MADHYA PRADESH GENERAL SALES TAX ACT, 1958

Act No. 02 of 1959

27th February, 1959

An Act to consolidate and amend the laws relating to levy of a general tax on the sales or purchases of goods in the State of Madhya Pradesh.1 Be it enacted by the Madhya Pradesh Legislature in the Ninth Year of the Republic of India as follows:-- 1. For Statement of Objects and Reasons (in English) see Madhya Pradesh Gazette, Extraordinary dated the 25th April, 1958, Page 793 and (in Hindi) 323. For proceedings in Assembly, see Madhya Pradesh Vidhan Sabba proceedings 1958, Vol. 3, No. 35 Pages 3131 to 3167, No. 36, pages 3246 to 3263, Vol. 4 No. 1 pages 32, No. 7, pages 644 to 686, No. 8, pages 775 to 786, No. 9, pages 881 to 918, No. 15, pages 1630 to 1652.

S.1 Short title, extent and commencements

(1) This Act may be called the Madhya Pradesh General Sales Tax Act, 1958.

(2) It extends to the whole of Madhya Pradesh.

(3) It shall come into force on such date1 as the State Government may, by notification, appoint in this behalf.

1. 1st April, 1959, see Govt. of M.P. Separate Revenue Department Notification No. 622-1586-V-Sr., dated the 21st March 1959, published in the Madhya Pradesh Gazette dated the 27th March 1959, part III Section I, page 50.

S.2 Definitions

In this Act, unless there is anything repugnant in the subject or context,--

• (a) "Appellate Assistant Commissioner" means an Appellate Assistant Commissioner of Sales Tax appointed under section 3 and includes an Additional Appellate Assistant Commissioner of Sales Tax;
• [(aa) "Appellate Deputy Commissioner" means an Appellate Deputy Commissioner of Sales Tax appointed under section 3 and includes an Additional Appellate Deputy Commissioner of Sales Tax;]1
• (b) "Assistant Commissioner" means an Assistant Commissioner of Sales Tax appointed under section 3 and includes an Additional Assistant Commissioner of Sales Tax;
• 2[(bb) "business" includes-
  • [(i) any trade, commerce, manufacture or any adventure or concern in the nature of trade, commerce, manufacture, adventure or concern is carried on with a motive to make gain or profit and whether or not any gain or profit accrues from such trade, commerce, man
    

S.3 Taxing authorities and other officers

[(1) There may be appointed a person to be the Commissioner of Sales Tax and the following category of officers to assist him, namely:-

• (a) Additional Commissioner of Sales Tax;
• (b) Appellate Deputy Commissioner or Additional Appellate Deputy Commissioner of Sales Tax;
• (c) Deputy Commissioner or Additional Deputy Commissioner of Sales Tax;
• (d) Appellate Assistant Commissioner or Additional Appellate Assistant Commissioner of Sales Tax;
• (e) Assistant Commissioner or Additional Assistant Commissioner of Sales Tax;
• (f) Sales Tax Officer or Additional Sales Tax Officer;
• (g) Assistant Sales Tax Officer; and
• (h) Inspector of Sales Tax.]1

(2) The Commissioner of Sales Tax and the Additional Commissioner of Sales Tax shall be appointed by the State Government and the other officer referred to in sub-section (1) shall be appointed by the State Government or such other authority as it may dir


S.3A Tribunal

(1) Subject to such rules as may be made in this behalf, the State Government may, by notification, with effect from a date specified therein, constitute a Tribunal to exercise the powers and perform the functions conferred on the Tribunal by or under this Act.

(2) Till the date specified in the notification under sub-section (1) the Board of Revenue shall act as Tribunal for the purposes of the Act and on the date aforementioned all proceedings pending before the Board of Revenue, Madhya Pradesh, acting as Tribunal shall stand transferred to the Tribunal constituted under sub-section (1).

(3) Subject to the previous approval of the State Government, the Tribunal may, from time to time, make regulations consistent with the provisions of this Act regulating the procedure and disposal of its business.]1

1. Inserted. by S. 4, ibid




S.4 Incidence of taxation

(1) Every dealer whose turnover during a period of twelve months immediately preceding the commencement of this Act exceeds the limit specified in sub-section (5). shall from such commencement be liable to pay tax under this Act on his taxable turnover in respect of sales or supplies of goods effected in Madhya Pradesh.

(2) Every dealer to whom sub-section (1) docs not apply shall be liable to pay tax under this Act on his taxable turnover in respect of sales or supplies of goods effected in Madhya Pradesh with effect from the date on which his turnover calculated during a period of twelve months immediately preceding such date first exceeding the limits specified in sub-section (5) but for purpose of assessment of the tax only so much of his turnover as in excess of such limits shall be taken into consideration.

(3) Every dealer who is liable to pay tax under this Act shall continue to be so liable until the expiry of two consecutive years during each of which his tu


S.4A Determination of liability to pay tax under this Act

(1) 1[For the purpose of determining the liability of a dealer to pay tax under this Act, the Commissioner shall Institute proceedings in such, manner as may be prescribed and such liability shall be determined within a period of twelve months from the date of Institution of such proceedings.)2

[(2) Notwithstanding anything contained in sub-section (2) of section 4, liability of a dealer to pay tax under this Act, shall not be determined from a date earlier than five years--

• (i) from the date of Institution of proceedings under sub-section (1); or
• (ii) from the date of validity of the registration certificate issued to him; whichever is earlier.]3

1. Substituted. by M.P. Act 35 of 1973, S. 2.

2. Substituted. by M.P. Act 25 of 1978, S. 6{i).

3. Substituted. by M.P. Act 25 of 1978, S. 6(ii).




S.5 Liability of dealer registered under Act No. LXXIV of 1956 to pay tax

[(1) A dealer registered under the Central Sales Tax Act, 1956 (74 of 1956) who is not liable to pay tax under section 4 shall nevertheless be liable to pay tax on his sale of any goods in respect of the purchases of which he has furnished a declaration under sub-section (4) of section 8 of the said Act or on the sale of any goods in the manufacture of which such goods have been used at the rate specified in sub-section (1) of section 6.]1

(2) Every dealer to whom sub-section (1) applies shall, for the purposes of sections 17, 18, 22 and 26 be deemed to be a registered dealer.

[5-A............................]2

[5-B................................]3

1. Substituted. by S. 7, ibid.

2. Omitted by M.P. Act 25 of 1982, S. 3.

3. Omitted, ibid.




S.6 Levy of tax

(1) 1[Subject to the provisions of [sub-sections (2) and (3)]2 the tax payable by a dealer under this Act shall be levied on the taxable turnover relating to goods specified in Schedule II [at the rate as mentioned in the corresponding entry in column (3) of the said Schedule.]3

(2) (a) Subject to such restrictions and conditions as may be prescribed and to the provisions of sub-clause (hi) of clause (r) of section 2]4 the tax payable by a registered dealer on the sales of any goods specified in Schedule II except tendu leaves and whole pulses to another registered dealer for use by him as raw material or as incidental goods in the manufacture or processing of goods or in the mining of goods or in the generation of or distribution of electric energy or any other form of power shall be levied at the concessional rate of 3 1/2 per cent [.............]5 in respect of raw materials, and 4 1/2 per cent [................]


S.7 Levy of purchase tax

(1) 1[Every dealer who in the course of his business purchases any goods specified in Schedule II :--

• (i) from a registered dealer in circumstances in which no tax under section 6 is payable by that registered dealer on the sale price of such goods; or
• (ii) from any other person;
shall be liable to pay tax on the purchase price of such goods, if after such purchase the goods are not sold either within the State or in the course of inter-State trade or commerce but are--
• [(a) sold or disposed of otherwise; or]2
• (b) used or consumed in the manufacture or processing of other goods or used or consumed otherwise; over tax shall be levied at the same rate at which tax under sub-section (1) of section 6 would have been levied on the sale of such goods within the State on the date of such purchase.

(2) Notwithstanding anything contained in sub-section (1) but subject to s


S.7A Dealer not to pass incidence of tax to agriculturists and horticulturists under certain circumstances

No dealer shall collect any amount, by way of sales tax or purchase tax, from a person who sells agricultural or horticultural produce grown by himself or grown on any land in which he has an interest, whether as owner, usufructuary mortgage, tenant or otherwise, when such produce is sold in the form in which it was produced, without being subjected to any physical, chemical or other process for being made fit for consumption save mere dehusking cleaning, grading or sorting]1

1. Inserted. by M.P. Act 23 of 1963, S. 2




S.7AA Levy of additional tax

Every dealer liable to pay tax under section 4, other than a dealer holding a licence under section 15, shall also be liable to pay an additional tax at the rate of one per centum on his taxable turnover of goods specified in Schedule II, other than declared goods.]1

1. Sub. by M.P. Act 3 of 1986, S. 3




S.7B Payment of grant-in-aid for Joss of octroi revenue

(1) As and from the financial year commencing on the 1st April 1978, the State Government shall pay to each Municipal Corporation, Municipal Council and Town Committee referred to in section 5 of the Madhya Pradesh Municipal Laws (Amendment) Act, 1976 (50 of 1976), a grant-in-aid in such manner as may be prescribed to compensate it for the loss of revenue on account of abolition of cess, octroi or tax on entry of animals or goods into the local area under the said section. The grant-in-aid payable to each Municipal Corporation, Municipal Council and Town Committee for the financial year, 1978-79 and for the financial year Substitutedequent thereto shall be computed--

• (a) taking the financial year 1975-76 as the base year;
• (b) taking the total income in the base year from cess, octroi or tax abolished as seventeen crores; and
• (c) allowing an Increase of ten per cent over the amount paid in each previous financial year

(2) The g


S.8 Set-oil or refund of tax in respect of tax-paid goods in certain circumstances

[(1)]2 Subject to such conditions and restrictions as may be prescribed, a set-off as provided in this section shall be granted in such manner as may be prescribed, to registered dealers in the circumstances specified below in respect of tax-paid goods:-

• 1[(a) When a registered dealer has purchased tax-paid raw material other than tendu leaves and whole pulses or incidental goods which have borne tax under sub-section (1) of section 6 at the full rate exceeding 3 1/2 per cent [. . . .]3 or 4 1/2 per cent [.. . .]4 respectively or exceeding such other rate as may be notified by the State Government in respect of any raw material or incidental goods and has consumed or used such raw material or incidental goods in manufacture of or in the mining of any goods specified in Schedule II which have not been declared tax-free under section 12, he shall be entitled to a set-off at a rate equal to the difference between the full rate o
  

S.9 Burden of proof

The burden of proving that any sale or purchase effected by a dealer is not liable to nay tax under [section 6 or section 7 or section 14-A]1 as the case may be, shall be on the dealer.

1. Words "section 6 or section 7 or section 8" Substituted by M.P. Act 25 of 1982, S. 7.




S.10 Tax free goods

(1) No tax shall be payable on the sales or purchases of goods specified in the second column of Schedule I subject to the conditions and exceptions, if any, set out in the corresponding entry in the third column thereof.

(2) The State Government may in respect of any goods, by notification amend Schedule I so as to include therein any goods not already specified or may relax or omit any of the conditions and exceptions set out in the corresponding entry in the third column thereof.




S.11 Power of Government to amend Schedule II

X[(1) The State Government may, by notification, amend Schedule II and thereupon Schedule II shall stand amended accordingly]1

2[Provided that the [rate of tax]3 shall not exceed:-

• (a) in respect of declared goods the limit specified in clause (a) of section 15 of the Central Sales Tax Act, 1956 (No. 74 of 1956);
• (b) 6 per cent in respect of goods in part I other than declared goods;
• (c) 50 percent in respect of foreign and Indian made foreign liquor, 15 per cent in respect of goods specified in entries 1 to 32, [20 percent in respect of goods specified in entries 32-A and 32-B]4 and 13.5 percent in respect of goods specified in entries 34 to 46 in Part II;
• (d) 12 percent in respect of goods specified in entries 1 to 28 and 10 per cent in respect of goods specified in entries 29 to 41 in part III;
• (e) 8 per cent in respect of goods specified in part IV other than declared goods
  

S.12 Saving

(1) The State Government may, by notification and subject to such restrictions and conditions as may be specified there in exempt whether prospectively or retrospectively, in whole or in part-

• (i) any class of dealers or any goods or class of goods from the payment of tax under this Act for such period as may be specified in the notification,
• (ii) any dealer or class of dealers from any provision of the Act for such period as may be specified in the notification.

(2) Any notification issued under this section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission such notification shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect.

(3) Notwithstanding the repeal of the Madhya Pradesh Vikraya Rashi Tatha Kraya Rashi Par Kar Adhiniyam, 1972 (No. 8 of 1972)1, (sic) Government may, by notification, exempt a


S.13 Licensing of certain dealers

1[(1) The Commissioner may, subject to such conditions as may be prescribed license under this section [any registered dealer]2 who carries on business in any of the goods specified in Schedule III and whose yearly turnover in respect of all goods specified in Schedule T and Schedule II [does not ordinarily exceed such amount as may be prescribed on advance payment of such annual licence fee as may be determined in relation to such registered dealer in accordance with the rules made in this behalf]3 and the provisions of sections 17. 26 and 27 shall not apply to [such registered dealer]4 in respect of his business relating to goods specified in Schedule I and III during the period in which the licence issued to him under this section remains in force.]

[................]5

[(I-A)............]6

7[(2) The licence fee recovered from a [registered dealer]8 under subjection (1) [.


S.14 Liability to tax of persons not observing conditions of exemption or licence

If any restrictions or conditions notified under section 12 or imposed under section 13 are not complied with by a dealer, the sales or purchases, as the case may be, of the dealer may, with effect from the commencement of the veer in which such non-compliance took place, be assessed to tax under section 6 or section 7 and the licence fee, if any, recovered from such dealer, shall be adjusted towards the tax so assessed.




S.14A Liability of a dealer purchasing exempted goods

1[Notwithstanding anything contained in section 14, where any condition of exemption imposed under section 12 requires that the registered dealer purchasing the goods exempted in whole or in part from the payment -of tax under this Act, shall furnish a declaration or certificate to the effect that--

• (a) the goods purchased shall be used by him for a specified purpose and within a specified time; or
• (b) the goods purchased shall be disposed of by him in a specified manner and within a specified time; and contrary to such declaration or certificate, if such dealer-
  • (i) does not use the goods for the specified purpose or within the specified time; or
  • (ii) does not dispose of the goods in the specified manner or within specified time;
he shall be liable to pay the tax on the purchase price of such goods at the full rate mentioned in [column (3)]2 of Schedule II and penalty


S.15 Registration of dealers

(1) Every dealer whose turnover during the twelve months immediately preceding the commencement of this Act exceeds the limits specified in sub-section (5) of section 4 shall get himself registered in the prescribed manner before such date as may be notified in this behalf.

(2) Every dealer other than a dealer to whom sub-section (1) applies shall be liable to get himself registered within the prescribed period from the date on which his turnover during the twelve months immediately preceding such date first exceeds the limits specified in sub-section (5) of section 4.

1[(3) Every dealer required by sub-section (1) or sub-section (2) or Subsection (1) of section 33 to be registered shall make an application accompanied by a satisfactory proof of payment of fee of [fifty rupees]2 in that behalf in the prescribed manner to the Commissioner.]

[(4) (a) On receipt of the application,--

• (i) the said authority shall, if it is s
  

S.16 Voluntary registration of dealers

[(1) If on an application of any dealer the Commissioner is satisfied that his turnover is likely to exceed the limits specified in sub-section (5) of section 4, the Commissioner may, notwithstanding that the dealer may not be liable to pay tax under section 4, register the dealer and grant him a certificate of registration in the prescribed manner not later than ninety days from the date of receipt of the application and thereupon the provisions of section 15 shall apply to such dealer as they apply in the case of a dealer registered under that section :

Provided that where the Commissioner is not too satisfied, he shall reject the application within ninety days from the date of receipt of the application :

Provided further that if the certificate of registration is not granted or the application is not rejected within that aforesaid period of ninety days, the applicant shall, on the expiration of the said period be entitled to a certificate of registration in


S.16A Voluntary registration of dealers

(1) 1Where an application for the issue of a certificate of registration has been made under section 15 or section 16 by a dealer who either does not own any immovable property in Madhya Pradesh or who has not been continuously residing in Madhya Pradesh for a period of three years preceding the date of such application and it appears necessary to the Commissioner so to do for the proper realisation of tax or any other sum payable under this Act, he may, by an order in writing impose a condition for the issue of certificate of registration under section 15 or section 16 that the dealer shall furnish, in the prescribed manner and within such time as may he specified in the order, such security in the form of Cash Security or bank guarantee or security in such other form as may be prescribed, as may be specified in the order for the aforesaid purpose.

(2) Where a dealer registered under section 15 or section 16 fails to furnish returns under section 17 in time or fa


S.16B Provisional Registration of intending manufacturers

[(1) 1[Any]2 person intending to establish a business in the State for the purpose of manufacturing goods for sale of a value exceeding [rupees ten thousand]3 a year and who is registered with the Industries Department of the State Government for establishing small scale industrial unit in the State or who is issued a licence to establish a new industrial undertaking in the State under the provisions of the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951) may, notwithstanding that he is not liable for registration under section 15, make an application to the Commissioner accompanied by a satisfactory proof of payment of fee of [fifty rupees]4 in that behalf in the prescribed manner for provisional registration under this Act.]

(2) If the Commissioner after making such inquiry as he may consider necessary, is satisfied as to the bona fide intention of the person making the application, he may grant a provisional ce


S.16C Issue of recognition certificates to certain registered dealers

Where the Commissioner is satisfied that the business of a registered dealer who, manufactures taxable goods is likely to suffer in view of the provisions of section 3 relating to grant of refund or set off in respect of the use of tax paid raw material or incidental goods in such manufacture either due to the fact that the manufactured goods are liable to be taxed at Substantially lower rates than the rates of tax on raw materials or that the manufactured goods are wholly or Substantially sold in the course of export out of the territory of India or for any other reasons, fie may issue a recognition certificate to such registered dealer in such form and in such manner are subject to such restrictions and conditions, as may be prescribed so as to enable him to purchase the raw material and incidental goods in accordance with the provisions of sub-section (3) of section 6.]1

1. Inserted. by M.P. Act 19 of 1979, S. 7.




S.17 Returns

(1) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner and every registered dealer shall furnish 1[returns in such form [in such manner]1 for such period] by such dates and to such authority, as may be prescribed :

[Provided that the Commissioner may, subject to such terms and conditions as may be prescribed, exempt any such dealer from furnishing such returns or permit any such dealer to furnish them for such different period, in such other form and to such other authority, as he may direct.]2

[(1-A) Every registered dealer shall, along with the return under sub-section (1), furnish the proof of the payment of the full amount of tax required to be made by him under sub-section (2) of section 22.]3

(2) If any dealer discovers any omission, error or wrong statement in any return furnished by him under sub-section (1) he may furnish a raised return in t


S.18 Assessment of tax

[(1) The amount of tax due from a registered dealer shall be assessed separately for each year :

Provided that where such dealer fails to furnish any return by the prescribed date or knowingly furnishes incomplete or incorrect return for any period of any year, the Commissioner may, at any time, assess such dealer to tax for such period:

Provided further that the Commissioner may, subject to such conditions as may be prescribed, and for reasons to be recorded in writing, assess the tax due from any such dealer at any time for any part, of a year.]1

[(1-A) In the case of a registered dealer--

• (a) who is an importer or a manufacturer and whose gross turnover in a year does not exceed Rs. 50,000; and
• (b) who is neither an importer nor a manufacturer and whose gross turnover in a year does not exceed Rs. 2,00,000;
the Commissioner may subject to such restrictions and conditions as may be prescribed w


S.18A Assessment of tax escaping assessment in respect of the period prior to the commencement of this Act

(1) Where a dealer was registered or licensed under any of the Acts repealed by section 52 and has not been assessed to tax for any period prior to the commencement of this Act, then notwithstanding--

• (i) any judgment, decree, or order of any Court, Tribunal or any other competent authority to the effect that the turnover for that period cannot be assessed to tax on the ground that the assessment has not been made within the period prescribed there for under the relevant provisions of the relevant repealed Act; or
• (ii) anything contained in section 19 of this Act or in the relevant repealed Act;
he shall within five years from the date of the commencement of the Madhya Pradesh General Sales Tax (Second Amendment) Act, 1964 be assessed to tax for that period.

(2) Where, before the commencement of this Act, a proceeding for assessment had been initiated or an assessment had been made, for any period prior to such commencement, i


S.18B Section 18B

[x x z x x]1

1. Omitted by M.P. Act 35 of 1983, S. 6.




S.19 Assessment of turnover escaping assessment

[(1) Where an assessment has been made under this Act or any Act repealed by section 52 and if for any reason any sale or purchase of goods chargeable to tax under this Act or any Act repealed by section 52 during any period has been under-assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom, the Commissioner may, at any time within five calendar years from the date of order of assessment, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as maybe prescribed to reassess within a period of two calendar years from the commencement of such proceedings, the tax payable by such dealer and the commissioner may, where the omission leading to such reassessment is attributable to the dealer, direct that the dealer shall pay, by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount :

Provid


S.19A Power of reassessment in certain cases

(1) Where any order passed in respect of a dealer for any period is rendered erroneous and prejudicial to the interests of revenue consequent to or in the light of any judgement or order of any Court or tribunal, which has become final, then notwithstanding anything contained in this Act, the Commissioner may at any time within a period of three years from the date of such judgement or order initiate proceeding to re-assess the tax payable by such dealer.

(2) The re-assessment proceeding initiated under sub-section (1) shall be completed as for as may be within a period of two calendar years from the date of initiation of such proceedings.

(8) No order of re-assessment under this section shall be passed without giving to the dealer a reasonable opportunity of being heard.]1

1. Inserted. by M.P. Act 35 of 1983, S. 7.




S.20 Exclusion of time in assessment proceedings

[(1) Nothing contained in section 18-A or section 19 or sub-section (1-a) of section 52 limiting the time within which any assessment or re-assessment may be made, shall apply to an assessment or re-assessment made in consequence of, or to give effect to, any finding or direction contained in an order under section, 38, 39 or 44.]1

[(2) In computing the period of limitation prescribed for assessment or reassessment, as the case maybe, under section 18 or section 18-A or section 19, the time during which any assessment or reassessment proceedings remained stayed under the order of any civil or other competent court, or under special or general order of the Commissioner issued under section 42-A shall be excluded.]2

[(3) Where any turnover or a part thereof of any dealer has been assessed to tax under this Act or under any of the Acts repealed by section 52 of this Act (hereinafter referred to as the repealed Acts) and not under the Central Sales T


S.21 Appearance before taxing authorities

(1) Any dealer who is entitled or required to attend or appear before any officer appointed under section 3 in connection with any proceedings under this Act, otherwise than when required under section 35 to attend personally for examination on oath or affirmation, may attend or appear by a person authorised by him in writing in this behalf being a relative of, or a person regularly employed fey, the dealer or a legal practitioner or a chartered accountant or a Sales Tax practitioner.

1[(2) For the purposes of sub-section (1), any person who--

• (a) at any time before the coming into force of this Act, was practising as a Sales Tax practitioner before any Sales Tax Authority not below the rank of an Assistant Sale Tax Officer; or
• (b) holds a