KARNATAKA VALUE ADDED TAX ACT, 2003

Act, No. 32 of 2004

15th December, 2004

An Act to provide for further levy of tax on the purchase or sale of goods in the State of Karnataka. Be it enacted by the Karnataka State Legislature in Fifty-fourth year of the Republic of India, as follows:-1 1. First published in the Karnataka Gazette Extraordinary on the twenty third day of December 2004.

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S.1 Short title, extent and commencement

• (1) This Act may be called the Karnataka Value Added Tax Act 2003.
• (2) It extends to the whole of the State of Karnataka.
• (3) It shall come into force on such date as the Government may, by notification, appoint and different dates may be appointed for different provisions of the Act.
• (4) The tax shall be levied on the sale or purchase of goods made after such date as the Government may, by notification, appoint and different dates may be appointed for different class or classes of goods.

S.2 Definitions

In this Act unless the context otherwise requires:-

• (1) Agriculture with its grammatical variations includes horticulture, the raising of crops, grass or garden produce and grazing but does not include dairy farming, poultry farming, stock breeding and mere cutting of wood.
• (2) Agriculturist means a person who cultivates land personally.
• (3) Agricultural produce or horticultural produce shall not be deemed to include tea, beedi leaves, raw cashew, timber, wood, tamarind and such produce, except coffee as has been subject to any physical, chemical or other process for being made fit for consumption, save mere cleaning, grading, sorting or drying.
• (4) Appellate Tribunal means the Karnataka Appellate Tribunal constituted under the Karnataka Appellate Tribunal Act, 1976 (Karnataka Act 59 of 1976).
• (5) Assessment means an assessment made or deemed to have been made under this Act and includes a re-assessment.
• (6) Business include
  

S.3 Levy of tax

• (1) The tax shall be levied on every sale of goods in the State by a registered dealer or a dealer liable to be registered, in accordance with the provisions of this Act.
• (2) The tax shall also be levied, and paid by every registered dealer or a dealer liable to be registered, on the sale of taxable goods to him, for use in the course of his business, by a person who is not registered under this Act.

S.4 Liability to tax and rates thereof

• (1) Every dealer who is or is required to be registered as specified in Sections 22 and 24, shall be liable to pay tax, on his taxable turnover,
  • (a) in respect of goods mentioned in,-
    • (i) Second Schedule, at the rate of one per cent,
    • (ii) Third Schedule, at the rate of four per cent, and
    • (iii) Fourth Schedule, at the rate of twenty per cent.
  • (b) in respect of other goods, at the rate of twenty five per cent.
• (2) Where goods sold or purchased are contained in containers or are packed in any packing material liable to tax under this Act, the rate of tax applicable to taxable turnover of such containers or packing materials shall, whether the price of the containers or packing materials is charged for separately or not, be the same as the rate of tax applicable to such goods so contained or packed, and where such goods sold or purchased are exempt from tax under this Act, th
  

S.5 Exemption of tax

Goods specified in the First Schedule and any other goods as may be specified by a notification by the State Government shall be exempt from the tax payable under this Act.

S.6 Place of sale of goods

• (1) The sale or purchase of goods, other than in the course of inter-State trade or commerce or in the course of import or export, shall be deemed, for the purposes of this Act, to have taken place in the State irrespective of the place where the contract of sale or purchase is made, if the goods are within the State.-
  • (a) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and
  • (b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation.
• (2) Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of clause (a) shall apply as if there were separate contracts in respect of goods at each of such places.
• (3) Notwithstanding anything contained i
  

S.7 Time of sale of goods

• (1) Notwithstanding anything contained in the Sale of Goods Act, 1930 (Central Act 3 of 1930), for the purpose of this Act, and subject to sub-section (2), the sale of goods shall be deemed to have taken place at the time of transfer of title or possession or incorporation of the goods in the course of execution of any works contract whether or not there is receipt of payment:

  Provided that where a dealer issues a tax invoice in respect of such sale within fourteen days from the date of the sale, the sale shall be deemed to have taken place at the time the invoice is issued.

• (2) Where, before the time applicable in sub-section (1), the dealer selling the goods issues a tax invoice in respect of such sale or receives payment in respect of such sale, the sale shall, to the extent that it is covered by the invoice or payment, be deemed to have taken at the time the invoice is issued or the payment is received.
• (3) The Commissioner may on an
  

S.8 Agents liable to pay tax

• (1) Notwithstanding anything contained in any law for the time being in force including this Act, every person who, for an agreed commission or brokerage, buys or sells on behalf of any principal who is a resident of the State shall be liable to tax under this Act at the rate or rates leviable thereunder in respect of such purchase or sale, notwithstanding that such principal is not a dealer or that the turnover of purchase or sale relating to such principal is less than the minimum specified in sub-sections (1), (2) and (3) of Section 22.
• (2) The principal shall not be liable to tax on his turnover in respect of which the agent is liable to tax under sub-section (1), and the burden of proving that the turnover has been effected through an agent liable to tax under the said sub-section, shall be on such principal.

S.9 Collection of tax by registered dealers, Governments and statutory authorities

• (1) Every registered dealer liable to pay tax under the Act shall collect such tax at the rate or rates at which he is liable to pay tax, and the tax collected shall be accounted for under the provisions of this Act and rules made thereunder.
• (2) The Central Government, a State Government, a statutory body or a local authority shall, in respect of any taxable sale of goods effected by them, collect by way of tax any amount which a registered dealer effecting such sale would have collected by way of tax under this Act, issue a tax invoice, pay the tax so collected into the Government Treasury or any designated bank and furnish monthly returns, as specified under Section 35, to the prescribed authority.

S.10 Output tax, input tax and net tax

• (1) Output tax in relation to any registered dealer means the tax payable under this Act in respect of any taxable sale of goods made by that dealer in the course of his business, and includes tax payable by a commission agent in respect of taxable sales of goods made on behalf of such dealer subject to issue of a prescribed declaration by such agent.
• (2) Subject to input tax restrictions specified in Sections 11,12,14, 17, 18 and 19, input tax in relation to any registered dealer means the tax collected or payable under this Act on the sale to him of any goods for use in the course of his business, and includes the tax on the sale of goods to his agent who purchases such goods on his behalf subject to the manner as may be prescribed to claim input tax in such cases.
• (3) Subject to input tax restrictions specified in Sections 11, 12, 14, 17, 18 and 19, the net tax payable by a registered dealer in respect of each tax period shall be the amount of output tax
  

S.11 Input tax restrictions

• (a) Input tax shall not be deducted in calculating the net tax payable, in respect of:
  • (1) tax paid on purchases attributable to sale of exempted goods exempted under Section 5, except when such goods are sold in the course of export out of the territory of India;
  • (2) tax paid on purchase of goods that are despatched outside the State, other than as a direct result of sale or purchase in the course of inter-State trade or commerce;
  • (3) tax paid on goods including capital goods as specified in the Fifth Schedule and any other goods as may be notified by the Government or the Commissioner, purchased or put to use for purposes other than for re-sale;
  • (4) tax paid on purchase of capital goods other than those falling under clause (3), except as provided in Section 12;
  • (5) tax paid on purchase of goods used as inputs in the manufacture, processing or packing of other taxable goods despatched to a place outside the State not
    

S.12 Deduction of input tax in respect of Capital goods

• (1) Deduction of input tax shall be allowed to the registered dealer in respect of the purchase of capital goods for use in the business of sale of any goods in the course of export out of the territory of India and in the case of any other dealer in respect of the purchase of capital goods wholly or partly for use in the business of taxable goods.
• (2) Deduction of input tax under this Section shall be allowed only after commencement of commercial production, or sale of taxable goods or sale of any goods in the course of export out of the territory of the India by the registered dealer and shall be apportioned over a specified period, as may be prescribed.

S.13 Pre-registration purchases

Deduction of input tax shall be allowed to the registered dealer, subject to the restrictions of Section 11, in respect of tax charged to him by a seller on taxable sale of goods made to him for the purpose of the business within three months prior to the date of his registration provided that no input tax shall be allowed in respect of goods which have been sold or otherwise disposed of prior to the date of registration.

S.14 Special rebating scheme

Deduction of input tax shall be allowed on the difference between the rate of input tax charged at a rate higher than four per cent and the rate specified in Third Schedule on purchases specified in sub-section (5) and sub-section (6) of Section 11.

S.15 Composition of tax

• (1) Subject to such conditions and in such circumstances as may be prescribed, any dealer other than a dealer who purchases or obtains goods from outside the State or from outside the territory of India, liable to pay tax as specified in Section 4 and,
  • (a) whose total turnover in a period of four consecutive quarters does not exceed fifteen lakh rupees; or
  • (b) who is a dealer executing works contracts; or
  • (c) who is a hotelier, restaurateur, caterer; or
  • (d) who is a mechanised crushing unit producing granite metals;
  may elect to pay in lieu of the net amount of tax payable by him under this Act by way of composition, an amount at such rate not exceeding five per cent on his total turnover or on the total consideration for the works contracts executed or not exceeding two lakh rupees for each crushing machine per annum as may be prescribed.
• (2) For the purposes of sub-section (1) a quarter shall me
  

S.16 Special accounting scheme

Where a dealer liable to pay tax under Section 4 is unable to identify each individual sale, its value or the rate of tax, he may apply to the prescribed authority to pay net tax under Section 10 under a special method to be mutually agreed by such authority in such manner as may be prescribed.

S.17 Partial rebate

Where a registered dealer deducting input tax.-

• (1) makes sales of taxable goods and goods exempt under Section 5, or
• (2) in addition to the sales referred to in clause (1), despatches taxable goods or goods exempted under Section 5 outside the State not as a direct result of sale or purchase in the course of inter-State trade, or
• (3) puts to use the inputs purchased in any other purpose (other than sale, manufacturing, processing, packing or storing of goods), in addition to use in the course of his business,

apportionment and attribution of input tax deductible between such sales and despatches of goods or such purpose, shall be made in accordance with Rules or by special methods to be approved by the Commissioner or any other authorised person and any input tax deducted in excess shall become repayable forthwith.

S.18 Transitional provisions

Transitional provisions covering relief on Sales Tax on stock in hand for manufacture and resale at the date of commencement of this Act shall be as prescribed.

S.19 Change in use after deduction of input tax

• (1) Where a registered dealer has deducted input tax on any goods and those goods are not used in the course of his business or lost or destroyed, any input tax deducted becomes repayable in the period following the date on which those goods were put to such other use.
• (2) Where such goods have been wholly or mainly used or are intended for use in sale of taxable goods or in sale of any goods in the course of export out of the territory of India prior to the change of use, tax shall be calculated on the prevailing market value of such goods at the time of change of use.

S.20 Deduction of input tax on exports and interstate sales, etc.

• (1) Tax paid under this Act by any dealer on purchase of inputs in respect of,-
  • (a) any goods sold in the course of export out of the territory of India, or
  • (b) any goods taxable under the Act, sold in the course of interstate trade or commerce, or
  • (c) any goods sold to a dealer who is a unit located in any special economic zone established under authorisation by the authorities specified by the Central Government in this behalf, or
  • (d) any goods sold to a dealer who is an Export Oriented Unit,
  shall be deducted as provided under Section 10, from output tax payable by such dealer.
• (2) Goods sold by a registered dealer to any other registered dealer who is a unit located in any special economic zone established under authorisation by the authorities specified by the Central Government in this behalf or who is an Export Oriented Unit, shall be exempt from the tax payable under this Act.

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S.21 Reimbursement of tax

Tax collected under this Act on purchases made by specialised agencies of the United Nations Organisation and Consulates or Embassies of any other country located in the State shall be reimbursed in such manner and subject to such conditions as may be prescribed.

S.22 Liability to register

• (1) Every dealer whose total turnover exceeds or who reasonably expects his total turnover to exceed two lakh rupees, as computed under the provisions of the Karnataka Sales Tax Act 1957 (Karnataka Act 25 of 1957), in the year ending Thirty First day of March 2003 shall be liable to be registered and report such liability on such date as may be notified by the Government.
• (2) Every dealer who at any time has reason to believe that his taxable turnover is likely to exceed two lakh rupees during any year after the year ending Thirty First day of March 2003 shall be liable to be registered and report such liability forthwith or on such date as may be notified by the Government.
• (3) Every dealer whose taxable turnover exceeds fifteen thousand rupees in any one month after the date from which the tax shall be levied, in accordance with Section 3, and every dealer executing a works contract whose receipts or amounts receivable by way of consideration towards work
  

S.23 Voluntary registration

A dealer who sells taxable goods, though not liable to register under Section 22 but who desires to register voluntarily, shall make an application to the prescribed authority in such form and in such manner as may be prescribed, giving correct and complete particulars.

S.24 Suo motu registration

Where a dealer liable to be registered has failed to inform the competent authority of his liability to be registered, the competent authority may after conducting such survey, inspection or enquiry as may be prescribed, proceed to register such person under Section 22.

S.25 Registration

• (1) The form of application to register under Section 22 or 23, the time and manner of making application, and the fee, payable shall be as may be prescribed.
• (2) On receipt of an application to register under Section 22 or 23, the prescribed authority shall register any such dealer and grant him a certificate of registration, if he is satisfied that the applicant is a bona fide dealer and that he complies with the requirements of this Act, with effect from the first day of the month following the month in which such application is made or from such earlier date as may be mutually agreed.
• (3) The prescribed authority may refuse to grant a certificate of registration to the applicant for any good and sufficient reasons to be recorded in writing, after allowing the applicant to show cause in writing against such refusal.
• (4) In respect of the Central Government, any State Government, any statutory body or any local authority liable to collect tax unde
  

S.26 Security

• (1) The prescribed authority may, for the proper payment of the tax, from time to time demand from a registered dealer or from a dealer who has applied for registration under this Act, reasonable security not exceeding a prescribed amount to be paid in the prescribed manner.
• (2) The prescribed authority may, by order, forfeit the whole or any portion of the security furnished by a dealer,
  • (a) for collecting any amount of tax, interest or penalty that is payable by such dealer, or
  • (b) if such dealer is found to have misused any prescribed certificate or declaration or has failed to keep or retain them in the prescribed manner.
• (3) No order shall be passed under sub-section (2), without giving the dealer an opportunity of showing cause in writing against such forfeiture.

S.27 Cancellation of registration

• (1) In any case where,
  • (a) any business of a registered dealer has been discontinued, transferred fully or otherwise disposed of; or
  • (b) there is any change in the status of the ownership of the business; or
  • (c) the taxable turnover of sale of goods of a registered dealer has, during any period of twenty four consecutive months, not exceeded two lakh rupees; or
  • (d) a dealer issues tax invoices without effecting any taxable sales; or
  • (e) a dealer being an individual, registered under this Act dies, and for any other good and sufficient reason, the prescribed authority may, either on its own motion or on the application of the dealer, or in the case of death, on the application of the legal heirs, made in the prescribed manner, cancel the registration certificate from such date, including any anterior date, as it considers fit having regard to the circumstances of the case.
• (2) The cancellation of a c
  

S.28 Obligation of registered dealer to inform changes after registration

• (1) Where,-
  • (a) a registered dealer sells or otherwise disposes of his business or any part thereof, or
  • (b) there is any other change in the ownership of the business including any change in the status, or
  • (c) a registered dealer discontinues his business or changes his place of business or opens a new place of business, or
  • (d) a registered dealer changes the name or nature of the business,
  such registered dealer or, in case of his death his legal representative, shall within the prescribed time, inform the prescribed authority accordingly.
• (2) Where,-
  • (a) a change of ownership of the business takes place on account of transfer of business from one registered dealer to another, the dealer succeeding to the business, or
  • (b) there is any change in the status of the ownership of the business,
  such registered dealer shall surrender the certificate o
  

S.29 Tax invoices and bills of sale

• (1) A registered dealer effecting a taxable sale, or sale of exempt goods along with any taxable goods, shall issue at the time of the sale, a tax invoice marked as original for the sale, containing the particulars prescribed, and shall retain a copy thereof.
• (2) A tax invoice marked as original shall not be issued to any registered dealer in circumstances other than those specified in sub-section (1), and in a case of loss of the original, a duplicate may be issued where such registered dealer so requests.
• (3) A registered dealer selling non-taxable goods or a dealer opting to pay tax by way of composition under Section 15 selling goods in excess of the prescribed value shall issue a bill of sale containing the particulars prescribed.

S.30 Credit and Debit Notes

• (1) Where a tax invoice has been issued for any sale of goods and within six months from the date of such sale the amount shown as tax charged in that tax invoice is found to exceed the tax payable in respect of the sale effected , the registered dealer effecting the sale shall issue forthwith to the purchaser a credit note containing particulars as prescribed.
• (2) Where a tax invoice has been issued for sale of any goods and the tax payable in respect of the sale exceeds the amount shown as tax charged in such tax invoice, the registered dealer making the sale, shall issue to the purchaser a debit note containing particulars as prescribed.
• (3) Any registered dealer who receives or issues credit notes or debit notes shall modify his return for the period in which the credit note or debit note is issued and pay any tax due on such return.

S.31 Accounts

• (1) Every registered dealer and every dealer liable to pay tax under this Act shall keep and maintain a true and correct account, in Kannada or English or Hindi or in such other language as the Government may, by notification, specify, of all his purchases, receipts, sales, other disposals, production, manufacture and stock showing the values of goods subject to each rate of tax under this Act including input tax paid and output tax payable.
• (2) If the Commissioner or prescribed authority is of the opinion that the accounts kept and maintained by any dealer or any class of dealers do not sufficiently enable him or it to verify the returns required under this Act or to make any assessment under it, he or it may, by order, require any dealer or class of dealers, to keep such accounts and records including tax invoices of manufacture, sales, purchases, disposals or transfers of stock other than by way of sales in such form and in such manner as he or it may direct.

S.32 Period of retention of accounts

• (1) Every dealer required under this Act to keep and maintain books of account or other records including tax invoices relating to his purchases and sales shall retain them until the expiration of five years after the end of the year to which they relate or for such other period as may be prescribed or until the assessment reaches finality, whichever is later.
• (2) Where such dealer is a party to an appeal or revision under this Act, he shall retain, until the appeal or revision and any appeal therefrom is finally disposed of, every record and accounting document that pertains to the subject matter of the appeal or revision.

S.33 Electronic records

Every dealer required to keep and maintain records and accounts pursuant to Section 31 and who does so by electronic means shall retain them in an electronically readable format for the retention period specified in Section 32.

S.34 Requirement to provide documents and information

Notwithstanding anything to the contrary contained in this Act, the prescribed authority may, for any purpose related to the administration or enforcement of this Act, by notice, require any person to provide the prescribed authority, within such reasonable time as is stipulated in the notice, with any information or additional information, including a return under this Act, or any other document, whether inside or outside the State.

S.35 Returns

• (1) Subject to sub-sections (2) to (4), every registered dealer, and the Central Government, a State Government, a statutory body and a local authority liable to pay tax collected under sub-section (2) of Section 9, shall furnish a return in such form and manner, including electronic methods, and shall pay the tax due on such return within twenty days after the end of the preceding month or any other tax period as may be prescribed.
• (2) The tax on any sale or purchase of goods declared in a return furnished shall become payable at the expiry of the period specified in sub-section (1) without requiring issue of a notice for payment of such tax.
• (3) Subject to such terms and conditions as may be specified, the prescribed authority may require any registered dealer.-
  • (a) to furnish a return for such periods, or
  • (b) to furnish separate branch returns where the registered dealer has more than one place of business.
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S.36 Interest in case of failure to furnish returns or to pay tax declared on returns or other amounts payable

• (1) Every dealer shall be liable to pay simple interest on any amount of tax which should have been declared on a return, but which has been omitted from it, unless that omission is corrected within three months of the omission subject to sub-section (2) of Section 72, and such interest is payable from the date the tax should have been declared, and the dealer shall declare his liability to pay that interest in such form and manner as may be prescribed.
• (2) If a dealer required to furnish a return under this Act.-
  • (a) fails to pay any amount of tax or additional tax declared on the return, or
  • (b) furnishes a revised return more than three months after tax became payable, declaring additional tax, but fails to pay any interest declared to be payable under sub-section (1), or
  • (c) fails to declare any tax or interest which should have been declared, or
  • (d) fails to make a return,
  such dealer shall be
  

S.37 Rate of interest

• (1) The rate of simple interest payable under Section 36 shall be two per cent per month:
  • (a) from the date the tax had become payable to the date of its payment or to the date of any assessment under this Act, whichever is earlier; and
  • (b) from the date on which any amount payable under this Act was due.
• (2) For the purpose of this Section interest in respect of parts of a month shall be computed proportionately and month shall mean any period of thirty days.

S.38 Assessment of tax

• (1) Every dealer shall be deemed to have been assessed to tax based on the return filed by him under Section 35, except in cases where the Commissioner may notify the dealer of any requirement of production of accounts in support of a return filed for any period.
• (2) Where a registered dealer fails to furnish his monthly or final return on or before the date provided in this Act or the rules made thereunder, the prescribed authority shall issue an assessment to the registered dealer to the best of its judgement and the tax assessed shall be paid within ten days from the date of issue of the assessment.
• (3) Where an assessment has been made under sub-section (2) and the dealer subsequently furnishes a return for the period to which the assessment relates, the prescribed authority may withdraw the assessment but the dealer shall be liable to penalties and interest as applicable.
• (4) Where the dealer furnishes a return under sub-section (3), such retur
  

S.39 Re-assessment of tax

• (1) Where the prescribed authority has grounds to believe that any return furnished which is deemed as assessed is incorrect or that any assessment issued under Section 38 understates the correct tax liability of the dealer, it,-
  • (a) may, based on any information available, re-assess, to the best of its judgement, the additional tax payable together with any penalty and interest ; and
  • (b) shall issue a notice of re- assessment to the registered dealer demanding that the tax shall be paid within ten days of the date of service of the notice after giving the dealer the opportunity of showing cause against such re-assessment in writing.
• (2) Where after making a re-assessment under this Section, any further evidence comes to the notice of the prescribed authority, it may make any further re-assessments in addition to such earlier re-assessment.

S.40 Period of limitation for assessment

• (1) An assessment under Section 38 or re-assessment under Section 39 of an amount of tax due for any prescribed tax period shall not be made after the following time limits.-
  • (a) five years after the end of the prescribed tax period; or
  • (b) three years after evidence of facts, sufficient in the opinion of the prescribed authority to justify making of the re-assessment, comes to its knowledge,
  whichever is later.
• (2) If any tax is fraudulently evaded attracting punishment under Section 79, an assessment may be made as if in sub-section (1), reference to five years was a reference to ten years.
• (3) In computing the period of limitation specified for assessment or re-assessment, as the case may be under this Act, the period taken for disposal of any appeal against an assessment or other proceeding by the appellate authority, a tribunal or competent court shall not be taken into account in computing such perio
  

S.41 Power of rectification of assessment or re-assessment in certain cases

• (1) Where any assessment or re-assessment or an order of an appellate authority or a revisional authority other than a court or tribunal, is found to be erroneous in so far as it is prejudicial to the interest of the public revenue by a judgement or an order of any court, then notwithstanding anything contained in this Act, authority concerned may proceed to rectify such assessment or re-assessment or order and determine the tax payable by the dealer in accordance with such judgement or order at any time within a period of three years from the date of such judgement or order.
• (2) Where any court makes an order or gives judgement to the effect that any tax assessed under this Act or any other law should have been assessed under a provision of a law different from that under which it was assessed, then in consequence of such order or judgement or to give effect to any finding or direction contained in any such order or judgement, such turnover or part thereof, may be a
  

S.42 Payment and recovery of tax, penalties, interest and other amounts

• (1) Every registered dealer shall furnish returns to the prescribed authority, and the tax payable shall be paid in such manner as may be prescribed, within the period specified and on an application by a dealer, the Government or Commissioner may permit, subject to such conditions as may be prescribed, payment of tax or any other amount payable, in such instalments and at such intervals as may be prescribed.
• (2) Every registered dealer shall, on receipt of a Notice from the prescribed authority, pay any penalty or interest due in such manner as may be prescribed.
• (3) (a) The Government may, in such circumstances and subject to such conditions as may be prescribed, by notification, defer payment by any new industrial unit of the whole or any part of the tax payable in respect of any period and also permit payment of such tax before the expiry of any deferred period, subject to the condition that in respect of such industrial unit the Government has already n
  

S.43 Duties of Receivers

• (1) A receiver appointed by any court shall notify the Commissioner in writing within fourteen days after being appointed to the position of receiver or taking possession of an asset in the State whichever is earlier.
• (2) The Commissioner may notify the receiver in writing of the amount which appears to be sufficient to provide for any tax which is or will become payable by the person whose assets are in the possession of the receiver.
• (3) A receiver shall not part with any asset in the State, which is held by the receiver in his capacity as receiver without the prior written permission of the Commissioner or any other officer authorised by him.
• (4) A receiver.-
  • (a) shall set aside, out of the proceeds of sale of an asset, the amount notified by the Commissioner under sub-section (2), or such lesser amount as may subsequently be fixed by the Commissioner;
  • (b) is liable to the extent of the amount set aside for the tax p
    

S.44 Special provisions relating to companies

• (1) Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956),when any tax due from or assessed on a company under this Act for any period cannot be recovered, then, every person who is or was a director of the 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.
• (2) (a) If the person committing an offence under this Act is a company, the company as well as every person in charge of, or responsible to, the company for the conduct of its business at the time of the commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly.

  (b) No such person referred to in clause (a) shall be liable to any punishment if he proves that t
  

  S.45 Recovery of tax, penalty, or any other amount, from certain other persons

  • (1) The prescribed authority may at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the dealer at his last address known to the prescribed authority, require any person from whom money is due or may become due to the dealer or any person who holds or may subsequently hold money for or on account of the dealer to pay to the prescribed authority, either forthwith upon the money becoming due or being held at or within the time specified in the notice, not being before the money becomes due or is held, so much of the money as is sufficient to pay the amount due by the dealer in respect of arrears of tax or penalty or the whole of the money when it is equal to or less than that amount.
  • (2) The prescribed authority may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.
  • (3) Any person making any payment in compliance with a notice under thi
    

  S.46 Tax payable on transfer of business, assessment of legal representatives, etc.

  • (1) When the ownership of the business of a dealer is transferred, the transferor and the transferee shall jointly and severally be liable to pay any tax or penalty or any other amount remaining unpaid at the time of transfer or that may become payable in respect of such business after the date of transfer but relating to the years up to the date of transfer and for the purpose of recovery from the transferee, such transferee shall be deemed to be the dealer liable to pay the tax or penalty or other amount due under this Act.
  • (2) When a firm liable to pay the tax or penalty is dissolved, the assessment of the tax and imposition of penalty shall be made as if no dissolution of the firm had taken place, and every person who was at the time of dissolution a partner of the firm and the legal representative of any such person who is deceased shall be jointly and severally liable to pay the tax or penalty assessed or imposed.
  • (3) Where any firm is liable to pay an
    

  S.47 Payment and disbursement of amounts wrongly collected by dealer as tax

  • (1) Subject to Section 30, where any amount is collected by way of tax or purporting to be way of tax from any person by any dealer, whether knowingly or not, such dealer shall pay the entire amount so collected, to the prescribed authority within twenty days after the close of the month in which such amount was collected, notwithstanding that the dealer is not liable to pay such amount as tax or that only a part of it is due from him as tax under this Act.
  • (2) If default is made in payment of the amount in accordance with sub-section (1), -
    • (a) the whole of the amount outstanding on the date of default shall become immediately due and shall be a charge on the properties of the dealer;
    • (b) the dealer liable to pay the amount shall pay interest at the rate of two per cent of such amount for each month of default and
    • (c) the whole of the amount remaining unpaid along with the interest calculated under clause (b) of this sub-sectio
      

  S.48 Tax to be first charge on property

  Notwithstanding anything to the contrary contained in any law for the time being in force, any amount payable by a dealer or any other person on account of tax, penalty or interest or any amount which a dealer is required to pay or deduct from payment or for which he is personally liable to the Government shall be a first charge on the property of the dealer or such person, as the case may be.

  
  

  S.49 Period of limitation for recovery of tax

  • (1) Notwithstanding anything contained in any law for the time being in force, no proceedings for the recovery of any amount under this Act shall be initiated after the expiry of twelve years from the end of the relevant tax period or from the date of the relevant assessment, provided that when an appeal or application for revision has been filed, the period of limitation shall run from the date on which the amount due is finally determined.
  • (2) The period of limitation specified under sub-section (1) shall not apply to any case in which, during the course of recovery proceedings initiated under any clause of sub-section (3) of Section 42 or under Section 45, any other fresh proceedings are initiated.
  
  

  S.50 Payment of interest on refunds

  • (1) Where any amount refundable to any person under an order made, or proceedings taken, under any provision of this Act or Rules made thereunder is not refunded to him within thirty five days,
    • (a) of the date of such order, if that order is made by the refunding authority, or
    • (b) of the date of receipt of such order by the refunding authority, if that order is made by an authority other than the refunding authority,
    the refunding authority, being any officer of the Commercial Taxes Department authorized to make any refund under this Act, shall pay such person simple interest at the rate of twelve percent per annum on the said amount from the day immediately following the expiry of the said thirty five days to the day of the refund.
  • (2) The interest calculable under sub-section (1) shall be on the balance of the amount remaining after adjusting out of the refundable amount any tax, interest or other amount due unde
    

  S.51 Power to withhold refund in certain cases

  • (1) Where an order giving rise to a refund is the subject matter of an appeal or any other proceedings under this Act, the prescribed authority may, if, to the best of its judgement it is of the opinion that the grant of a refund is likely to prejudice the public revenue, withhold the refund until such time as it deems proper.
  • (2) The dealer shall be paid interest under sub-section (1) of Section 50 on the amount of refund ultimately determined to be due to the dealer as a result of such proceedings for the period commencing from the expiry of thirty five days from the date of the order referred in sub-section (1) to the date of refund.
  
  

  S.52 Production and inspection of documents and powers of entry, search and seizure

  • (1) Any officer authorised by the Commissioner in this behalf shall have the power.-
    • (a) to enter and inspect the place of business of any dealer, or any other place, where it is believed by such Officer that business is being carried on or accounts including documents are being kept by such dealer.
    • (b) to direct such dealer to produce at such time and at such place accounts, registers and documents relating to his business activities for examination.
    • (c) to enter and inspect the goods in the possession of the dealer or in the possession of any other person on behalf of such dealer, wherever such goods are kept.
    • (d) to enter and search such places including the dealers place of residence, and including the search of the dealer or person acting on behalf of the dealer found there, where concealment of facts relating to the business are suspected.
    • (e) to seize any accounts, registers or documents from the dealer, where he
      

  S.53 Establishment of check posts and inspection of goods in movement

  • (1) If the Government or the Commissioner considers it necessary, with a view to prevent or check evasion of tax under this Act in any place or places in the State, it or he may, by notification, direct the establishment of a check post or the erection of a barrier, or both, at such place or places as may be notified.
  • (2) The owner or person in charge of a goods vehicle or a boat, ship or similar vessel shall:
    • (a) carry with him a goods vehicle record, a trip sheet or a log book, as the case may be; and
    • (b) carry with him a tax invoice or a bill of sale or a delivery note or such other documents as may be prescribed, in respect of the goods carried in the goods vehicle or boat, ship or similar vessel; and
    • (c) produce the documents referred to in sub-clauses (a) and (b) before any officer-in-charge of check post or barrier, or any other officer as may be empowered by the Government in this behalf, and obtain the seal of such offi
      

  S.54 Transit of goods by road through the State and issue of transit pass

  • (1) Where a vehicle is carrying goods taxable under this Act,
    • (a) from any place outside the State and bound for any place outside the State and passes through the State ; or
    • (b) imported into the State from any place outside the country and such goods are being carried to any place outside the State,
    the driver or any other person-in-charge of such vehicle shall furnish the necessary information and obtain a transit pass in duplicate containing such particulars as may be prescribed, from the officer-in-charge of the first check post or barrier after his entry into the State or after movement has commenced from the State, as the case may be, or from the officer empowered for the purposes of sub-section (3) of Section 52, upon interception of the goods vehicle after its entry into the State or after movement has commenced, as the case may be.
  • (2) The driver or the person-in-charge of the vehicle shall deliver within
    

  S.55 Penalty in case of under-valuation of goods

  • (1) Where, in respect of goods liable to tax under this Act carried in a goods vehicle or boat, ship or similar vessel, or held in stock by any dealer or on his behalf by any other person, or held in the custody of any transporter, the prescribed authority, or any officer empowered under Section 53, has reason to believe that the value shown in the document accompanying the goods in transit or in the purchase invoice is lower than the prevailing market price or Maximum Retail Price, by a difference of thirty per cent or more, such authority or officers, for reasons to be recorded in writing and after allowing the person or dealer a reasonable opportunity of being heard, may impose a penalty of a sum not exceeding twice the amount of the tax due on such goods.
  • (2) The amount of tax and the penalty levied under this Section shall be recovered in the manner specified under sub-Section (14) of Section 53.
  • (3) The value of goods in transit shall be the total pric
    

  S.56 Liability to furnish information by certain agents

  • (1) Every person or a clearing or forwarding house or agency, transporting agency, shipping agency, shipping-out agency or steamer agency or air-cargo agency or courier agency engaged in the business of transporting taxable goods in the State shall furnish to the prescribed authority information relating to any taxable goods cleared, forwarded, transported or shipped by him or it during any period or relating to any dealer as may be required by the prescribed authority.
  • (2) The authority prescribed in this behalf, shall have the power to call for and examine the books of account or other documents in the possession of such person or agency with a view to verify the correctness of the information furnished under sub-section (1).
  • (3) Any person failing to comply with the provisions of sub-sections (1) and (2) without valid reason shall be liable to penalty under Section 75.
  
  

  S.57 Special evidential requirements relating to banks

  The prescribed authority may require any bank or any officer thereof to furnish such information, document or statement for the purpose of any proceedings under this Act, and any person failing to comply with such requirement without valid reason shall be liable to penalty under Section 75.

  
  

  S.58 Appointment of Commissioner, Additional Commissioners, Joint Commissioners, Deputy Commissioners, Assistant Commissioners, State Representatives and Commercial Tax Officers

  • (1) The State Government may appoint a Commissioner of Commercial Taxes and as many Additional Commissioners, Joint Commissioners, Deputy Commissioners, Assistant Commissioners, State Representatives and Commercial Tax Officers, as they think fit for the purpose of performing the functions, respectively conferred on them by or under this Act or by or under any other law for the time being in force.
  • (2) The Commissioner may, empower an officer not below the rank of an Assistant Commissioner or an Advocate or a Chartered Accountant or a Tax Practitioner enrolled in the prescribed manner to perform the functions of a State Representative.
  • (3) In proceedings before the Appellate Tribunal, the State Representative shall be competent, -
    • (a) to prepare and sign applications, appeals and other documents,
    • (b) to appear, represent, act and plead,
    • (c) to receive notices and other processes, and
    • (d) to do all other acts co
      

  S.59 Instructions to Subordinate Authorities

  • (1) The Government and the Commissioner may from time to time, issue such orders, instructions and directions to all officers and persons employed in the execution of this Act as they may deem fit for the administration of this Act, and all such officers and persons shall observe and follow such orders, instructions and directions of the Government and the Commissioner.
  • (2) No such orders, instructions, or directions shall be issued under sub-section (1) so as to interfere with the discretion of any appellate authority in the exercise of its appellate functions.
  • (3) All officers and persons employed in the execution of this Act, shall observe and follow such administrative instructions as may be issued to them for their guidance by the Additional Commissioner or Joint Commissioner within whose jurisdiction they perform their functions.
  • (4) Without prejudice to the generality of the foregoing power, the Commissioner may, on his own motion or on an ap
    

  S.60 Clarification and Advance Rulings

  • (1) The Commissioner may constitute an Authority for Clarification and Advance Rulings, consisting of three Additional Commissioners, to clarify the rate of tax in respect of any goods or the exigibility to tax of any transaction under the Act.
  • (2) Any registered dealer seeking clarification or advanced ruling under this Section shall make an application to the Authority in such form and accompanied by proof of payment of such fee, paid in such manner as may be prescribed.
  • (3) No officer or any other authority of the Department or the Appellate Tribunal shall proceed to decide any issue in respect of which an application has been made by an applicant under this Section.
  • (4) The order of the authority shall be binding only on the applicant who seeks clarification and only in respect of the goods or transaction in relation to which a clarification is sought and also only on all the subordinate officers.
  • (5) The order of the Authority under th
    

  S.61 Jurisdiction of officers and change of incumbent of an office

  • (1) The Additional Commissioners, Joint Commissioners, Deputy Commissioners, Assistant Commissioners and Commercial Tax Officers shall perform their functions in respect of such areas or of such dealers or classes of dealers or of such cases or classes of cases as the Commissioner may direct.
  • (2) The word case' in relation to any dealer specified in any order or direction issued thereunder means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year.
  • (3) Whenever in respect of any proceeding under this Act, any prescribed authority ceases to exercise jurisdiction and is succeeded by another who may exercise that jurisdiction, the authority or officer so succeeding may continue the proceeding from the stage at
    

  S.62 Appeals

  • (1) Any person objecting to any order or proceedings affecting him passed under the provisions of this Act by the prescribed authority may appeal to the prescribed appellate authority.
  • (2) The appeal shall be preferred,
    • (a) in respect of an order of assessment, within thirty days from the date on which the notice of assessment, was served on the appellant, and
    • (b) in respect of any other order, within thirty days from the date on which the order was communicated to the appellant:
  • (3) The appellate authority may admit an appeal preferred after the period as aforesaid but within a further period of one hundred and eighty days, if it is satisfied that the appellant had sufficient cause for not preferring the appeal within that period.
  • (4) (a) No appeal against an order of assessment shall be entertained by the appellate authority unless it is accompanied by satisfactory proof of the payment of tax and penalty n
    

  S.63 Appeal to the Appellate Tribunal

  • (1) Any officer empowered by the Government in this behalf or any other person objecting to an order passed by the appellate authority under Section 62 may appeal to the Appellate Tribunal within a period of sixty days from the date on which the order was communicated to him.
  • (2) The Appellate Tribunal may admit an appeal preferred after the period of sixty days referred to in sub-section (1), but within a further period of one hundred and eighty days, if it is satisfied that the appellant had sufficient cause for not preferring the appeal within that period.
  • (3) The officer authorized under sub-section (1) or the person against whom an appeal has been preferred, as the case may be, on receipt of notice that an appeal against the order of the appellate authority has been preferred under sub-section (1) by the other party, may, notwithstanding that he has not appealed against such order or any part thereof, file, at any time before the appeal is finally heard