BOMBAY SALES TAX ACT, 1959

Act No. 51 of 1959

An Act to consolidate and amend the law relating to the levy of tax on the sales or purchase of certain goods in the State of Bombay.* * For Statement of Objects and Reasons, See Bombay Government Gazette, 1959, Part V, pps. 469-74; for Report of the Select Committee, see Bombay Government Gazette, 1969, Part V, pps. 661-69.

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S.1 Short title, extent and commencement

(1) This Act may be called the Bombay Sales Tax Act, 1959.

(2) It extends to the whole of the 1 [State of Maharashtra] 2 [ * * * ]

1. These words were substituted for the words "State of Bombay" by the Maharashtra Adaptation Act.

2. Sub-Sections (3) and (4) were deleted by Mah. 21 of 1962, but such deletion shall not affect anything done thereunder including the operation of any notification issued thereunder which has already brought the other provisions of the Act into force and accordingly, those provisions as amended from time to time shall continue to be in force.

S.2 Definitions

In this Act, unless the context otherwise requires,-

(1) "agriculture" with all its grammatical variations and cognate expressions, includes horticulture, the raising of crops, grass or garden produce, and also grazing; but does not include dairy farming, poultry farming, stock breeding or the mere cutting of wood or grass or gathering of fruit 1 [or raising of man-made forests or rearing of seedlings or plants];
(2) 1 ["agriculturist" means a person who cultivates land personally, for the purpose of agriculture.
(3) "appointed day" means 1 [the 1st day of January 1960];
(4) "Authorization" means an authorization granted under section 24;
(5) "Authorized dealer" means a Registered dealer who holds an Authorization;

1. [Explanation.-For the purposes of this clause and clause (5A), the expression "forest" means the forest to which the Indian Forests Act, 1927, in its application to the

S.3 Incidence of Tax

(1) Every dealer whose turnover either of all sales or all purchases, made during-

(i) the year ending on the 31st day of 1 [March 1981], or
(ii) the year commencing on the 1st day of 2 [April 1981],

has exceeded or exceeds the relevant limit specified in sub-section (4), shall until such liability ceases under sub-section (3), be liable to pay tax under this Act on his turnover of sales, and on his turnover of purchases, made on or after the 3 [notified day]:

Provided that, a dealer to whom sub-clause (i) does not apply but sub-clause (ii) applies 4 [and whose turnover either of all sales or of all purchases] 5 first exceeds the relevant limit specified in sub-section (4) after the 3 [notified day] shall not be liable to pay tax in respect of sales and purchases which take place up to the time when his turnover of sales, or his turnover of purchases as computed from the 1st

S.4 Liability of dealer registered under Act No. 74 of 1956 to pay tax

(1) Notwithstanding anything in section 3, a dealer who is registered under the Central Sales Tax Act, 1956, but who is not liable to pay tax under the said section 3, shall nevertheless be liable to pay tax- (a) on sales of goods in respect of the purchase of which he has furnished a declaration under sub-section (4) of section 8 of the Central Sales Tax Act, 1956, and (b) on sales of goods in the manufacture of which the goods so purchased have been used; and accordingly, the provisions of 1 [sections 7, 8, 8A, 11 and 12] shall apply to such sales, as they apply to the sales made by a dealer liable to pay tax under section 3.

(2) Every dealer who is liable to pay tax under sub-section (1) shall for the purposes of sections 32, 33, 34, 35, 36, 37, 38, 46, 47 and 48 be deemed to be a registered dealer.

1. These words figures were substituted for the words and figures "sections 7, 8, 11 and 12" by Mah. Tax Laws (Levy and Amendment) Act 1988 Act No. 9 of

S.5 Sales and purchases of certain goods free from all taxes

(1) Notwithstanding anything in this Act, but subject to the conditions or exceptions (if any) set out against each of the goods specified in column 3 of Schedule A, no tax shall be payable on the sales or purchases of any goods specified in that Schedule.

(2) The State Government may by notification in the Official Gazette add to, or enlarge, any entry in Schedule A, or relax or omit any condition or exception specified therein; and thereupon, the said Schedule shall be deemed to be 1 [amended accordingly; and the amendment so made shall take effect from the date of the publication of the notification in the Official Gazette or from such other date as may be mentioned therein].

1. These words were substituted for the words "amended accordingly" by Mah. Act No. 29 of 1965.

S.6 Taxes payable by a dealer

Subject to the provisions of this Act and to any rules made thereunder, there shall be paid by every dealer, who is liable to pay tax under this Act, the tax or taxes leviable in accordance with the provisions of this Chapter.

S.7 Levy of sales tax or general sales tax on Declared goods specified in Schedule B

1 [ 2 (1) There shall be levied a sales tax, on the turnover of sales of Declared goods specified in Schedule B, at the rate set out against each of them in column (3) thereof, but after deducting from such turnover-

(i) resales of goods 3 [* * *] on the purchase of which the dealer is liable to pay purchase tax under section 14;
(ii) resales of goods 3 [* * *] purchased by the dealer on or after the appointed day from a Registered dealer, otherwise than on a declaration furnished under section 11 or 12, if the requirements of section 12A are satisfied;
(iii) resales of goods 3 [* * *] purchased by the dealer on or after the appointed day from a dealer liable to pay tax under section 4, if a certificate as provided in sub-section (2) of section 12A is furnished; and
4 [(iv) sales of goods to a Commission agent holding a Permit who purchases on behalf of a principal, upon such C

S.8 Single point levy of sales tax on goods specified in Schedule C

3 [ 1 [ 2 (1)] There shall be levied a sales tax on the turnover of sales of goods specified in Schedule C at the rate set out against each of them in column 3 thereof, but after deducting from such turnover :-

(i) resales of goods on the purchase of which the dealer is liable to pay purchase tax under section 14;
(ii) resales of goods 4 ["except those covered by 5 [entries 20 and 22] of PART II of Schedule C,"] purchased by the dealer on or after the appointed day from a registered dealer, otherwise than on a declaration furnished under section 11 or 12, if the requirements of section 12A are satisfied :

6 [Provided that, resales of goods purchased by the dealer from a registered dealer during the period commencing on the 1st July 1981 and ending on the day immediately preceding the date of commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 1988, on a declaration f

S.8A Power to specify points of sale at which goods may be taxed

1 [(1) Notwithstanding anything contained in this Act, but subject to the condition of previous publication, the State Government may, by notification in the Official Gazette, and subject to such conditions, if any, as may be stated therein, specify the point of sale at which any goods or class of goods, except Declared goods , may be taxed, and on the issue of any such notification, such goods or class of goods, shall be exempt from the levy of tax under section 8.

(2) There shall be levied a sales tax on the turnover of sales of goods specified in Schedule C and notified under sub-section (1), at the rate set out against each of them in column 3 of the said Schedule, but after deducting from such turnover,-

2 [(a) Sales of goods to a Commission agent holding a Permit, who purchases on behalf of a principal, upon such Commission agent furnishing a declaration as provided in section 12;]
(b) sales of goods or resales of goods to a

S.8B Provisions of section 8A not to apply to declared goods

1 [Nothing in section 8A as it existed before the commencement of the Maharashtra Tax Laws (Levy and Amendment) Act, 1988, shall apply or shall be deemed ever to have applied to Declared goods during the period commencing on the 1st July 1981 and ending on the day immediately preceding the date of such commencement.]

1. Section 8B was inserted by Maharashtra Act No. 9 of 1988 w.e.f. 22-4-1988.

S.8C Deduction of resales during pendency of application by the dealer for grant of patent or registration of trade mark

1 [ Notwithstanding anything contained in clause (26) of section 2, as it stood during the period commencing on the 22nd April 1988 and ending on the 30th September 1995, deduction under clauses (i), (ii) and (iii) of section 8 in respect of a sale of purchased goods effected during the said period shall not be disallowed only on the ground that the selling dealer had applied for grant of patent or for registration of trade mark, not being an application for the renewal of trade mark, in respect of the goods sold.].

1. Section 8C was inserted by Mah. Act No. 19 of 1996 w.e.f 22-4-1988.

S.9 Levy of turnover tax on goods specified in Schedule 'C'

1 [9. Levy of turnover tax on goods specified in Schedule 'C' :

There shall be levied a turnover tax on the turnover of sales of goods specified in Schedule 'C' at the rate of one per cent but after deducting from such turnover, _

(a) resales of goods on the purchase of which the dealer is liable to pay purchase tax under section 14;
(b) resales of goods purchased by the dealer from a registered dealer, otherwise than on a declaration furnished under section 11 or 12, if the requirements of section 12A are satisfied;
(c) resales of goods purchased by the dealer from a dealer liable to pay tax under section 4, if a certificate as provided in sub-section (2) of section 12A is furnished ; and
(d) sales or resales of goods, in respect of which a notification under section 8A is issued, to a registered dealer furnishing a declaration under clause (b) of sub-section (2) of section 8A.]

2 [Provided that, where in

S.10 Levy of resale tax on goods specified in Schedule 'C'

1 [ 10. Levy of resale tax on goods specified in Schedule `C' :-

There shall be levied a resale tax at the rate of 0.5 per cent., on the turnover of resale of goods specified in Schedule `C' where the goods resold were purchased from a. registered dealer, after deducting from such turnover,-

(i) the turnover of sales of goods covered by any notification issued under section 8A;
(ii) the turnover of sales of goods against whom the rate of sales tax specified in column (3) of the said Schedule is less than four per cent. ;
(iii) the turnover of sales of goods which are liable for payment of sales tax at a rate less than four per cent., by virtue of the notification issued under section 41 and which goods are specified in Group A of the said notification;
(iv) the resale of goods covered by entry 37 in Part II of Schedule `C';
(v) the turnover of sales of goods, as may be notified, from time to time, by the State Gover

S.11 Tax payable at reduced rate on certain sales

1 [Where any dealer liable to pay tax under this Act, sells any taxable goods.-

(1) to an authorised dealer, who certifies in the prescribed declaration form,-

(a) that the goods will be despatched in the same form in which they were purchased and without doing anything to them, which might amount to or result in manufacture thereof, or will be used for packing of the goods which will be so despatched, within six months from the date of purchase, to his own place of business outside the State for sale or for use in the manufacture of goods for sale outside the State or for use in the packing of goods so manufactured; and
(b) that in respect of the said place of business he or his manager or agent at that place is a Registered dealer under the Central Sales Tax Act, 1956;

(2) to a Commission agent holding a Permit, who certifies in the prescribed declaration form-

(a) that he is registered under the Central Sales Tax

S.12 No deduction from turnover except on declarations

1 [ There shall not be deducted from the turnover of sales, sales of goods 2 [* * *] to a Commission agent holding a Permit purchasing on behalf of his principal, 3 [or to a Registered dealer 4 ["or to a dealer holding a Certificate of Entitlement"] as provided in sections 7,8 and 8A] unless-

5 [(a) ****]
[(b) ****]
[(c) ****]
[(d) ****]]
(e) the Commission agent certifies in the prescribed declaration form-

(i) that he is registered under the Central Sales Tax Act, 1956;
(ii) that his principal is registered under the Central Sales Tax Act, 1956 for his place of business outside the State;
(iii) that the goods are purchased by him for his principal for the purpose of complying with the pre-existing agreement or order for sale entered into by such principal for or in relation to an export out of the territory of India by such principal himself or f

S.12A No deduction from turnover of certain sales except on a certificate

1 [12A. No deduction from turnover of certain sales except on a certificate.- 2 [(1)] There shall not be deducted from the turnover of sales, the resales of goods purchased by a dealer after the commencement of the Bombay Sales Tax (Amendment) Act, 1965, from a Registered dealer, as provided in Sections 3 [7, 8 and 9] unless the dealer claiming deduction produces a bill or cash memorandum containing a certificate that the registration certificate of the selling dealer was in force on the date of sale of the goods to him. Such certificates shall be signed by the selling dealer or a person duly authorised by him in this behalf : 4 [Provided that, where the certificate of registration of the selling dealer has been cancelled with effect from a date anterior to the date of the cancellation order, and such sale was made on or after such anterior date of cancellation, then subject to the provisions of sub-section (7) of section 22, the certific

S.12B On and after specified dates certain prescribed forms to be obtained from prescribed authority

1 [The State Government may, by notification in the Official Gazette, direct that on and after such dates as may be specified therein, the form of 2 [any of the certificates or declarations under section 11 or section 12 or under any notification issued under section 41] 3 [or under any rule] shall be obtained from the prescribed authority subject to the conditions prescribed in that behalf].

1. 'Section 12B' was inserted by Maharashtra Act No. 29 of 1965.

2. These words and figures were substituted by Maharashtra Act No. 11 of 1991 w.e.f.1-4-91.

3. These words were inserted by Maharashtra Act No. 11 of 1992 in force from 1-5-1992.

S.13 Purchase tax payable on certain purchases of goods [**]

1 [ 2 (1) Where a dealer, who is liable to pay tax under the provisions of this Act, purchases any goods specified in Schedule B or C from a person or a Government, who or which is not a 3 [dealer or a dealer who is not a registered dealer] and treats them as capital assets any time after such purchase, then there shall be levied, subject to the provisions of sub-section (2) of section 7, a purchase tax on the turnover of such purchases at the rate set out against each of such goods in the Schedules aforesaid.

(2) Subject to the provisions contained in sub-section (1), where a dealer, who is liable to pay tax under the provisions of this Act, purchases any goods specified in Schedule B or C from a person or Government, who or which is not a 4 [dealer or a dealer who is not a registered dealer] then unless the goods so purchased are resold by the dealer, there shall be levied, subject to the provisions of sub-section (2) of section

S.13A Levy of purchase tax in certain cases

1 [Where a dealer, holding a Certificate of Entitlement, purchases any goods on a declaration referred to in clause (g) of section 12, there shall be levied a purchase tax on the turnover of such purchases at such rate not exceeding four percent., as may be prescribed and different rates may be prescribed for different classes of dealers.]

1. Section 13A was deleted by Mah. Act No. 29 of 1994 w.e.f. 1-5-1994 and again Section 13A was inserted by The Maharashtra Tax Laws (Levy, Amendment and Validation) Act, 1997. (Act No. 30 of 1997) w.e.f. 15.5.1997. Section 23.

S.13B Purchase tax payable on specified goods

1 [(1) Notwithstanding anything contained in this Act, but subject to the condition of previous publication, the State Government may, by notification in the Official Gazette, specify the goods or classes of goods (hereinafter referred to in this section as "the specified goods") in respect of which purchase tax shall be leviable on the turnover of purchase of the specified goods effected by a dealer liable to pay tax under this Act at the rate of purchase tax leviable in respect of the specified goods under schedule B or Schedule C, as the case may be, unless such purchased goods are resold by such dealer:

2 [*****]

(2) Where the specified goods are declared goods, the purchase tax leviable under sub-section (1) shall be subject to the provisions of sub-section (2) of section 7.

(3) On issue of the notification under sub-section (1), nothing in sections 7,8 3 [or 13] shall apply to the sale or purchase, as the case may be, of t

S.14 Liability to purchase tax for contravention of terms of declaration

1 [(1) Where any dealer or a Commission agent has purchased any taxable goods either before or after the notified day, under a certificate or declaration given by him under section 8A, 11 or 12 and the conditions, recitals and undertakings of such certificate or declaration are not complied with then such dealer shall be liable to pay purchase tax on the purchase price of such goods and the purchase tax shall be levied at the rate set out against each of such goods in column 4 of Schedules B and C and accordingly he shall include the purchase price thereof in his turnover of purchases in his return under section 32 which he is to furnish next thereafter :

2 [Provided that, where the dealer holding a Certificate of Entitlement has purchased goods directly or through a commission agent under the declaration given by him under section 12, and has used them in the manufacture, and contrary to the recital of such declaration, despatched the goods so manufact

S.15 Liability to purchase tax on certain stocks of goods

(1) Where a dealer, liable to pay tax under this Act,-

(a) dies, or
(b) transfers or otherwise disposes of his business, or effects any change in the ownership thereof, or
(c) is a firm, company, society or other association of persons, or a trust, which is dissolved, liquidated, wound-up, or revoked, or
(d) is a Hindu undivided family, and the family is partitioned, or
(e) discontinues his business,

and the stock of goods held by such dealer immediately before the death, transfer, disposal, change, dissolution, liquidation, winding up, revocation, partition or discontinuance, 1 [as the case may be, includes taxable goods purchased by him on a certificate given by him under section 11 or 12, then, there shall be levied a purchase tax on the purchase price of such taxable goods at the relevant rate or purchase tax applicable thereto as if such dealer had become liable to pay purchase tax on such goods under se

S.15-IA Levy of surcharge

1 [In case of a dealer liable to pay tax under any provisions of this Act, the tax payable before adjustment of any set-off, drawback or refund on sales and purchases made by him at the rates of sales tax or purchase tax, as the case may be, shall be increased by the levy of surcharge at the rate of ten per cent. of the tax so payable:

Provided that, in calculating the surcharge payable by the dealer, the tax payable under the other provisions of this Act in respect of sales or purchases of declared goods shall not be taken into consideration.

Explanation.-For the purposes of this section, tax payable means the aggregate of the following:-

(a) in case of sales or purchases of goods exempted in part or full from the payment of any tax under section 41, the sales tax and purchase tax paid or payable;
(b) in any other case, the sales tax and purchase tax levied or leviable, without adjustment of any drawback, set-off, or as the case may b

S.15A Rate of tax on packing materials

1 [Where any goods are sold or purchased and such goods are packed in any materials the tax shall be leviable on the sales or purchases of such packing materials (whether such materials are separately charged for or not) at the same rate of tax 2 ["at which tax is payable on the sales or purchases, as the case may be, of the goods so packed.]

1. Section 15A was inserted by Maharashtra Act No. 21 of 1962.

2. These words were substituted for the words ["if any"] as is set out in the relevant Schedule against such goods packed" by Maharashtra Tax Laws (Levy Amendment) Act, 1995 (16 of 1995).

S.15-A1 Levy of additional tax in the case of dealer whose turnover exceeds Rs 10,00,000 a year

1 [ 2 [ * * * ]

1. 'Section 15A-I' was substituted by Mah. Act No. 7 of 1983 w.e.f. 1-12-1982 and was deleted by Mah. Act No. 16 of 1995 Dated 18-8-1995 w.e.f. 1-10-1995.

2. Section 15A-1 was deleted w.e.f. by Maharashtra Tax Law (Levy and Amendment) Act No. 16 of 1995 Dated 18-8-1995 w.e.f. 1-10-1995.

S.16 Commission agent liable to tax for sales on behalf of principal

(1) Where a Commission agent sells any taxable goods on behalf of his principal, such Commission agent and his principal shall both be jointly and severally liable to pay the tax or taxes on the turnover of such sales under section 6

(2) If the principal, on whose behalf the Commission agent has sold goods, shows to the satisfaction of the Commissioner that the tax has been paid by his Commission agent on such goods under sub-section (1), the principal shall not be liable to pay the tax again in respect of the same transaction.

1 [(3) Where there is a sale by auction, the auctioneer and the principal shall both be jointly and severally liable to pay the tax or taxes on the turnover of such sale irrespective of whether the principal or the auctioneer is a dealer.

(4) On the principal satisfying the Commissioner that tax has been paid by the auctioneer on such sale, the principal shall not be liable to pay the tax in respect of such sale.]

S.17 Power to reduce rate of tax and to amend Schedules

The State Government may, by notification in the Official Gazette, reduce any rate of tax specified in Schedule B or C in respect of any entry (or part thereof) in the said Schedules, and may, by like notification-

(a) Omit or amend any entry (or part thereof), but not so as to enhance the rate of tax in any case;
(b) transpose any entry by deleting it from one of the Schedules and inserting it in or adding it to another;

and thereupon, the Schedule shall be deemed to have been amended accordingly

Provided that, no notification which transposes any entry from one Schedule to another as aforesaid, shall be issued by the State Government unless it has been laid in draft before the 1 [Maharashtra] Legislative Assembly and has been: approved by resolution of that Assembly; and upon such approval, the notification may be issued and shall take effect in the form in which it is so approved.

2 [Any notification issued

S.18 Liability of firms

Notwithstanding any contract to the contrary, where any firm is liable, to pay tax under this Act, the firm and each of the partners of the firm shall be jointly and severally liable for such payment :

Provided that, where any such partner retires from the firm, he shall be liable to pay 1 [the tax, the penalty and the interest] (if any) remaining unpaid at the time of his retirement and any tax due upto the date of retirement though unassessed at that date.

1. Inserted by Maharashtra Act No. 11 of 1987 w.e.f. 21-4-1987.

S.19 Special provision regarding liability to pay tax in certain cases

(1) Where a dealer, liable to pay tax under this Act, dies then,-

(a) if the business carried on by the dealer is continued after his death by his legal representative or any other person, such legal representative or other person shall be liable to pay the tax 1 [(including any penalty and interest)] due from such dealer under this Act or under any earlier law 2 [in the like manner and to the same extent as the deceased dealer], and
(b) if the business carried on by the dealer is 3 [discontinued whether before or after his death], his legal representative shall be liable to pay out of the estate of the deceased, 4 [in the like manner and to the same extent as the deceased dealer would have been liable to pay if he had not died], the tax 5 [(including any penalty and interest)] due from such dealer under this Act, or under any earlier law whether such tax 3 [(including any penalty and interest)]

S.20 Sales Tax Authorities

(1) For carrying out the purposes of this Act, the State Government shall appoint an officer to be called the Commissioner of Sales Tax.

(2) 1 [Likewise], the State Government may appoint Additional Commissioners of Sales Tax (if any), and such number of-

(a) Deputy Commissioners,
2 [(aa)] [Senior Assistant Commissioners]
(b) Assistant Commissioner,
(c) Sales Tax Officers, and
(d) other officers and persons,

and give them such designations (if any), as that Government thinks necessary.

(3) The Commissioner shall have jurisdiction over the whole of the 3 [State of Maharashtra]; and an Additional Commissioner of Sales Tax, if any, be appointed, shall have jurisdiction over the whole of the State, or where the State Government so directs, over any local area thereof. All other officers shall have jurisdiction over such local areas as the State Government may specify.

S.21 Tribunal

1 [(1) There shall be a Tribunal to be called "the Maharashtra Sales Tax Tribunal". Subject to the provisions of this section, the Tribunal shall consist of such number of members appointed by the State Government as that Government may from time to time consider necessary for the proper discharge of the functions conferred on the Tribunal by or under this Act.]

(2) The State Government shall appoint one of the members of the Tribunal to be the President thereof 8 [on the basis of his seniority in the judicial service].

2 [(3) The qualifications and the term of office of the members of the Tribunal shall be as may be prescribed, and a member shall hold office for such period as prescribed or as the State Government may, by special order in his case, specify.]

(4) Any vacancy in the membership of the Tribunal shall be filled up by the State Government as soon as practicable.

3 [(5) The functions of the Tribunal

S.21A Settlement Commission

1 [(1) The State Government may, by notification in the Official Gazette, constitute a Commission to be called the "Maharashtra Sales Tax Settlement Commission" for the settlement of tax liability (including interest penalty) under the provisions of this Act.

(2) The Commission shall consist of such number of members appointed by the State Government, as it may from time to time consider necessary for the proper discharge of the functions conferred on the Commission under this Act.

(3) The State Government shall appoint one of the members of the Commission to be the Chairman thereof.

(4) The qualifications of the members of the Commission shall be such as may be prescribed, and a member shall hold office for such period as the State Government may fix in his case.

(5) The functions of the Commission may be discharged by the members sitting in Benches of two or more.

(6) Subject to the previous sanction of the State Government, the Comm

S.22 Registration

(1) No dealer shall, while being liable to pay tax under section 3 or under sub-section (6) of section 19, carry on business as a dealer, unless he possesses a valid certificate of registration as provided by this Act :

Provided that, the provisions of this sub-section shall not be deemed to have been contravened, if the 1 [dealer] having applied for such registration as in this section provided, within the prescribed time or, as the case may be, within the period specified in sub-section (6) of section 19, carries on such business.

(2) Every dealer, required by sub-section (1) to possess a certificate of registration, shall apply in the prescribed manner, to the prescribed authority.

2 [(2A)A person or a dealer who intends to carry on the business of buying or selling of the goods, but is not liable to pay the tax under section 3 may, if he so desires, apply for the Certificate of registration in the prescribed manner to the prescribed au