The Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011

Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 
 
Act No.29 of 2011 
 
Arrangement of Sections 
Sections 
1. Short title, extent and commencement.  
2. Definition.  
3. Designated authority.  
4. Eligibility for settlement.  
5. Application for settlement.  
6. Determination of amount payable by the applicant.  
7. Rate applicable in determining amount payable.  
8. Settlement of arrears and issues of certificate.  
9. Bar on re-opening of settled cases.  
10. Withdrawal of appeal and revision.  
11. Authority not to proceed in certain cases.  
12. Revocation of certificate.  
13. Information to be sent to authorities under relevant  Act.  
14. Power to remove difficulties.  
15. Power to make rules.  
Tamil Nadu Sales Tax (Settlement of Arrears) Act, 2011 
Act No. 29 of 2011 
[26th September 2011] 
An Act to provide for settlement of arrears of tax, penalty or interest pertaining to sales tax 
and the matters connected therewith or incidental thereto. 
Be it enacted by the Legislative Assembly of the State of Tamil Nadu in the Sixty- second 
Year of the Republic of India as follows:- 
 
1. Short title, extent and commencement. - (1) This Act may be called the Tamil Nadu 
Sales Tax (Settlement of Arrears) Act, 2011. 
(2) It extends to the whole of the State of Tamil Nadu. 
 (3) It shall c ome into force on such date as the State Government may, by 
notification, appoint. 
 
2. Definition. - (1) In this Act, unless the context otherwise requires,- 
 (a) "applicant" means a dealer as defined in the relevant Act; 
 (b) "arrears of tax, penalty or interest" means- 
  (i) tax including additional sales tax, surcharge, additional surcharge and 
central sales tax, payable by an applicant upon assessment under the relevant Act; or 
  (ii) penalty payable by an applicant under the relevant Act; or 
  (iii) interest payable by an applicant under the relevant Act, 
 as the case may be, pertaining to the assessment years upto 2006 -2007 for which 
assessment has been made prior to the 1st day of August 2011 under the relevant Act, and 
pending collection on the date of filing of application under this Act; 
 (c) "designated authority" means an authority appointed under section 3; 
 (d) "Government" means the State Government; 
 (e) "relevant Act" means,- 
  (i) the repealed Tamil Nadu General Sales Tax Act, 1959 (Tamil Nadu Act                  
1 of 1959); 
  (ii) the repealed Tamil Nadu Sales Tax (Surcharge) Act, 1971 (Tamil Nadu 
Act  24 of 1971); 
  (iii) the repealed Tamil Nadu Additional Sales Tax Act, 1970 (Tamil Nadu Act 
14 of 1970); 
  (iv) the Central Sales Tax Act, 1956 (Central Act 74 of 1956) 
 and includes the rules made or notifications issued thereunder. 
 (2) Unless there is anything repugnant to the subject or context, all expressions used 
in this Act, which are not defined, shall have th e same meaning as defined or used in the 
relevant Act. 
 
3. Designated authority.  - For carrying out the purposes of this Act, the Government may, 
by notification, appoint one or more authorities referred to in section 48 of the Tamil Nadu 
Value Added Tax A ct, 2006 (Act 32 of 2006), to be the designated authority and such 
authority shall exercise Tamil Nadu jurisdiction over such area or areas as the Government 
may specify in the notification. 
 
4. Eligibility for settlement.  - Subject to the other provisions  of this Act, an applicant may 
make an application for settlement of arrears of tax, penalty or interest pertaining to the 
assessment years upto 2006-2007 for which assessment has been made prior to the 1st day 
of August 2011, against which an appeal or re vision is not pending before any court on the 
date of filing application. 
 
5. Application for settlement.  - (1) An application for the purpose of section 4 shall be 
made to the designated authority by an applicant within six months from the date of 
commencement of this Act or by such later date as the Government may, by notification, 
specify, from time to time, in such form, and in such manner, as may be prescribed, with 
proof of payment of the amount payable at the rates specified in section 7. 
 (2) A separate application shall be made for each assessment year. 
 (3) The applicant shall send a copy of the application made under sub -section (1) to 
the assessing authority, appellate authority or revisional authority under the relevant Act, 
before whom any proc eeding or appeal or revision, as the case may be, is pending, within 
seven days from the date of making such application before the designated authority. 
 
6. Determination of amount payable by the applicant. - (1) The designated authority shall 
verify the correctness of the particulars furnished in the application made under section 5 
with reference to all relevant records and determine the amount payable at the rates 
specified in section 7. 
 (2) The designated authority shall demand further amount payable by the applicant in 
the form prescribed, if the amount paid by the applicant along with application falls short of 
not more than ten per cent of the amount determined under sub-section (1). 
 (3) If the applicant has not paid ninety per cent of t he amount payable under section 
7 along with the application, the designated authority shall summarily reject the application. 
 (4) The amount determined under sub-section (1) shall be rounded off to the nearest 
rupee and, for this purpose, where such amou nt contains a part of a rupee, and, if such part 
is fifty paise or more, it shall be rounded off to the nearest rupee, and if such part is less than 
fifty paise, it shall be ignored. 
 
7. Rate applicable in determining amount payable.  - The amount payable b y the 
applicant and to be waived shall be determined as follows:- 
 (a) Where it relates to arrears of tax which was assessed on the best of judgment 
due to non production of accounts with corresponding arrears of penalty and interest, the 
applicant shall pay forty per cent of arrears of tax pending collection on the date of 
application along with interest calculated at seven and a half per cent per annum thereon 
and on such payment of tax, the balance of tax and interest and the entire penalty shall be 
waived. 
 (b) Where it relates to arrears of tax, including any arrears of tax accrued due to non 
filing of declaration forms which was in excess of the tax admitted as per the returns filed for 
the year with the corresponding arrears of penalty and interest, the applicant shall pay forty 
per cent of such arrears of tax pending collection on the date of application along with 
interest at seven and a half per cent per annum thereon and on such payment of tax, the 
balance of tax and interest and the entire penalty shall be waived. 
 (c) Where it relates to arrears of tax, which was admitted as tax due as per returns 
filed for the year with corresponding arrears of penalty and interest, the applicant shall pay 
the entire arrears of tax pending collection along with interest at seven and a half percent per 
annum and on such payment, the balance of interest and the entire penalty shall be waived. 
 (d) Where it relates to arrears of penalty or interest or both and where there is no 
corresponding arrears of tax pending collection on the date of application, the applicant shall 
pay ten per cent of the penalty and twenty-five per cent of interest, the balance of penalty 
and interest shall be waived. 
 
8. Settlement of arrears and issue of certificate. - (1) The designated authority shall, on 
being satisfied about the payment of the amount determined under sub-section (1) of section 
6, by an order, settle the arrears of tax, penalty or interest and issue a certificate in such 
form as may be prescribed, and thereupon, the applicant shall be discharged from his 
liability to make payment of the balance amount of such arrears of tax, penalty or interest. 
Separate certificate shall be issued in respect of each application. 
 (2) The designated authority, for reasons to be recorded in writing, may refuse to 
settle the arrears of tax, penalty or interest: 
 Provided that no order under this sub-section shall be passed without giving the 
applicant a reasonable opportunity of showing cause against such refusal. 
 (3) The authority notified by the Government in this behalf may, at any time within 
ninety days from the date of issue of certificate under sub-section (1) by the designated 
authority, modify the certificate by rectifying any error apparent on the face of the record: 
 Provided that no such rectification adversely affecting the applicant shall be passed 
without allowing the applicant a reasonable opportunity of showing cause against such 
rectification. 
 
9. Bar on re -opening of settled cases.  - A certificate issued under sect ion 8 shall be 
conclusive as to the settlement to which it relates, and no matter covered by such certificate 
shall be re-opened in any proceeding of review or revision, or in any other proceeding, under 
the relevant Act. 
 
10. Withdrawal of appeal and revi sion. - Notwithstanding anything to the contrary 
contained in any provision in the relevant Act, any proceeding or appeal or revision for any 
period pending before the assessing authority or appellate authority or revisional authority, 
as the case may be, under the relevant Act in respect of which a certificate is issued under 
section 8, shall be deemed to have been withdrawn from the date of making of the 
application by the applicant under sub -section (1) of section 5. Any order passed by the 
assessing authority or appellate authority or revisional authority subsequent to the date of 
filing of application for settlement of arrears of tax, penalty or interest, resulting in claim for 
refund of amount paid upto the time of settlement of such arrears of tax, pe nalty or interest 
under this Act, will not be taken into consideration. 
 
11. Authority not to proceed in certain cases.  - No authority shall proceed to decide in 
any proceeding or appeal or revision under the relevant Act relating to any assessment year 
in respect of which a copy of the application has been received under sub -section (3) of 
section 5: 
 Provided that such authority shall proceed to decide such proceeding or appeal or 
revision in accordance with the provisions of the relevant Act, if a certif icate referred to in 
sub-section (1) of section 8 is refused to the applicant by an order passed by the designated 
authority under sub-section (2) of section 8. 
 
12. Revocation of certificate.  - (1) Notwithstanding anything contained in section 9 or 
section 10, where it appears to the designated authority that an applicant has obtained the 
certificate under section 8 by suppressing any material information or particulars or by 
furnishing any incorrect or false information or particulars, such designated aut hority, may, 
within a period of two years from the date of issue of the said certificate, for reasons to be 
recorded in writing and after giving the applicant a reasonable opportunity of showing cause, 
revoke the certificate issued under sub-section(1) of section 8. 
 (2) If a certificate is revoked under sub -section (1), any proceeding or appeal or 
revision, as the case may be, under the relevant Act, covered by such certificate shall, 
notwithstanding the provisions of section 9 or section 10, stand revived  or reinstated 
immediately upon such revocation, and such proceeding or appeal or revision shall be 
decided in accordance with the provisions of the relevant Act, as if no settlement of the 
arrears of tax, penalty or interest in such proceeding or appeal o r revision has ever been 
made under this Act. 
 (3) In the case of revocation of a certificate in accordance with sub -section(1), the 
amount paid by the applicant under section 6 shall be treated as payment towards the 
amount payable under the relevant Act for the period for which the certificate has been 
revoked. 
 
13. Information to be sent to authorities under relevant Act.  - The designated authority 
shall inform the assessing authority or appellate authority or revisional authority, as the case 
may be, un der the relevant Act, who for the time being, has jurisdiction over the applicant 
under the relevant Act,- 
 (a) the fact of making of an application by the applicant under section 5; 
 (b) the fact of passing of any order by the designated authority under section 8; 
 (c) the fact of revocation of any certificate under section 12; and 
 (d) such other matters as it may deem necessary in such form, in such manner, and 
within such time, as may be prescribed. 
 
14. Power to remove difficulties.  - If any difficulty arises in giving effect to any of the 
provisions of this Act, the Government may, by order, not inconsistent with the provisions of 
this Act, remove such difficulty: 
 Provided that no such order shall be made after the expiry of one year from th e date 
of coming into force of this Act. 
 
15. Power to make rules.  - (1)The Government may, make rules, whether prospectively or 
retrospectively, for carrying out the purposes of this Act. 
 (2) (a) All rules made under this Act shall be published in the Ta mil Nadu 
Government Gazette and unless they are expressed to come into force on a particular date, 
shall come into force on the date, on which they are so published. 
 (b) All notifications issued under this Act shall, unless they are expressed to come 
into force on a particular date, come into force on the date on which they are so published. 
 (3) Every rule made and every notification issued under this Act and every order 
made under section 14 shall, as soon as possible after it is made or issued, be placed on the 
table of the Legislative Assembly and if before the expiry of the session in which it is so 
placed or the next session, the Assembly makes any modification in any such rule or 
notification or order or the Assembly decides that the rule or notifica tion or order should not 
be made or issued, the rule or notification or order shall thereafter have effect only in such 
modified form or be of no effect, as the case may be, so, however, that any such 
modification or annulment shall be, without prejudice t o the validity of anything previously 
done under that rule or notification or order. 
 
 
 
 
 
 

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