LexThe Kerala General Sales Tax Act, 1963 (No.15 of 1963)
Kerala · state statute
Open in Lexace · Ask the AI about this act36
THE KERALA GENERAL SALES TAX ACT, 1963
(Act 15 of 1963)
Preamble.
Sectiom.
CONTEN1S
CHAPTER I
Preli:minary
I. Short title, extent and commencement.
2. Definition~.
CHAPTER II
Authorities and Appellate Tribunal
3. Sale~ taJo.. authorities.
4. Appellate Tribunal.
CHAPTER III
Incidence and Levy of Tax
5. Levy of tax on sale or purchase of goods.
6. Tax under this Act to be in addit1on to tax under Central Act
74 of 1956 or any othe1 law.
7. Payment of tax at compounded rates.
8. Stage of levy of taxes in respect of imported and exported
goods.
9. ExemptiOn from tax.
I 0. Power of Government to grant exemptiOn and reduction in
rate of tax.
II. L1ab1hty to tax of persons not observmg restnct10ns and condi
tiOns pt·escl!bed under sectton 9 or noufied under sectiOn 10.
12. Burden of proof.
CHAPTER IV
Registration and Permit
13. Regtstration of dealers.
14. Procedmc for rcgtstlation.
15. Issue of permits.
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17.
18.
o!.9.
20.
21.
22.
23.
24.
25.
26.
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CIIAPIER v
Assessment, Collection and Penalty
A~sessment of tax.
Procedure to be followed by the asses~ing authonty.
ProvisiOnal asse~sment.
Asses~ment of escaped turnover.
A~sessment of legal teprcsentatlVes.
Liabthty of firms. ·
Collectwn of tax by dealers.
Payment and recovery of tax.
Recovery of penalty.
Fw ther mode of recovet y.
Recovct y of tall. when business i~ trd.nsfet red.
CHAPTER VI
Inspection of Business places and Accounts and
Establishment of Check Posts
27. Mamtenance of true d.nd correct accounts by dealers.
28. Powets to order productiOn of accounts and powers of entry,
mspection, etc.
29. E~tabli~hment of check posts and impection of goods in
transit.
30. Regulatton of tramport of notified good~.
31. Possession and submi~sion of certain recmds by owners', etc ,
of vehicles and vessels.
32. Forwarding agency, etc., to submtt t eturns.
33. Banks to submit returns.
CHAPTER VII
Appeals, Revisions and Refunds
34. Appeals to the Appellate Assistant Commi~~wner.
35. Powers of revision of the Deputy Commissioner ~uo motu.
36. Power~ of revi~ton of Deputy Commi~~wnet Oil apphcatwn.
37. Po wets of 1 eviswn of the Board of Revenue ~uo motu.
38. Powers of ti!Vt~ion of the Bo~ard of Revenue on apphcd.tton
39. Appeal to the Appellate Tnbunal.
40. Appeal to the H1gh Court.
41. Revision by the High Court.
42. Appeals, petitions and applications to the H1gh Court to be
. heard by a Bench of not less than two Judges.
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43. Powet to recttfy any enor apparent on the face of the
recot d.
44. Refund~.
45. Refund or adjustment in certain cases.
CHAPTER VIII
Offences and renalties
46. Penalty for submittmg untrue return, etc.
47. Composition of offences.
4!.1. Offences by companies.
CHAPTF.R IX
Miscellaneous
49. Courts not to set astde or modify assessments except as pro-
vided m this Act.
50. Assessment, etc., not to be questioned m prosecution.
51. Bar of certam proceedings.
52. Ltmttatton for certain suits and prosecutions.
53. Power to summon witnesses and cause production of docu
ments.
j4. Prohibition of disclosure of particulars produced before sales
tax authonties.
55. Persons entttled to appear before authority.
56. Sale or purcha~e deemed to have taken place inside the Std.te
in certain cases.
57. Power to make rules.
58. Power to amend Schedules.
59. Certain transactiOns deemed to be first sale.
60. Power to remove dtfficulties.
61. Repeal.
The Fmt Schedule.
The Second Schedule.
The Tim cl Schedule.
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ACT 15 OF 1963 "'
THE KERALA GENERAL SALES TAX ACT, 1963
An Act to consoltdate a11d amend the law rclatzng to the leuy of a general tax
on th~ sale 01 purchase of goods 111 the State of Kcrala.
Preamblc.-\VHEREAS it is expedtent to consohdate and amend the
law relatmg to the levy of a genet al tax on the sale or purchase of goods
m the State of Kerala ;
BE tt enacted in the Fourteenth Year of the Republic of Ind1a as
follows:-
CHAP1ER I
Preliminary
I. Sholl tztlc, CA/ent and commencement.-(1} Thi:, Act may be calletl
the Ketala General Sales Tax Act, 1963.
(2) It extends to the whole of the State of Kerala.
(3) It shall come into force on such date as the Govet nmcnt
may, by notification m the Gazette, appoint.
2. Dejzmtwns.-In this Act, unlcs:, the context othrt wtse
reqUires,-
(z) " Appellate As-,istant Commisswner" means any person
appointed to be an Appellate Asststant Commtssioner under section 3 ,
(zt) "Appellate Tnbuna1 '' means the Appellate Tnbuna1
appointed under sectiOn 4 ,
(zzz) "assessee" means a person by whom tax or any other sum
of money IS payable under this Act, and mcludes every person in respect
of whom any proceedings under tlus Act have been taken for the assess
ment of tax pavable by htm ;
(zv) "assessmg authority" means any person authorised by the
Government or by any authority empowered by them to make any
assessm~nt under thts Act ,
(u) "Board of Revenue" means the Board of Revenue consti
tuted under the Kerala Board of Revenue Act, 1957 ,
(vt) "business" includes any trade, commerce or manufactwe
01 any ddventure or concern m the nature of trade, commerce or manu
factwe, wtth or without pro'1t motive in such tt ade, commerce, manu
facture, adventure 01 concet n ;
(vu) "casual tradet " means d person who hds, whether ct~
principal, agent 01 m any othet capactty, occaswnal transactions of a
business nature mvolvmg the buymg, sellmg, supply of distributiOn of
goods ill the State, whether for cash or fot deferred paymeut, 01 lor
commi~~ion, remunerdtion, or other valuable constderatton ,
* Received the assent of the Governot on the 5th day of March
1963 and pubhshed m the Gazette Extraordmary, dated the
6th Match 1963.
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(vlll) "dec1let " meam dllY pet son who c.uries on the bmine~s
ol buymg, sellmg, ~upplymg ot d1stnbuting good~, d1rectly 01 othet wtse,
whether for cash or for deferred payment, or for commissiOn, 1 emune
ration or other valuable consideratton and mcludes-
(a) the Central Government, a State Government, local autho
rity, company, a Hmdu undtvided family, a Marumakkathayam
tat wad, a famtly govet ned by the Ketala Nambudin Act, I 958, an
Aliya~c1nthana family, a firm, a society, a club or an association whtch
carnes ou ~uch busme~s ;
(b) d. ca~ual tt auer ,
(c) a comnussion agent, a btoket or a del credere agent, or an
auctwnecr or any other mercantile agent, by whatevet name caJied, who
carnes on the busmess of buying, selltng, supplymg or dtstnbutmg
good~ on behalf of any pt incipal ,
(d) ,1 non-re~tdent dealer or an agent of a non-restdeut dealet,
or a Ioc.d I Hauch of a firm ot company or as~ociatton ~ttuateu outstde
the State ;
(c) a persou who sells goods produceJ by him by manufacture,
agnculture, horticulture or otherwi~e.
E\plauatwn.-A soctety (111cluding a co-operattve society), club 01
f11 m 01 an assoctatton whtch, whether or not m the course of busmess,
buys, sells, suppltes, or distnbutes goods from or to tts membets for
cash, or for deferred payment, or for commtsswn, remuneratwn or other
valuable COnstderattOn, shall be deemed to ue a dealer for the purposes
of thts Act.
( 1.\) " declared good~ ·· means goods declared by section 14 of
the Centtal Sales Tax Act, I 956 (Central Act 74 of 1956), to be of
special un pot tdnce in m tct-Sta te trade or com met ce ,
(A) " Deputy Commtssioner " means any person appomted to be
a Deputy Commissioner of Sales Tax under sectton 3;
(xt) '' food grams " means paddy, nee, wheat, maize, jowat,
bajra, barley and ragt and includes such other articles as the Govern
ment may, by nottficatwn in the Gazette, spectfy as such ,
(w) "goods" means all kinds of movable property (other than
newspapers, actiOnable clatms, electnetty, stocks and shares and
secunttes) and mcludes ltve-stock, all matet ials, commodtttes, and
arttcles (mcluGimg those to be· used in the fittmg out, tmprovement
or repatr of movable property), and all growmg crops, grass or things
attached to, or formmg part of, the land which are agreed to be severed
before sale 01 under the contract of sale;
(xlll) "Inspectmg Asst~tant CommtSstoner" means any per~on
appomted to be au Iuspectmg Asststant Commtsstoner of Sales Tax
undet ~ect10n 3,
(xw) "local autho11ty" mea'lS a municipal counctl, a munictpal
corporation, c1 townshtp conm1ittee or a panehayat,
(Av) "motor sptrit" means any substance which by itself or m
admixture wtth other substances tS ordinanly used dtrectly or indtrectly
to provtde reasonably effic1ent fuel for automatJve or stationary internal
combustiOn engmes and mcludes petrol, dresel oil and other mternal
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combustion oils, but does not include kerosene, furnace oil, coal or
charcoal;
(xvl) "permrt" means a perm1t granted under scct10n 15;
(xvtt) "petrol" means dangerous petroleum havmg its flashing
point below 24·4 degrees centigrade; ·
(xviu) "place of business" means any place where a dealer
purchases or sells goods and includes-
( a) any warehouse, godown or other place where a dealer
stores or processes his goods,
(b) any place where a deale1 p10duces or manufacture
goods;
(c) any place where a
account; and
dealer keeps his books of
(d) in any case where a dealer carnes on business through
an agent (by whatever name called), the place of busmess of such agent,
(..\t..\) "prescribed" means prescribed by rules made under th1s
Act;
( xx) "regrstered dealer" means a dealer reg1stered under this
Act;
(x..\i) "sale" with all its grammatical variations and cognate
expresswns means every transfer of the property in goods by one person
to another in the c )Urse of trade or busmess for cash or for deferred
payment or other valuable consideration, but does not mclude a
mortgage, hypothecation, charge or pledge.
Explanation (I) .-A transfer of the property 111 the following
goods, namely, tea, coffee, rubber, cardamom or timber, whether in
the course of trade or business or otherwrse, for cash or for deferred
payment or other valuable consideration, by a person who produce~ the
same, shall be deemed to be a sale for the purposes of this Act.
Ex,blanatwn (2).- fhe transfer of propel ty mvolved in the
supply or distributiOn of goods by a socrety ( includmg a co-operative
society), club, firm, or any assocratwn torts members, for cash, or for
deferred payment or other valuable consideration, whether or not m
the course of business, shall be deemed to be a sale for the purposes of
this Act.
Explanatzon (3).-A transfer of goods on hrrc-purchase or other
instalment system of payment shall, notw1thstandmg the fact that the
seller retains the t1tle in the goods as secunty for payment of the price,
be deemed to be a sale.
E;>.planatzon (4).-(a) The sale or purchase of goods shall be
deemed, for the purposes of tillS Act, to have taken place m the State,
wherever the contract of sale or purchase mrght have been made, if the
goods dre witlun the State,-
(z) in the case of specrfic or ascertained goods, at the time
the contract of sale or purchasers made, and
(n) in the case of unascertamed or future goods, at the time
of the1r appropnation to the contract of sale or purchase
by the seller or by the purchaser, whether the assent of
the other party is prior or subsequent to such appropri
ation.
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(b) Where there is a single contract of sale 01 purcha~e of
goods situated at more places than one, the provi~ions of clause (a) shall
apply as If there were separate contracts 111 respect of the goods at each
of such places.
Explanatzon (5).-Notwithstandmg anyth111g to the contrary
contained 111 this Act or any other law fo, the tunc be111g m force, two
independent sales or purchases shall, for the pu1 poses of this Act, be
deemed to have taken place-
(a) When the goods are transferred from a principal to his
sellmg agent and from the sellmg agent to the purchaser, or
(b) when the goods arc transferred from the seller to a buying
agent and from the buying agent to Ius principal, If the agent is found
111 either of the cases aforesaid-
(t) to have sold the goods at one rate and to have passed
on the sale proceeds to his pnncipal at another rate;
or
(u) to have purchased the goods at one rate and to have
passed them on to his principal at another rate, or
(m) not to have accounted to his pnncipal for the entire
collectwns or deductions made by him in the sales or
purchases effected by him on behalf of his principal;
or
(w) to have acted for a fictitious or non-existent pnncipal,
Provided that the deduction or additiOn, as the case may be,
of the commission agreed upon and specified m the accounts and
incidental charges 111curr<."d by the agent which are specified in the
accounts and which the assessing authonty considers legitimate shall
not be deemed to be a difference m the rates referred to m sub-clauses
(t) and (tt) ;
(xx!!) " Sales Tax Officer" mean~ any person appointed to be a
Sales Tax Officer undei section 3 ;
(xxw) " State" means the State of Kerala,
(xxw) "tax" means the tax payable under this Act ;
(xxv) " taxable turnover " means the turnover on which a dealer
shall be hable to pay tax as determined after making such deductiOns
from his total turnover and 111 such manner as may be prescnbed, but
shall not include the turnover of purchase or sale !11 the course of mtei
State trade or commerce or in the course of export of the goods out of
the tern tory of India or Ill the course of import of the goods mto the
territory of India ;
{uvt) " total turnovei ., means the aggregate turnover in all
goods of a dealer at all places of busmess in the State, whether or not
the whole or dny portwn of such turnover IS liable to tax, including the
turnover of ourchase or sale HI the course of inter.State trade or com
merce or in. the course of export of the goods out of the ternto1 y of
India or in the course of import of the goods mto the territory of India;
(xxvu) "turnover" means the aggregate amount for which goods
are either bought or sold, or supplied or d1str1buted, by a dealer, either
d1rectly or through another, on Ius own account or on account of others,
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whether for cash or for deferred payment or other valuable considera
tion, provided that the proceeds of the sale by a pe1 son of agricultural
or horticultural produce, grown by himself or grown on any land m
which he has an interest, whether as owner, usufructuary mortgagee,
tenant, or otherwise, shall be excluded f10m h1s turnover.
Explanatwn ( l ).-"Agricultural or horticultural produce" shall
not include-
(t) such produce as has been subjected to any physical, che
mical or other process for bemg made fit for consumptiOn, save mere
cleaning, gradmg, sortmg, drymg or dehuskmg ,
(u) tea, coffee, rubber, cardamom or timber.
E>.planatzon (2).-Subject to such conditions and rest! ictions, u
any, as may be prescribed in this behalf,-
(t) the amount for which goods are sold shallmclude any sums
charged for anythmg done by the dealer m respect of the goods sold at
the tune of, or before, the delivery thereof,
(u) any cash or other discount.on the price allowed in respect
of any sale and any amount refunded m respect of articles returned
by customers shall not be included in the turnover ; and
(m) where for accommodatmg a patticular customer, a dealer
obtains goods from another dealer and 1mmed1ately d1sposcs of the same
to the said customer, the sale in respect of such goods shall be included
in tne turnover of the latter dealer but not in that of the former ;
(xxvm) "vehicle" includes every wheeled conveyance used for
the carriage of goods solely or m additiOn to passengers;
(xxzx) " vessel" includes any ship, barge, boat, raft, timber,
bamboos or floatmg materials propelled m any manner ,
(x>.x) " year " means the financial year.
CHAP1ER II
Authorities and Appellate Tribunal
3. Sales tax authorztzes.-(1) The Board of Revenue shall have and
exercise all the powers and shall perfmm all the duties conferred or im
posed upon it by or under th1s Act.
(2) The Government shall appomt as many Deputy Commis
sionet s, Appellate Asststant CommiSSioners, Inspectmg As~tstant Com
nussioners, Sales Tax Officers and such other officers as they thmk fit for
the purpose of perfm mmg the functiOns respectively assigned to them
by or under this Act. Such officer~ shall perform the said functiOns
w1thm such local lmuts as the Government 01 any authonty or officer
empowered by them 111 tim behalf may assign to them.
(3) All officers and pcr~ons employed m the executton of this
Act shall ob3erve and follow tilt: orders, instructiOns and directions of
the officers superior to them :
Provided that no such orders, instructions or directions shall be
given so as to interfere w1th the disci etion of the Appellate Assistant
Commissioner in the exc1cise of h1s appellate functions.
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4. Appellatf T11bunal. -(I) The Go vet nment shall appoint an
Appellate Tnbunal consJstmg of a Cha1rman and two other members
to perform the functions assigned to the Appellate Tnbunal by or
under this Act. The Chairman shall be a person who is or has been a
J udicJal Officet not below the rank of a Dt~tnct Judge and the other
two members shall possess such qualifications ,ts may be prescribed.
(2) Any vacancy in the office of a member of the Appellate Tri
bunal shall be filled b}' the Government.
(3) (a) The fuuctwns of the Appellate Tribunal may be per
fmmed-
(z) by a Bench consisting of all the members of the Tri
bunal, or
(n) by a Bench conststing of two members constituted by
the Chairman, or
(m) by a Bench consistmg of the Chairman and other
member m the event of the office of a membet other
than the Chatrman bemg vacant:
Provided that, if any case which comes up before a Bench
(ofwl11ch the Chaitman is not a member) involves a questton of law,
the Bench may, m 1ts dtscretiOn, reserve such case for dcCI~ion by a
Bench to be constituted under tillS clause of wluch the Chait man shall
be a member.
(b) Where an appeal or apphcation is heard by a Bench
consisting of all the three mcmbets ol the Tnbunal and the members
dtffcr m opmion on any pomt, the pomt shall be dec1ded m accordance
with the opmwn of the majonty.
(c) Whete an appeal or apphcation is heard by a Bench con
sistmg of two members and the members arc dtvtded in their opmion
on any pomt, th.e pomt shall be referred for decision to a Bench consist
ing of all the members.
(4) The Appellate Tnbunal shall, with the previous sanction of
the Government, make tegulations conststcnt wtth the provisions of this
Act and the rules made thereunder for regulatmg its procedure and the
dtsposal of its business.
(5) The regulations made under sub-section (4) shall be publi·
shed in the Gazette.
CIIAP'!ER III
Incidence and Levy of Tax
5. Levy of tax on sale 01 pw chase of goods.-( l) Every dealer (other
than a casual trader or agent of a non-resident dealer) whose total
turnover for a yeat ts not less than ten thousand rupees and every
aasual tt ader or agent of a non-restdent dealer, whatever be his total
tum over for the yeat, shall pay tax on hts taxable tUt nover fur that
year,-
( z) 111 the case of goods specified in the First or Second
Schedule, at the rates and only at the points spectfied
agamst such goods m the said Schedules, and
(u) m the case of )ther goods, at the rate of two per cent,
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(2) Every dealer other than a dealer referred to in sub-section ( l)
whose total turnover for a year in respect of the goods specified in the
First or Second Schedule is not less than two thousand five hundted
rupees shall pay tax at the rate and only at the pomt specified agamst
the goods in the Ftrst or Second Schedule, as the case may be, on his
taxable turnover in that year relatmg to such goods :
Provided that where a tax has been levied under sub-section (I)
or sub-section (2) m respect of the sale or purchase of goods specifictf
in the Second Schedule and such goods are sold in the course of inter
State trade or commerce, the tax so levied shall be refunded to such
person in such manner and subject to such conditiOns as mliy b<'
prescribed.
(3) Notwithstanding anything contained in sub-~ection (I) or
sub-section (2), the tax payable by a dealer m respect of any sale of the
goods mentioned in the Ftrst Schedule by such dealer to another for
use by the latter as component part of any other goods mentioned m the
c;aid Schedule, which he mtends to manufacture m<;!de the State for sale,
shall be at the rate of only one per cent on the taxable turnover relatmg
to such sale :
Provided that the provistons of this sub-section shall not apply to
any sale unless the dealer selling the goods furnishes to the assessing
authority in the prescnbed manner a declaration duly filled m and
signed by the deale1 to whom the goods are sold contammg the prescri
bed particulars in a prescnbed form.
( 4) Notwithstandmg anything con tamed in sub-section (I), every
dealer registered under sub-section (3) of section 7 of the Central Sales
Tax Act, 1956 (Central Act 74 of 1956), shall whatever be the quantum
of his total turnover, pay tax for each year m respect of the sale of the
goods with reference to the purchase of whtch he has fur111shed a decla
ration under sub-section (4) of section 8 of the aforesaid Central Act at
the rate of two per cent of his taxable turnover in respect of the goods
other than those specified m the Ftrst or Second Schedule ·
Provided that this sub-section shall not apply to any dealer m
respect of the sale of the goods the purchase of wluch IS !1able to tax
under sub-section (I).
6. Tax under this Act to be m addztion to tax under Central Act 74 of
1956 or any other law.- The provisions of this Act relating to taxa
tion of successive sales or purchases mside the State, only at a single point
or at one or more pomts, shall apply only to sales or purchases Imide the
State (other than sales or purchases m the course of mter-State trade
or commerce) . and the tax under th1s Act shall be levted m additiOn to
any tax levied unde1 the Central Sales Tax Act, I956 (Central Act 74
of I956), or any other law for the time bemg m force.
7. Payment cif tax at comfJounded rates.-( I) Notw1thstandmg any
thing contained m sub-sectiOn (I) of sectiOn 5,-
( z) every dealer (other than a dealer in coo ked food including
coffee, tea and hke articles served 111 a hotel, restaurant or any other
place) whose total turnover in a year is not less than ten thousand
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rupees but not more than twenty-five thousand rupees may, at his option
m~tead of paymg the tax m accordance with the provisions of that aub
sectiOn, pay tax at the followmg rates :-
Rate of tax
(a) Where the total turnover is not less One per cent on
than ten thousand rupees but is less the taxable
than fifteen thousand rupees turnover.
(b) Where the total turnover is not less One and a half
than fifteen thousand rupees but IS per cent on
not more than t111 enty-five thousand the taxable
rupees turnover.
( 11) every dealer m cooked food includmg coffee, tea and like
articles served in a hotel, restaurant, or any other place, whose total
turnover in respect of such food is not less than twenty thousand rupees
but IS not mme than fifty thousand rupees, may, at his option, instead
of paymg the tax m accordance with the provisions of that sub-section
in respect of the turnover 1 elatmg to such food, pay tax at the following
rates:-
(a) Where the total turnover is not less than twenty
thousand rupees but is less than twenty-five
Rs.
thousand rupees 360
(b) Wher<· the total turnover is not less than twenty-
five thousand rupees but is less than thirty
thousand rupees 480
(c) Where the total turnover is not less than thirty
thousand rupees but is less than forty thousand
ru~ ~
(d) Where the total turnover is not less than forty
thousand rupees but is not more than fifty
thousand rupees 720
(2) Any dealer whose estimated total turnover for a year is within
the hmlts specified m clause ( z) or clause ( u) of sub-section ( l) may
apply to the assessmg authonty to be permitted to pay the tax under
this section and on bemg so permitted he shall pay the tax due m
advance durmg the year m monthly or other prescribed instalments and
for that purpose ~hall submit such returns and in such manner as may
be pt escribed. The apphcat10n shall be submitted to the assessing
authonty withm such time and m such manner as may be prescnbed:
Provided that the asse~sing authority may, for sufficient reasons,
condone the delay 111 case of late apphcat10n.
(3) It shall be open to the assessing authority to reject any such
apphcat10n for permiSSIOn for good and sufficient reasons to be recorded
in writmg after givmg the dealer a reasonable opportunity of bemg
heard.
( 4) Notwithstanding anythmg contained m clau~e (i) of sub
section(!), 1f under any of the other provisiOns of this Act the sale or
pU! chase of any goods by a dealer is ~ubject to tax only at a lower rate,
the tax payable under the sa1d sub-section on his turnover, in so far as
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the turnover or any part thereof relates to the sale or purchase of such
goods, shall be calculated only at such lower rates.
(5) Notwithstanding anything contamed in clause (z) of sub
section ( 1 ),-
(i) a dealer whose total turnover in a year relates only to
goods spectfied in the First or Second Schedule or a ca<;ual trader or
agent--of a non-resident dealer shall not be entttled to exerctse the option
under the said clause ; and
( u) a dealer whose turnover relates to the goods specified in
the First or Second Schedule and also to goods other than those speCified
in the satd Schedules shall be entttled to exerctse the optiOn under
clause ( z) of sub-section (I) only m respect of the turnover relating to
the goods other than those spectfied in the Ftrst or Second Schedule,
and m respect of the turnover relating to the goods spectfied m the Ftrst
or Second Schedule, he shall be lia 1)le to pay the tax under sectiOn 5.
(6) The tax paid under sub-section (2) shall be subject to such
adjustments as may be preset ibed on the completion of the final assess
ment in the manner prescribed.
8. Stage of :evy of taxes zn respect of zmported and export!d goods.
Where in the case of any goods tax 1s leviable at one pomt m a senes
of sales or/purchases, mch senes shall,-
,_, ~(~) in the Cdse of goods imported into the State etther from
o)ttstde the territory of Indm or from any other State m Indta, be
.deemed to commence at the stage of the sale or purchase effected
/ 1mmedtately after the tmport of such goods;
/ (b) in the case of goods exported out of the State to any place
outside the terntory of Indta or to any other State m Indta, be deemed
to conclude at the stage of the sale or purchase effected 1mmedJately
before the export of such goods.
9. Exemptionfrom tax.-Subject to such restrictions and conditions
as may be prescribed, a dealer who deals m the goods specified in the
Thtrd Schedule sha!J not be liable to pay any tax under th1s Act in
respect of the sale or purchase of such goods.
10. Power of Government to grant exemptzon and 1educt·on liZ rate of
lax.-( l) The Government may, tf they constder 1t necessary m the public
intetest, by n_otJficatwn 111 the Gazette, make an exemption, or reduction
in rate, in respect of any tax payable under this Act-
(z) on the sale or purchase of any specified e-oods or class of
goods, at all points or at a specified pomt or pomts in the series of sales
or purchases by successiVe dealers, or
(!!) by any spec1fied class of persons, in regard to the whole or
any part of thetr turnover.
(2) Any exemption from tax, or reductiOn m the rate of tax,
notified under sub-sect10n ( l) ,-
(a) may extend to the whole State or to any specified area
or areas therein,
(b) may be subject to such restnctions and conditions as may
he specified m the notification.
(3) The Government may, by notification in the Gazette, cancel
or vary any notificatwn Issued under sub-section (1).
11. Lzabzlzty to tax of persons and not observzng restnctzons and conditions
prescnbed under sectzon 9 01 notzjzed under sectiort I 0.-If any restriction or
conditwn prescnbed under sect1on 9 or notified under section 10 is
contravened or 1s not observed by a dealer, the sales or purchases of
such dealer may, With effect from the commencement of theoyear in ~
which such contraventwn or non-observance took place, be assessed to ~,;
tax or taxes under the app10priate provisions of this Act as if the provi-
swns of sectwn 9 or section l 0, as the case may be, did not apply to
such sales or purchases.
12. Burden of proof.- The burden of proving that any transaction
of a dealer IS not liable to tax under this Act shall he on such dealer.
CHAPTER IV
Registration and Permit
13. Regzstratzon of dealers.-( I) Every dealer whose total turnover
in any year IS not less than seven thousand five hundred rupees shall,
alild any other dealer may, get himself registered under this Act.
(2) Notwithstandmg anything con tamed in sub-se<ztion (I),
every ded ler carrymg on bus mess m all or any of the goods mentioned
111 the FirSt and the Second Schedules whose total turnover in re~pect
of those goods in any year IS not less than two thousand five hundred
rupees shall get himself Iegisteied. \
(3) Notwithstandmg anyth111g contained in sub-section ( 1) or sub- '\
section (2) ,-
( z) every casual trader,
(zz) every dealer registere<;l under sub-section (3) of section 7
of the Central Sales tax Act, 1956 (Central Act 74 of
1956);
(m) every dealer residing outside the State, but carrying on
business m the State;
(zv) every agent of a non-resident dealer; and
(v) every commission agent, broker, del credere agent, auctio
neer or any other mercantile agent, by whatever name
called, who carnes on the business of buying, selling,
supplying or distubuting goods on behalf of any
pnnCJpal,
shall get himself registered under this Act, Irrespective of the quantum
of his total turnovei 111 such goods.
(4) Nothmg contamed in this section shall apply to any State
Government, the Central Government or any local authority.
I 4. Procedure for regzstratzon.-( I) An application for registration
shall be made to such authonty, in such manner and within such penod
as may be prescnbed and shall be accompanied by a fee of ten rupees.
(2) If the prescnbed authonty after making such enquiries as it
may consider necessary is satisfied that the application is in order and
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that the particulars furnished therein are correct, it shall register the
apphcant and issue to him a certificate in the prescnbed form.
(3) Where a dealer has more than one place of business, the
registration certificate shall cover all such places of business. The
assessing authm ity shall issue cop1es of the reg1strat10n certificate to the
dealer for exhibitiOn at each of his places of busmess and the dealer
shall pay a fee of five rupees f01 each copy.
(4, The prescnbed authority ~hall have power for good and
sufficient reasons to demand from any dealer, who has been registered
or has apphed for renewal of registration, secunty for the proper pay
ment of tax by him for an amount not exceedmg one-half of the tax
payable on the turnover of the dealer for the year as estimated by the
prescribed authonty or three months' compounded rate in the case of
applicants who have opted to pay tax under section 7:
Provided that the assessing authority shall have power to
demand at any time adqitional security 1f such authority has reason to
beheve that the turnover estimated under this sub-sectiOn was too
low.
(5) A certificate issued under sub-section (2) shall be vahd for
a year and shall be renewed from year to year on payment of the fee
specified m sub-section (I).
(6) A dealer registered under sub-section ( 1) or sub-section (2)
of section 13 shall be entitled to have his registration cancelled if he is
able to prove to the satisfaction of the prescribed authonty that Ius
turnover m each of the two consecutive years Immediately precedmg
the application was less than the lim1ts mentioned in the respective sub
sectiOns.
(7) The prescnbed authority shall have power, for good and
sufficient reasons, to cancel, mod1fy or amend any registration cedifi
cate issued by it.
(8) No application for registration and no renewal under this
section shall be refused and no order under sub-section (4) or sub
section (7) shall be made, unless the dealer concerned has been given
an opportunity of being heard.
(9) When a dealer has ceased to do business in any year, and
gives notice ol that fact to the prescnbed authonty, he shall not be
liable to pay any registration fee from the commencement of the follow
ing year unless he resumes business.
(10) The dealer shall exhibit the certificate of registration
granted under sub-section (2) at the place of busmess mentioned
in the certificate. Where the dealer has more than one place of
busmess, he shall exhibit the cert1ficate of registration at the
prmcipal place of busmess mentioned in the certificate and a copy
of such certificate granted under sub-section (3) at every other place
of busmess wJthm the State mentioned m the certificate.
15. Issue of permzts.-( l) Every reg1stered dealer who transacts
busmess at places other than his registered place or places of busmess
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or employs a travelling salesman or representative to transact business
as aforesatd, shall obtain a permit Issued under this Act authonsing
himself 01, as the case may be, the travelling salesman or represent
ative so to do.
(2) Tne entire turnover of busmess carried on under the
permit shall be included and accounted for by the registered dealer
m his accounts and returns and shall be dealt wtth as tf it were the
turnover of busmess done by the registered dealer himself at the re
gistered place of business.
(3) Every permit holder shall carry the penr.it wtth him and
shall produce it on demand by any officer of the Sales Tax Depart
ment empowered by the Government m thts behalf. He shall mam
tain and produce on demand to any such officer a true and coirect
account oJ all the transactions carried on under the perm1t and also
a stock-book showmg the quantities of goods held by him, the quan
tities disposed of from day to day by sale or otherwise and the balance
on hand at the end of each day.
(4) An application for the pt'rmit referred to in sub-section
(I) shall be made to such authority, in such manner and withm such
period as may be prescribed and shall be accompanied by such fee not
exceeding ten rupees as may be prescnbed.
Exp!anatzon.-A separate application with a separate fee shall be
necessary for the registered dealer and for each travelling salesman
or representative employed by htm.
(5) If the prescribed authority is satisfied that the appl•cation
is in order, and the particulars furnished therein are correct, it shall
Issue the permit in the prescribed form.
(6) A permit issued under sub-section (5) shall be valid for
a ¥ear and shall be renewed from year to year on receipt of an
application from the registered dealer accompanied by such fee not
exceedmg ten rupees as may be prescribed.
(7) The ptescnbed authority shall cancel a permit-
(a; on requistion made in writmg by the registered dealer, or
(b) on the cancellation of the certificate of registration.
(8) The prescnbed authority may cancel a permit tf the
permit huldet has contravened any of the terms or condttwns of the
permit or any of the provisions of this Act or the rules made there
under.
(9) r\o pet mtt shall be cancelled under sub-section (8) unless
the person affected has been gtven a reasonable opportunity of bemg
heard.
CHAPTER v
A<isessment, Collection and Penalty
16. Assessment tJj ta.\.-(1) The tax under tht~ Act shall be
d~<;essed, levied and collected m such manner as may he prescnbed.
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(2) In the case of a dealer with more than one place of busi~
ness, the aggregate turnover of all such places of busmess shall be
taken as the turnover of the business for the purposes of this Act.
(3) Notwithstanding anything contamed in sub-section (2) or
any of the other proviSions of this Act, the Board of Revenue may,
with the consent of the dealer, treat each of s11ch places of business
as a separate unit for the purposes of levy, assessment and collec
tion of tax and thereupo'n all the provisions of this Act regardmg
registration, filing of return~, assessment and collection of tax shall
apply as If each of such place~ of busine~s IS a sepat ate unit.
(4) Where any order IS passed by the Board of Revenue under
sub-sectiOn (3), the turnover of each of such places of busine~s shall
be l1able to tax 11 respective of such turnover bemg below the mmimum
turnover mentwned m section 5:
Provided that the total turnover in respect of all such places of
bu~iness together is not less than the minimum turnover mentioned
m sect•on 5.
1 7. Procedure to be followed by the arsesszng authonty.- ( l) Every
dealer who IS liable to pay tax under this Act shall submit such
return or returns relating to his turnover in such manner and Within
such penod as may be prescnbed.
(2) Ifthe assessing authority is satisfied that any return sub
mitted under sub-section ( 1) is correct and complete, it ~hall assess
the dealer on the basis thereof.
(3) If no return is submitted by the dealer under sub-sectiOn
( 1) within the prescnbed penod, or tf the return submitted by him
appears to the assessmg authority to be incorrect or mcomplete, the
assessmg authonty shall, after making such enquiry as it may con
sider necessary and after taking into account all relevant matenals
gather'ed by it, assess the dealer to the best of its judgment:
Provided that before taking action under thts sub-section the
dealer shall be gtven a reasonable opportum ty of bemg heard and,
where a return has been submitted, to prove the correctness or com
pleteness of such return.
18. Provzszonal assefSment.-(l) The tax for each year payable
under any of the provistons of this Act may be assessed, levied and
collected 1n advance dunng the year m monthly or other prescribed
imtalments, and for that purpose a dealer may be required to furmsh
withm the prescnbed penod either an advance esumate of his turnover
fot the year, ot such penod1cal returns of the actual tllrnover as may
be prescnbed. The assessing authority may determme the amount of
- tax payable m respect of any penod and on such assessment the dealer
shall pay the sum demanded within such t1me as may be fixed by such
authority.
(2) If no return is submttted by the dealer under sub-section ( i)
within the prescnbed period, or if the return submitted by him appears
to the assessing authonty to be incorrect or incomplete, the assessing
authonty may dete;mme the amount of tax payable by the dealer m
accordance w1th the pmvis10ns ofsub-sectJOn (3) of section 17.
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(3) If the assessing authority has reason to believe that the
provisional asses>ment made by it for any period was based on too low
a turnover 01 was made at too low a rate or was based on too h1gh a
turnover or was made at too high a rate, it may enhance or reduce, as
the case may be, such proviswnal assessment:
Provided that before making an enhancement of the provisional
assessment as aforesa1d, the assessmg authority ~hall, except where such
f'nhancement 1s based on the turnover finally determmcd for the prece
ding year, g1ve a Ieasonable opportunity to the dealer to show cause
agamst such enhancement and make such enquiry as 1t may consider
n eccssa 1 y.
( 4) The assessment, levy and collectron of tax under this 'ection
shall be subject to such adjustment as may be prescribed on the com
pletion of final assessment in the manner prescribed.
19. Assessment of escaped tumover .-(I) Where for any rea,on the
whole or any pa1 t of the turnover of busmess of a dealer has escaped
assessment to tax in any year or has been under-assessed or has been asse
'sed at a rate lower than the rate at wh1ch 1t is assessable, or any dedu
ction has been wrongly made therefrom, the assessing autho11ty may, at
any time w1thin four years from the exp1ry of the year to wh1ch the tax
relates, proceed to determine to the best of its judgment the turnover
which has escaped assessment to tax or has been under-assessed or has
been a~sessed at a rate lower than the rate at which it 1s assessable or
the deductiOn that has been wrongly made and assess the tax payable on
such turnover after issuing a notice on the dealer and after makmg such
enqmry as 1t may consider necessary :
Provided that before makmg an assessment under this sub-section
the dealer shall be given a 1easonab1e opportunity of being heard.
(2) In makmg an assessment under sub-sectwn (I), the assessing
authority may, 1f it 1s satisfied that the escape from assessment 1' due to
wJiful non-d1sclo5ure of assessable turnover by the dealer, direct the
dealer to pay, in additwn to the tax assessed under sub-sect10n (I), a
penalty not exceedmg one and a half t1mes the tax so assessed :
Provided that no penalty under tl11S sub-section shall be Imposed
unless the deale1 affected has had a reasonable opportumty of showing
cause against such Impos1t10n.
(3) The powers under sub-sectiOn (I) may be exerc1sed bv the
assessmg auth011ty even though the 01 igmal 01 der of assessment, 1f any,
passed m tile matter, has been the subject matter of an appeal or
revision.
(4) In computmg the penod of limllatlon for the purposes of
this sectwn, the time durmg wh1ch the proceedmgs for assessment
remained stayed under the mders. of a civJ! court or other competent
authority shall be excluded.
20. Assessment rif legal representatives.-Vvhere a dealer dies, his execu
tor, admm1St1ator, or other legal rep1esentatlve shall be deemed to be
the dealer for the purposes of this Act, and the p10visions of thi~ Act
shall apply to him m 1espect of the busmess of the sa1d deceased dealer,
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provided that, in respect of any tax, fee or other amount asse~sccl ..t~
payable by any such dealer or levted on htm or any tax, fee or other
amount which would have been payable by h1m under th1s Act 1f
he had not d1ed, the executor, admmtstrator or other legal representa
tive shall be liable only to the extent of the assets of the deceased in
his hands.
21. Lzabzlzty of fzrms.-( l) Where any firm IS liable to pay any
tax, fee or other amount under this Act, the firm and each of the pa1 t
ners of the firm shall be jomtly and severally hable for such payment.
(2) Where a partner of a firm hablc to pay any tax, fcc or other
amount under th1s Act retires, he shall, notwithstandmg any contract
to the contrary, be liable to pay the tax, fee or other amount remaining .
unpaid at the tunc of h1s rettrement and any tax, fee or other amount
due up to the date of retirement, though unassessed.
22. Collcctwn of La:>.. by dealers.-( I) No per~on who IS not a 1 egt
stet ed dealer shall collect any amount by way of tax under th1s Act ;
nm shall a 1 egtstered dealer make any such collection except m accord
ance with such condttions and restnctwns, 1f any, as may be pt escri
bed:
Provided that nothing cotamed in thts sub-section shall apply to
the Central Government, a State Government or a local authonty.
(2) If any dealer or person who is not liable 'to tax under th1s
Act collects any amount purportmg to be by way of tax, such dealer
or person shall, unless 1t IS established to the sat1sfact10n of the assessing
authonty that the amount so collected has been refunded to the person
'"'ho had ongmally patd the amount, pay over to the Govemmcnt
w1thin such time and m such manner as may be prescribed all amounts
so collected.
(3) If any dealer or person collects tax on transactions not !table
to tax under th1s Act or m exces~ of the tax leviable under th1s Act,
such dealer or person shall, unless 1t is estabhshed to the satisfactiOn of
the assessing authority that the tax so collected has been refunded to
the person who had onginally pa1d the tax, pay over to the Govern
ment, in addition to the tax payable, the amount so collected, withm
such time and in such manner as Excerpt shown. Open the full act in Lexace.