may in his discretion call for and examine the record of any order passed or proceeding taken by any authority, officer or person under the provisions of this Act subordinate to him and against which no appeal has been preferred to the Tribunal under section for the purpose of satisfying himself with regard to the legality or propriety of such order or with regard to the regularity of such proceeding and may pass such order in reference thereto as he thinks fit.

(2) The powers conferred by sub-section (1) may be exercised by the Commissioner suo motu at any time or on application preferred within six months of the passing or taking of the order or proceeding in question.

(3) No order prejudicial to the assessee shall be passed under this section unless he has been given a reasonable opportunity of being heard.

(4) Nothing contained in this section shall apply to the orders or proceedings of any Court or Magistrate.

S.15-A Appeal to the Tribunal

**[(1) Any assessee objecting to an order passed by the appellate authority under section 14 may, if the assessee has not preferred an application for revision of the order under sub-section (1) of section 15, appeal to the Tribunal within 60 days from the date on which the order was communicated to the assessee.

(2) The Tribunal may admit an appeal preferred after the period of 60 days referred to in sub-section (1) if it is satisfied that the assessee had sufficient cause for not preferring the appeal within that period.

(3) The appeal shall be in the prescribed form, shall be verified in the prescribed manner, and shall be accompanied by such fee not exceeding one hundred rupees as may be prescribed.

(4) The Tribunal shall, after giving both parties to the appeal a reasonable opportunity of being heard, pass such order thereon as it thinks fit.

(5) Notwithstanding that an appeal has been preferred under sub-section (1), tax shall be paid in

S.16 Accounts to be maintained by dealers

(1) Every registered dealer and every person licensed under this Act shall keep and maintain a true and correct account showing the goods sold and bought by him and the value thereof, exempted goods and goods subject to different rates of tax being shown separately.

(2) If any dealer or person licensed under this Act does not maintain an account in accordance with sub-section (1) the assessing authority may direct him to prepare and maintain a true and correct account in such form as may be prescribed.

S.16-A Certain dealers to issue bill or cash memorandum

*[(1) Every dealer whose turnover exceeds Rs. 50,000 in any year shall, in respect of all goods sold by him, issue a bill or a cash memorandum to the purchaser, signed and dated by him or his servant, manager or agent showing such particulars as may be prescribed and shall keep the counterfoil or duplicate of such bill or cash memorandum duly signed and dated and preserve it for a period of not less than three years from such date.

(2) If any person to whom this sub-section applies contravenes the provisions of this sub-section, he shall be liable to a fine equal to double the amount of the bill or the cash memorandum in respect of which such contravention has occurred or rupees fifty whichever is less.

(3) The prescribed authority may, either before or after the institution of proceedings in respect of an offence under this section, compound any such offence.]

* Added by Act No. VII of 1955, published in Gazette Extraordinary No. 56, dated 14th

S.17 Powers to order production of accounts and powers of entry, inspection and seizure

(1) Any officer authorised by the Government in this behalf may, for the purposes of this Act, require any dealer carrying on business in any kind of goods to produce before him any accounts or other documents, and to furnish any other information relating to such business.

(2) All accounts and registers maintained by dealers in the ordinary course of their business, the goods in their possession and their offices, shops, godowns, or vehicles shall be open to inspection at all reasonable times by any officer so authorised.

(3) If the Commissioner or a Deputy Commissioner has reason to suspect that any dealer is attempting to evade the payment or any tax due from him under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers or documents of the dealer as may be necessary, and shall grant a receipt for the same, and shall retain the same only for so long as may be necessary for examination thereof or for a prosecution.

(4) For t

S.18 Liability to tax of non-resident dealers

In the case of any person carrying on the business of buying or selling goods in the Hyderabad State but resident outside it (hereinafter in this section referred to as "a non-resident") the provisions of this Act shall apply subject to the following modifications and additions, namely:--

• (i) in respect of the business of the non-resident, his agent residing in the Hyderabad State shall be deemed to be the dealer;
• (ii) the agent of a non-resident shall be assessed to tax or taxes under this Act at the rate or rates leviable thereunder in respect of the business of such non-resident in which the agent is concerned, even if the amount of the turnover of such business is less than the minimum specified in section 3, or section 4 as the case may be;
• (iii) without prejudice to his other rights, any agent of a non-resident who is assessed under this Act in respect of the business of such non-resident may retain out of any moneys payable to the non-resident
  

S.19 Penalty for failure to furnish returns and for false returns

§[] If an assessing authority or an appellate authority in the course of any proceedings under this Act is satisfied that any person,

• (a) has without reasonable cause failed to furnish any return required by the provisions of this Act, or
• (b) has submitted an untrue return,

such authority may direct that such person shall, pay by way of penalty, in the case referred to in clause (a), a sum not exceeding Ø[rupees five hundred] and in the case referred to in clause(b) a sum not exceeding one and a half times the amount of tax which would have been avoided if the return submitted by him had been accepted as correct.

§ Amended by Act No. VII of 1955, published in Gazette Extraordinary No. 56, dated 14th May, 1955.

S.19-A Appearance of authorised representatives

‡[Any assessee who is entitled or required to attend before the tribunal or any Sales Tax Authority in connection with any proceedings under this Act, otherwise than when required to attend personally for examination on oath, or affirmation, may attend,--

• (a) by a person authorised in this behalf being his relative or a person regularly employed by him, or
• (b) by a legal practitioner, or
• (c) subject to such conditions as may be prescribed by a practising Accountant or Sales Tax practising Accountant or Sales Tax practitioner who possesses the prescribed qualifications.]

‡ Amended by Act No. VII of 1955, published in Gazette Extraordinary No. 56, dated 14th May 1955.

S.20 Offences and prosecutions

Any person, who--

• (a) fails to submit an application for registration as required by sub-section (1) of section 10; or
• †[(aa) fails to pay within the time allowed any tax assessed on him or any fee due from him, under this Act; or]
• (b) collects any amount by way of tax under this Act, in contravention of the provisions of sub-section (1) of section 11; or
• (c) fails to pay the amounts specified in sub-section (2) of section 11 within the prescribed time; or
• (d) prevents or obstructs any inspection, entry, search or seizure by any officer authorised under section 17 to effect the same; or
• (e) wilfully acts in contravention of any of the provisions of this Act;

shall, on conviction by a Magistrate of the first class, be liable to a fine which may extend to one thousand rupees, and where the offence is a continuing one to a further fine which may extend to fifty rupees for every day after the first durin

S.21 Composition of offences

The prescribed authority may, either before or after the institution of proceedings in respect of an offence under section 20, compound any such offence.

S.21-A Disclosure of information by public servant

*[

(1) All particulars contained in any statement made, return furnished, or accounts or documents produced under the provisions of this Act, or in any evidence given, or affidavit or deposition made, in the course of any proceedings under this Act (other than proceedings in a Criminal Court) or in any record of an assessment proceedings or any proceeding relating to the recovery of a demand prepared for the purposes of this Act, shall be treated as confidential, and notwithstanding anything contained in the Hyderabad Evidence Act, II of 1313 Fasli, no court shall, save as provided in this Act be entitled to require any public servant to produce before it any such return, account, document or record or any part of such record or to give evidence before it in respect thereof.

(2) If, save as provided in sub-section (3), a public servant discloses any particulars contained in any such statement, return accounts, document, evidence, affidavit, deposition or re

S.22 Assessments etc., not to be questioned in courts

The validity of the assessment of any tax or of the levy of any fee or other amount, made under this Act, or the liability of any person to pay any tax, fee, or other amount so assessed or levied shall not be questioned in any criminal court in any prosecution or other proceeding, whether under this Act or otherwise.

S.23 Bar of suits

(1) No suit, prosecution or other proceeding shall lie against any officer or servant of the Government for any act done or purporting to be done under this Act, without the previous sanction of the Government.

(2) No officer or servant of the Government shall be liable in respect of any such act in any civil or criminal proceeding if the act was done in good faith in the course of the execution of duties or the discharge of functions imposed by or under this Act.

S.24 Limitation for certain suits and prosecutions

No suit shall be instituted against the Government and no suit, prosecution or other proceeding shall be instituted against any officer or servant of the Government in respect of any act done or purporting to be done under this Act, unless the suit, prosecution or other proceeding is instituted within six months from the date of the act complained of.

S.25 Application of certain provisions to casual traders and agents deemed to be dealers

(1) Such provisions of this Act as are expressed to apply to, or in respect of, dealers shall, so for as may be, apply also, subject to such modifications and exceptions as may be prescribed, to and in respect of casual traders.

(2) The application of such provisions as aforesaid to and in respect of an agent deemed by clause (i) of sub-section (1) of section 18 to be a dealer shall be subject to such modifications and exceptions as may be prescribed.

S.26 Power to make rules

(1) Government may make rules to carry out the purposes of this Act.

*[Provided that the rules shall be laid on the table of the house.]

(2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for--

• (a) all matters expressly required or allowed by this Act to be prescribed;
• (b) the grant of licenses under **[sections 6, 8 or 9] including the fees, if any, payable for the same and the conditions thereof;
• (c) the assessment to tax under this Act of businesses which are discontinued or the ownership of which has changed;
• (d) the assessment to tax under this Act of businesses owned by minors and other incapacitated persons or by persons residing outside the Hyderabad State;
• (e) the assessment of a business owned by any person whose estate or any portion of whose estate is under the control of the Court of Wards, the Administrator-General, the Official Tr
  

S.27 Operation of Act 3 of 1357 F

(1) Nothing in this Act shall affect the application of the Luxury Sales Tax Act, 1357 F. (hereinafter in this section and in section 28 referred to as the said Act) to the assessment and levy of the tax imposed by the said Act in respect of the years 1357 F. and 1358 F. and to all matters arising therefrom.

(2) In respect of the period from the 1st day of October, 1949 to the 30th day of April, 1950 all the provisions of the said Act shall have effect as if--

• (a) references in the said Act to a year were references to the period aforesaid;
• (b) the reference to one thousand rupees in the first proviso to sub-section (1) of section 3 of the said Act were a reference to five hundred and eighty-three rupees; and
• (c) the reference to ten thousand rupees in the second provision to the said sub-section were a reference to five thousand eight hundred and thirty-three rupees.

(3) Save as provided in sub-sections (1) and (2) the said Act s

S.28 Power to remove difficulties

If any difficulty arises in giving effect to the provisions of this Act, or of the said Act as operative by virtue of section 27 of this Act, Government may, as occasion may require, by order, do anything which appears to them necessary for the purpose of removing the difficulty.