SIKKIM TAX ON PROFESSIONS, TRADES, CALLINGS AND EMPLOYMENTS ACT, 2006

Act No. 05 of 2006

24th day of March, 2006

An Act to provide for the levy and collection of a tax on professions, trades, callings and employments for raising additional resources for the benefit of the State. Be it enacted by the Legislature of Sikkim in the Fifty-seventh 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 Tax on Professions, Trades, Callings and Employments Act, 2006.

(2) It extends to the whole of Sikkim.

(3) (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;-

(a) "Act" means the Sikkim Tax on Professions, Trades, Callings and Employments Act, 2006;
(b) "appointed day" means the date on which this Act comes into force;
(c) "Commissioner" means the Commissioner of Profession Tax appointed under section 3 of the Act;
(d) "employee" means a person employed on salary or wages and includes-
- (i) a Government servant receiving pay from the revenues of the Central Government or any State Government;
- (ii) a person in the service of a body, whether incorporated or not, which is owned or controlled by the Central Government or any State Government, any authority or corporation, established by or under any statute, where the body or authority or corporation operates in the State of Sikkim, even though the headquarters may be outside the State;
- (iii) a person engaged in any employment of an employer, not covered by claus

S.3 Authorities for implementation of the Act

(1) For carrying out the purposes of this Act, the Government shall appoint-

(i) an officer to be the Commissioner of Profession Tax;
(ii) such other officers as Special Commissioner, Additional Commissioner, Joint Commissioner, Deputy Commissioner, Assistant Commissioner and Inspector of Professional Tax and in such number, as it thinks necessary, to assist the Commissioner.

(2) An officer appointed under clause (ii) shall, within limits of such area as the Government or any authority or officer empowered by it in this behalf may assign to him, exercise such powers and perform such duties as may be delegated or conferred or imposed upon him by or under this Act.

(3) The superintendence and control for the proper execution of the provisons of this Act and the rules made thereunder relating to the levy and collection of tax shall vest in the Commissioner.

S.4 Levy and charge of tax

(1) Subject to the provisions of Article 276 of the Constitution of India, there shall be levied and collected a tax on professions, trades, callings and employments, in accordance with the provisions of this Act.

(2) Every person engaged in any profession, trade, calling or employment and falling under one or the other of the classes mentioned in column II of the Schedule shall be liable to pay to the State Government the tax at the rate mentioned against the class of such persons in column III of the said Schedule:

Provided that entry 18 in the Schedule shall apply only to such classes of persons as may be specified by the State Government by notification from time to time.

S.5 Power to amend the Schedule

The State Government, if deemed necessary to do so, may, by notification, add to, amend or alter the Schedule to this Act.

S.6 Liability of employer to deduct and pay tax on behalf of the employees

The tax payable under this Act by any person earning salary or wage shall be deducted by his employer from the salary or wage payable to such person, before such salary or wage is paid to him, and such employer shall, irrespective of whether such deduction has been made or not when the salary or wage is paid to such person, be liable to pay tax on behalf of all such persons:

Provided that if the employer is an officer of Government, the State Government may, notwithstanding anything contained in this Act, prescribe by rules the manner in which such employer shall discharge the said liability:

Provided further that where any person earning a salary or wage-

(i) is also covered by one or more entries other than entry 1 in the Schedule and the rate of tax under such entry or any of such entries is higher than that in entry 1, or
(ii) is simultaneously engaged in employment of more than one employer, and such person furnishes to his employer or emplo

S.7 Registration and enrolment

(1) Every employer, not being an officer of Government, liable to pay tax under section 6 shall obtain a certificate of registration from the prescribed authority in the prescribed manner.

(2) Every person liable to pay tax under this Act (other than a person earning salary or wages, in respect of whom the tax is payable by his employer), shall obtain a certificate of enrolment from the prescribed authority in the prescribed manner.

(3) Every employer required to obtain a certificate of registration or every person required to obtain a certificate of enrolment, as the case may be, shall, within ninety days of his becoming liable to pay tax, apply for a certificate of registration or enrolment, as the case may be, to the prescribed authority in the prescribed form, and the prescribed authority shall, after making such inquiry as may be necessary, within thirty days of the receipt of the application, grant him such certificate, if the application is in order:

Pro

S.8 Information to be furnished by the registered employers regarding changes in respect of profession, trade, calling or employment

(1) In the event of any changes in the trade or business or any part thereof carried out by an employer registered under this Act or changes in the ownership of such trade or business, due to sale or otherwise, or changes in the nature of profession, trade or business, or changes in the constitution of board of directors in the case of a company, or discontinuation of the profession, trade or business of any person liable for tax under this Act, or changes of place of work, the employer or the person concerned shall, within thirty days from the date of such changes or discontinuance, inform the prescribed authority in an application furnishing necessary particulars together with the copy of the certificate of registration or enrolment, as the case may be, and in the absence of the employer or the person for any reason whatsoever, his legal representative, shall, in the like manner, inform the said authority:

(2) If the prescribed authority, after making such inquiry as he de

S.9 Returns

(1) Every employer registered under this Act shall furnish to the prescribed authority a return in respect of every quarter, on or before the end of the month following the end of the quarter showing therein the salaries and wages paid by him and the amount of tax deducted by him in respect thereof, in such form and manner as may be prescribed.

(2) Every such return shall be accompanied by a challan of payment prescribed under the standing financial rules of the Government or any other documents showing payment and acceptable as such, in proof of payment of full amount of tax due according to the return, and a return without such proof of payment shall not be deemed to have been duly filed:

Provided that if an employer, having furnished a return discovers any omission, error or wrong statement therein, he may furnish a revised return in prescribed form and in such manner and time as may be directed by the prescribed authority.

(3) Where an employer, without rea

S.10 Assessment of employers

(1) If the prescribed authority is satisfied that the return or revised return filed by any employer is correct and complete, he shall accept the return.

(2) (a) If the prescribed authority is not satisfied that the return or revised return filed is correct and complete he shall serve upon employer a notice requiring him to attend in person or through an authorized representative, and to produce accounts and papers in support of the return, on a date specified in the notice.

(b) The prescribed authority shall, on examination of the accounts and papers, assess the amount of tax payable by the employer.

(c) If the employer fails to comply with the terms of the notice, or if, in the opinion of the prescribed authority, the accounts and papers are incorrect or incomplete or unreliable, such authority shall, after such inquiry, as it deems fit or otherwise, assess the tax to the best of its judgment.

(3) If an employer fails to get himself registered or being

S.11 Assessment of other persons

(1) If a person liable to obtain a certificate of enrolment under sub-section (2) of section 7 has failed to get himself enrolled or, being enrolled, has failed to make payment of the whole or any part of the amount of tax as required by or under this Act, the prescribed authority shall, after giving such person a reasonable opportunity of being heard, and after holding such inquiry as he deems fit or otherwise, determine the amount of tax due from him, and if such amount cannot be determined properly on the basis of the available material, determine the same to the best of his judgment.

(2) The amount of tax due as determined shall be paid within thirty days of receipt of the notice of demand served by the prescribed authority in the prescribed form and manner.

S.12 Audit

If the Commissioner is satisfied to do so, he may order for a detail audit of any of the employer or person liable to pay tax under this Act by an appropriate auditing authority, either individually or as a team consisting of such appropriate auditing authorities or the prescribed authorities as he may decide.

S.13 Payment of tax

(1) The tax payable under this Act shall be paid in the prescribed manner.

(2) The amount of tax due from any person who stands enrolled before the commencement of any year shall be paid by him before the 30th day of September of that year:

Provided that subject to such conditions and restrictions as may be prescribed, an enrolled person shall not be required to make payment of tax in terms of his certificate of enrolment in respect of the year or years, during which he is not temporarily engaged in any profession, trade or calling in Sikkim.

S.14 Consequences of failure to deduct or pay tax

(1) If an employer, not being an officer of Government, fails to pay tax as required by or under this Act, he shall, without prejudice to any other consequences and liabilities which he may incur, be deemed to be an assessee in default in respect of such tax.

(2) Without prejudice to the provisions of sub-section (1), an employer referred to in that sub-section shall be liable to pay, in addition to the amount of tax, simple interest at two per centum of the amount of tax due for each month or part thereof for the period for which the tax remains unpaid.

(3) If an enrolled person fails to pay tax as required by or under this Act, he shall be liable to pay, in addition to the amount of tax, simple interest at the rate and in the manner laid down in sub-section (2).

S.15 Penalty for nonpayment of tax

If a registered employer or an enrolled person fails without reasonable cause, to make payment of any amount of tax within the required time or date as specified in the notice of demand, the prescribed authority may, after giving him a reasonable opportunity of being heard, impose upon him a penalty not exceeding fifty percent of the amount of tax due.

S.16 Recovery of tax, penalty, interest and fee

(1) The provisions of the Sikkim (Collection of Taxes and Prevention of Evasion of Payment of Taxes) Act, 1987 (7 of 1987) and the rules made thereunder shall apply for recovery of all arrears of any tax, penalty, interest or fees due under this Act from any person.

(2) The State Government may appoint, by notification, such number of Tax Recovery Inspectors under section 4 of the Sikkim (Collection of Taxes and Prevention of Payment of Taxes) Act, 1987 (7 of 1987) for the purpose of this Act.

S.17 Appeal

(1) Subject to such rules as may be made by the State Government, any person or employer aggrieved by any order made under this Act or by an authority, not being an authority under section 18, may, in the prescribed manner, appeal to the authority prescribed.

(2) The appellate authority shall dispose of the appeal in the prescribed manner.

S.18 Revision

Any order passed by any authority under this Act may be revised, either on application or on own motion, by such authority and in such manner as may be prescribed.

S.19 Rectification of mistakes

Any authority under this Act may, on its own motion or on an application made in this behalf, by order, rectify any mistake apparent on the face of the record.

S.20 Accounts

(1) Every employer or person shall keep and maintain a true and up-to-date accounts and documents pertaining to his business, profession, trade or calling along with a true and up-to-date records relating to disbursement of salaries and wages in respect of his employees or workers and in addition to such accounts, documents and records, he shall maintain and keep such registers or accounts in such form as may be directed by the prescribed authority.

(2) Where an employer or person willfully fails to maintain the books of accounts or other registers or documents as referred to or directed under sub-section (1), the Commissioner may, after giving him an opportunity of being heard, impose a penalty not exceeding rupees one hundred for each day of such failure.

S.21 Special mode of recovery

(1) Notwithstanding anything to the contrary contained in any law or in any contract, the Commissioner may, at any time or from time to time, by notice in the prescribed form, a copy of which shall be forwarded to the assessee at his last address known to the Commissioner, require-

(a) any person from whom any amount of money is due or may become due to an assessee on whom notice of demand has been served under this Act, or
(b) any person who holds or may subsequently hold money for or on account of such assessee, to pay the Commissioner, either forthwith upon the money becoming due or being held or at within the time specified in the notice (but not before the money becomes due or is held as aforesaid), so much of the money as is sufficient to pay the amount due by the assessee in respect of arrears of tax, penalty and interest under this Act, or the whole of the money when it is equal to or less than that amount.

Explanation- For the purposes o

S.22 Production and inspection of accounts and documents and search of premises

Any authority under this Act may, at all reasonable time, inspect and search any premises, where any profession, trade, calling or employment liable to tax under this Act is carried on and may seize or cause production of books, registers, accounts or documents as may be necessary for examination or prosecution:

Provided that if the said authority seized from the said premises any book, register, account or document, he shall give to the person in charge of the place, a receipt describing the book, register, account or register so seized by him and retain the same only for so long as may be necessary for the purpose of examination thereof or prosecution.

S.23 Refund of excess payment

The prescribed authority shall refund to a person the amount of tax, penalty, interest and fees, if any, paid by such person in excess of the amount due from him. The refund may be made either by cash payment or, at the option of such person, by deduction of such excess from the amount of tax, penalty, interest and fees due from him:

Provided that such excess amount shall first be adjusted towards the recovery of any amount due from an employer under the Act or from a person to whom a certificate of enrolment has been issued, and thereafter the balance, if any, shall be refunded.

S.24 Offences and penalties

(1) Under this Act-

(i) violation of section 6, sub-section (1) and sub-section (2) of section 7, subsection (1) of section 8, sub-section (1) and sub-section (2) of section 9, subsection (2) of section 11, sub-section (1) and sub-section (2) of section 13, sub-section (2) of section 14, sub-section (1) of section 20;
(ii) furnishing any incorrect information in a return under sub-section (1) of section 9;
(iii) furnishing any incorrect information as required under section 13 and the rules made thereunder;
(iv) refusing to comply with any direction given under section 22;
(v) neglecting or refusing to furnish information required by section 29;
(vi) knowingly producing incorrect accounts, registers or documents, or suppressing material information;
(vii) obstructing any officer making inspection or search or seizure or taking other actions under section 22, shall constitute to be punishable offences.

S.25 Offences by Companies

(1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised due diligence to prevent the commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where any offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer shall be deemed to be guilty of that offence and sha

S.26 Power to transfer proceedings

(1) The Commissioner may by order in writing,-

(i) transfer any proceeding or proceedings under this Act relating to any person or assessee or class of assessees pending before a prescribed authority to another prescribed authority or to himself, or
(ii) specify any one of the prescribed authorities which shall deal with any proceeding or proceedings relating to any person or assessee or class of assessees.

(2) Where any proceeding is transferred to a prescribed authority under sub-section (1) of this section, such prescribed authority may deal with the proceeding either de novo or from the stage at which it was transferred.

S.27 Compounding of offences

(1) Subject to such conditions as may be prescribed, the Commissioner may, either before or after the institution of proceedings for an offence under this Act, permit any person charged with the offence to compound the offence on payment of such sum, not exceeding double the amount of tax to which the offence relates, as the Commissioner may determine.

(2) On payment of such sum as may be determined by the Commissioner under subsection (1), no further proceedings shall be taken against the person in respect of the same offence.

S.28 Power to enforce attendance, etc

The authorities under this Act shall have power to summon and enforce the attendance of any person and any witness and compel the production of any document by the same means and, so far as may be, in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908).

S.29 Power to call for information from any person

(1) The prescribed authority may, for the purposes of this Act, require any person including any individual, Hindu undivided family, firm, company, corporation or other corporate body, society, club or association to furnish to him particulars relating to profession, trade, calling or employment of any person in the State of Sikkim.

(2) The person from whom any information is sought for by the prescribed authority under sub-section (1) shall furnish such information accordingly.

S.30 Bar to proceedings

(1) No suit shall lie in any Civil Court against any assessment made or order passed under this Act.

(2) No suit, prosecution or other legal proceeding shall lie against any authority under this Act or against any employer for anything which is in good faith done or intended to be done in pursuance of this Act or rules made thereunder.

S.31 Power to delegate

The Commissioner may, subject to such conditions and restrictions as the State Government may by general or special order impose, by order in writing delegate to any of the authorities subordinate to him, either generally or in respect of any particular matter or class of matters any of his powers under the Act.

S.32 Clearance certificate

(1) Notwithstanding anything contained in any other law for the time being in force,-

(a) no Government, local authority, educational institution, corporation or body corporate established by or under a Central or State Act shall place order with, or make purchases of any goods from any person or make any payment to such person for such purchases, or
(b) no Government, local authority, educational institution, corporation or body corporate established by or under a Central or State Act, or company incorporated under the Companies Act, 1956 (1 of 1956), or registered co-operative society, shall enter into any contract with any person for execution by him of such contract and shall make payment to such person for execution of such contract, or
(c) no Government, local authority, educational institution, corporation or body corporate established under a Central or State Act, shall renew any license issued by them to any person, unless the Commissioner ce

S.33 Exemption

(1) Nothing contained in this Act shall apply to the persons who are subject to the Army Act, 1950, the Navy Act, 1957 or the Air Force Act, 1950 and are serving in any part of the State of Sikkim.

(2) Subject to such conditions as it may impose, the State Government may, if it considers it necessary so to do in the public interest, by notification, exempt any class of persons from payment of the whole or any part of the tax payable under this Act.

S.34 Power to make rules

(1) The State Government may, by notification, make rules for carrying out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the matters which, under any provisions of this act, are required to be prescribed or provided by rules.