The KARNATAKA PROVISIONAL COLLECTION OF TAXES ACT, 1974

THE  KARNATAKA  PROVISIONAL COLLECTION OF TAXES ACT, 1974 
ARRANGEMENT OF SECTIONS 
Statement of Object and Reasons 
Sections: 
 1. Short  title and commencement. 
 2. Definitions. 
 3. Power to make declaration under this Act. 
 4. Effect of declaration under this Act and duration thereof. 
 5. Certain refunds to be made when declarations ceases to have effect.  
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STATEMENT OF OBJECTS AND REASONS 
 Act 2 of 1974.- The  purpose of this Bill is to enable the State Government to 
provisionally collect taxes, pending enactment of the relevant legislation. Thus a Bill 
introduced in the Legislative Assembly for imposition or increase of tax may contain a 
declaration to the effect that it is in the public interest that any provision of the Bill shall 
have immediate effect. A similar legislation has been enacted by the Union Government 
and the Government of Maharashtra. 
 (Published in the Karnataka Gazette (Extraordinary) Part IV-2A, as No. 400, dated 
28-2-1974  at page 4.) 
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 2
KARNATAKA ACT No. 2 OF 1974 
(First Published in the Karnataka Gazette Extraordinary on the Twenty-first day of 
March, 1974) 
THE KARNATAKA PROVISIONAL COLLECTION OF TAXES ACT, 1974 
(Received the assent of the Governor on the Twenty-first day of  March, 1974) 
(As on 1.12.2004) 
 An Act to provide for immediate effect being given for a limited period to provisions in 
Bills relating to the  imposition or increase of taxes. 
 W HEREAS it is expedient to provide for immediate effect being given for a limited 
period to provisions in Bills relating to the imposition or increase of taxes; 
 B E it enacted by the Karnataka State Legislature in the Twenty-fifth year of the 
Republic of India as follows:- 
 1. Short title and commencement.-  (1) This Act may be called the Karnataka 
Provisional Collection of Taxes Act, 1974. 
 (2) It shall come into force at once. 
 2. Definitions. - In this Act,- 
 (1) "declared provision" means a provision in  a Bill in respect of which a declaration 
has been made under section 3; 
 (2) "tax" includes any rate, cess, duty, fee, toll or other impost, whether general or 
local or special. 
 3. Power to make declaration under this Act.- Where a Bill to be introduced in the 
Karnataka Legislative Assembly on behalf of the State Government provides for the 
imposition or increase of a tax, the State Government may cause to be inserted in the 
Bill a declaration that it is expedient in the public interest that any provision of the Bill 
relating to such imposition or increase shall have immediate effect under this Act. 
 4. Effect of declaration under this Act and duration thereof.-  (1) A declared 
provision shall have the force of law immediately on the expiry of the day on which the 
Bill containing it is introduced. 
 (2) A declared provision shall cease to have the force of law under provisions of this 
Act,- 
  (a) when it come into operation as an enactment with or without amendment, or 
  (b) when the State Government, in pursuance of a motion passed by the 
Karnataka Legislative Assembly, directs by notification in the official Gazette, that it shall 
cease to have the force of law, or 
(c) if it has not already ceased to have the force of law under clause (a) or 
clause (b), then on the expiry of the sixtieth day after the day on which the 
declared provision has the force of law under sub-section (1). 
 5. Certain refunds to be made when declaration ceases to have effect.-  (1) 
Where a declared  provision came into operation as an enactment in an amended form 
before the expiry of the sixtieth day after the day  on which such provision has the force 
which would not have been collected if the provision adopted in the enactment had been 
the declared provision: 
 3
 Provided that the rate at which refunds of any tax may be made under this sub-
section shall not exceed the difference between the rate of such tax proposed in the 
declared provision and the rate in force immediately prior to the day on which the 
declared provision has the force of law under sub-section (1) of section 4. 
 (2) Where a declared provision ceases to have the force of law under clause (b) or 
clause (c) of sub-section (2) of section 4, refunds shall be made of all taxes collected 
which would not have been collected if the declaration in respect of it had not been 
made. 
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