SIKKIM VALUE ADDED TAX ACT, 2000

ACT NO. 5 of 2005

to consolidate the law relating to the levy of tax on sale or purchase* of goods in the State of Sikkim and for matters connected therewith or incidental thereto. Be it enacted by the Legislature of Sikkim in the Fifty-Sixth Year of the Republic of India as follows: -

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S.1 Short title, extent and commencement

(1) This Act may be called The Sikkim Value Added Tax Act, 2005.

(2) It extends to the whole of Sikkim.

(3) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint.

S.2 Definitions

In this Act, unless the context otherwise requires,

(i) Act means the Sikkim Value Added Tax Act, 2005;
(ii) Appellate Authority means the Sikkim Commercial Taxes Appellate Authority constituted under sub-section (1) of section 4;
(iii) appointed day means the date on which this Act comes into force;
(iv) assessee means any person by whom tax or any other sum of money is payable under this Act and includes every person in respect of whom any proceedings under this Act have been taken for the assessment of tax payable by him.
(v) assessing authority means any officer not below the rank of Assistant Commissioner authorized by the Government or by any authority empowered by the Government to make any assessment under this Act;
(vi) Business includes-
- (a) any trade, commerce, manufacture, or any adventure or concern in the nature of trade, commerce, manufacture, whether or not such trade, commerce, manufact

S.3 Commercial Tax Authorities

(1) There shall be the Commissioner of Commercial Taxes to be appointed by the Government who shall have all the powers and shall perform all the duties conferred or imposed upon him by or under this Act.

(2) The Commissioner shall have superintendence over all officers and persons employed in the execution of this Act and the Commissioner may,-

(a) call for returns from such officers and persons;
(b) make and issue general rules and specify forms for regulating the practice and procedure to be followed by such officers and persons;
(c) issue such orders, instructions and directions to such officers and persons as it may deem fit, for the proper administration of this Act.

(3) (a) The Government shall appoint the Special Commissioner, Additional Commissioner and as many Joint Commissioners, Deputy Commissioners Assistant Commissioners, Commercial Tax Inspectors and such other persons as it think fit for the purpose of performing t

S.4 Appellate Authority

(1) The Government shall appoint the Sikkim Commercial Taxes Appellate Authority to perform the functions assigned to the Appellate Authority by or under this Act.

(2) The Appellate Authority shall be a person who is or has been an officer not below the rank of the Secretary to Government of Sikkim and has served for a minimum period of two years in the department of Commercial Taxes.

(3) The term of office, filling of vacancy and other conditions of service of the Appellate Authority shall be such as may be prescribed.

(4) The functions of the Appellate Authority may be performed in accordance with the provisions of this Act and the rules made thereunder.

(5) The Appellate Authority shall, with the previous sanction of the Government make regulations consistent with the provisions of this Act and the rules made thereunder for regulating its procedure and the disposal of its business.

(6) The regulations made under sub-section (5) shall be publish

S.5 Delegation of Commissioners powers and functions

Subject to such restrictions and conditions as may be imposed, the Commissioner may, by order in writing, delegate any of his powers and functions under this Act and the rules made thereunder to any person appointed under Section 3.

S.6 Tax Authorities and Appellate Authority to be public servants

The Commissioner and all officers appointed under section 3 including the member of the Appellate Authority shall be deemed to be public servants within the meaning of section 21 of Indian Penal Code, 1860 (45 of 1860).

S.7 Indemnity

No suit, prosecution or other legal proceedings shall lie against any Government servant employed for execution of the provisions of this Act and rules made thereunder for anything which is in good faith done or intended to be done thereunder.

S.8 Incidence of tax

(1) Every dealer,

(a) whose gross turnover of sales during the year immediately preceding the commencement of this Act,
- (i) who has been liable immediately before the appointed day to pay tax under the Sikkim Sales Tax Act, 1983 or the Central Act, or
- (ii) whose gross turnover during a year first exceeds the taxable limit on the day immediately preceding the appointed day, and
(b) who is in possession of a registration certificate under the Sikkim Sales Tax Act, 1983 before the appointed day and to whom clause (a) does not apply,

shall be liable to pay tax under this Act on all sales effected on or after the appointed day.

(2) Every dealer on whom sub-section (1) does not apply shall, if his gross turnover of sales calculated from the commencement of any year exceeds the taxable limit at any time within such year, be liable to pay tax under this Act on all sales, effected on and from the date imme

S.9 Levy of tax on sale

(1) In this Act, the expression taxable turnover of sales means, in the case of a dealer who is liable to pay tax on sales of goods under section 8 that part of his gross turnover of sales during any period which remains after deducting therefrom his turnover of sales during that period as represents;

(a) sales of goods which are not liable for any tax specified in Schedule of section 12;
(b) sales of goods, which are shown to the satisfaction of the Commissioner, have not taken place in Sikkim or have taken place in the course of inter-State trade or commerce within the meaning of the Central Act or in the course of import of the goods into or export of the goods out of, the territory of India within the meaning of section 5 of that Act;
(c) such other sales on such conditions and restrictions as may be prescribed.

(2) (a) Where the taxable turnover of sale is calculated without a separate amount of the consideration being identified as

S.10 Levy of tax on purchases

Every dealer who is in the course of his business purchases any goods-

(i) from a registered dealer in the circumstances in which no tax under section 9 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 of such goods, if after such purchases, the goods are not sold within the State of Sikkim or in the course of inter-State trade and commerce or in the course of export out of the territory of India but are-
- (a) sold or disposed off otherwise, or
- (b) consumed or used in the manufacture of goods declared to be exempt from tax under this Act, or
- (c) after their use or consumption in the manufacture of goods , such manufactured goods are disposed off otherwise than by the way of sale in the State of Sikkim or in the course of inter-State trade and commerce or export out of the territory of India; or
- (d) used or consumed other

S.11 Levy of tax on containers and packing material

(1) Where any goods are sold in containers or packed in any packing materials, the rate of tax applicable to such containers or packing materials shall, whether the price of the containers or packing materials is charged separately or not, be the same as those applicable to the goods contained or packed therein;

(2) Where such goods are exempt from tax, the sale of the containers or packing materials shall also be exempt from tax.

S.12 Rates of tax on sale or purchase of goods

The tax payable by a dealer on his taxable turnover shall be, in so far as such turnover or any part thereof, relates to,

(a) the goods specified in Schedule I Nil
(b) the goods specified in Schedule II 1 per cent
(c) the goods specified in Schedule III 4 per cent
(d) the goods specified in Schedule IV 4 per cent
(e) the goods specified in Schedule V 12.5 per cent

S.13 Levy of tax on transfer of property in goods involved in the execution of Works Contract

(1) Every dealer shall pay for each year, a tax under this Act on his taxable turnover for transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract determined at the rates specified for the same goods in the Schedules mentioned in section 12:

Provided that all amounts towards labour charges and other like charges not involving any transfer of property of goods actually incurred in connection with the execution of works contract, shall be allowed to be deducted from gross turnover of such dealer in determining his taxable turnover.

*Provided further that if the amount towards labour charges and other like charges not involving any transfer of property in goods, actually incurred in connection with the execution of works contract are not ascertainable from the books of accounts manitained and produced by a dealer before the appropriate assessing authority, such dealer shall be allowed to deduct from hi

S.14 Out-put tax

(1) Output tax in relation to a registered dealer means the tax payable under this Act in respect of any sale of goods by that dealer in the course of his business.

(2) Subject to the provisions of section 20, a dealer shall be liable to pay the output tax under this Act which shall be levied on the taxable turnover at the rates specified in the Schedules under section 12.

S.15 Input tax

Input Tax in relation to a registered dealer means the tax charged under this Act by the selling dealer to such dealer on the sale to him of any goods for resale or use in manufacturing or processing of goods for sale.

S.16 Compounding of tax liability in certain cases

(1) Notwithstanding anything to the contrary contained in this Act, the State Government may, by notification and subject to such conditions and restrictions as may be prescribed, permit any class of registered dealers whose gross turnover does not exceed the limit specified in the notification to pay in lieu of the tax payable by them, an amount calculated at such rate not exceeding four percent of his gross turnover as may be specified in the notification issued in this behalf:

Provided that no such permission shall be granted to a manufacturer or a person who imports any goods from any place outside the State for the purpose of his business:

Provided further that the amount so specified shall be in addition to any tax that may be payable by the dealer under section 10.

(2) Dealers to whom the provisions of sub-section (1) apply shall,

(a) not charge any tax on the sale of goods specified in Schedule I
(b) not charge in excess of t

S.17 Compounding of tax liability in case of Works Contract

(1) Notwithstanding anything contained in sections 9, 10, 11 or 12, every contractor referred to in clause (xi) of section 2 may, subject to such restrictions and conditions and in such manner as may be prescribed, at his option, instead of paying tax in accordance with section 12 pay, on the total value of each of the works contract executed by him, a lump sum tax, by way of composition, at the rate of two percent or at such rate not exceeding fifteen percent, as the State Government may, from time to time, by notification, specify:

Provided that in case of cancellation of the permission granted for payment of lumpsum tax by way of composition, the provisions of sections 9, 10, 11 and 12 and rules made thereunder shall apply.

(2) A contractor, exercising option under sub-section (1) shall, so long as the option remains in force, not be required to maintain accounts of his business under this Act or the rules made thereunder except the records in original of the works

S.18 Information of awarding of Works Contract

(1) Any person entering into any contract or letter of intent with any contractor for transfer of property in goods (whether as goods or some other form) involved in the execution of works contract shall furnish within fifteen days from the date of signing of the contract or letter of intent such information as may be prescribed, to the assessing authority under whose jurisdiction the contractors place of business is situated.

(2) Failure to do so shall entail a penalty not exceeding five hundred rupees per day of default after affording such person a reasonable opportunity of being heard.

S.19 Deduction of tax at source from the payment to dealer

(1) Notwithstanding anything contained in any other law or contact to the contrary, any person or any specified class of persons responsible to pay any sum to any dealer for sale or supplies made by it to the State or Central Government including department of other States, situated in Sikkim, any local body, any authority or corporation established by or under a statute and any State or Central Government undertaking shall, at the time of credit of such sum to the account of the dealer or at the time of payment thereof in cash or by cheque or draft or any other mode, deduct the amount of tax from the bills or invoices, at the rate or rates notified under this Act from time to time.

(2) The amount of tax so deducted shall be deemed to be the amount of tax collected by the dealer from the State or Central Government Departments or aforesaid organizations or authorities, as the case may be, within the meaning of section 8.

(3) While making deduction under sub-section (1

S.20 Tax payable

(1) The net tax payable by a registered dealer for a quarter shall be the difference between the output tax, if any, and the input tax, which can be determined from the following formula:-

Net tax payable = (O+P-I)

Where O denotes the output tax payable for any tax period as determined under section 14, P denotes the purchase tax paid by a registered dealer for any tax period as determined under section 10 and I denotes the input tax paid or payable for the said quarter as determined under section 15.

(2) The net tax payable by a dealer liable to pay tax but not registered under this Act for a quarter shall be equal to the output tax payable for the said quarter as determined under section 14.

(3) If an amount calculated under sub-section (1) is a negative quantum in a quarter,-

(a) the same shall be adjusted against the tax liability, if any, under the Central Act, at the option of the dealer for the said quarter and only the remaining amou

S.21 Input tax credit

(1) Subject to the provisions of this Act, an input tax credit as provided in this section shall be claimed by a registered dealer, subject to such conditions and restrictions as may be prescribed on sale of goods in the circumstances specified below:-

(a) when a registered dealer purchases any input within the State from another such dealer after paying him the tax as specified under section 12, he shall claim credit of the said input tax in the manner prescribed if the goods are sold within the State or in the course of Inter-State trade and commerce;
(b) when a registered dealer-
- (i) purchases any input within the State from another such dealer after paying him the tax under section 12, or
- (ii) purchases any input and pays tax on such purchase under section 10 of the Act and consumes such goods in the manufacture of any goods mentioned in Schedules II to V under section 12, he shall claim credit of the said input tax in the man

S.22 Exports to be zero-rated

(1) A sale specified under section 5 of the Central Act, by a dealer or an export oriented unit, shall be zero-rated and there shall be no tax payable on the turnover of such sale, and the person exporting the goods shall be entitled in the manner prescribed to a credit of input tax paid:-

(a) on the purchase of the goods sold in the course of export, or
(b) on the purchase of inputs and capital goods which have been used for the manufacture of goods sold in the course of export:

Provided that the input tax credit on account of capital goods shall be allowed only to the extent and in the manner prescribed.

Explanation For the purpose of this section, all sale of inputs made to the dealers in a Special Economic Zone as notified by the Central Government under section 5 of the Foreign Trade Regulation Act, 1988 shall also be zero-rated.

(2) Notwithstanding anything contained in sub-section (1), sale of goods made to foreign diplomat

S.23 Burden of proof

Where any assessee claims

(a) that any receipt or dispatch of goods by him is otherwise than by way of purchase or sale of such goods by him;
(b) that any sum of money received or receivable or paid or payable by him by any means including adjustment against a debt is not in the course of business and where in the course of business such sum is not valuable consideration for any sale or purchase of goods effected by him in the year in which the said sum was received or receivable or paid or payable;
(c) that any purchase or sale of goods by him is not liable to tax by reason of such purchase or sale being outside the State or in the course of Inter-State trade and commerce or in the course of the import of the goods into, or the export of the goods out of, the territory of India;
(d) that any purchase or sale of goods effected by him is exempt from tax or leviable to tax at a particular rate;
(e) that any purchase or sale of goods e

S.24 Power of State Government to amend Schedules

The State Government, after giving by notification not less than fourteen days notice of its intention to do so, may, by like notification, add to, amend or alter any of the Schedule to this Act.

S.25 Credit and Debit Notes

(1) Where a tax invoice has been issued and the amount shown as tax charged in the tax invoice exceeds the tax chargeable under this Act in respect of that sale, the registered dealer making the sale shall provide the purchaser with a credit note containing the requisite particulars as may be prescribed.

(2) Where the tax invoice has been issued and the tax chargeable under this Act in respect of the sale exceeds the amount of tax charged in that invoice, the registered dealer making the sale shall provide the purchaser with a debit note containing the requisite particulars as may be prescribed.

(3) In case of goods returned or rejected by the purchaser, a credit note shall be issued by the selling dealer to the purchaser and a debit note will be issued by the purchaser to the selling dealer containing particulars of the transaction as prescribed.

S.26 Registration of dealers

(1) Subject to the other provisions of this Chapter, no dealer shall, while being liable to pay tax under section 8, carry on business as a dealer unless he has been registered and possesses a valid certificate of registration in respect of his business in the State of Sikkim:

(2) Every dealer required by sub-section (1) to be registered shall make an application in this behalf in the prescribed manner to the prescribed authority and such application shall be accompanied by a declaration in the prescribed form duly filled up and signed by the dealer specifying therein the class or classes of goods dealt in or manufactured by him.

(3) If the prescribed authority is satisfied that an application for registration is in order, it shall, in accordance with the manner prescribed, grant registration to the applicants and issue a certificate of registration in the prescribed form which shall specify the class or classes of goods dealt in or manufactured by the dealers.

S.26A Registration of certain classes of dealers

*Notwithstanding anything contained in section 16, sub section (1) of section 26 but subject to the provisions sub section (2), (3), (4), (5), (6), (7), (8), (9) and (10) of section 26, section 28 and section 29, where a dealer has no fixed place of business in Sikkim but sells goods inside the State either directly or through representatives or agents including traveling representatives or agents or salesmen inside the State or otherwise or, having one or more places of business in Sikkim, sells goods in places other than those in which such place is, or places of business are, situated, the Commissioner or an appropriate assesssing authority authorized by him in this behalf, by order in writing, direct that such dealer shall be registered under the Act in respect of such sales and shall be liable for payment of tax as per the rates specified in Schedules II or III or IV or V, as the case may be, and that unless provided otherwise in this Act, the provisions of the Act

S.27 Voluntary registration of dealers

(1) Any dealer whose gross turnover of sales during a year does not exceed the taxable limit may, notwithstanding that he is not liable to pay tax under section 8, apply in the prescribed manner to the prescribed authority for registration under this Act.

(2) Every dealer who has been registered on application made under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act.

(3) The registration of a dealer on application made under this section shall be in force for a period of not less than three complete years and shall remain in force thereafter unless cancelled under the provisions of this Act.

(4) A dealer registered on application made under this sub-section may apply in the prescribed manner not less than six months before the end of a year to the authority which granted him his certificate of registration for the cancellation of such registration to take effect at the end of the year in which the a

S.28 Security to be furnished in certain case

(1) The prescribed authority may, at the time of granting of certificate to a dealer, for good and sufficient reasons to be recorded in writing, require the dealer to furnish in the prescribed manner such security as may be specified by it for securing proper and timely payment of tax or any other sum payable by him under this Act.

(2) The prescribed authority may, by order in writing and for good or sufficient reason to be recorded therein, demand from any person who imports into Sikkim any consignment of goods, a reasonable security for ensuring that there is no evasion of tax.

(3) The prescribed authority may, by order in writing and for good or sufficient reason to be recorded therein, forfeit the whole or any part of the security or additional security referred to in sub-section (1) or sub-section (2), furnished by a dealer, registered dealer, undertaking or person as required by sub-section (1) or demanded under sub-section (2), for-

(a) reali

S.29 Imposition of penalty for failure to get registered

(1) If a dealer, who is required to get himself registered within two months from the date from which he is first liable to pay tax under section 8, fails to get himself so registered, the prescribed authority may, after giving the dealer an opportunity of being heard, by order impose by way of penalty a sum not less than five thousand rupees and not exceeding ten thousand rupees for each month of default: Provided that no penalty shall be imposed under this sub-section in respect of the same fact for which a prosecution has been instituted and no such prosecution shall lie in respect of a fact for which a penalty has been imposed under this section.

(2) If any penalty is imposed under sub-section (1), the prescribed authority shall issue a notice in the prescribed form directing the dealer to pay such penalty by such date as may be specified in the notice and the date to be specified shall not be less than fifteen days from the date of service of such notice and the penalty

S.30 Returns, payment of tax, interest and penalty

(1) Every such dealer as may be required so to do by the prescribed authority, by notice served in the manner prescribed and every registered dealer (other than a dealer required by section 16 to pay tax at a fixed rate in lieu of the tax payable by him), shall furnish a true and complete return in respect of all his transactions relating to sales, purchases, receipts and dispatches of goods in a quarter, on or before the end of the month following the end of the quarter to the prescribed authority in such form and in such manner as may be prescribed.

(2) Every such dealer as may be required so to do by the prescribed authority, by notice served in the manner prescribed and every registered dealer (other than a dealer required by section 16 to pay tax at a fixed rate in lieu of the tax payable by him), shall furnish a true and complete statement in respect of all his transactions relating to sales and purchases of goods and any such details as may be prescribed for each comp

S.30A Deferment of payment of tax in respect of certain industrial units and payments of tax in installments by the dealers

*Subject to such restrictions and conditions as may be prescribed, the Commissioner may, in the prescribed manner, permit the output tax payable under this Act by a registered dealer, or a class or classes of dealers as may be prescribed, according to his returns referred to in sub-sections (1), (2) and (3) of section 30, to be deferred or to be paid in installments, as the case may be, subject to the provisions of the rules made under this section.

* Inserted vide notification no. 4/LD/2005 dated 20/09/2005

S.31 Interest on non-payment or delayed payment of tax before assessment

(1) Where a registered dealer, or a dealer required to furnish return under sub-section (3) of section 30, furnishes a return referred to in that section in respect of any period by the prescribed date or thereafter, but fails to make full payment of the tax payable under sub-section (9) of that section in respect of such period by such prescribed date, he shall pay a simple interest at the rate of two per centum for each calendar month of default from the first day of such month next following the prescribed date up to the month preceding the month of full payment of such tax or upto the month prior to the month of assessment under section 39 or section 40, as the case may be, in respect of such period, whichever is earlier upon so much of the amount of tax payable by him according to such return as remains unpaid at the end of each such month of default:

Provided that where such dealer admits in writing that the amount of tax payable in respect of such period is an amount

S.32 Interest on non-payment of assessed tax

(1) Where a dealer fails to make payment of any tax payable after assessment by the date specified in the notice issued under section 41 for payment thereof, he shall pay a simple interest at the rate of two per centum for each calendar month of default from the first day of the month next following the date specified in such notice upto the month preceding the month of full payment of such tax or upto the month of commencement of proceedings under section 45, whichever is earlier, upon so much of the amount of tax payable by him according to such notice as remains unpaid at the end of each such month of default.

(2) A dealer liable to pay interest under sub-section (1) of this section shall, in the prescribed manner, pay into a Government Treasury or the State Bank of Sikkim or any other bank as may be notified by the Government the amount of interest payable by, or due from, him by such date as maybe prescribed.

(3) Where as a result of an order under section 74, se

S.33 Exemption from payment of interest

Notwithstanding anything contained in section 31 or 32, no interest shall be payable in such cases or under such circumstances and subject to such conditions, if any, as may be prescribed.

S.34 Interest payable by Commissioner

The Commissioner shall in the prescribed manner, pay a simple interest at the rate of two per centum for each calendar month of delay in making refund to a dealer of the amount of tax paid in excess which arises out of an order under section 74, section 76 or section 77, passed on or after the appointed day, from the thirty first day of the date following the date of such order upto the date preceding the date in which the refund is made in the manner referred to in section 53, upon the amount of tax refundable to him according to such order.

S.35 Rounding off of amount of tax, interest or penalty

The amount of tax, interest or penalty payable or refundable for any period under the provisions of this Act shall be rounded off to the nearest rupee and for this purpose, where such amount contains a part of a rupee, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.

S.36 Collection of tax only by dealers liable to pay tax

(1) No dealer who is not liable to pay tax under this Act shall collect in respect of any sale of goods by him any amount of tax under this Act, and no dealer who is liable to pay tax under this Act, shall make any such collection except in accordance with the provisions of this Act or in excess of the amount of tax payable by him under this Act.

(2) If any dealer contravenes the provisions of sub-section (1), he shall, notwithstanding anything contained elsewhere in this Act, deposit the amount collected by way of tax or the amount collected by way of tax in excess of the amount payable under this Act, as the case may be, into a Government Treasury or the State Bank of Sikkim or any other bank as may be notified by the Government within thirty days from the date of such collection and intimate the prescribed authority of such deposit along with a receipt from such Treasury or Bank showing payment of such amount.

(3) The prescribed authority shall on application made

S.37 Scrutiny of returns

(1) The prescribed authority shall, within the time and in the manner prescribed, scrutinize every return filed under sub-sections (1), (3) and (4) of section 30 for the purpose of ascertaining that-

(a) all calculations contained therein are arithmetically accurate;
(b) the output tax, the input tax, the tax payable and interest payable, if any, have been computed correctly and properly;
(c) tax rates have been applied correctly; and
(d) evidence has been furnished with regard to payment of tax and interest payable, if any.

(2) If, upon scrutiny under sub-section (1) the prescribed authority discovers any error, it shall serve a notice in prescribed form on the dealer directing him to-

(a) either pay, within thirty days, the extra amount of tax along with the interest, if any, payable and furnish the challan evidencing such payment; or
(b) explain, within thirty days, that the return or returns filed by h

S.38 Assessment of tax payable by registered dealers

(1) If no returns are furnished by a dealer in respect of any period by the prescribed date, or the prescribed authority is not satisfied that the returns furnished are correct and complete, the prescribed authority shall proceed in such manner as may be prescribed to assess to the best of his judgment the amount of tax due from the dealer, and in making such assessment, give a dealer a reasonable opportunity of being heard.

(2) In the case of failure by a registered dealer to furnish, in respect of any period, a return accompanied by a receipt from a Government Treasury or the State Bank of Sikkim or any other bank as may be notified by the Government as required under sub-section (9) of section 30, by the prescribed date, the prescribed authority may, if it is satisfied that the default was made without reasonable cause, direct that the registered dealer shall pay by way of penalty, in addition to the amount of tax so assessed, a sum not exceeding one and a half times that

S.39 Self assessment of tax

(1) Subject to the provisions of section 37, the tax due in respect of a financial year from every registered dealer who has furnished the return and statement mentioned in section 30 shall be deemed to have been assessed.

(2) Notwithstanding anything contained in sub-section (1), the Commissioner may select any registered dealer for detailed audit on the basis of a selection model incorporating such criteria as may be deemed fit by the Commissioner.

(3) The audit of the returns and statements of a dealer selected under sub-section (2) shall be conducted in the manner prescribed, within a period of twenty four months from the due date within the meaning of sub-section (3) of section 30.

S.40 Assessment of tax payable by dealer other than registered dealers

(1) If the prescribed authority is satisfied that reasonable ground exist to believe that any dealer has been liable to pay tax under this Act in respect of any periods, and has nevertheless failed to apply for registration certificate, or, having so applied, failed to furnish any particulars or information required for the purposes of section 26, the prescribed authority shall, after giving the dealer reasonable opportunity of being heard, assess, to the best of its judgment, the amount of tax due from the dealer in respect of such period and all subsequent periods:

(2) The prescribed authority may, without prejudice to any action that is or may be taken under section 81, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum of one hundred rupees for every day of the period during which the dealer failed to apply for registration or failed to furnish any particulars or information required for the purposes of section 26 or

S.41 Payment of assessed tax and penalty

The amount of tax, -

(i) due from a dealer where the returns are furnished without receipt showing full payment of tax, or
(ii) assessed under section 39 or section 40 for a period, less the sum, if any, already paid by a dealer in respect of the said period, together with any penalty that may be directed to be paid under section 40, if any,

shall be paid by such dealer into a Government Treasury or the State Bank of Sikkim or any other bank as may be notified by the Government by such date as may be specified in a notice issued by the prescribed authority in this behalf and the date to be so specified shall be ordinarily not less than thirty days from the date of service of such notice.

S.42 Limitation for assessment

(1) No assessment under section 39 or section 40 shall be made after the expiry of six years, from the end of the year in respect of which or part of which the assessment is made whether such six years end on the 30th day of June or the 31st day of December.

(2) No assessment under section 39 shall be made,-

(a) after the 30th day of June next following the expiry of six years from the end of the year in respect of which or part of which the assessment is made where such six years end on any date during the period commencing on the 1st day of January and ending on the 30th day of June; and
(b) after the 31st day of December next following the expiry of six years from the end of the year in respect of which or part of which the assessment is made, where such six years end on any date during the period commencing on the 1st of July and ending on the 31st day of December.

(3) Notwithstanding anything contained in sub-section (1) or sub-sect

S.43 Determination of interest

(1) Where the prescribed authority is satisfied that a dealer is liable to pay interest under section 31 or section 32, he shall, in such manner as may be prescribed, determine the amount of interest payable by such dealer.

(2) If on such additional amount of interest is found to be payable by the dealer or any excess amount of interest is found to be refundable to the dealer, the prescribed authority shall issue a notice, in the prescribed manner to such dealer directing him to pay such additional amount or informing him of the excess amount paid, as the case may be.

(3) No determination of interest under sub-section (1) in respect of interest payable under section 31 shall be made after the date of assessment under section 39 or 40 in respect of the period to which interest is determined.

S.44 Rectification of mistake in determination of interest

(1) Where there is an apparent mistake in the determination of interest under sub-section (1) of section 43, the prescribed authority may, on its own motion or upon application made by a dealer within six months from the date of such determination of interest, rectify the amount of interest payable by such dealer or refundable to such dealer and issue a fresh notice for payment of interest in the manner prescribed under that section.

(2) Where on rectification of the amount of interest under sub-section (1), any excess amount is found refundable to a dealer, the prescribed authority shall, in the manner referred to in section 53, refund such excess amount of interest to such dealer.

S.45 Recovery of tax, penalty and interest

(1) Any amount of tax, penalty or interest due under this Act from a dealer, which remains unpaid after the date specified in a notice of demand issued in this behalf under this Act or the rules made thereunder, directing payment of such amount of tax, penalty or interest, shall be recoverable by the Tax Recovery Inspector in accordance with the provisions of sub-section (2) of this section, section 50, section 51 or section 52 and the rules regulating the procedure for recovery of tax, penalty and interest made thereunder where the State Government directs by general or special order so to do in respect of such class or classes of dealers having their places of business in such area or areas as may be specified in such order.

(2) Where any amount of tax, penalty or interest is recoverable in accordance with sub-section (1), the prescribed authority shall send to the Tax Recovery Inspector a certificate under its signature specifying the amount of tax, penalty or interest du

S.46 Tax Recovery Inspector whom certificates to be forwarded

(1) The prescribed authority may forward the certificate referred to in sub-section (2) of section 45 in respect of a certificate-debtor to, -

(a) the Tax Recovery Inspector within whose jurisdiction such certificate debtor carries or carried on his business or within whose jurisdiction the goods are seized under section 68; or
(b) the Tax Recovery Inspector within whose jurisdiction such certificate-debtor is available or situated.

(2) Where such certificate-debtor has property within the jurisdiction of more than one Tax Recovery Inspector and the Tax Recovery Inspector to whom a certificate is sent by the prescribed authority,

(a) is not able to recover the entire amount by sale of the property, movable or immovable within his jurisdiction, or
(b) is of the opinion that for the purpose of expediting or securing the recovery of the whole amount , a copy of the certificate shall be sent to the Tax Recovery Inspector in w

S.47 Amendment of certificates for tax recovery

(1) Notwithstanding that a certificate has been forwarded to a Tax Recovery Inspector, the prescribed authority shall have the power to withdraw or cancel such certificate, or to correct such certificate.

(2) The prescribed authority shall intimate to the Tax Recovery Inspector any order withdrawing or canceling a certificate or any correction made by him under sub-section (1).

S.48 Validity of Certificate for Tax Recovery

(1) When the prescribed authority forwards a certificate to a Tax Recovery Inspector under section 46, it shall not be open to the certificate-debtor to dispute before the Tax Recovery Inspector the propriety or correctness of the assessment of tax, imposition of penalty or determination of interest under this Act and no objection to such certificate on any such ground shall be entertained by the Tax Recovery Inspector .

(2) It is hereby declared that where any amount of tax, penalty or interest is recoverable in accordance with the provisions of sub-section (3) of section 46, the provisions of the Sikkim (Collection of Taxes and Prevention of Evasion of Payment of Taxes) Act, 1987, shall not apply to any proceedings for the recovery of such amount of tax, penalty or interest.

S.49 Transmission of Certificates for Tax Recovery to Collector in certain cases

Where any amount of tax, penalty or interest due from a certificate debtor cannot be recovered by the Tax Recovery Inspector by any one of the modes referred to in section 45 and where the Tax Recovery Inspector has information that such certificate-debtor owns any property outside Sikkim, the amount of such tax, penalty or interest remaining unpaid shall be deemed to be an arrear of land revenue and the Tax Recovery Inspector shall apply to the Collector of the district in Sikkim in which such certificate-debtor carries on his business, has his principal place of business or his goods have been seized, as the case may be, for the recovery of the said amount in accordance with the provisions of the law for the time being in force in Sikkim.

S.50 Special mode of recovery of tax, penalty and interest

(1) Notwithstanding the forwarding of a certificate under section 46 for recovery of any amount of tax, penalty or interest, the prescribed authority may, at any time, by notice in the prescribed form, require any person from whom money is due or may become due to a dealer or any person who holds or may subsequently hold money for, or on account of, such dealer, to deposit into a Government Treasury or State Bank of Sikkim or any other bank as may be notified by the Government under the appropriate head of account, either forthwith upon the money becoming due or being held or at or within the time specified in the notice so much of the money as is sufficient to pay the amount due from such dealer in respect of the arrears of such tax, penalty or interest or the whole of the money when such money is equal to or less than that amount.

(2) A notice under this section may be issued to any person who holds or may subsequently hold any money for, or on account of, the dealer joint

S.51 Assessment without prejudice to prosecution for any offence

Any assessment of tax or determination of interest made under this Act shall be without prejudice to any prosecution instituted for an offence under this Act.

S.52 Assessment after partition of Hindu Undivided Family or dissolution of firm and tax payable by a deceased dealer

(1) Where a dealer is a Hindu undivided family, firm or other association of persons, and such family, firm or association is partitioned , disrupted or dissolved, as the case maybe,-

(a) the tax, penalty or interest payable under this Act by such family, firm or association of persons for the period up to the date of such partition, disruption shall be assessed, imposed or determined as if no such partition, disruption or dissolution had taken place and all the provisions of this Act shall apply accordingly, and
(b) every person who was, at the time of such partition, disruption or dissolution, a member of the Hindu divided family, partner of a firm or member of an association of persons and the legal representative of any such person, who is deceased, shall, notwithstanding such partition, disruption or dissolution, be jointly and severally liable for the payment, of the tax, penalty or interest payable under this Act by such family, firm or association of p

S.53 Refunds

(1) The prescribed authority shall, in the manner prescribed, refund to a dealer any amount of tax, penalty or interest paid by such dealer in excess of the amount due from him under this Act, either by cash payment, deduction or adjustment of such excess from the amount of tax, penalty or interest due in respect of other period or periods.

(2) Nothing in sub-section (1) shall be deemed to empower the prescribed authority to amend, vary or rescind any assessment, or to amend, vary or rescind any order passed on appeal, revision or review under section 74, section 75, section 76, or section 77 or to confer on a dealer any relief in addition to what he is entitled under the provisions of this Act.

(3) Subject to other provisions of this Act, the prescribed authority shall, in the manner prescribed, refund to a dealer the amount of excess input tax credit if it is satisfied that the claim made under section 21 is true and correct.

S.54 Maintenance of accounts and records etc.

(1) Every registered dealer or a dealer to whom a notice has been served to furnish return under section 30 shall maintain a true and up to date account of the value of goods purchased or manufactured and sold by him or goods held by him in stock, and, in addition to the books of account that a dealer maintains and keeps for the purpose referred to in this sub-section, he shall maintain and keep such registers and accounts in such form in the manner prescribed.

(2) Every registered dealer or dealer referred to in sub-section (1) shall keep at his place of business all accounts, registers and documents maintained in the course of business.

(3) Where a dealer as referred to in sub-section (1) has established branch offices of the business in the State other than the principal place of business, the relevant accounts, registers and documents in respect of each such branch shall, without prejudice to the provisions of sub-section (5), be kept by him at such branch.

S.55 Tax invoice