LexThe MADHYA PRADESH VAT ACT, 2002
Madhya Pradesh · state statute
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THE MADHYA PRADESH VAT ACT, 2002
(No.20 of 2002)
Incorporating amendments made by-
MP Vat (Amendment) Act, 2003
( No.11 of 2003),
MP Vat (Amendment) Act, 2006
( No.12 of 2006)
MP Vat (Amendment) Ordinance, 2006
(No.5 of 2006) read with
MP Vat (Second Amendment) Act, 2006
( No.22 of 2006)
MP Vat (Amendment) Act, 2007
( No.8 of 2007)
MP Vat (Second Amendment) Act, 2007
( No. 26 of 2007)
MP Vat (Amendment) Ordinance, 2008
(No.1 of 2008) read with
MP Vat (Amendment) Act, 2008
( No. 14 of 2008)
MP Vat (Amendment) Act, 2009
( No. 9 of 2009)
MP Vat (Amendment) Act, 2010
( No. 11 of 2010)
MP Vat (Second Amendment) Act, 2010
( No. 20 of 2010)
&
Notifications
[ THE MADHYA PRADESH VAT ACT, 2002 (No 20 of 2002 - received the assent of the
President on the 12th November , 2002; assent first published in the “Madhya Pradesh
Gazette (Extra Ordinary )” dated the 28th November. 2002.]
Amended by -
1 *MP Vat (Amendment) Act, 2003 ( No.11 of 2003)-received the assent of the Governor on
the 21st April, 2003; assent first published in the “Madhya Pradesh Gazette(Extra Ordinary )”
dated the 26th April, 2003.
2 *MP Vat (Amendment) Act, 2006 ( No.12 of 2006) - received the assent of the Governor on
the 31st March, 2006; assent first published in the “Madhya Pradesh Gazette (Extra
Ordinary )” dated the 31st March , 2006.
2
3 MP Vat (Amendment) Ordinance, 2006 (No.5 of 2006)- published in the “Madhya Pradesh
Gazette (Extra Ordinary )” dated the 2nd June, 2006-
4**MP Vat (Second Amendment) Act, 2006 ( No.22 of 2006) - received the assent of the
Governor on the 4th August, 2006; assent first published in the “Madhya Pradesh Gazette
(Extra Ordinary )” dated the 8th August, 2006
* The Act and the amendment Acts have come in to force with effect from 1st April, 2006
(Notification No. (9)* dated 14 March, 2006 and (17)* dated 31 March, 2006)
** (i) The amendment Act has been made effective from 1st April, 2006, subject to the
condition that the provisions of section 2(ii)(b), section 19(i) (b) relating to "Bulk drugs" and
section 19(ii) relating to "Drugs and Medicines" of this amending Act shall come into force
from such date as the State Government may, by notification, appoint; and the remaining
provisions of this amending Act shall be deemed to have come into force from 1.4.2006
subject to the condition that if the rate of tax prevailing before the date of publication of this
Act in the Gazette was higher and the amount of tax collected at such higher rate from 1st
April 2006 to the date of publication of this Act in the Gazette,-
(a) has been deposited in the treasury, such amount shall not be refunded; and/ or
(b) has not been deposited in the treasury, such amount shall have to be deposited in
the treasury.
(ii) the provision of section 19(i) (b) relating to "Bulk drugs" has been made effective
from 8.8.2006 - Noti. No. (22)
* dated 26.4.2007.
5 Notification No.(79) dated 5.12.2006- amendment of Schedule II-part III-entry No.3.
6 MP Vat (Amendment) Act, 2007 ( No.8 of 2007) - received the assent of the Governor on
the 31st March, 2007; assent first published in the “Madhya Pradesh Gazette (Extra
Ordinary )” dated the 1st April, 2007. [The amendment Act has come in to force with
effect from 1st April, 2007 -Notification No. (11)* dated 1st April, 2007]
7 Notification No.(12) dated 1.04.2007 -insertion of new entry No.14-A-Bidi in Schedule II-
part II.
8 Notification No.(23) dated 8.05.2007 - insertion of new entry No.50-Bidi in Schedule I &
omission of entry No.14-A-Bidi of Schedule II-part II.
9 Notification No.(27) dated 5.07.2007 - Amendment of Schedule I & Schedule II .
10 MP Vat (Second Amendment) Act, 2007 ( No. 26 of 2007) - received the assent of the
Governor on the 10th December, 2007; assent first published in the “Madhya Pradesh
Gazette (Extra Ordinary )” dated the 11th December, 2007. [The amendment Act has
come in to force with effect from 24th December, 2007 -Notification No. (35)* dated
19th December, 2007]
11. Notification No.(11) dated 29.03.2008 - Amendment of Schedule I & Schedule II .
12. MP Vat (Amendment) Ordinance, 2008 (No.1 of 2008)- published in the “Madhya
Pradesh Gazette (Extra Ordinary )” dated the 12th May, 2008 - converted into * MP Vat
(Amendment) Act, 2008 ( No. 14 of 2008) - received the assent of the Governor on the
30th July, 2008; assent first published in the “Madhya Pradesh Gazette (Extra Ordinary)”
dated the 2nd August, 2008.
3
13. Notification No. (17) dated 19.05.2008 - Amendment of Schedule II
14. Notification No. (22) dated 18.06.2008 - Amendment of Schedule II - read with
Notification No. (24)* dated 25.06.2008
15. Notification No.(26) dated 22.07.2008 - Amendment of Schedule I
16. Notification No.(29) dated 16.09.2008 - Amendment of Schedule II
17. Notification No.(31)* dated 27.09.2008 - Amendment of Schedule II read with
Notification No. (35)1 dated 26-12-08
18. Notification No.(33) dated 18.12.2008 - Amendment of Schedule I and II
19. Notification No.(12) dated 2.07.2009 - Amendment of Schedule I and II
20. MP Vat (Amendment) Act, 2009 ( No. 9 of 2009) - received the assent of the Governor
on the 1st August, 2009 ; assent first published in the “Madhya Pradesh Gazette (Extra
Ordinary)” dated the 1 August, 2009. [The amendment Act has come in to force with
effect from 1 August, 2009-Notification No. (16)* dated 1 August, 2009]
21. Notification No.(33) dated 22.12.2009 - Amendment of Schedule I
22. Notification No.(36) dated 27.01.2010 - Amendment of Schedule I I
23. MP Vat (Amendment) Act, 2010 ( No. 11 of 2010) - received the assent of the Governor
on the 29th March, 2010 ; assent first published in the “Madhya Pradesh Gazette (Extra
Ordinary)” dated the 1 April, 2010. [The amendment Act has come in to force with effect
from the date of publication
24. MP Vat (Second Amendment) Act, 2010 (No. 20 of 2010) - received the assent of the
Governor on the 9th August, 2010 ; assent first published in the “Madhya Pradesh
Gazette (Extra Ordinary)” dated the 10th August, 2010. [The amendment Act has come
in to force with effect from the date of publication]
---------------------------------------------------
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Table of contents
Section Page
Chapter I - Preliminary
1 Short title, extent and commencement. 7
2 Definitions. 7
Chapter II - Taxing Authorities
3 Taxing authorities and other officers. 12
23-A Appellate Authority2 13
4 Appellate Board 13
4-A. Orders of Appellate Board.
4-B. Procedure of Appellate Board
Chapter III – Incidence of tax
5 Incidence of tax. 14
6 Determination of liability to pay tax. 14
7 Joint and several liability of certain class of dealers.. 14
8 Liability of a dealer registered under Central Sales Tax Act,
1956 ( No. 74 of 1956) to pay tax.
15
Chapter IV - Levy of tax
9 Levy of tax. 15
209-A Levy of tax by weight, volume, measurement or unit on
certain goods
15
10 Levy of purchase tax. 15
2010A. Levy of purchase tax on certain goods. 16
11 Composition of tax 16
3 /4 11A Composition of tax by certain registered dealers3 /4 17
611B Payment of lump sum in lieu of tax 6 17
12 Dealer not to pass incidence of tax to agriculturists and
horticulturists under certain circumstances.
17
13 Rate of tax on container or packing material. 17
14 Rebate of input tax 18
15 Burden of proof. 21
16 Tax free goods. 21
3 /4 16 A Savings3 /4 21
Chapter V- Registration of dealers
17 Registration of dealers 22
Chapter VI- Returns, Assessment,
Payment and Recovery of Tax
18 Returns 25
19 Tax Audit 27
20 Assessment of tax 27
220-A Self assessment2 29
21 Assessment / reassessment of tax in certain circumstances. 30
22 Exclusion of time in assessment proceedings. 31
23 Appearance before taxing authorities. 31
24 Payment and recovery of tax, interest, penalty and other dues. 32
24-A Commercial tax Settlement Authority.
24-B Application for settlement of cases.
24-C Procedure on receipt of an application
25 Payment of tax in advance of assessment on failure to furnish
returns.
35
26 Deduction and payment of tax in certain cases. 36
1026 A Deduction of tax at source in respect of certain goods. 10 38
5
Section Page
627 Saving for person responsible for deduction of tax at source6 38
28 Special mode of recovery. 39
29 Payment of tax in case of transfer or discontinuance of
business and liability of the company in case of amalgamation
39
30 Liability of firms. 41
31 Transfers to defraud revenue void.. 41
32 Assessment/re-assessment of legal representatives.&
Assessment in special cases
41
33 Tax to be first charge 42
234 Omitted 2
35 Collection of tax by dealers. 42
36 Sales not liable to tax 43
Chapter VII - Refund of Tax
37 Refunds 44
38 Power to withhold refund in certain cases 44
Chapter VIII – Accounts and Issue of Bills,
invoices or cash memoranda
39 Accounts 45
40 Dealers to issue bills, invoices or cash memoranda 45
Chapter IX -Certain powers of the Commissioner and
delegation by the Commissioner
41 Delegation of Commissioner's powers and duties. 46
42 Transfer of proceedings 46
43 Power of Commissioner and his assistants to take evidence on
oath etc.
46
44 Power of Commissioner to call for information in certain cases. 46
45 Power of Commissioner to stay proceedings. 47
Chapter X- Appeals, Revisions and Rectification
46 Appeal 47
47 Power of revision by Commissioner 49
48 Additional evidence in appeal or revision 49
49 Court fee stamps on memorandum of appeal and application
for revision
50
50 Application of Sections 4 and 12 of Limitation Act, 1963 50
51 Extension of period of limitation in certain cases 50
52 Power of Commissioner or Appellate Authority or the Appellate
Board to impose penalty in certain circumstances
50
53 Appeal to High Court. 51
54 Rectification of mistakes. 51
Chapter XI- Detection and prevention of tax evasion
55 Detection and checking evasion of tax by dealers liable to pay
tax and power of commissioner to investigate into tax evasion
by a dealer
52
1055 A Special provision for assessment of cases relating to detection
and prevention of tax evasion. 10
55
56 Survey 56
57 Establishment of check-post and inspection of goods while in
movement
57
58 Transit of goods by road through the State and issue of transit
pass
60
259 Omitted2
260 Omitted2
6
Section Page
61 Regulation of delivery and carrying goods away from Railway
premises
61
62 Control on clearing, forwarding or booking agent and any
person transporting goods and furnishing of information by such
agent or person
61
263 Power to call for information from Banking , non-banking
financial Companies or insurance companies2
62
Chapter XII- Offences and Penalties
64 Offences and Penalties 62
Chapter XIII- Miscellaneous
65 Production of Tax Clearance Certificate 63
66 Bar to Certain Proceedings 63
67 Bar of prosecution in certain cases 64
68 Protection of persons acting in good faith and limitation of suit
and prosecution
64
69 Disclosure of information by public servant 64
70 Determination of disputed questions 65
Chapter XIV -Power to make rules, Repeal and Saving,
transitory provisions and power to remove difficulties
4 70A Power of State Government to amend Schedule I and II4 65
71 Power to make rules 66
72 Repeal and savings. 69
73 Transitory provisions. 70
74 Power to remove difficulties. 71
Schedule I 71
Schedule I I 77
Schedule III - 2Omitted2
7
MADHYA PRADESH ACT
No 20 of 2002.
THE MADHYA PRADESH VAT ACT, 2002
An Act to levy tax on sale and purchase of goods in the State of Madhya Pradesh.
Be it enacted by the Madhya Pradesh Legislature in the Fifty third year of the
Republic of India as follows: -
CHAPTER - I PRELIMINARY
1. Short Title, Extent and Commencement –
(1) This Act may be called The Madhya Pradesh Vat Act, 2002.
(2) It extends to the whole of Madhya Pradesh .
(3) It shall come into force on such date as the State Government may, by
notification, appoint.
2. Definitions -In this Act, unless there is anything repugnant in the subject or
context, -
(a) "Appellate Board" means the Appellate Board constituted under section 4;
2(b) "Appellate Authority " means an Authority appointed under section 3 A.2
(c)``Assistant Commissioner’’ means an Assistant Commissioner of Commercial Tax
appointed under Section 3 and includes an Additional Assistant Commissioner of
Commercial Tax;
(d) “Business “ includes, -
(i) any trade, commerce, manufacture or any adventure or concern in the
nature of trade, commerce or manufacture, whether or not such trade,
commerce, manufacture, adventure or concern is carried on with a motive to
make gain or profit and whether or not any gain or profit accrues from such
trade, commerce, manufacture, adventure or concern and irrespective of the
volume, frequency, continuity or regularity of such trade, commerce,
manufacture, adventure or concern; and
(ii) any transaction of sale or purchase of goods in connection with or
incidental or ancillary to the trade, commerce, manufacture, adventure or
concern referred to in clause (i), that is to say –
(a) goods whether or not they are in their original form
or in the form of second hand goods, unserviceable
goods, obsolete or discarded goods, mere scrap or
waste material; and
(b) goods which are obtained as waste products or by-
products in the course of manufacture or
processing of other goods or mining or generation
of or distribution of electrical energy or any other
form or power;
8
3 /4 (e) "Canteen stores" means the goods included in part IV of Schedule II, but
excluding such goods as the State Government may by *notification specify;3 /4
(f) " Commercial Tax Office " means an office of any Officer appointed under
section 3 of this Act.
(g) “Commercial Tax Officer” means a Commercial Tax Officer appointed under
Section 3 and includes an Additional Commercial Tax Officer;
(h)“Commissioner” means the Commissioner of Commercial Tax appointed under
Section 3;
23. (ha) "Cooked food" means meal prepared and served by hotels, restaurants and the
like, including prepared tea and prepared coffee: 23.
(i) “Dealer” means any person, who carries on the business of buying, selling, supplying
or distributing goods, directly or otherwise, whether for cash, or for deferred payment
or for commission, remuneration or other valuable consideration and includes -
(i) a local authority, a company, an undivided Hindu family or any society
(including a co-operative society), club, firm or association which carries on
such business;
(ii) a society (including a co-operative society), club, firm or association which
buys goods from, or sells, supplies or distributes goods to its \members;
(iii) a commission agent, broker, a del-credere agent, an auctioneer or any
other mercantile agent, by whatever name called, who carries on the business of
buying, selling, supplying or distributing goods on behalf of the principal;
(iv) any person who transfers the right to use any goods including leasing thereof
for any purpose, (whether or not for a specified period) in the course of business
to any other person;
Explanation I - Every person who acts as an agent of a non- resident dealer, that
is as an agent on behalf of a dealer residing outside the State and buys, sells,
supplies or distributes goods in the State or acts on behalf of such dealer as -
(i) a mercantile agent as defined in the Sale of Goods Act, 1930 (III of 1930); or
(ii) an agent for handling goods or documents of title relating to goods; or
(iii) an agent for the collection or the payment of the sale price of goods or
as a guarantor for such collection or payment, and every local branch of a firm or
company situated outside the State,
shall be deemed to be a dealer for the purpose of this Act.
Explanation II - The Central or a State Government or any of their departments or
offices which, whether or not in the course of business, buy, sell, supply or
distribute goods, directly or otherwise, for cash or for deferred payment, or for
commission, remuneration or for other valuable consideration, shall be deemed to
be a dealer for the purpose of this Act.
Explanation III - Any non-trading, commercial or financial establishment including a
bank, an insurance company, a transport company and the like which whether or
not in the course of business buys, sells, supplies or distributes goods, directly or
otherwise, for cash or for deferred payment, commission, remuneration or for
other valuable consideration, shall be deemed to be a dealer for the purposes of
this Act:
9
(j) The expression “declared goods” shall have the meaning assigned to it in the
Central Sales Tax Act, 1956 (No.74 of 1956);
(k) “Deputy Commissioner” means a Deputy Commissioner of Commercial Tax
appointed under Section 3 and includes an Additional Deputy Commissioner
of Commercial Tax ;
(l) “Document” means title deeds, writings or inscriptions and includes "electronic record"
and "electronic form" as defined in the Information Technology Act, 2000 (No.21 of
2000) and the like that furnishes evidence;
(m) “Goods” means all kinds of movable property including computer software but
excluding actionable claims, newspapers, stocks, shares, securities or Government
stamps and includes all materials, articles and commodities, whether or not to be
used in the construction, fitting out, improvement or repair of movable or immovable
property, and also includes all growing crops, grass, trees, plants and things attached
to, or forming part of the land which are agreed to be severed before the sale or
under the contract of sale;
(n) "Import" means the bringing or causing to be brought of goods in to the State of
Madhya Pradesh from any place outside the State;
(o)
2'' input tax'' means an amount paid or payable by way of tax under section 9 by a
registered dealer in respect of the purchase of any goods specified in Schedule
II , to a selling registered dealer and who is liable to pay tax under the said
section on the sale of such goods; 2
(p) “Manufacture” includes any activity that brings out a change in an article or articles
as a result of some process, treatment, labour and results in transformations into a
new and different article so understood in commercial parlance having a distinct
name, character and use, but does not include such activity of manufacture as may
be
*notified*;.
(q) “Place of business” means any place where a dealer purchases or sells any goods
or stores goods or keeps documents or accounts of his purchases or sales or both
and also includes -
(i) the place of business of an agent where a dealer carries on business through
an agent;
(ii) any place or building whether any business is carried on therein or not, in
which the person carrying on the business, keeps any of his books of
accounts, documents, stocks or other things, relating to his business;
(iii) any vehicle or vessel or any other carrier wherein goods are stored or used
for transporting goods;
(r) "prescribed" means prescribed by rules made under this Act;
(s) “Purchase price” shall comprise of -
(i) the amount payable by a dealer as valuable consideration for the purchase of
goods ‘ simplicitor ’;
Provided that where goods are purchased together with the packing
material or container, then notwithstanding anything contained in this Act, the
purchase price of such goods shall be inclusive of the price or cost or value of such
10
packing material or container, whether such price or cost or value is paid separately
or not as if such packing material or container were the goods purchased;
(ii) transport costs, if any;
(iii) trade commission, if any, by whatever name called;
(iv) forwarding and handling charges, if any;
(v) insurance charges, if any;
(vi) local taxes, if any;
(vii) excise duty, if any, leviable under the Central Excise Act, 1944 (No.1 of
1944);
(viii) cost of packing, if any; and
(ix) any other charges or costs other than those specified above, if incurred or
paid in respect of goods so purchased;
Explanation -For the purpose of this clause “transport cost” includes such
expenses as are incurred by the dealer on transportation of goods after taking delivery
from the seller;
(t) “Registered dealer” means a dealer registered under this Act;
(u) “Sale” with all its grammatical variations and cognate expressions means any
transfer of property in goods for cash or deferred payment or for other valuable
consideration and includes -
(i) a transfer, otherwise than in pursuance of a contract, of property in any goods
for cash, deferred payment or other valuable consideration;
(ii) a transfer of property in goods whether as goods or in some other form,
involved in the execution of works contract;
(iii) a delivery of goods on hire purchase or any system of payment by
instalments ;
(iv) a supply of goods by any unincorporated association or body of persons to a
member thereof for cash, deferred payment or other valuable consideration;
(v) a supply, by way of or as part of any service or in any other manner
whatsoever, of goods being food or any other article for human consumption or any
drink (whether or not intoxicating) where such supply or service is for cash,
deferred payment or other valuable consideration;
(vi) a transfer of the right to use any goods including leasing thereof for any
purpose (whether or not for a specified period) for cash, deferred payment or other
valuable consideration,
and such transfer, delivery or supply of any goods shall be deemed to be a sale of those
goods by the person making the transfer, delivery or supply and purchase of those
goods by the person to whom such transfer, delivery or supply is made, but does not
include a mortgage, hypothecation, charge or pledge;
Explanation - (a) Notwithstanding anything contained in the Sale of Goods Act, 1930 (III
of 1930), where a sale or purchase of goods takes place in pursuance of a
contract of sale, such sale or purchase shall be deemed for the purposes of
this Act to have taken place in the State of Madhya Pradesh irrespective of
the place where the contract of sale or purchase might have been made, if
the goods are within the State -
(i) in the case of specific or ascertained goods, at the time the contract
of sale or purchase is made; and
11
(ii) in the case of unascertained or future goods, at the time of their
appropriation 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 appropriation; and
(b) Where there is a single contract of sale or purchase of goods situated at more
places than one, the provisions of clause (a) shall apply as if there were
separate contracts in respect of the goods at each of such places;
2(c) Notwithstanding anything to the contrary contained in this Act or any other
law for the time being in force, two independent sales or purchases shall, for
the purposes of this Act, be deemed to have taken place,
(i) when the goods are transferred from a principal to his selling agent
and from the selling agent to the purchaser, or
(ii) when the goods are transferred from the seller to a buying agent
and from the buying agent to his principal. 2
23. (d) Notwithstanding anything to the contrary contained in this Act or any other
law for the time being in force, two independent sale or purchase shall, for the
purposes of this Act, be deemed to have taken place, when the goods
specified in Schedule II are transferred from a unit of a dealer to another unit
of the same dealer for sale or for consumption or use in / for manufacture of
goods specified in Schedule II in such unit and the dealer holds separate
registration certificate for each of such units. 23. (with effect from
01.08.2009)
(v) "Sale price" means the amount or any other consideration payable to a dealer as
valuable consideration for the sale of any goods less any sum allowed as 3discount
according to ordinary trade practice but inclusive of any sum charged for anything done
by the dealer in respect of the goods at the time of or before delivery thereof other than
the cost of freight or delivery or the cost of installation when such cost is separately
charged.
Explanation - (i) Where goods are sold on hire purchase or any system of payment by
installments, the sale price of such goods shall be exclusive of
insurance charges, interest and hire charges and such other charges
as may be prescribed.
(ii) Where goods are sold by way of transfer of right to use such goods,
the sale price thereof shall be the amount of valuable consideration
received or receivable by the transferor for such transfer ;
(iii) 3/4 Discount at the time of sale as evident from the invoice shall be
excluded from the sale price but any ex post facto grant of discounts
or incentives or rebates or rewards and the like shall not be excluded;
4 (iv) The amount of valuable consideration paid or payable to a dealer for
sale of drugs and medicines specified in entry 10 of part III of
Schedule II shall be the maximum retail price printed on the package
containing the drugs and medicines, for the purposes of levy of tax
under section 9; 4
(w) " Tax "means the tax payable under this Act.
(x)
2“Taxable turnover" in relation to a dealer for any period means that part of dealer's
turnover which remains, after deducting therefrom :-
(1 )The sale price of goods declared tax free under Section 16;
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(2) The sale price of goods which are in the nature of tax paid goods in the hands of
such dealer;
(3) The amount collected by way of tax under Section 9 or
the amount arrived at by applying the following formula :
rate of tax X aggregate of sale prices
100 + rate of tax
Provided that no deductions on the basis of the above formula shall be
made if the amount by way of tax collected by a registered dealer, in accordance with the
provisions of this Act, has been otherwise deducted from the aggregate of sale prices.
Explanation – Where the turnover of a dealer is taxable at different rates, the aforesaid
formula shall be applied separately in respect of such part of the turnover liable to a different
rate of tax under section 9 ; 2
(y)
2 “Tax paid goods” in relation to goods specified in part III of schedule II on which tax is
payable under section 9 means any such goods which have been purchased by a dealer
from a registered dealer inside the State of Madhya Pradesh within the meaning of section 4
of the central Sales Tax Act, 1956 (No. 74 of 1956). 2(upto 31-07-2009)
20
(y) “Tax paid goods” in relation to goods specified in Part III of Schedule II and the
goods notified under section 9-A, on which tax is payable under section 9, means
any such goods which have been purchased by a dealer from a registered dealer
inside the State of Madhya Pradesh within the meaning of section 4 of the Central
Sales Tax Act, 1956 (No. 74 of 1956). 20 (from 01-08-2009)
(z) ‘Turnover’ in relation to any period means the aggregate of the amount of sale prices
received and receivable by a dealer in respect of any sale or supply or distribution of goods
made during that period, whether or not the whole or any portion of such turnover is liable to
tax but after deducting the amount, if any, refunded by the dealer to a purchaser, in respect
of any goods purchased and returned by the purchaser within six months from the date of
such sale:
Provided that -
(i) in the case of sale by bonafide agriculturist as defined in clause (e) of sub-
section (1) of Section 2 of the Madhya Pradesh Land Revenue Code, 1959
(No.20 of 1959), of ghee produced by himself; or
(ii) in case of sale by a person of agricultural or horticultural produce grown by
himself or grown on any land in which he has an interest whether as owner,
usufructuary mortgagee, tenant or otherwise, when such produce is sold in the
form in which it was produced, without being subjected to any physical, chemical
or other process for being made fit for consumption save mere dehusking,
cleaning, grading or sorting, the amount of consideration relating to such sales,
shall be excluded from his turnover;
(a-1) " VAT" (Value Added Tax) means tax on sale or purchase of goods payable under
this Act.
(b-1) ‘Year’ means the twelve months ending on the 31st day of March.
CHAPTER - II Taxing Authorities
3 : Taxing Authorities and other Officers
(1) There may be appointed a person to be the Commissioner of Commercial Tax and
the following category of officers to assist him, namely :
20(a) Director of Commercial Tax
13
(b) Additional Commissioner of Commercial Tax20
(c) Deputy Commissioner or Additional Deputy Commissioner of Commercial
Tax;
(d) Assistant Commissioner or Additional Assistant Commissioner of Commercial
Tax;
(e) Commercial Tax Officer or Additional Commercial Tax Officer;
(f) Assistant Commercial Tax Officer; and
(g) Inspector of Commercial Tax .
(2) The Commissioner of Commercial Tax, 20the Director of Commercial Tax and the
Additional Commissioner of Commercial Tax20 shall be *appointed* by the State Government
and the other officers referred to in sub-section (1) shall be appointed by the State
Government or such other authority as it may direct.
20(3) The Commissioner of Commercial Tax, Director of Commercial Tax and the
Additional Commissioner of Commercial Tax shall exercise all the powers and
perform all the duties conferred or imposed on the Commissioner by or under this
Act throughout the State and for this purpose any reference to the Commissioner in
this Act, shall be construed as a reference to the Director of Commercial Tax and
Additional Commissioner of Commercial Tax.20
(4) Other officers referred to in sub-section (2) 3/4 (and Appellate Authority) 3/4 shall, within
such areas as the appointing authority may, by general or special *order* specify, exercise
such powers as may be conferred and perform such duties as may be imposed by or under
this Act.
23A. Appellate Authority
The State Government may, by order, *appoint any officer not below Deputy Commissioner
of Commercial Tax as Appellate Authority. 2
4 Appellate Board -
(1) The State Government shall, by *notification with effect from a date specified therein,
constitute Appellate Board to exercise the powers and perform the functions conferred on
the Appellate Board by or under this Act.
(2) Till the date specified in the notification under sub-section (1), the 2Appellate Board
constituted under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) 2 shall
act as Appellate Board for the purpose of this Act and on the date aforementioned all
proceedings pending before the 2Appellate Board constituted under the Madhya Pradesh
Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) 2,Madhya Pradesh, acting as Appellate Board
shall stand transferred to the Appellate Board constituted under sub-section (1).
(3) The Appellate Board shall consist of a Chairman and such number of judicial and
accountant members as the State Government may decide. [from 10.8.10]
[The Appellate Board shall consist of a Chairman and 2such number of members as the
State Government may decide2 who have vast knowledge of administration or taxation
matter.] [upto 9.8.10]
(4) The Appellate Board shall, for the purpose of discharging its functions, have all the
powers which are vested in the commercial tax authorities referred to in section 3, and any
proceedings before the Appellate Board shall be deemed to be judicial proceedings within
the meaning of sections 193 and 228 of the Indian Penal Code 1860 (No. 45 of 1860) and
for the purpose of section 196 of the Indian Penal Code, 1860. The Appellate Board shall
also be deemed to be the civil court for all the purposes of section 195 and chapter XXXV of
the Code of Criminal Procedure 1973 (No. 2 of 1974).
(5) 2The tenure of the Chairman and members shall be five years, but shall not be beyond
the age of 65 years in case of Chairman and 62 years in case of members, and the salary
and other conditions of service of the Chairman and members shall be such as may be
prescribed : 2
14
[Provided that the Chairmen and the members shall hold office during the pleasure of the
State Government]. [omitted from 10.8.10]
(6) The Chairman of the Board shall be a retired member of the Indian Administrative
Service who has held a post equivalent to the Chief Secretary of the State Government or
Secretary to the Government of India and has experience of tax administration.
(7) Judicial members shall be the person who has been a member of Madhya Pradesh Higher
Judicial Service or a person who has been an advocate dealt in tax matters for at least ten
years. At least one judicial member shall be a serving or retired member of Madhya Pradesh
Higher Judicial Service.
(8) Accountant members shall be the person who has been in practice of accountancy in
Sales Tax / Commercial Tax / Value Added Tax, as a Chartered Accountant for at least ten
years, or who has been a member of the Madhya Pradesh State Taxation Service and has
held the post of Additional Commissioner or equivalent or a higher post for at least three
years. At least one accountant member shall be a serving or retired member of Madhya
Pradesh State Taxation Service.
(9) The State Government may remove from office, the Chairman or a Member of the Board
who-
(a) has been adjudged an insolvent, or
(b) has been convicted of an offence which in the opinion of the State Government, involves
moral turpitude, or
(c) has become physically or mentally incapable of acting as such Member, or
(d) has acquired such financial or other interest as is likely to affect prejudicially his functions
as a Member, or
(e) has so abused his position as to render his continuance in office prejudicial to the public
interest;
Provided that the Chairman shall not be removed from his office on the ground
specified in clause (d) and (e) above except on an enquiry held by State Government in
accordance with such procedure as it may prescribe in this behalf and finds the chairman to
be guilty of such ground.
Provided further that any member of the Board may be removed from the office, only
after the consultation with the Chairman.
(10) The terms and conditions of the service of the Chairman and the Members of the Board
shall not be varied to their disadvantage during their tenure of office.
(11) The Chairman or any Member ceasing to hold office shall not be eligible to appear, act
or plead before any authority appointed under the Act.
(12) Subject to the previous approval of the State Government, the Appellate Board may,
from time to time make regulation consistent with the provisions of this Act to regulate the
procedure in all matters arising out of the exercise of its powers or the discharge of its
functions under the Act.
4-A. Orders of Appellate Board.
(1) The Appellate Board may after giving both the parties to the appeal an opportunity
of being heard, pass such orders thereon as it thinks fit
(2) The Appellate Board may, at any time within four calendar years from the date of
order, with a view to rectify any mistake apparent from the record, rectify any order
passed by it under sub-section (1), and may make such rectification if the mistake
is brought to its notice by the dealer or the Assessing officer:
Provided that no such rectification shall be made if it has the effect of enhancing
an assessment or reducing a refund or otherwise increasing the liability of a
dealer, unless the Appellate Board has given notice to the dealer of its intention to
do so and has allowed the dealer a reasonable opportunity of being heard:
15
(3) On an application under sub-section (6) of section 46, the Appellate Board may,
after considering the merits of the application made by the dealer, pass an order of
stay for a period not exceeding one hundred and eighty days from the date of such
order and the Appellate Board shall dispose of the appeal within the said period of
stay specified in that order ;
Provided that where such appeal is not so disposed of within the said period of
stay as specified in the order of stay, the Appellate Board may, on an application
made in this behalf by the dealer and on being satisfied that the delay in disposing
of the appeal is not attributable to the dealer, extend the period of stay, or pass an
order of stay for a further period or periods as it thinks fit; so, however, that the
aggregate of the period originally allowed and the period or periods so extended or
allowed shall not, in any case, exceed three hundred and sixty-five days and the
Appellate Board shall dispose of the appeal within the period or periods of stay so
extended or allowed :
Provided further that if such appeal is not disposed of within the period allowed
under this sub-section or the period or periods extended or allowed under the first
proviso, which shall not, in any case, exceed three hundred and sixty-five days,
the order of stay shall stand vacated after the expiry of such period or periods,
even if the delay in disposing of appeal is not attributable to the dealer.
(4) The cost, if any, in an appeal shall be at the discretion of the Appellate Board.
(5)
The Appellate Board shall send a copy of any orders passed under this section to
the dealer and to the Commissioner.
4-B. Procedure of Appellate Board
(1) The powers and functions of the Appellate Board may be exercised and
discharged by Benches constituted by the Chairman of the Appellate Board from
among the members thereof.
(2) Subject to the provisions contained in sub-section (3), a Division Bench shall
include at least one judicial member and one accountant member.
(3) The Chairman or any other member of the Appellate Board may, sitting singly,
dispose of any case which pertains to a dealer whose total turnover as computed
by the Assessing Officer in the case does not exceed rupees sixty lacs and the
Chairman may, for the disposal of any particular case, constitute a Special Bench
consisting of three or more members, one of whom shall necessarily be a judicial
member and one an accountant member.
(4) If the members of a Bench differ in opinion on any point, the point shall be decided
according to the opinion of the majority, if there is a majority, but if the members
are equally divided, they shall state the point or points on which they differ, and the
case shall be referred by the Chairman of the Appellate Board for hearing on such
point or points by one or more of the other members of the Appellate Board, and
such point or points shall be decided according to the opinion of the majority of the
members of the Appellate Board who have heard the case, including those who
first heard it.
(5) Subject to provisions of this Act, the Appellate Board shall have power to regulate
its own procedure and the procedures of Benches thereof on all matters arising out
of the exercise of its powers or of the discharge of its functions, including the
places at which the Benches shall hold their sittings.
16
(6) The Appellate Board shall, for the purpose of discharging its functions, have all the
powers which are vested in the commercial tax authorities referred to in section 3,
and any proceeding before the Appellate Board shall be deemed to be a judicial
proceeding within the meaning of sections 193 and 228 of the Indian Penal code,
1860 (45 of 1860) and for the purpose of section 196 of the Indian Penal code,
1860 (45 of 1860), the Appellate Board shall be deemed to be a civil court for all
the purposes of section 195 and Chapter 35 of the Code of Criminal Procedure,
1973 (No. 2 of 1974).
[from 10.8.10]
CHAPTER - III Incidence of tax
5 : Incidence of tax.
(1) Every dealer whose turnover during a period of twelve months immediately preceding
the commencement of this Act exceeds the prescribed limits, which shall not exceed rupees
five lacs, shall from such commencement be liable to pay tax under this Act in respect of
sales or supplies of goods effected by him in Madhya Pradesh. Different limits may be
prescribed for different category of dealers.
(2) Every dealer to whom sub-section (1) does not apply shall be liable to pay tax under this
Act in respect of sales or supplies of goods effected by him in Madhya Pradesh with effect
from the date on which his turnover in a year first exceeds the limit prescribed under the said
sub-section but for the purpose of assessment of the tax for that year, only so much of his
turnover as is in excess of such limit, shall be taken into consideration.
6 : Determination of liability to pay tax
(1) The Commissioner shall, in the prescribed manner, institute proceedings for the purpose
of determining the liability of a dealer to pay tax under this Act. Such liability shall be
determined by an order and such determination shall be made within a period of twelve
months from the date of institution of such proceedings.
(2) Notwithstanding anything contained in sub-section (2) of Section 5, liability of a dealer to
pay tax under this Act shall not be determined from a date earlier than five years prior to -
(i)the date of institution of proceedings under sub-section (1); or
(ii) the date of validity of the registration certificate,
whichever is earlier.
7 : Joint and several liability of certain class of dealers.
(1) (a) Where a dealer who carries on the business of supplying goods in the course of
execution of a works contract entered into by him (hereinafter referred to as a contractor)
through another such dealer (hereinafter referred to as a sub-contractor) directly or
otherwise, and the sub-contractor executes such works contract and each or either of them
is liable to pay tax under this Act, then notwithstanding anything contained in this Act, the
contractor and the sub-contractor shall be jointly and severally liable to pay tax in respect of
transfer of property in goods whether as goods or in some other form involved in the
execution of such works contract.
(b) If the contractor proves in the prescribed manner to the satisfaction of the Commissioner
that the tax has been paid by the sub-contractor on the turnover of the goods supplied in the
course of execution of the works contract, the contractor shall not be liable to pay tax again
on the turnover of such goods.
6 (c) If the sub-contractor proves in the prescribed manner to the satisfaction of the
Commissioner that the contractor has opted for composition under section 11-A in respect of
the works contract being executed by the sub-contractor, the sub-contractor shall not be
liable to pay tax on the turnover of the goods supplied in the execution of the works contract. 6
(2) 2Omitted2
17
(3) Where any dealer or person with a view to evade payment of tax or in order to claim
any input tax rebate which he otherwise is not eligible for or was carrying on business in the
name of or in association with any other person either directly or indirectly, whether as an
agent, employee, manager, partner or power of attorney holder, guarantor, relative or sister
concern or any other capacity, such person and the dealer in whose name the registration
certificate was obtained shall jointly and severally be liable for the payment of tax assessed,
reassessed, interest payable and penalty imposed under the Act and such tax, interest and
penalty shall be recovered from all or any of such persons as if such peExcerpt shown. Open the full act in Lexace.