Thursday, May 5, 2011
THE CHIT FUNDS ACT, 1982
THE CHIT FUNDS ACT, 1982
CHAPTER I - PRELIMINARY
1.Short title, extent and commencement.- (1) This Act may be called the Chit Funds Act, 1982.
(2) It extends to the whole of
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different States.
2.Definition.- In this Act, unless the context otherwise require, -
(a) "approved bank" means the State Bank of India constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955), or a subsidiary bank constituted under section 3 of the State Bank of India (Subsidiary Banks) Act, 1959 (33 of 1959), or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (5 of 1997), or a Regional Rural Bank established under section 3 of the Regional Rules Banks Act, 1976 (21 of 1976) , or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980), or a banking company as defined under clause (e) of section 5 of the Banking Regulation Act, 1949 (10 of 1949 ), or a banking institution notified by the Central Government under section 51 of that Act or such other banking institution as the State Government may, in consultation with the Reserve Bank, approve for the purposes of this Act;
(b) "chit" means a transaction whether called chit, chit fund, chitty, kuri or by any other name by or under which a person enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or a certain quantity of grain instead) by way of periodical installments over a definite period and that each such subscriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be specified in the chit agreement, be entitled to the prize amount.
Explanation.- A transaction is not a chit within the meaning of this clause, if in such transaction, -
(i) some alone, but not all, of the subscribers get the prize amount without any liability to pay future subscriptions; or
(ii) all the subscribers get the chit amount by turns with a liability to pay future subscriptions;
(c) "chit agreement" means the document containing the articles of agreement between the foreman and the subscribers relating to the chit;
(d) "chit amount" means the sum-total of the subscriptions payable by all the subscribers for any installment of a chit without any deduction of discount or otherwise;
(e) "chit business" means the business of conducting a chit;
(f) "defaulting subscriber" means a subscriber who has defaulted in he payment of subscriptions due in accordance with the terms of the chit agreement.
(g) "discount" means the sum of money or the quantity of grain which a prized subscriber is, under the terms of the chit agreement, required to forego and which is set apart under the said agreement to meet the expenses of running the chit or for distribution among the subscribers or for both;
(h) "dividend" means the share of the subscriber in the amount of discount available under the chit agreement for rateable distribution among the subscribers at each installment of the chit;
(i) "draw" means the manner specified in the chit agreement for the purpose of ascertaining the prized subscriber of any installment of the chit;
(j) "foreman" means the person who under the chit agreement is responsible for the conduct of the chit and includes any person discharging the functions of the chit and includes any person discharging the functions of the foreman under section 39;
(k) "non-prized subscriber" does not include a defaulting sub-scriber;
(l) "prescribed" means prescribed by rules made under this Act;
(m) "prize amount" means the difference between the chit amount and the document, and in the case of a fraction of a ticket means the difference between the chit amount and the discount proportionate to the fraction of the ticket, and when the prize amount is payable otherwise then in cash, and value of the prize amount shall be the value at the time when it becomes payable;
(n) "prize subscriber" means a subscriber who has either received or it entitled to receive the prize amount;
(o) "Registrar" means the Registrar of Chits appointed under section 61, and includes an Additional, a Joint, Deputy or an Assistant Registrar appointed under that section;
(p) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934);
(q) "State Government", in relation to a Union territory, means the administrator of that Union territory appointed by the President under article 239 of the Constitution;
(r) "subscriber" includes a person who hold a fraction of a ticket and also a transferee of a ticket or fraction thereof by assignment in writing or by operation of law;
(s) "ticket" means the share of a subscriber in a chit.
3. Act to override other laws, memorandium ,articles ,etc.- Save as otherwise expressly provided in this Act,-
(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force or in the memorandum or articles of association or bye-laws or in any agreement or resolution whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, bye-laws, agreement or resolution aforesaid, shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.
4. Prohibition of chits not sanctioned or registered under the Act.- (1) Not chit shall be commenced or conducted without obtaining the previous sanction of the State Government within whose jurisdiction the chit is to be commenced or conducted or of such officer as may be empowered by that Government in this behalf, and unless the chit is registered in that state in accordance with the provisions of this Act:
Provided that a sanction obtained under this sub-section shall laps if the chit is not registered within twelve months from the date of such sanction or within such further period or periods not exceeding six months in the aggregate as the State Government may, on application made to it in this behalf, allow.
(2) An application for the purpose of obtaining a sanction under subsection (1) shall be made by the foreman in such form and in such manner as may be prescribed.
(3) The previous sanction referred to in sub-section (1) may be refused, if foreman, -
(a) had been convicted of any offence under this Act or under any other Act regulating chit business and sentenced to imprisonment for any such offence; or
(b) had defaulted in the payment of fees or the filing of any statement or record required to be paid or filed under this Act or had violated any of the provisions of this Act or the rules made thereunder; or
(c) had been convicted of any offence involving moral turpitude and sentenced to imprisonment for any such offence unless a period of five years has elapsed since his release :
Provided that before refusing any such sanction, the foreman shall be given a reasonable opportunity of being heard.
(4) The order of the State Government, and, subject to the provisions of sub-section (5), the order of the officer empowered under sub-section (1), issuing or refusing previous sanction under this section shall be final.
(5) Any person aggrieved by the refusal to issue previous sanction by a officer empowered under sub-section (1) may appeal to the State Government within thirty days of the date of communication to him of such refusal and the decision of that Government on such appeal shall be final.
5. Prohibition of invitation for subscriptions except under certain conditions.- No person shall issue or cause to be issued any notice, circular, prospectus, proposal or other document inviting the public to subscribe for tickets in any chit unless such notice, circular, prospectus, proposal or document contains a statement that the previous sanction required under section 4 has been obtained and the particulars of such sanction.
6. Form of chit agreement.- (1) Every chit agreement shall be is duplicate and shall be signed by each of the subscribers or by any person authorised by him in writing and the foreman and attested by at least two witnesses and it shall contain the following particulars, namely:-
(a) full name and residential address of every subscriber;
(b) the number of tickets including the fraction of a ticket held by each subscriber;
(c) the number of installments, the amount payable for each ticket at every installment and the interest or penalty, if any, payable on any default in the payment of such installments;
(d) the probable date of commencement and the duration of the chit;
(e) the manner of ascertaining the prizing subscriber at each installment;
(f) the maximum amount of discount which the prized subscriber has to forego at any installment;
(g) the mode and proportion in which the discount is distributable by way of dividend, foreman's commission or remuneration or expenses for running the chit, as the case may be;
(h) the date, time and place at which the chit is to be drawn;
(i) the installment at which the foreman is to get the chit amount;
(j) the name of the approved bank in which chit moneys shall be deposited by the foreman under the provisions of this Act;
(k) where the foreman is an individual, the manner in which a chit shall be continued when such individual dies or becomes unsound mind or is otherwise incapacitated;
(l) the consequences to which a non-prized or prized subscriber or the foreman shall be liable in case of violation of any of the provisions of the chit agreement;
(m) the conditions under which a subscriber shall be treated as a defaulting subscriber;
(n) the nature and particulars of the security of to be offered by the foreman;
(o) the dates on which and time during which the foreman shall, subject to the provisions contained in section 44, allow inspection of chit records to non-prized and unpaid prized subscribers;
(p) the names of the nominees of each subscriber, that is to say, the names of the persons to whom the benefits accruing to the subscriber under the chit may be paid in the case of the death of the subscriber or when he is otherwise incapable of making an agreement;
(q) any other particulars that may, from time to time, be prescribed.
Explanation: - For the purposes of this sub-section, it shall be sufficient if the signature of each subscriber is obtained in separate copies of the agreement.
(2) The duration of a chit shall not extend beyond a period of five years from the date of its commencement;
Provided that the State Government may permit the duration of a chit up to a period of ten years if it is satisfied that it is necessary so to do, having regard to,-
(a) the financial condition of the foreman;
(b) his methods of operation;
(c) the interests of prospective subscribers;
(d) the requirements as to security; and
(e) such other factors as the circumstances of the easy may require.
(3) The amount of discount referred to in clause (f) of sub-section (1) shall not exceed their per cent, of the chit amount.
(4) Where the prized subscriber at any installment at any installment of the chit is required to be determined by auction and more than one person offer the maximum discount, the prized subscriber shall be determined by lot.
7. Filing of chit agreement
(1) Every chit agreement shall be filed in duplicate by the foreman with the Registrar.
(2) The Registrar shall retain one copy of the chit agreement and return the duplicate to the foreman with an endorsement that the chit agreement has been registered:
Provided that the Registrar may refuse to register the chit agreement on may one or more of the following grounds, namely:-
(a) that the security offered by the foreman under section 20 is insufficient;
(b) that the foreman had been convicted of any offence under this Act or under any other Act regulating chit business and sentenced to imprisonment for any such offence;
(c) that the foreman had defaulted in the payment of fees or the filing of any statement or record required to be paid or filed under this Act or had violated any of the provisions of this Act or the rules made thereunder;
(d) that the foreman had been convicted of any offence involving moral turpitude and sentenced to imprisonment for any such offence unless a period of five years has elapsed since his release:
Provided further that before refusing to register a chit under the first proviso, the foreman shall be given a reasonable opportunity of being heard.
(3) Every endorsement made under sub-section (2) shall be conclusive evidence that the chit is duly registered under this Act and the registration of a chit shall lapse if the declaration by the foreman under sub-section (1) of section 9 is not filed within three months from the date of such endorsement or within such further period or periods not exceeding three months in the aggregate as the Registrar may, on application made to him in this behalf, allow.
8. Minimum capital requirements for the commencement, etc., of a chit, and chit, and creation of a reserve fund by a company.- (1) Notwithstanding anything contained in the Companies Act, 1956, but subject to the provisions of this Act, a company shall not commence or carry on chit business unless it has a paid-up capital of not less than rupees one lakh.
(2) Every company having a paid-up capital of less than rupees one lakh and carrying on chit business on chit business on the commencement of this Act, shall, before the expiry of a period of three years from such commencement, increase its paid-up capital to not less than rupees one lakh.
Provided that the State Government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period of three years in respect of any company by such further period at periods not exceeding two years in the aggregate:
Provided further that no such company shall commence any new chit the duration of which would extend beyond the said period of three years or such extended period or periods under the first proviso unless it increases its paid-up capital to not less than rupees one lakh.
(3) Every company carrying on chit business shall create and maintain a reserve fund and shall, out of the balance of profit of each year as disclosed in its profit and loss account and before any dividend on its shares is declared, transfer to such reserve fund, a sum equal to not less than ten per cent, of such profit.
(4) No company shall appropriate any sum or sums from the reserve fund except with the prior approval of the Registrar and for the purpose of obtaining such approval, it shall an application in the prescribed form to the Registrar explaining the circumstances relating to such appropriation.
9. Commencement of chit.- (1) Every foreman shall, after all the tickets specified in the chit agreement are fully subscribed, file a declaration to that effect with the Registrar
(2) As soon as may be after a declaration is filed under sub-section (1), the Registrar shall, after satisfying himself that all the requirements relating to sanction, registration of chit and other matters have been duly complied with, grant a certificate of commencement to the foreman.
(3) No foreman shall commence any auction or the draw of any chit or appropriate any chit or appropriate any chit amount unless a certificate of commencement referred to in sub-section (2) is obtained by him.
10. Copies of chit agreement to be given to subscribers.- (1) A foreman shall, as soon as may be after he has obtained the certificate of commencement under sub-section (2) of section 9, but not later than the date of the first draw of the chit, furnish to every subscriber, a copy of the chit agreement certified to be a true copy.
(2)A foreman shall, within fifteen days after the close of the month in which the draw for the first installment of the chit is held, file with the Registrar, a certificate to the effect that the provisions of sub-section (1) have been complied with.
11. Use of the words chit, chit fund, chitty or kuri.- (1) No person shall carry on chit business unless he uses as part of his name any of the words "chit fund", "chitty" or "Kuri" and no person other than a person carrying on chit business shall use as part of his name any such word.
(2) Where at the commencement of this Act,-
(a) any person is carrying on chit business without using as part of his name any of the words specified in sub-section (1); or
(b) any person not carrying on chit business is using any such word as part of his name,
he shall, within a period of one year from such commencement, add as part of his name any such word or, as the case may be, delete such word from his name:
Provided that the State Government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period of one year by such further period or periods not exceeding one year in the aggregate.
12. Prohibition of transacting business other than chit business by a company.- (1) Except with the general or special permission of the State Government, no company carrying on chit business shall conduct any other business.
(2) Where at the commencement of this Act, any company is carrying on any business in addition to chit business, it shall wind up such other business before the expiry of a period of three years from such commencement:
Provided that the State Government may, if it considers it necessary in the public interest or for avoiding any hardship, extend the said period of three years by such further period or periods not exceeding two years in the aggregate.
13. Aggregate amount of chits.- (1) No foreman, other than a firm or other association of individuals of a company or co-operative society, shall commence or conduct chits, the aggregate chit amount of which at any time exceeds twenty-five thousand rupees.
(2) Where the foreman is a firm or other association of individuals, the aggregate chit amount of the chit conducted by the firm or other association shall not at any time exceed,-
(a) where the number of partners of the firm or the individuals constituting the association is not less than four, a sum of rupees one lakh;
(b) in any other case, a sum calculated on the basis of twenty-five thousand rupees with respect to each partner or individual.
(3) Where the foreman is a company or co-operative society, the aggregate chit amount of the chits conducted by it shall not at any time exceed ten times the net owned funds of the company or the co-operative society, as the case may be.
Explanation.- For the purposes of this sub-section, "net owned funds" shall mean the aggregate of the paid-up capital and free reserves as disclosed in the last audited balance sheet of the company or co-operative society, as reduced by the amount of accumulated balance of loss, deferred revenue, expenditure and other intangible assets, if any, as disclosed in the said balance sheet.
14. Utilisation of funds.- (1) No person carrying on chit business shall utilise the moneys collected in respect of such business (other than commission or remuneration payable to such person or interest or penalty, if any, received from a defaulting subscriber), except for-
(a) carrying on chit business; or
(b) giving loans and advances to non-prized subscribers on the security of subscriptions paid by them; or
(c) investing in trustee securities within the meaning of section 20 of the Indian Trusts Act, 1882; or
(d) making deposits with approved banks mentioned in the chit agreement.
(2) Where any person carrying on chit business has utilised the moneys collected in respect of such business before the commencement of this Act, otherwise than for the purposes specified in sub-section (1), he shall secure that so much of such moneys as have not been realised before such commencement are realised before the expiry of a period of three years from such commencement:
Provided that the State Government may, if it considers it necessary in the public interest of for avoiding any hardship, extend the said period of three years by such further period or periods not exceeding one year in the aggregate.
15. Alteration of chit agreement.- A chit agreement shall not be altered, added to or cancelled except with the consent in writing of the foreman and all the subscribers to the chit.
16. Date, time and place of conducting chits.- (1) Every draw in a chit shall be held on the date, at the time and place mentioned in the chit agreement and a notice therefore in such form and in such manner as may be prescribed shall be issued by the foreman to all the subscribers.
(2) Every such draw shall be conducted in accordance with the provisions of the chit agreement and in the presence of not less than two subscribers.
(3) Where any draw was not conducted on the ground that two subscribers required to be present at a draw under sub-section (2) were not present or on any other ground, the Registrar may, on his own motion or on an application made by the foreman or any of the subscribers, direct that the draw shall be conducted in his presence or in the presence of any person deputed by him.
17. Minutes of proceedings.- (1) The minutes of the proceedings of every draw shall be prepared and entered in a book to be kept for that purpose immediately after the closure of the draw and shall be signed by the foreman, the prized subscribers, if present, or their authorised agents, and at least two other subscribers who are present, and where a direction has been made under sub-section (3) of section 16, also by the Registrar or the person deputed by him under that sub-section.
(2) The minutes referred to in sub-section (1) shall state clearly-
(a) the date and hour when proceedings began and ended and the place where the draw was held;
(b) the number of the installment of the chit to which the proceedings relate;
(c) the names of the subscribers present;
(d) the person or persons who become entitled to the prize amount in the installment;
(e) the amount of discount;
(f) full particulars regarding the disposal of the unpaid prize amount, if any, in respect of any previous installment; and
(g) any other particulars that may be prescribed.
18. Copies of minutes to be filed with Registrar.- A true copy of the minutes of the proceedings of every draw certified as such by the foreman shall be filed by the foreman with the Registrar within twenty-one days from the date of the draw to which it relates.
19. Restriction on opening of new place and business.- (1) No person carrying on chit business shall open a new place of business without obtaining the prior approval of the Registrar within whose territorial jurisdiction his registered office of, as the case may be, the place or the principal place of business is situated.
(2) Before granting approval under sub-section (1), the Registrar shall consult the Registrar of the State within whose territorial jurisdiction the new place of business is proposed to be opened and shall also keep in view the financial condition and methods of operation of the foreman, the extent to which public interest will be served by the opening of the new place of business and such other matters as may be prescribed.
(3) Where a person carrying on chit business opens a new place of business in a State other than the State (hereinafter referred to as the State of origin) in which his registered office or the place or the principal place of his business is situated, the Registrar of the State in which such new place of business is opened may also exercise and perform any of the powers and functions which the Registrar of the State of origin may exercise and perform in respect of the chit business carried on at such new place of business.
(4) For the purposes of this section, "place of business" shall include any branch office, sub-office, or any place of business where the chit business may be conducted by such person.
THE CHIT FUNDS ACT, 1982
CHAPTER III - RIGHTS AND DUTIES OF FOREMAN
20. Security to be given by foreman.- (1) For the proper conduct of the chit, every foreman shall, before applying for a previous sanction under section 4,-
(a) deposit in an approved bank an amount equal to the chit amount in the name of the Registrar; or
(b) transfer Government securities of the face value or market value (whichever is less) of not less than one and a half times the chit amount in favour of the Registrar; or
(c) transfer in favour of the Registrar such other securities, being securities in which a trustee
may invest money under section 20 of the Indian Trusts Act, 1882 (2 of 1882)., of such value, as may be prescribed by the State Government from time to time.
Provided that the value of the securities referred to in clause (c) shall not, in any case, be less than one and a half time the value of the chit amount.
(2) Where a foreman conducts more than one chit, he shall furnish security in accordance with the provisions of sub-section (1) in respect of each chit.
(3) The Registrar may, at any time during the currency of the chit, permit the substitution of the security:
Provided that the face value or market value (whichever is less) of the substituted security shall not be less than the value of the security given by the foreman under sub-section (1).
(4) The security given by the foreman under sub-section (1), or any security substituted under sub-section (3), shall not be liable to be attached in execution of a decree or otherwise until the chit is terminated and the claims of all the subscribers are fully satisfied.
(5) Where the chit is terminated and the Registrar has satisfied himself that the claims of all the subscribers have been fully satisfied, he shall order the release of the security furnished by the foreman under sub-section (1), or the security substituted under sub-section (3), as the case may be, and in doing so, he shall follow such procedure as may be prescribed.
(6) Notwithstanding anything to the contrary contained in any other law for the time being in force, the security furnished under this section shall not be dealt with by the foreman during the currency of the chit to which it relates and any dealing by the foreman with respect thereto by way of transfer or other encumbrances shall be null and void.
21. Rights of foreman.- (1) The foreman shall be entitled,-
(a) in the absence of any provision in the chit agreement to the contrary to obtain the chit amount at the first installment without deduction of the discount specified in the chit agreement, subject to the condition that he shall subscribe to a ticket in the chit:
Provided that in a case where the foreman has subscribed to more than one ticket, he shall not be eligible to obtain more than one chit amount in a chit without discount;
(b) to such amount not exceeding five per cent.of the chit amount as may be fixed in the chit agreement, by way of commission, remuneration or for meeting the expenses of running the chit;
(c) to interest and penalty, if any, payable on any default in the payment of installments and to such other amounts as may be payable to him under the provisions of the chit agreement;
(d) to receive and realise all subscriptions from the subscribers and to distribute the prize amounts to the prized subscribers;
(e) to demand sufficient security from and prized subscriber for the due payment of future subscriptions payable by him.
Explanation.- A security shall be deemed to be sufficient for the purposes of this clause if its value exceeds by one-third, or if it consists of immovable properties, the value of exceeds by one-half, of the amount due from the prized subscriber;
(f) to substitute subscribers in place of defaulting subscribers; and
(g) to do all other acts that may be necessary for the due and proper conduct of the chit.
(2) Where any dispute arises with regard to the value of the property offered as security under clause (e) of sub-section (1), it shall be referred to the Registrar for arbitration under section 64.
22. Duties of foreman.- (1) The foreman shall, on the prized subscriber furnish sufficient security for the due payment of future subscriptions, be bound to pay him the prize amount:
Provided that the prize subscriber shall be entitled to the payment of the prize amount without any security whatsoever if he agrees to the deduction therefrom of the amount of all future subscriptions and in such a case, the foreman shall pay the prize amount to the prized subscriber within seven days after the date of the draw or before the date of the next succeeding installment, whichever is earlier:
Provided further that where the prize amount has been paid to the prized subscriber under the first proviso, the amount deducted shall be deposited by the foreman in an approved bank mentioned in the chit agreement and he shall not withdraw the amount so deposited except for the payment of future subscriptions.
(2) If, owing to the default of the prized subscriber, the prize amount due in respect of any draw remains unpaid until the date of the next succeeding installment, the foreman shall deposit the prize amount forthwith in a separate account in an approved bank mentioned in the chit agreement and intimate in writing the fact of such deposit and the reasons therefore to the prized subscriber and the Registrar:
Provided that where any prized subscriber does not collect the prize amount in respect of any installment of a chit within a period of two months from the date of the draw, it shall be open to the foreman to hold another draw in respect of such installment.
(3) Every payment of the prize amount or the amount of future subscriptions under sub-section (1), and the deposit of the prize amount under sub-section (2),shall be intimated to the subscribers at the next succeeding draw and the particulars of such payment or deposit shall be entered in the minutes of the proceedings of that draw.
(4) The foreman shall not appropriate to himself any amount in excess of what he is entitled to under clause (b) or clause (c) of sub-section (1) of section 21:
Provided that where the foreman is himself a prized subscriber, he shall be entitled to appropriate to himself the prize amount subject to his complying with the provisions of section 31:
Provided further that the foreman may appropriate to himself the interest accruing on the amount deposited under the second proviso to sub-section (1)
(5) The foreman shall not admit any person as a subscriber to a chit, if by such admission, the total number of tickets mentioned in the chit agreement is increased.
(6) The foreman shall distribute among the subscribers, in accordance with the chit agreement, the dividend either in cash, grain or by way of adjustment towards the subscriptions payable for the next installment, if any.
23. Books, records, etc., to be kept by foreman.- The foreman shall maintain in his registered office, or as the case may be in the place or the principal place of his business, or, where the foreman has any branch office, sub-office or nay place of business for the conduct of chit business in a State other than the State in which his registered office or the principal place of his business is situated, in such branch office, sub-office or place of business in respect of the business conducted in that State-
(a) a register containing-
(i) the names and full particulars of the subscribers in each chit together with the number of tickets held by each subscriber;
(ii) the dates on which the subscribers signed the chit agreement; and
(iii) in the case of an assignment of a ticket by a subscriber, the name and full address of the assignee with the date of assignment and the date on which the assignment had been recognised by the foreman;
(b) a book containing the minutes of the proceedings of each draw;
(c) a ledger containing-
(i) the amounts paid by the subscribers in each chit and the dates of such payments;
(ii) the amounts paid to the prized subscribers and the dates of such payments; and
(iii) in the case of any deposit in an approved bank mentioned in the chit agreement the date and the amount of such deposit;
(d) a register in the prescribed form showing the amounts deposited in approved banks as required under the provisions of this act in respect of all chits conducted by the foreman at his office; and
(e) such other registers and books in such form as may be prescribed by the State Government within whose jurisdiction the chit is conducted.
24. Balance sheet.- Without prejudice to the provisions of the Companies act, 1956 (1 of 1956.), every foreman shall prepare and file with the Registrar within such item as may be prescribed, a balance sheet as on the last date of each calendar year, or as the case may be the financial year of the foreman, and a profit and loss account relating to the year of account, in the forms set out in Parts I and II of the Schedule or as near thereto as circumstances admit, in respect of the chit business and audited by auditors qualified to act as auditors under the Companies act, 1956, or by chit under appointed under section 61:
Provided that where a balance sheet is audited by an auditor qualified to act as auditor under the Companies Act, 1956 (1 of 1956.), a chit auditor appointed under section 61 shall have the right to audit the balance sheet at any time if so authorised by the Registrar in this behalf.
25.Liability of foreman to subscribers.- (1) Every foreman shall be liable to account to the subscribers for the amounts due to them.
(2) Where there are more than one foreman in a chit, each one of them jointly and severally and if the foreman is a firm or other association of individuals each one of the partners or individuals thereof jointly and severally and if the foreman is a company, the company as such ,shall be liable to the subscribers in respect of the obligations arising out of the chit.
26. Withdrawal of foreman.- (1) No foreman, or where there are more than one foreman in a chit, none of them shall withdraw form the chit until its termination unless such withdrawal is assented to in writing by all the non-prized and unpaid prized subscribers and a copy of such assent has been filed with the Registrar under section 41.
(2) The withdrawal from a chit of any one of the foreman shall not affect the security given by him under section 20 or section 31.
CHAPTER IV - RIGHTS AND DUTIES AND NON-PRIZED SUBSCRIBERS
27. Non-prized subscribers to pay subscriptions and obtain receipts.- Every non-prized subscriber shall pay his subscription due in respect of every installment on the dates and times and at the places mentioned in the chit agreement and shall, on such payment be entitled to obtain a receipt from the foreman.28. Removal of defaulting subscribers.- (1) A non-prized subscriber who defaults in paying his subscription in accordance with the terms of the chit agreement shall be liable to have his name removed from the list of subscribers and a written notice of such removal shall be given by the foreman to the defaulting subscriber within fourteen days of the date of such removal;
Provided that if the defaulter pays the defaulted installment with interest at such rate as may be prescribed within seven days of the date of receipt of such notice, his name shall be re-entered in the list of such subscribers.
(2) Every such removal under sub-section (1) shall with the date thereof be entered in the relevant book maintained by the foreman.
(3) A true copy of the entry referred to in sub-section (2) shall be filed by he foreman with the Registrar within fourteen days from the date of removal.
(4) Any defaulting subscriber aggrieved by the removal of his name from the list of subscribers may within seven days of the date of receipt of the notice of removal refer the matter to the Registrar for arbitration under section 64.
29. Substitution of subscribers.- (1) A foreman may substitute in the list of subscribers any person (hereafter in this Chapter referred to as the substituted subscriber) in place of the defaulting subscriber whose name has been removed under sub-section (1) of section 28.
(2) Every substitution referred to in sub-section (1) shall with the date thereof, be entered in the relevant book maintained by the foreman and a true copy of every such entry shall be filed by the foreman with the Registrar within fourteen days from the date of substitution.
30. Amounts due to defaulting subscribers.- (1) A foreman shall our of the amounts payable by and realized from the substituted subscriber towards the installments relatable to the period before the date of the substitution (including the arrears due from the defaulting subscriber), deposit, before the date of the next succeeding installment, in a separate identifiable, account in an approved bank mentioned in the chit agreement, an amount equal to the contributions made by the defaulting subscriber, less such deductions as may be provided for in the chit agreement and shall inform the defaulting subscriber as well as the Registrar of the fact of such deposit and shall not withdraw the amount so deposited except for payment to the defaulting subscriber.
(2) The amount so deposited under sub-section (1) shall be paid to the defaulting subscriber as and when he claims the amount and the amount so deposited shall not be withdrawn by the foreman for any purpose other than for such payment.
(3) The contributions of any defaulting subscriber who has not been substituted till the termination of the chit shall be paid to him within fifteen days from the date of termination of the chit subject to such deductions as may be provided for in the chit agreement.
31. Prized subscriber to furnish security.- Every prized subscriber shall, if he has not offered to deduct the amount of all future subscription from the prize amount due to him, furnish and a foreman shall take, sufficient security for the due payment of all future subscriptions and if the foreman is a prized subscriber, he shall give security for the due payment of all the future subscription to the satisfaction of the Registrar.
32. Prized subscriber to pay subscriptions regularly.- Every prized subscriber shall pay his subscription regularly on the dates and times and at the place mentioned in the chit agreement and on his failure to do so, he shall be liable to make a consolidated payment of all the future subscriptions forthwith.
33. Foreman to demand future subscriptions by written notice.- (1) A foreman shall not be entitled to claim a consolidated payment from a defaulting prized subscriber under section 32 unless he makes a demand to that effect in writing.(2) Where a dispute is raised under this Act by a foreman for a consolidated payment of future subscriptions from a defaulting prized subscriber and if the subscriber pays to the foreman on or before the date to which the dispute is posted for hearing the arrears of subscription till that date together with the interest thereon at the rate provided for in the chit agreement and the cost of adjudication of the dispute, the Registrar or his nominee, hearing the dispute, shall notwithstanding any contract to the contrary, make an order directing the subscriber to pay to the foreman the future subscription on or before the dates on which they fall due, and that, in case of any default of such payments by the subscriber ,the foreman, shall be at liberty to realise, in execution of that order, all future subscriptions and interest together with the costs, if any less the amount, if any already paid by the subscriber in respect thereof:
Provided that if any such dispute is on a promissory note, no order shall be passed under this sub-section unless such promissory note expressly states that the amount due under the promissory note is towards the payment of subscriptions to the chit.(3) Any person who holds any interest in the property furnished as security or part thereof, shall be entitled to make the payment under sub-section (2).
(4) All consolidated payments of future subscriptions realised by a foreman shall be deposited by him in an approved bank mentioned in the chit agreement before the date of the succeeding installment and the amount so deposited shall not be withdrawn except for payment of future subscriptions.
(5) Where any property is obtained as security in lieu of the consolidated payment of future subscriptions it shall remain as security for the due payment of future subscriptions.
CHAPTER VI - TRASNFERS
34. Restrictions on transfer of rights of foreman.- (1) No transfer of the rights of a foreman to receive subscriptions from the prized subscribers shall be made without the previous sanction in writing of the Registrar.
(2) Any transfer of the rights of a foreman to receive subscriptions from the prized subscribers shall, if it is likely to defeat or delay the interests of a non-prized or unpaid prized subscriber, be avoidable at the instance of such subscriber.
(3) When under sub-section (2)a transfer is disputed by a subscriber, the burden of proving that the foreman was in solvent circumstances at the time of the transfer and that the transfer does not defeat or delay the interests of such subscriber is on the transferee.
35. Transfer of non-prized subscribers rights to be in writing.- Every transfer by a non-prized subscriber of his rights in the chit shall be in writing dully attested by at least two witnesses and shall be filed with the foreman.
36. Recognition of transfer by foreman.- Every transfer under section 35 shall within a period of fourteen days from the date of receipt of the proposal for transfer by the foreman, be recognised by him unless the transferee is not solvent or the transfer was effected with a view to defeating the provisions of any law including this Act and the decision of the foreman to recognise the transfer or not shall forthwith be communicated to the parties concerned.
37. Entry of transferees name in the books.- Every transfer under section 34 or section 35 shall be entered by the foreman in the books of the chit forthwith and a true copy of such entry shall be filed by the foreman with the Registrar within fourteen days from the date of making such entry.
THE CHIT FUNDS ACT, 1982
CHAPTER VII - MEETINGS OF GENERAL BODY OF SUBSCRIBERS
38. Meetings of general body of subscribers.- (1) The foreman, may, on his own motion, convene a special meeting of the general body of subscribers for considering any proposal to pass a special resolution.
(2) The foreman shall convene such a meeting on the requisition in writing of not less than twenty-five per cent.of the number of non-prized and unpaid prized subscribers, and the meeting so convened shall be held within thirty days of the date of receipt of the requisition and if the foreman refuses or fails to call such a meeting within fourteen days of the date of receipt of such requisition, not less than twenty-five per cent of the number of non-prized and unpaid prized subscribers may give notice of the fact to the Registrar.
(3) The Registrar shall, within twenty-one days of the receipt of the notice under sub-section 92) convene or direct the convening of a special meeting of the general body of the subscribers and on receipt of such a direction it shall be the duty of the foreman to comply with such direction.
(4) Notice of not less than fourteen days shall be given to all the subscribers of a meeting under this section specifying the object date, hour and place of meeting and a copy of the special resolution shall also be sent along with the notice of the meeting.
Explanation- For the purposes of this section and section 39, "special resolution" means a resolution which is passed at a meeting of the general body of the subscribers specially convened for the purpose, by a majority of not less than two-thirds of the subscribes to the chit present at the meeting in person or by proxy and representing not less than three-fourths of the amount, or as the case, may be the value of the grain subscribed by all the non-prized and unpaid prized subscribers if any.
39. Provision for continuation of chits in certain cases.- (1) Where a foreman dies or becomes of unsound mind or is otherwise incapacitated, the chit may continue in accordance with the provisions of the chit agreement.
(2) Where a foreman is adjudicated as insolvent, or withdraws from the chit under section 26, or fails to conduct the chit at any installment or on any other date before the next succeeding installment as may have been agreed upon by a special resolution, any one or more of such subscribers authorised by such resolution may, in the absence of any provision in the chit agreement for the future conduct of the chit, take the place of the foreman and continue the chit or make other arrangements for the further conduct of the chit.
40. Termination of chits.- A chit shall be deemed to have terminated,-
(a) when the period specified therefor in the chit agreement has expired provided the payment of dues to all the subscribers has been completed; or
(b) when all the non-prized and unpaid prized subscribers and the foreman consent in writing to the termination of the chit and a copy of such conceit is filed with the Registrar as required under section 41; or
(c) where a foreman dies or becomes of unsound mind or is otherwise incapacitated and the chit is not continued in accordance with the provisions of the chit agreement.
Provided that, in a case where the foreman is a firm, if a partner thereof dies or becomes of unsound mind or is otherwise incapacitated, the chit shall not be deemed to have terminated and the surviving partner or partners shall conduct the chit in the absence of any provision to the contrary in the chit agreement.
41. Copy of assent of consent to be filed with Registrar.-. A true copy of every assent referred to in section 26 and of every consent referred to in clause (b) of section 40 with their dates shall be filed by the foreman or by the surviving partner or partners, as the case may be with Registrar within fourteen days from the date of such assent or consent.
42. Refund of non-prized subscribers subscriptions.- Except in the cases referred to in clauses (a) and (b) of section 40,-
(a) every non-prized subscriber, shall, unless otherwise provided for in this Act or in the chit agreement, be entitled to get back his subscriptions at the termination of the chit without any
deduction for dividend if any earned by him:
Provided that, any person to whom the rights of a non-prized subscriber are transferred in accordance with the provisions of section 35, shall, in addition to his subscriptions, be entitled to get back the subscriptions paid by such non-prized subscriber, subject, to the conditions specified in this section;
(b) if a chit terminates on a date earlier than the date originally fixed in the hit agreement the non-prized subscriber's claim shall be deemed to have arisen on the date on which he has notice thereof.
43. Subscribers dues to be first charge on chit assets.- Any amount due to the subscriber from a foreman in relation to the chit business shall be a first charge on the chit assets.
CHATPER IX - INSPECTION OF DOCUMENTS
44. Foreman to allow certain subscribers to inspect chit records.- Every foreman shall, on payment of such fee not exceeding five rupees as may be specified in the chit agreement, allow the non-prized subscribers and unpaid prized subscribers reasonable facilities on all the dates of draw or on such other dates and within such hours as may be provided for in the chit agreement for the inspection of security bonds and documents, receipts and other records taken from the prized subscribers or furnished by the foreman as a subscriber and al chit records including books of account pass book balance sheet and profit and loss accounts and such other records as may show the actual financial position of the chit.
45. Preservation of chit records by foreman.- All the records pertaining to a chit shall be kept by the foreman for a period of eight years from the date of termination of the chit.
46. Inspection of chit books and records by Registrar.- (1) Without prejudice to the provisions of sections 209 and 209A of the Companies Act, 1956 (1 of 1956), the Registrar or an officer authorised by the State Government in this behalf may inspect chit books and all the records of a chit during working hours on any working day at the premises of the foreman with or without giving notice and it shall be the duty of every foreman to produce to the Registrar or the officer so authorised, all such books and records as are in his custody or power and to furnish him with any statement or information relating to the chits as he may require from the foreman within such time as he may specify.
(2) The Registrar or an officer authorised by the State Government in this behalf may, after giving seven days' notice in writing to the foreman, direct him to produce before him for inspection such chit books and records as he may require at the time and place mentioned in the notice.
(3) If on an inspection made under sub-section (1) or sub-section (2) any defects are found, the Registrar may bring such defects to the notice of the foreman and may also make an order directing the foreman to take such action as may be specified in the order to remedy the defects within the time specified therein.
(4) Every foreman shall be bound to comply with the directions contained in an order made under sub-section (3).
47. Power Reserve Bank to inspect chit books and records.- (1) Nothing in section 46 shall be deemed to affect the power of the Reserve Bank to inspect the books and records of any foreman under the provisions of section 45N of the Reserve Bank of India Act, 1934 (2 of 1934).
(2) The Reserve Bank may, if it considers necessary forward a copy of its report or of any part of its report on the inspection of the books and records of a foreman to the foreman for taking necessary action.
(3) Every foreman shall, on report or part thereof under sub-section (2), be bound to comply with the directions, if any given by the Reserve Bank in this behalf and shall if so required submit periodical reports in regard to the action taken by him.
(4) The Reserve Bank may also forward a copy of the report on the inspection of the books and records of a foreman to the State Government within whose jurisdiction the registered office of the company, if the foreman, is a company or the place or the principal place of business of the foreman in any other case, is situated for such action as may be considered necessary.
CHAPTER X - WINDING UP OF CHITS
48. Circumstances under which chits may be wound up.- A chit may be wound up by the Registrar within whose territorial jurisdiction the chit has been registered wither on his own motion or on an application made by any non-prized or unpaid prized subscriber,-
(a) if the chit has terminated under clause (c) of section 40; or
(b) if the foreman commits any such act in respect of the security specified in section 20 as is calculated to impair materially the nature of the security or the value thereof; or
(c) if he fails to deposit any amount required to be deposited under any of the provisions of this act; or
(d) if it is proved to the satisfaction of the Registrar that the foreman is unable to pay the amounts due to the subscribers; or
(e) if the execution or other process issued on an order passed by the Registrar in favour of any subscriber in respect of amounts due to him from the foreman in relation to the chit business is returned unsatisfied in whole or in part; or
(f) if it is proved that there has been a fraud or collusion on the part of the foreman in the matter of taking securities from any prized subscriber; or
(g) if the foreman has appropriated the prize amount in his capacity as a subscriber without furnishing sufficient security for future subscriptions; or
(h) if the Registrar is satisfied that the affairs of the chit are being conducted in a manner prejudicial to the interests of the subscribers; or
(i) if it is just and equitable that the chit should be wound up.
Explanation- For the purposes of clause(d) in determining whether the foreman is unable to pay the amounts due to the subscribers, the Registrar shall take into account his contingent and future liabilities in respect of the chit.
49. Application for winding up.- An application for the winding up of a chit shall be made by a petition presented by any non-prized or unpaid prized subscriber to the Registrar signed and verified in the manner laid down by the Code of Civil Procedure, 1908 (5 of 1998), and shall contain such particulars as may be prescribed.
Provided that no application for the winding up of a chit under clause (d) or clause (i) of section 48 shall lie unless such application is presented,-
(a) by non-prized and unpaid prized subscribers representing not less than twenty-five per cent of the amount or, as the case may be the value of the grain subscribed by all the non-prized and unpaid prized subscribers, if any; or
(b) with the previous sanction of the State Government within whose jurisdiction the chit is commenced or conducted.
Explanation- For the purposes of clause (a) of the proviso, a subscriber of a fraction of a ticket shall be deemed to be a subscriber only to the extent of such fraction.
50.Bar to winding up proceedings.- Notwithstanding anything contained in sections 48 and 49, no petition for the winding up of a chit shall be entertained by the Registrar,-
(a) if proceedings relating to insolvency are pending against the foreman or
(b) where the foreman is a firm, if proceedings relating to insolvency are pending against all the partners or all the partners except one thereof, or proceedings for the dissolution of the firm are pending; or
(c) where the foreman is a company or co-operative society, of proceedings for the winding up of such company or co-operative society are pending.
51. Commencement and effect of winding up order.- An order for the winding up of a chit shall operate in favour of all the subscribers to whom amounts are due from the foreman and it shall be deemed to have commenced from the date of the presentation of the application for the winding up.
52. Injunction order.- The Registrar may, on the application of the foreman or of any subscriber to whom amounts are due in respect of a chit, at any time after the presentation of the application for the winding up of the chit under this Act and before the making of an order for the appointment of an interim receiver or for the winding up of the chit, restrain any other proceedings, instituted, against the foreman for the realisation of amounts due from him on such terms as the Registrar thinks fit.
53. Powers of Registrar.- The Registrar may, after hearing an application under this Chapter dismiss, it with or without costs, or adjourn the hearing conditionally or unconditionally or make an interim or any other order that he deems fit.
54. Vesting of chit assets in Registrar or other persons.- On the making of an order for the winding up of a chit all the chit asset pertaining to such chit shall vet in the Registrar or in any person appointed by him for distribution amongst the subscribers to whom amounts are due in respect of the chit.
55. Suits, etc., to be stayed on winding up order.- When a winding up order has been made or a receiver has been appointed no suit or other legal proceedings shall be continued or commenced against the foreman by a subscriber for the realisation of amounts duet o him in respect of the chit except with the leave of the Registrar winding up the chit and on such terms as he may impose.
56. Notification of winding up order.- On the making of a winding up order, the Registrar shall make an entry in his book relating to the chit and shall notify in the Official Gazette, that the order has been made.
57. Cessation of winding up proceedings on in solvency of foreman, etc., or the winding up of the company and transfer of such proceedings.- Where during the pendency of the proceedings for the winding up of a chit the foreman is adjudicated an insolvent or where the foreman is a firm, al the partners or all the partners except one thereof are adjudicated insolvent or where the foreman is a company the company has been ordered to be wound up by the Court, the winding up proceedings under this Chapter shall cease and the distribution of the chit assets shall subjects, to the provisions of sections 43 and 52, be made by the insolvency court or the court winding up the company, as the case may be.
58. Award of compensation to foreman.- (1) Where an application for the winding up of a chit is dismissed and the Registrar is satisfied that the petition is frivolous or vexatious, he may, on the application of the foreman award, against the petitioner such amount, not exceeding one thousand rupees, as he deems reasonable as compensation tot he foreman for the expenses or injury caused to him by the presentation of the application and the proceedings thereon, and such amount may be realised as if the award were a decree of a Civil Court.
(2) On the making of an award under sub-section (1) no suit for compensation in respect of an application for any winding up of the chit shall be entertained.
59. Right to appeal.- The foreman or any subscriber or any other person aggrieved by a decision or order of the Registrar in any proceedings for the winding up of a chit may, within sixty days from the date of such decision or order, appeal to the State Government.
60. Limitation.- (1) Where an order refusing to wind up a chit has been made under this Act, the chit shall be deemed to have been under suspension from the date of presentation of the application to the date of such order in respect of non-prized subscribers, and notwithstanding anything contained in the chit agreement no non-prized subscriber who was not a defaulter on the date of the presentation of the petition for winding up shall be deemed to be a defaulter on the date of such order.
(2) Where an order refusing to wind up a chit has been made under this Act in computing the period of limitation prescribed for any suit or other legal proceedings (other than a suit or application in respect of which the leave of the court has been obtained) which might have been brought or instituted, but for the presentation of the application for the winding up of the chit, the period, from the date of the presentation of the application to the date of the order refusing to wind up a chit shall be excluded.
(3) Nothing contained in this Chapter shall affect the rights of a subscriber to proceed against the foreman personally for the balance, if of the amount due to him after the declaration of the final dividend in the proceedings for the winding up of the chit and in computing the period of limitation prescribed for any such proceedings, the period from the date of the presentation of the application for the winding up of the chit to the date of the declaration of the final dividend shall be excluded.
CHAPTER XI - APPOINTMENT OF OFFICERS AND LEVY OF FEES
61. Appointment of Registrar and other officers.- (1) The State Government may by notification in the Official Gazette, appoint a Registrar of Chits and as many Additional, Joint, Deputy and Assistant Registrars as Amy be necessary for the purpose of discharging the duties imposed upon the Registrar by or under this Act.
(2) The Registrar may appoint as many inspectors of chits and chit auditors as may be necessary for the purpose of discharging the duties imposed on the inspectors of chits or chit auditors by or under this Act.
(3) All inspectors of chits and chit auditors shall discharge the duties imposed upon them by or under this Act under the general superintendence and control of the Registrar.
(4) If the Registrar is of the opinion that the accounts of any chit are not properly maintained and that such accounts should be audited it shall be lawful, for him to have such accounts audited by a chit auditor.
(5) It shall be the duty of the foreman of the chit whose accounts are to be audited by a chit auditor under sub-section (4)to produce before the chit auditorium all accounts, books and other records relating to the chit, to furnish him with such information as may be required and afford him all such assistance and facilities as may be necessary and reasonable in regard to the audit of the accounts of the chit.
(6) The foreman shall pay to the chit auditor such fees as may be prescribed for the audit of the accounts of the chit under sub-section (4);
Provided that different scales of fees may be prescribed for different chits depending other quantum of the chit amount.
62. Inspection of documents is Registrars office.- The foreman of a chit or any subscriber in a chit or the heirs or legal representatives of any foreman or subscriber may, on payment of such fees as may be prescribed,-
(a) inspect the documents of the concerned chit kept by the Registrar; or
(b) obtain a certified copy or an extract of any such document or record.
63. Levy of fees.- (1) There shall be paid to the Registrar such fees as the State Government may, from item to time prescribe, for,-
(a) the issue of previous sanction under section 4:
(b) the filing of the chit agreement with the Registrar and the registration f the chit under section 7.
(c) the filing of a declaration with the Registrar and the grant of a certificate of commencement under section 9;
(d) the filing of copies of documents under any of the provisions of this Act;
(e) the audit of the accounts of the foreman under section61;
(f) the inspection of documents under section 62;
(g) the obtaining of certified copies or extracts of documents and records under section 62; and
(h) such other matters as may appear necessary to the State Government.
(2) A table of fees prescribed under sub-section (1) shall be exhibited on a notice board in the office of the Registrar.
The Dissolution of Muslim Marriages Act, 1939 - When can a muslim woman obtain decree for dissolution of marriage
A woman married under Muslim law shall be entitled to obtain a decree for the dissolution of her marriage on any one or more of the following grounds, namely:
(i) that the whereabouts of the husband have not been known for a period of four years;
(ii) that the husband has neglected or has failed to provide for her maintenance for a period of two years;
(iii) that the husband has been sentenced to imprisonment for a period of seven years or upwards;
(iv) that the husband has failed to perform , without reasonable cause , his marital obligations for a period of three years;
(v) that the husband has impotent at the time of the marriage and continues to be so;
(vi) that the husband has been insane for a period of two years or is suffering from leprosy or a virulent venereal disease;
(vii) that she, having been given in marriage by her father or other guardian before she attained the age of fifteen years., repudiated the marriage before attaining the age of eighteen years;
Provide that the marriage has not been consummated;
(viii) that the husband treats her with cruelty, that is to say.—
(a) habitually assaults her or makes her life miserable by cruelty of conduct does not amount to physical ill-treatment, or
(b) associates with women of evil repute or leads an infamous life, or
(c) attempts to force her to lead an immoral life, or
(d) disposes of her property or prevents her exercising her legal rights over it, or
(e) obstructs her in the observance of her religious profession or practice, or
(f) if he has more wives than one, does not treat her equitably in accordance with the injunctions of the Qoran;
(ix) on any other ground which is recognized as valid for the dissolution of marriages under Muslim law;
Provide that—
(a) no decree shall be passed on the ground (iii) until the sentence has become final;
(b) a decree passed on ground (I) shall not take effect for a period of six months from the date of such decree, and if the husband appears either in person or through an authorized agent within that period and satisfied the Court that he is prepared to perform his conjugal duties, the Court shall set aside the said decree; and
(c) before passing a decree on ground (v) the Court shall, on application by the husband, make an order requiring the husband to satisfy the Court within a period of one year from the date of such order that he has ceased to be impotent, and if the husband so satisfies the Court within such period, no decree shall be passed on the said ground.
THE CENTRAL SALES TAX ACT, 1956
THE CENTRAL SALES TAX ACT, 1956
INTRODUCTION
By the constitution (Sixth Amendment) Act’1956, certain amendments were made in the constitution, whereby (a) taxes on sales or purchase of goods in the course of interstate trade or commerce were brought expressly within the purview of the legislative jurisdiction of Parliament, (b) restrictions could be imposed on the powers of State legislatures with respect to the levy of taxes on the sale or purchase of goods within the state where the goods are of special importance in inter-state trade commerce. To provide for the legislation authorized by the Constitution as amended by the said Amendment Act of 1956 the Central Sales Tax Bill was introduced in the Parliament.
STATEMENT OF OBJECTS AND REASONS
In the interest of the national economy of India
(a) taxes on sales or purchases of goods in the course of interstate trade or commerce were brought expressly within the purview of the legislative jurisdiction of Parliament.
(b) Restrictions could be imposed on the powers of State legislatures with respect to the levy of taxes on the sale or purchase of goods within the state where the goods are of special importance in interstate trade or commerce.
The amendments at the same time authorized Parliament to formulate principles for determining when a sale or purchase takes place in the course of interstate trade or commerce or in the course of export or import or outside a state in order that the legislative spheres of parliament and the State legislatures become clearly demarcated. In the case of goods of special importance in interstate trade or commerce, a law of Parliament is to lay down the restrictions and conditions subject to which any State law may regulate the tax on sales or purchases of such goods in the state.
2. This Bill seeks to provide for the legislation authorised by the Constitution as amended above with a view to enabling the State Governments to raise additional revenues by levying tax on interstate transactions which are at present immune from tax under their respective sales tax laws. After taking into account the recommendations of the Taxation Enquiry Commission and in consultation with the States the Government of India were of the view that the following principles should govern the scheme of the detailed legislation on the three inter-related subjects;
(i) The Central Government should authorise the State Government to impose on behalf of the Central Government tax on the sale or purchase of goods in the course of interstate trade or commerce. The Central legislation should also delegate to the states the Central Government’s power to levy and collect the tax and for this purpose prescribe the same system of registration, assessment, etc., as prevails in the States concerned under their own sales tax system.
(ii) An important aspect of the Central legislation will be concerned with the definition of the locale of sales for the purpose of defining in detail the relative jurisdiction, firstly of the Union and the States, and secondly, of the State inter se. It is therefore, necessary that the law should define clearly, with specific reference to sales tax the circumstances in which a sale or purchase becomes taxable by a particular state and no other. It should also define for the purpose of the Constitutional restrictions on the State’s power to impose a tax under Item 54 of the State list, when a sale or purchase of goods may be said to take place:
(a) in the course of export out of India
(b) in the course of import into India
(c) in the course of inter-state trade or commerce.
(iii) The Central legislation should provide for the declaration of certain commodities which are in the nature of raw materials and of special importance in inter-state trade or commerce and lay down the restrictions and conditions as to the rate, system of levy and other incidents of tax subject to which the States may impose tax on the sale or purchase thereof.
3. Necessary provisions have, therefore, been made in the different Chapters of this Bill incorporating the principles stated above.
LIST OF AMENDMENT ACTS
1. The Central Sales Tax (Amendment) Act, 1957 (16 of 1957)
2. The Central Sales Tax (Amendment) Act, 1958 ( 5 of 1958)
3. The Central Sales Tax (Second Amendment) Act, 1958 (31 of 1958)
4. The Repealing and Amending Act’ 1960 (58 of 1960)
5. The Finance Act’ 1961 (14 of 1961)
6. The Central Sales Tax (Amendment) Act, 1963 (8 of 1963)
7. The Finance Act’ 1966 (13 of 1966)
8. The Finance Act’ 1968 (19 of 1968)
9. The Central Sales Tax (Amendment) Act, 1969 (28 of 1969)
10. The Central Sales Tax (Amendment) Act, 1972 (61 of 1972)
11. The Finance Act’ 1975 (25 of 1975)
12. The Central Sales Tax (Amendment) Act, 1976 (103 of 1976)
13. The Repealing and Amending Act’ 1978 (58 of 1960)
14. The Finance Act’ 1988 (26 of 1988)
15. The Finance Act’ 1989 (13 of 1989)
16. The Finance (No.2) Act’ 1996 (33 of 1996)
17. The Finance Act’ 2000 (10 of 2000)
18. The Finance Act’ 2001 (14 of 2001)
19. The Central Sales Tax (Amendment) Act, 2001 (41 of 2001)
20. The Finance Act’ 2002 (20 of 2002)
21. The Finance Act’ 2002 (32 of 2003)
22. The Finance (No.2) Act’2004 (23 of 2004)
23. The Finance Act’2005 (35 of 2005)
24. The Central Sales Tax (Amendment ) Act, 2006 (3 of 2006)
INDEX
Central Sales Tax Act (C.S.T. Act) (1956) | |||
Sr. No | Section Number | Section Name | P.No. |
1 | 1 | Short tile, extent and commencement | |
2 | 2 | Definitions | |
3 | 3 | When is a sale or purchase of goods said to take place in the course of interstate trade or commerce | |
4 | 4 | When is a sale or purchase of goods said to take place outside a State | |
5 | 5 | When is a sale or purchase of goods said to take place in the course of import or export. - | |
6 | 6 | Liability to tax on inter-State sales. | |
7 | 6A | Burden of proof, etc., In case of transfer of goods claimed otherwise than by way of sale.- | |
8 | 7 | Registration of dealers | |
9 | 8 | Rates of tax on sales in the course of inter-State trade or commerce | |
10 | 8A | Determination of turnover | |
11 | 9 | Levy and collection of tax and penalties | |
12 | 10 | Penalties | |
13 | 11 | Cognizance of offences | |
14 | 12 | Indemnity | |
15 | 13 | Power to make rules | |
16 | 14 | Certain goods to be of special importance in Inter-State trade or commerce | |
17 | 15 | Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State | |
18 | 16 | Liability in special cases : Definitions | |
19 | 17 | Company in liquidation | |
20 | 18 | Liability of directors of private company in liquidation | |
21 | 19 | Central Sales Tax Appellate Authority | |
22 | 20 | Appeals | |
23 | 21 | Procedure on receipt of application | |
24 | 22 | Powers of the Authority | |
25 | 23 | Procedure of Authority | |
26 | 24 | The Authority for Advance Rulings | |
27 | 25 | Transfer of pending proceedings | |
28 | 26 | Applicability of order passed | |
THE CENTRAL SALES TAX ACT, 19561
(74 of 1956)
(21st December, 1956 )
[1. The Act has been extended to Goa, Daman and Diu (with modifications) by Reg.12 of 1962, sec3 and sch.. to Kohima and Mokokchung districts of Nagaland (as in force on 5-8-1971) by Act 61 of 1972, sec.14(1) (w.e.f 30-11-1972). The amendments made to the Act by Act 61 of 1972, came into force in the said districts (w.e.f.1.4.1973) (vide sec.14 (2), Act 61 of 1972)].
An Act to formulate principals for determining when a sale or purchase of goods takes place in the course of inter-State trade or commerce or outside a State or in the course of import into or export from India, to provide for the levy, collection and distributions of taxes on sales of goods in the course of inter-State trade or commerce and to declared certain goods to be of special importance in inter-State trade or commerce and specify the restrictions and conditions to which laws imposing taxes on the sale or purchase of such goods of special importance shall be subject.
Be it enacted by Parliament in the Seventh Year of the Republic of India
CHAPTER I
PRELIMINARY
1. Short tile, extent and commencement: -
(1) This Act may be called The Central Sales Tax Act, 1956.
(2) It extends to the whole of India.2[****]
(3) It shall come into force on such 3date as the Central Government may, by notification if the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.
[2. The words “except the state of Jammu and Kashmir
[3. Came into force on 5-1-1957, all sections except section 15, vide S.R.O 78, dated 4/1/1957, Gazette of India Extra, 1957 Pt.II, Section 3, P.57, and s-15 w.e.f 1-10-1958 vide Notification No.G.S.R.897, Dt.23-9-1958, Gazette of India, extraordinary, 1958, Pt.II, Section 3(i) p.476.]
2. Definitions:- In this Act, unless the context otherwise requires,-
(a) ''appropriate State'' means -
(i) In relation to a dealer who has one or more places of business situated in the same State, that State;
(ii) In relation to a dealer who has 4places of business situate in different States, every such State with respect to the place or places of business situate within its territory;
5 [***]
[4. The words, “one or more” omitted by Act 31 of 1958, Sec. 2 (w.e.f. 1.10.1958)]
[5. Explanation omitted by Act 31 of 1958, Sec. 2, lbid (w.e.f. 1.10.1958)]
6(aa) ''business'' includes-
(i) any trade, commerce or 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
(ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern;
6(ab) ''crossing the customs frontiers of India'' means crossing the limits of the area of a customs station in which imported goods or export goods are ordinarily kept before clearance by customs authorities.
Explanation:- For the purposes of this clause, ' 'custom station'' and '' customs authorities'' shall have the same meanings as in the Customs Act, 1962 (52 of 1962);
[6. Inserted by Act 103 of 1976, Sec. 2 (w.e.f. 7.09.1976)]
7(b) ''dealer'' means any person who carries on (whether regularly or otherwise) the business of buying, selling, supplying or distributing goods, directly or indirectly, for cash, or for deferred payment, or for commission, remuneration or other valuable consideration, and includes-
(i) a local authority, a body corporate, a company, any co-operative society or other society, club, firm, Hindu undivided family or other association of persons which carries on such business;
(ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by whatever name called, and whether of the same description as herein before mentioned or not, who carries on the business of buying, selling, supplying or distributing goods belonging to any principal whether disclosed or not; and
(iii) an auctioneer who carries on the business of selling or auctioning goods belonging to any principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal.
Explanation-1 - Every person who acts as an agent, in any State, of a dealer residing outside that 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,(3 of 1930) or
(ii) an agent for handling of 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 a collection or payment,
and every local branch or office in a State of a firm registered outside that State or a company or other body corporate, the principal office or headquarters whereof is outside that State, shall be deemed to be a dealer for the purposes of this Act.
Explanation-2 - A Government which, whether or not in the course of business, buys, sells, supplies or distributes goods, directly or otherwise for cash or for deferred payment or for commission, remuneration or other valuable consideration, shall except in relation to any sale, supply or distribution of surplus, unserviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or accessories thereof, be deemed to be a dealer for the purposes of this Act;
[7. Subs. by Act 103 of 1976, Sec. 2 for clause (b) (w.e.f. 7.09.1976)]
(c) ''declared goods'' means goods declared under section 14 to be of special importance in inter-State trade or commerce;
(d) ''goods'' includes all materials, articles, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities;
8[(dd) ''place of business'' includes-
(i) in any case where a dealer carries on business through an agent (by whatever name called), the place of business of such agent;
(ii) a warehouse, godown, or other place where a dealer stores his goods; and
(iii) a place where a dealer keeps his books of account;]
[8. Ins. by Act 31 of 1958, Sec. 2 (w.e.f. 01.10.1958)]
(e) ''prescribed'' means prescribed by rules made under this Act;
(f) ''registered dealer'' means a dealer who is registered under sec.7;
9(g) ''sale'' with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any 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 a works contract;
(iii) a delivery of goods on hire-purchase or any system of payment by installments;
(iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;
(v) the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
(vi) a supply, by way of or as a 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,
[but does not include a mortgage or hypothecation of or a charge or pledge on goods].
[9. Subs. by Act 20 of 2002, Sec. 50 for clause (g) (w.e.f. 13.05.2002). The earlier section read as follows : “(g) “Sale” with its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on hire-purchase or other system of payment by installments, but does not include a mortgage or hypothecation of or a charge or pledge on goods.”]
(h) ''sale price'' means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such cost is separately charged;
10[“Provided that in the case of a transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, the sale price of such goods shall be determined in the prescribed manner by making such deduction from the total consideration for the works contract as may be prescribed and such price shall be deemed to be the sale price for the purposes of this clause.]
[10. Ins. by Act 35 of 2005, Sec. 89(a) (w.e.f.1.4.2005)]
11 [(i) “sales tax law” means any law for the time being in force in any State or part thereof which provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf and includes value added tax law, and ‘general sales tax law’ means any law for the time being in force in any State or part thereof which provides for the levy of tax on the sale or purchase of goods generally and includes value added tax law;]
[11. Subs. by Act 35 of 2005, Sec. 89 (b) for clause (i) (w.e.f.1.4.2005) The previous sub-section (i) read as follows : (i) “sales tax law” means any law for the time being in force in any state or part thereof which provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf, and “General Sales Tax Law” means the law for the time being in force in any state or part thereof which provides for the levy of tax on the sale or purchase of goods generally]
(j) ''turnover'' used in relation to any dealer liable to tax under this Act means the aggregate of the sale prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or commerce made during any prescribed period 12[and determined in accordance with the provisions of this Act and the rules made there under;]
[12. Subs. by Act 28 of 1969, Sec. 2, for the words “and determined in the prescribed manner” (w.e.f 1.10.1958)]
13(ja) ‘works contract’ means a contract for carrying out any work which includes assembling, construction, building, altering, manufacturing, processing, fabricating, erection, installation, fitting out, improvement, repair or commissioning of any movable or immovable property;
[13. Ins. by Act 35 of 2005, Sec. 89 (c) (w.e.f.1.4.2005)]
(k) ‘‘Year'', in relation to a dealer, means the year applicable in relation to him under the general sales tax law of the appropriate State, and where there is no such year applicable, the financial year.
CHAPTER II
FORMULATION OF PRINCIPLES FOR DETERMINING WHEN A SALE
3. When is a sale or purchase of goods said to take place in the course of inter-State trade or commerce:-
A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase-
a. occasions the movement of goods from one State to another; or
b. is effected by a transfer of documents of title to the goods during their movement from one State to another.
Explanation1. - Where goods are delivered to a carrier or other bailee for transmission, the movement of the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and terminate at the time when delivery is taken from such carrier or bailee.
Explanation2. - Where the movement of goods commences and terminates in the same State it shall not be deemed to be a movement of the goods from one State to another by reason merely of the fact that in the course of such movement the goods pass through the territory of any other State.
4. When is a sale or purchase of goods said to take place outside a State
(1) Subject to the provisions contained in section 3, when a sale or purchase of goods is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to have taken place outside all other States.
(2) A sale or purchase of goods shall be deemed to take place inside a State, if the goods are within the State-
(a) in the case of specific or ascertained goods, at the time of the contract of sale is made; and
(b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller or by the buyer, whether assent of the other party is prior or subsequent to such appropriation.
Explanation:- Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the goods at each of such places.
5. When is a sale or purchase of goods said to take place in the course of import or export
(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out of the territory of India India
(2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India India
14[(3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.]
[14. Inserted by Act 103 of 1976 Sec. 3 (w.e.f. 01.04.1976)].
15[(4) The provisions of sub-section (3) shall not apply to any sale or purchase of goods unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed authority.]
[15. Inserted by Act 35 of 2005 Sec. 90 (w.e.f.1.4.2005)].
16[(5) Notwithstanding anything contained in sub-section (1), if any designated Indian carrier purchases Aviation Turbine Fuel for the purposes of its international flight, such purchase shall be deemed to take place in the course of the export of goods out of the territory of India.
Explanation: For the purposes of this sub-section, ‘designated Indian carrier’ means any carrier which the Central Government may, by notification in the Official Gazette, specify in this behalf. ]
[16. Inserted by Act 35 of 2005 Sec. 90 (w.e.f. )].
Chapter III
INTER-STATE Sales TAx
6. Liability to tax on inter-State sales
17[(1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such 18date as the Central Government may, by notification in the Official Gazette, appoint, not being earlier than thirty days from the date of such notification, be liable to pay tax under this Act on all sales 19[of goods other than electrical energy] effected by him in the course of inter-State trade or commerce during any year on and from the date so notified:
20[Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which, in accordance with the provisions of sub-section (3) of section 5 is a sale in the course of export of those goods out of the territory of India.]
[17. Section 6 renumbered as sub section (1) of that section by Act 31 of 1958, sec.5 (w.e.f 1.10.1958)]
[18. 1st July 1957 , vide S.R.O.940-A, dated 26th March 1957 , published in the Gazette of India, extra 1957, Pt.II, sec.3 p.1233/1]
[19.Ins.by Act 61 of 1972, sec.2 (w.e.f.1.4.1973)]
[20.Ins.by Act 103 of 1976, sec.4 (w.r.e.f.1.4.1976)]
21[(1A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him, in the course of inter-State trade or commerce notwithstanding that no tax would have been leviable (whether on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place inside that State.]
[21.Ins.by Act 28 of 1969, sec.3 (w.e.f.1.10.1958)]
22(2) Notwithstanding anything contained in sub-section (1) or sub-section (1A), where a sale of any goods in the course of inter-State trade or commerce has either occasioned the movement of such goods from one State to another or has been effected by a transfer of documents of title to such goods during their movement from one State to another, any subsequent sale during such movement effected by a transfer of documents of title to such goods,-
(a) to the Government, or
(b) to a registered dealer other than the Government, if the
goods are of the description referred to in sub-section
(3) of section 8
shall be exempt from tax under this Act:
Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the prescribed time or within such further time as that authority may, for sufficient cause, permit,-
(a) a certificate dully filled and signed by the registered dealer from whom the goods were purchased containing the prescribed particulars in a prescribed form obtained from the prescribed authority; and
(b) If the subsequent sale is made-
(i) to a registered dealer, a declaration referred to in clause (a) of sub-section (4) of section 8, or
(ii) to the Government, not being a registered dealer, a certificate referred to in clause (b) of sub-section (4) of section 8:
Provided further that it shall not be necessary to furnish the declaration or the certificate referred to in clause (b) of the preceding proviso in respect of a subsequent sale of goods if :-
(a) the sale or purchase of such goods is, under the sales tax law of the appropriate State, exempt from tax generally or is subject to tax generally at a rate which is lower than 23[four per cent] (whether called a tax or fee or by any other name); and
(b) the dealer effecting such subsequent sale proves to the satisfaction of the authority referred to in the preceding proviso that such sale is of the nature referred to in clause (a) or clause (b) of this sub-section.
[22. Subs.by Act 61 of 1972, sec.2, for sub-section (2) (w.e.f.1.4.1973)]
[23. Subs.by Act 25 of 1975, sec.38, for “three percent” (w.e.f.1.7.1975)]
24[(3) Notwithstanding anything contained in this Act, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce, to any official, personnel, consular or diplomatic agent of-
(i) any foreign diplomatic mission or consulate in India
(ii) the United Nations or any other similar international body, entitled to privileges under any convention or agreement to which India is a party or under any law for the time being in force, if such official, personnel, consular or diplomatic agent, as the case may be, has purchased such goods for himself or for the purposes of such mission, consulate, United Nations or other body.
(4) The provisions of sub-section (3) shall not apply to the sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the prescribed authority a certificate in the prescribed manner on the prescribed form duly filled and signed by the official, personnel, consular or diplomatic agent, as the case may be.]
[24. Subs.by Act 35 of 2005, sec.91(w.e.f ). Sub section (3) was inserted first by Act 32 of 2003, sec.161 (w.e.f.14.5.2003)]
25[6A. Burden of proof, etc., In case of transfer of goods claimed otherwise than by way of sale
(1) Where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the ground that the movement of such goods from one State to another was occasioned by reason of transfer of such goods by him to any other place of his business or to his agent or principal, as the case may be and not by reason of sale, the burden of proving that the movement of those goods was so occasioned shall be on that dealer and for this purpose he may furnish to the assessing authority, within the prescribed time or within such further time as that authority may, for sufficient cause, permit, a declaration, duly filled and signed by the principal officer of the other place of business, or his agent or principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from the prescribed authority, along with the evidence of dispatch of such goods 26[and if the dealer fails to furnish such declaration, then, the movement of such goods shall be deemed for all purposes of this Act to have been occasioned as a result of sale.]
(2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the particulars contained in the declaration furnished by a dealer under sub-section (1) are true, he may, at the time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an order to that effect and thereupon the movement of goods to which the declaration relates shall be deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale.
Explanation.- In this section, '' assessing authority'', in relation to a dealer, means the authority for the time being competent to assess the tax payable by the dealer under this Act.]
[25. Ins.by Act 61 of 1972, sec.3 (w.e.f.1.4.1973)]
[26. Ins.by Act 20 of 2002, sec.151 (w.e.f.13.5.2002)]
7. Registration of dealers
(1) Every dealer liable to pay tax under this Act, shall within such time as may be prescribed for the purpose, make an application for registration under this Act to such authority in the appropriate State as the Central Government may, by general or special order, specify, and every such application shall contain such particulars as may be prescribed.
27[(2) Any dealer liable to pay tax under the sales tax law of the appropriate State, or where there is no such law in force in the appropriate State or any part thereof, any dealer having a place of business in that State or part, as the case may be, may, notwithstanding that he is not liable to pay tax under this Act, apply for registration under this Act to the authority referred to in sub-section (1), and every such application shall contain such particulars as may be prescribed.
Explanation.- For the purpose of this sub-section, a dealer shall be deemed to be liable to pay tax under the sales tax law of the appropriate State notwithstanding that under such law a sale or purchase made by him is exempt from tax or a refund or rebate of tax is admissible in respect thereof.]
[27. Subs.by Act 31 of 1958, sec.4, for sub-section (2) (w.e.f.1.10.1958)]
28[(2A) Where it appears necessary to the authority to whom an application is made under sub-section (1) or sub-section (2) so to do for the proper realisation of the tax payable under this Act or for the proper custody and use of the forms referred to in clause (a) of the first proviso to sub-section (2) of section 6 or sub-section (1) of section 6A or clause (a) of the sub-section (4) of section 8, he may, by an order in writing and for reasons to be recorded therein, impose as a condition for the issue of a certificate of registration a requirement that the dealer shall furnish in the prescribed manner and within such time as may be specified in the order such security as may be so specified, for all or any of the aforesaid purposes.]
[28. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
(3) If the authority to whom an application under sub-section (1) or sub-section (2) is made is satisfied that the application is in conformity with the provisions of this Act and the rules made thereunder 28A[and the condition, if any, imposed under sub-section (2A), has been complied with], he shall register the applicant and grant to him a certificate of registration in the prescribed form which shall specify the class or classes of goods for the purposes of sub-section (1) of section 8.
[28A. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
29[(3A) Where it appears necessary to the authority granting a certificate of registration under this section so to do for the proper realisation of tax payable under this Act or for the proper custody and use of the forms referred to in sub-section (2A), he may, at any time while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the dealer, to whom the certificate has been granted, to furnish within such time as may be specified in the order and in the prescribed manner such security, or, if the dealer has already furnished any security in pursuance of an order under this sub-section or sub-section (2A), such additional security, as may be specified in the order, for all or any of the aforesaid purposes.]
[29. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
30[(3B) No dealer shall be required to furnish any security under sub-section (2A) or any security or additional security under sub-section (3A) unless he has been given an opportunity of being heard.
(3BB) The amount of security which a dealer may be required to furnish under sub-section (2A) or sub-section (3A) or the aggregate of the amount of such a security and the amount of additional security which he may be required to furnish under sub-section (3A), by the authority referred to therein shall not exceed-
(a) in the case of a dealer other than a dealer who has made an application, or who has been registered in pursuance of an application, under sub-section (2), a sum equal to the tax payable under this Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in which such security or, as the case may be, additional security is required to be furnished,and
(b) in the case of a dealer who has made an application, or who has been registered in pursuance of an application, under sub-section (2), a sum equal to the tax leviable under this Act, in accordance with the estimate of such authority on the sales to such dealer in the course of inter-State trade or commerce in the year in which such security or, as the case may be, additional security is required to be furnished, had such dealer been not registered under this Act.]
[30. Sub section (3B) Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973) and thereafter sub section (3B) in the present form and sub section (3BB) were Subs. by Act 103 of 1976, sec.5 (w.e.f.7.9.1976)]
30A[(3C) Where the security furnished by the dealer under sub-section (2A) or sub-section (3A) is in the form of a surety bond and the surety becomes insolvent or dies, the dealer shall, within thirty days of the occurrence of any of the aforesaid events, inform the authority granting the certificate of registration and shall within ninety days of such occurrence furnish a fresh surety bond or furnish in the prescribed manner other security for the amount of the bond.
(3D) The authority granting the certificate of registration may by order and for good and sufficient cause forfeit the whole or any part of the security furnished by a dealer-
(a) for realizing any amount of tax or penalty payable by the dealer,
(b) if the dealer is found to have misused any of the forms referred to in sub-section (2A) or to have failed to keep them in proper custody:
Provided that no order shall be passed under this sub-section without giving the dealer an opportunity of being heard.
(3E) Where by reason of an order under sub-section (3D), the security furnished by any dealer is rendered insufficient, he shall make up the deficiency in such manner and within such time as may be prescribed.
(3F) The authority issuing the forms referred to in sub-section (2A) may refuse to issue such a forms to a dealer who has failed to comply with an order under that sub-section or sub-section (3A), or with the provisions of sub-section (3C) or sub-section (3E), until the dealer has complied with such order or such provisions as the case may be.
(3G) The authority granting a certificate of registration may, on application by the dealer to whom it has been granted, order the refund of any amount or part thereof deposited by the dealer by way of security under this section, if it is not required for the purposes of this Act.
(3H) Any person aggrieved by an order passed under sub-section (2A), sub-section (3A), sub-section (3D) or sub-section (3G) may, within thirty days of the service of the order on him, but after furnishing the security, prefer, in such form and manner as may be prescribed, an appeal against such order to such authority (hereinafter in this section referred to as the '' appellate authority'') as may be prescribed:
Provided that the appellate authority may, for sufficient cause, permit such person to present the appeal,-
(a) after the expiry of the said period of thiry days; or (b) without furnishing the whole or any part of such security.
(3I) The procedure to be followed in hearing any appeal under sub-section (3H), and the fees payable in respect of such appeals shall be such as may be prescribed.
(3J) The order passed by the appellate authority in any appeal under sub-section (3H) shall be final.]
[30A. Sub sections (J) were inserted by Act 61 of 1979 (w.e.f.1.4.1973)]
31[(4) A certificate of registration granted under this section may-
(a) either on the application of the dealer to whom it has been granted or, where no such application has been made, after due notice to the dealer, be amended by the authority granting it if he satisfied that by reason of the registered dealer having changed the name, place or nature of his business or the class or classes of goods in which he carries on business or for any other reason the certificate or registration granted to him requires to be amended; or
(b) be cancelled by the authority granting it where he is satisfied, after due notice to the dealer to whom it has been granted, that he has ceased to carry on business 32[or has ceased to exist or has failed without sufficient cause to comply with an order under sub-section (3A) or with the provisions of sub-section (3C) or sub-section (3E) or has failed to pay any tax or penalty payable under this Act, or in the case of a dealer registered under sub-section (2) has ceased to be liable to pay tax under the sales tax law of the appropriate State or for any other sufficient reason]].
[31. Subs.by Act 31 of 1958, sec.4, for sub-section (4) (w.e.f. 1.10.1958)]
[32. Subs. for words “or has ceased to exist” Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
(5) A registered dealer may apply in the prescribed manner not latter than six months before the end of a year to the authority which granted his certificate of registration for the cancellation of such registration, and the authority shall, unless the dealer is liable to pay tax under this Act, cancel the registration accordingly, and where he does so, the cancellation shall take effect from the end of the year.
8. Rates of tax on sales in the course of inter-State trade or commerce
33[(1) Every dealer, who in the course of inter-State trade or commerce
(a) sells to the Government any goods; or
(b) sells to a registered dealer other than the Government,
goods of the description referred to in sub-section (3)
33Ashall be liable to pay tax under this Act, which shall be 33B[four per cent] of his turnover 34[or at the rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law of that State, whichever is lower].
Provided that the rate of tax payable under this sub-section by a dealer shall continue to be four percent, of his turnover, until the rate of two percent takes effect under this sub-section.]
[33. Subs. by Act 31 of 1958, sec.5, for sub-sections (1) to (4) (w.e.f. 1.10.1958)]
[33A.Subs.by Act 32 of 2003, sec.162, for certain words (w.e.f 14.5.2003) (see Annexe)
[33B.Subs.by Act 25 of 1975 (w.e.f.1.7.1975)]
[34.Ins.by Act 20 of 2002 (w.e.f.13.5.2002)]
(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1)-
(a) in the case of declared goods, shall be calculated 35(at twice the rate) applicable to the sale or purchase of such goods inside the appropriate State 36
(b) in the case of goods other than declared goods, shall be calculated at the rate of 37(ten per cent) or at the rate applicable to the sale or purchase of such goods inside the appropriate State,38 whichever is higher and ;
39[(c) in the case of goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generally shall be nil,
and for the purpose of making any such calculation under clause(a) or clause (b), any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State, notwithstanding that he, if in fact, may not be so liable under that law.
Explanation: For the purposes of this sub-section, a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods.]
[35.Subs.by Act 25 of 1975, sec.38, for “at the rate” (w.e.f.1.7.1975)]
[36.The word “and” omitted by Act 20 of 2002, sec.152]
[37.Subs.by Act 8 of 1963, sec.2, for “seven percent” (w.e.f.1.4.1963)]
[38.Subs.by Act 20 of 2002, sec.152, for “whichever is higher” (w.e.f 13.5.2002)]
[39.Subs.by Act 20 of 2002, sec.152, for the portion “and for the purpose of making any such calculation any such dealer shall be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate sate, notwithstanding that he, in fact, may not be so liable under that law”]
40(2A)
[40.Sub section (2A) omitted by Act 20 of 2002, sec.152. The previous Sec.2(A) read as follows :- “(2A) Notwithstanding anything contained in sub section (1A) of Sec.6 or Sub Section (1) or clause (b) of sub section (2) of this section, the tax payable under this act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods, the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate state, exempt from tax generally or subject to tax generally at a rate which is lower than 4% whether called a tax or fee or by any other name, shall be nil, or as the case may be, shall be calculated at the lower rate.
Explanation : for the purpose of this sub section, a sale or purchase of any goods shall not be deemed to be exempt from tax generally under the sales tax law of the appropriate state if under that law the sale or purchase of such goods is exempt only in specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the turnover of the goods.]
(3) The goods referred to in clause (b) of sub-section (1)-
41Omitted
42are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or 43[in the telecommunications network or] in mining or in generation or distribution of electricity or any other form of power.
are containers or other materials specified in the certificate of registration of the registered dealer purchasing the goods, being containers or materials intended for being used for the packing of goods for sale;
are containers or other materials used for the packing of any goods or classes of goods specified in the certificate of registration referred to in clause (b) or for the packing of any containers or other materials specified in the certificate of registration referred to in clause(c).
[41.Clause (a) omitted by Act 8 of 1963, sec.2 (w.e.f.1.4.1963)]
[42.The words “in the case of goods others than declared goods” omitted by Act 8 of 1963, sec.2 (w.e.f.1.4.1963)]
[43.Ins.by Act 20 of 2002, sec.152 (w.e.f.13.5.2002)]
[Note: Sub section (3) was Subs. by Act No.31 of 1958. By Act No.8 of 1963, sec.2 (w.e.f 1.4.1963) clause (a) was omitted and in clause (b), the words “in the case of goods other than declared goods” were omitted. In clause (d) the words “clause (a) or” were omitted.]
44(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed manner-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in the prescribed form obtained from the prescribed authority; or
(b) if the goods are sold to the Government, not being a registered dealer, a certificate in the prescribed form duly filled and signed by a duly authorised officer of the Government.
[44.Subs. by Act 31 of 1958 (w.e.f 1.10.1958)]
45 [Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within such further time as that authority may, for sufficient cause, permit.]
[45.Ins.by Act 61 of 1972, sec.5 (w.e.f 1.4.1973)]
46 [(5) Notwithstanding anything contained in this section, the State Government may], 47[on the fulfilment of the requirements laid down in sub-section(4) by the dealer] if it is satisfied that it is necessary so to do in the public interest, by notification in the Official Gazette, and subject to such conditions as may be specified therein direct-
(a) that no tax under this Act shall be payable by any dealer having his place of business in the State in respect of the sales by him, in the course of inter-State trade or commerce, 48[to a registered dealer or the Government] from any such place of business of any such goods or classes of goods as may be specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification;
(b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the notification, which are made, in the course of inter-State trade or commerce, 49[to a registered dealer or the Government] by any dealer having his place of business in the State or by any class of such dealers as may be specified in the notification to any person or to such class of persons as may be specified in the notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the notification.
[46. Subs.by Act 61 of 1972, sec.5, for sub section (5) (w.e.f 1.4.1973)]
[47. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
[48. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
[49. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
50 [(6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce to a registered dealer for the purpose of setting up operation, maintenance, manufacture, trading, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as packing material or packing accessories in an unit located in any special economic zone or for development, operation and maintenance of Special Economic zone by the developer of the Special Economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate and maintain such Special Economic Zone by the authority specified by the Central Government in this behalf.]
[50.Subs.by Act 23 of 2004, sec.118, for Notwithstanding anything contained in this section, no tax under this Act shall be payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce to a registered dealer for the purpose of manufacture, production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as trading or packing material or packing accessories in an unit located in any special economic zone, if such registered dealer has been authorised to establish such unit by the authority specified by the Central Government in this behalf.]
(7) The goods referred to in sub-section (6) shall be the goods of such class or classes of goods as specified in the certificate of registration of the registered dealer referred to in that sub-section.
(8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course of inter-State trade or commerce unless the dealer selling such goods furnishes to the 51[prescribed authority referred to in sub-section (4), a declaration in the prescribed manner on the prescribed form obtained from the authority specified by Central Government under sub-section (6)], duly filled in and signed by the registered dealer to whom such goods are sold.
Explanation.- For the purpose of sub-section (6), the expression "special economic zone" has the meaning assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944.
[51. Subs. by Sec.108(b) of Act 23 of 2004 for “authority referred in sub section (6), a declaration in the prescribed manner on the prescribed form obtained from the authority referred to in sub section (5) (w.e.f.10.9.2004)]
52 [8A. Determination of turnover
(1) In determining the turnover of a dealer for the purpose of this Act, the following deductions shall be made from the aggregate of the sale prices, namely:-
(a) the amount arrived at by applying the following formula-
100 + rate of tax
Provided that no deduction 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 each part of the turnover liable to a different rate of tax;
(b) the sale price of all goods returned to the dealer by the purchasers of such goods,-
(b) the sale price of all goods returned to the dealer by the purchasers of such goods,-
(i) within a period of three months from the date of delivery of the goods, in the case of goods returned before the 14th day of May, 1966;
(ii) within a period of six months from the date of delivery of the goods, in the case of goods returned on or after the 14th day of May, 1966:
Provided that satisfactory evidence of such return of goods and of refund or adjustment in accounts of the sale price thereof is produced before the authority competent to assess or, as the case may be, re-assess the tax payable by the dealer under this Act; and
(c) such other deductions as the Central Government may, having regard to the prevalent market conditions, facility of trade and interests of consumers, prescribe.
(2) Save as otherwise provided in sub-section (1), in determining the turnover of a dealer for the purposes of this Act, no deduction shall be made from the aggregate of the sale prices.]
[52. Ins.by Act 28 of 1969, sec.5 (w.e.f.5.1.1957)]
53 9. Levy and collection of tax and penalties
(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be levied by the Government of India and the tax so levied shall be collected by the Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced.
54&55 [Provided that, in the case of a sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall within sub-section (2) of section 6, the tax shall be levied and collected
(a) where such subsequent sale has been effected by a registered dealer, in the State from which the registered dealer obtained or, as the case may be, could have obtained, the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods, and,
(b) where such subsequent sale has been effected by an unregistered dealer in the State from which such subsequent sale has been effected.]
[53. Subs.by Act 31 of 1958, Sec.6 and again Subs.by Act 28 of 1969, Sec.6 (w.e.f.5.1.1957)]
[54&55. Subs.by Act 103 of 1976, sec.6, for the proviso (w.e.f.7.9.1976)]
(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any 56 interest or penalty], payable by a dealer under this Act as if the tax or 57[interest or penalty] payable by such a dealer under this Act is a tax or 58[interest or penalty] payable under general sales tax law of the State; and for this purpose they may exercise all or any of the powers they have under the general sales tax law of the State; and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax registration of the transferee of any business, imposition of the tax liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third parties, appeals, reviews, revisions, references, 59[refunds, rebates, penalties], 60[charging or payment of interest], compounding of offences and treatment of documents furnished by a dealer as confidential, shall apply accordingly:
Provided that if in any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provisions for all or any of the matters specified in this sub-section.
[56. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[57. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[58. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[59. Subs.by Act 61 of 1972, sec.6, for “refunds, penalties” (w.e.f.1.4.1973]
[60. Ins.by Act 103 of 1976, sec.6 (retrospectively)]
61 [(2A) All the 62[provisions relating to offences, interest and penalties] (including provisions relating to penalties in lieu of prosecution for an offence or in addition to the penalties or punishments for an offence but excluding the provisions relating to matters provided for in section 10 and 10A) of the general sales tax law of each State shall, with necessary modifications, apply in relation to the assessment, re-assessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any processes connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such sales tax law.]
[61. Ins.by Act 103 of 1976, sec.6 (retrospectively)]
[62. Subs.by Act 10 of 2000, sec.119, for “provisions relating to offences and penalties” (w.e.f. 12.5.2000)]
63 [(2B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the provisions relating to due date for payment of tax, rate of interest for delayed payment of tax, of the general sales tax law of each state, shall apply in relation to due date for payment of tax, rate of interest for delayed payment of tax, and assessment and collection of interest for delayed payment of tax under this Act in such states as if the tax and the interest payable under this Act were a tax and an interest under such sales tax law.]
[63. Ins.by Act 10 of 2000, sec.119 (w.e.f.12.5.2000)]
(3) The proceeds in any financial year of any tax, 64[including any interest or penalty] including any penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributes to Union Territories shall form part of the Consolidated Funds of India.
[64. Subs. by Act 10 of 2000, sec.119, for “including any penalty” (w.e.f.12.5.2000)]
65Validation of Section 9
(1) The provisions of Section 9 of the Central Sales Tax’1956 (hereafter in this section referred to as the Central Sales Tax Act) shall have effect, and shall be deemed always to have had effect, as if that section also provided –
(a) That all the provisions relating to interest of the general sales tax law of each state shall, with necessary modifications, apply in relation to –
(i) the assessment, re-assessment, collection and enforcement of payment of any tax required to be collected under the Central Sales Tax Act, in such State; and
(ii) any process connected with such assessment, re-assessment, collection or enforcement of payment; and
(b) that for the purpose of the application of the provisions of such law, the tax under the Central Sales Tax Act shall be deemed to be tax under such law.
(2) Notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority, general sales tax law of any State imposed or purporting to have been imposed in pursuance of the provisions of Section 9 of the Central Sales Tax Act, and all proceedings, acts or things taken or done for the purposes of, or in relation to the imposition or collection of such interest, before the commencement of this section, shall for all purposes, be deemed to be and to have always been imposed, taken or done as validly and effectively as if the provisions of sub-section (1) had been in force when such interest was imposed or proceedings or acts or things were taken or done and, accordingly;
(a) no suit or other proceedings shall be maintained or continued in, or before, any court, tribunal or other authority for the refund of any amount received or realized by way of such interest;
(b) no court, tribunal or other authority shall enforce any decree or order directing the refund of any amount received or realized by way of such interest;
(c) where any amount which had been received or realized by way of such interest is refunded before the date on which the Finance Act’2000 receives the assent of the President and such refund would not have been allowed if the provisions of sub-section (1) had been in force on the date on which the order for such refund was passed, the amount so refunded may be recovered as an arrear of tax under the Central Sales Tax Act;
(d) any proceeding, act or thing which could have been validly taken, continued or done for the imposition of collection of such interest at any time before the commencement of this section if the provisions of sub-section (1) had then been in force but which had not been taken, continued or done, may after such commencement, be taken, continued or done.
(3) Nothing in sub-section (2) shall be construed as preventing any person
(a) from questioning the imposition or collection of any interest or any proceedings, act or thing in connection therewith; or
(b) from claiming any refund,
in accordance with the provisions of the Central Sales Tax Act, read with sub-section (1).
Explanation :- For this purposes of this section, “general sales tax law” shall have the same meaning assigned to it in the Central Sales Tax Act.
(65.Validation by section 120 of Act 10 of 2000, dt.12/5/2000)
66 9A. Collection of tax to be only by registered dealers
No person who is not a registered dealer shall collect in respect of any sale by him of goods in the course of inter-State trade or commerce any amount by way of tax under this Act, and no registered dealer shall make any such collection except in accordance with this Act and the rules made there under.
[66.Ins.by Act 31 of 1958, sec.6 (w.e.f.1.10.1958)]
67 9B. Rounding off of tax, etc.
The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund due, under the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee and if such part is less than fifty paise it shall be ignored.
Provided that nothing in this section shall apply for the purpose of collection by a dealer of any amount by way of tax under this Act in respect of any sale by him of goods in the course of inter-State trade or commerce.
[67. Ins.by Act 61 of 1972 (w.e.f.1.4.1973)]
10. Penalties
If any person-
68 [(a) furnishes a certificate or declaration under sub-section (2) of section 6 or sub-section (1) of section 6A or sub-section (4) 69[or sub-section (8)] of section 8, which he knows, or has reason to believe, to be false; or
(aa) fails to get himself registered as required by section 7 or fails to comply with an order under sub-section (3A) or with the requirements of sub-section (3C) or sub-section (3E), of that section,]
(b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such a class are covered by his certificate of registration, or
(c) not being a registered dealer, falsely represents when purchasing goods in the course of inter-State trade or commerce that he is a registered dealer; or
(d) after purchasing any goods for any of the purposes specified in 70clause (b) or clause(c) or clause (d) of sub-section (3) 71[or sub-section (6)] of section 8 fails, without reasonable excuse to make use of the goods for any such purpose,
(e) has in his possession any form prescribed for the purpose of sub-section (4) 72[or sub-section (8)]of section 8 which has not been obtained by him or by his principal or by his agent in accordance with the provisions of this Act or any rules made there under:
73 [(f) collects any amount by way of tax in contravention of the provisions contained in section 9A,]
he shall be punishable with simple imprisonment which may extend to six months or with fine or with both, and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues.
[68.Subs.by Act 61 of 1972, sec.8, for clause (a) w.e.f. 1.4.1973]
[69.Ins.by Act 20 of 2002, sec.153 ]
[70.Subs.by Act 61 of 1972, sec.8, for “clause(b)” (w.e.f.1.4.1973)]
[71.Ins.by Act 20 of 2002, sec.153]
[72.Ins.by Act 20 of 2002, sec.153]
[73.Ins.by Act 31 of 1958, sec.8, (w.e.f. 1.10.1958)]
74 10A. Imposition of penalty in lieu of prosecution
75 [(1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause(d) of section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing, impose upon him by way of penalty a sum not exceeding one and a half times 76 [the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section.]
Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section.]
(2)77[The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of India in the manner provided in sub-section (2) of section 9-
(a) in the case of an offence falling under clause (b) or clause (d) of section 10, in the State in which the person purchasing the goods obtained the form prescribed for the purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods,
(b) in the case of an offence falling under clause (c) of section 10, in the State in which the person purchasing the goods should have registered himself if the offence had not been committed.]
(b) in the case of an offence falling under clause (c) of section 10, in the State in which the person purchasing the goods should have registered himself if the offence had not been committed.]
[75.Sec.10A renumbered as sub section (1) of that section by Act 28 of 1969, sec.7 (w.e.f.1.10.1958)]
[76.Subs.by Act 61 of 1972, Sec.9, for “ the tax would have been levied under this Act in respect of the sale to him of the goods if the offence has not been committed”(w.e.f.1.4.1973)]
[77.Ins.by Act 28 of 1969, sec.7 (w.e.f.1.10.1958)]
11. Cognizance of offences
(1) No court shall take cognizance of any offence punishable under the Act or the rules made thereunder except with the previous sanction of the Government within the local limits of whose jurisdiction the offence has been committed or such officer of that Government as it may, by general or special order, specify in this behalf; and no court inferior to that of a presidency magistrate or a magistrate of the first class shall try any such offence.
(2) All offences punishable under this Act shall be cognizable and bailable.
12. Indemnity
No suit, prosecution or other legal proceeding shall lie against any officer of Government for any-thing which is in good faith done or intended to be done under this Act or the rules made thereunder.
13. Power to make rules
(1) The Central Government may, by notification in the Official Gazette, make rules providing for-
(a) the manner in which applications for registration may be made under this Act, the particulars to be contained therein, the procedure for the grant of such registration, the circumstances in which registration may be refused and the form in which the certificate of registration may be given;
78(aa) The manner of determination of the sale price and the deductions from the total consideration for a works contract under the proviso to clause (h) of section2;
79[80(ab) the form and the manner for furnishing declaration under sub-section (8) of section 8; ]
(b) the period of turnover, the manner in which the turnover in relation to the sale of any goods under this Act shall be determined, and the deductions which may be made 81[under clause (c) of sub-section (1) of section 8A] in the process of such determination;
(c) the cases and circumstances in which, and the conditions subject to which, any registration granted under this Act may be cancelled;
82 [(d) the form in which and the particulars to be contained in any declaration or certificate to be given under this Act, 83[the State of origin of such form or certificate and the time within which any such certificate or declaration shall be produced or furnished]
(e)the enumeration of goods or class of goods used in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other form of power;
(f)the matters in respect of which provisions may be made under the proviso to 84[sub-section (2)] of section 9;
(g)the fees payable in respect of applications under this Act.
85 [(h)the proper functioning of the authority constituted under Section 19.
(i)the salaries and allowances payable to , and the terms and conditions of service of, the Chairman and Members under sub-section (3) of section 19.
(j) any other matter as may be prescribed.]
86 [(2) Every rule made by the Central Government under sub-section (1) shall be laid as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the sessions or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule 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 to the validity of anything previously done under that rule.]
(3)The State Government may make rules, not inconsistent with the provisions of this Act and the rules made under sub-section (1), to carry out the purposes of this Act.
(4)In particular and without prejudice to the powers conferred by sub-section (3), the State Government may make rules for all or any of the following purposes namely:-
(a) the publication of lists of registered dealers, of the amendments made in such lists from time to time, and the particulars to be contained in such lists;
87 [(aa) the manner of determination of the sale price and the deductions from the total consideration for a works contract under the proviso to clause (h) of section 2;”.
88 (ab) the manner in which security may be furnished under sub-section (2A) or sub-section (3A) or sub-section (3C) of section 7 and the manner in which and the time within which any deficiency may be made up under sub-section (3E) of that section;]
(b) the form and manner in which accounts relating to sales in the course of inter-State trade or commerce shall be kept by registered dealers;
(c) the furnishing of any information relating to the stocks of goods of, purchase, sales and deliveries of books by any dealer or any other information relating to his business as may be necessary for the purposes of this Act;
(d) the inspection of any books, accounts or documents required to be kept under this Act, the entry into any premises at all reasonable time for the purposes of searching for any such books, accounts or documents kept or suspected to be kept in such premises and the seizure of such books, accounts or documents;
89[(e) the authority from whom, the conditions subject to which and the fees subject to payment of which any form of certificate prescribed under clause (a) of the first proviso to sub-section (2) of section 6 or of declaration prescribed under sub-section (1) of section 6A or sub-section (4) of section 8 may be obtained, the manner in which such forms shall be kept in custody and records relating thereto maintained and the manner in which any such form may be used and any such certificate or declaration may be furnished;
(ee) the form and manner in which, and the authority to whom, an appeal may be preferred under sub-section (3H) of section 7, the procedure to be followed in hearing such appeals and the fees payable in respect of such appeals;]
(e) in the case of an undivided Hindu family, association, club, society, firm or company or in the case of a person who carries on business as guardian or trustee or otherwise on behalf of another person, the furnishing of a declaration stating the name of the person who shall be deemed to be the manager in relation to the business of the dealer in the State and the form in which such declaration may be given,
(f) the time within which, the manner in which and the 90 [authorities to whom] any change in the ownership of any business or in 91 [the name, place, or nature] of any business carried on by any dealer shall be furnished.
(5) In making any rule under this section 92 [the Central Government, or, as the case may be, the State Government] may direct that a breach thereof shall be punishable with fine which may extend to five hundred rupees and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for every day during which the offence continues.
[78.Previous clause (aa) shall be relettered as clause (ab) and before clause (ab) as so relettered, clause (aa) inserted by Act 35 of 2005, sec.92 (w.e.f ) Previous clause (aa) of Sec.13(1) is read as follows : “The manner in which security may be furnished under sub section (2A) or sub section (3A) or sub section (3C) or section (7) and the manner in which and the time within which any deficiency may be made up under sub section (3E) of that section”.]
[79.Previous clause (aa) relettered as clause (ab) and before clause (ab) as so relettered, clause (aa) inserted by Act 35 of 2005, sec.92 (w.e.f )
[80.Ins.by Act 20 of 2002, Sec.154 as clause (aa)]
[81.Ins.by Act 61 of 1972, sec.10(w.e.f. 1.4.1973)]
[82.Subs.by Act 31 of 1958, Sec.9, for clause (d) (w.e.f 1.10.1958)]
[83.Ins.by Act 61 of 1972, sec.10 (w.e.f.1.4.1973)]
[84.Subs.by Act 28 of 1969, Sec.8, for “sub-section (3) “(retrospectively)]
[85.Ins.by Act 41 of 2001, sec.2]
[86.Subs.by Act 61 of 1972, Sec.10, for sub section (2) (w.e.f.1.4.73)]
[87.Previous clause (aa) relettered as the present clause (aa) and the present clause (aa) inserted by sec.92 of Act 35 of 2005]
[88.Previous clause (aa) relettered as the present clause (aa) and the present clause (aa) inserted by sec.92 of Act 35 of 2005]
[89.Subs.by Act 61 of 1972, sec.10, for clause (c) (w.e.f.1.4.1973).
[90.Subs.by Act 31 of 1958, sec.9, for “the authorities to which” (w.e.f.1.10.1958)]
[91.By Act 31 of 1953, sec.9, for “the nature” (w.e.f 1.10.1958)]
[92.By Act 61 of 1972, sec.10, for “the State Government” (w.e.f.1.4.1973)]
CHAPTER IV
GOODS OF SPECIAL IMPORTANCE IN INTER-STATE TRADE OR COMMERCE.
14. Certain goods to be of special importance in Inter-State trade or commerce.-
It is hereby declared that the following goods are of special importance in inter-State trade or commerce:-
93 [(i) cereals, that is to say .-(i) paddy (Oryza sativa L);
(ii) rice (Oryza sativa L.);
(iii) wheat (Triticum vulgare, T.compactum, T.sphaerococcum. T. durum, T. aestivum L.T. discoccum);
(iv) jowar or milo (Sorghum vulgare pers);
(v) bajara (Pennisetum typhoideum L.);
(vi) maize (Zea malys D.);
(vii) ragi (Eleusine coracana Gaertn.);
(viii) kodon (Paspalum scrobiculatum L.);
(ix) kutki (Panicum miliare L.);
(x) barely (Hordeum vulgare L.); ]
94[95(ia)] coal, including coak in all its forms, but excluding char-coal:
Provided that during the period commencing on the 23rd day of February, 1967 and ending with the date of commencement of section 11 of the Central Sales Tax (Amendment) Act, 1972, this clause shall have effect subject to the modification that the words ''but excluding char-coal'' shall be omitted;]
Provided that during the period commencing on the 23rd day of February, 1967 and ending with the date of commencement of section 11 of the Central Sales Tax (Amendment) Act, 1972, this clause shall have effect subject to the modification that the words ''but excluding char-coal'' shall be omitted;]
(ii) cotton, that is to say, all kinds of cotton (indigenous or imported in its unmanufactured state, whether ginned or unginned baled pressed or otherwise, but not including cotton waste:;
96 (iia) cotton fabrics covered under heading Nos. 52.05, 52.06, 52.07, 52.08,52.09, 52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 97 [58.06], 59.01, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985;
98 [(iib) cotton yarn but not including cotton yarn waste;]
99 [(iic) crude oil, that is to say, crude petroleum oils and crude oils obtained from bituminous minerals ( such as shale, calcareous rock, sand), whatever their composition, whether obtained from normal or condensation oil-deposits or by the destructive distillation of bituminous minerals and whether or not subject to all or any of the following processes:-
(1) decentration;
(2) de-salting;
(3) dehydration;
(4) stabilisation in order to normalise the vapour pressure,
(5) elimination of very light fractions with a view to returning them to the oil-deposits in order to improve the drainage and maintain the pressure;
(6) the addition of only those hydrocarbons previously recovered by physical methods during the course of above-mentioned processes;
(7) any other minor process (including addition of pour point depressants or flow improves) which does not change the essential character of the substance; ]
100 [(iid) Aviation Turbine fuel sold to a Turbo-Prop Aircraft.
Explanation : For the purposes of this clause, “Turbo-Prop Aircraft” means an aircraft deriving thrust, mainly from propeller, which may be driven by either turbine engine or piston engine.]
(iii) hides and skins, whether in a raw or dressed state;
101 [(iv) Iron and steel i.e. to say:-
(i) 102 [pig iron sponge iron and] cast iron including 103[ingot moulds, bottom plates], iron scrap, cast iron scrap, runner scrap and iron skull scrap;
(ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes);
(iii) skelp bars, tin bars, sheet bars, hoe-bars and sleeper bars;
(iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted, in coil form as well as straight lengths);
(v) steel structural (angles, joists, channels, tees, sheet, pilling section, Z sections or any other rolled sections);
(vi) sheets, hoops, strips and skelp, both black and galvanised, hot and cold rolled, plain and corrugated in all qualities, in straight lengths and in coil form, as rolled and in rivetted condition;
(vii) plates both plain and chequered in all qualities;
(viii) discs, rings, forgings and steel castings;
(ix) tool, alloy and special steels of any of the above categories;
(x) steel melting scrap in all forms including steel skull, turnings and borings;
(xi) steel tubes both welded and seamless, of all diameters and lengths including tube fittings;
(xii) tin-plates, both hot dipped and electrolytic and tin-free plates;
(xiii) fish plates bars, bearing plates bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails-heavy and light crane rails;
(xiv) wheels, tyres, axels and wheels sets;
(XV) wire rods and wire-rolled, drawn, galvanised, aluminised, tinned or coated such as by copper;
(xvi) defectives, rejects, cuttings or end pieces of any of the above categories; ]
104 [(v) jute, that is to say, the fibre extracted from plants belonging to the species corchorus capsularies, and Corchorus olitorius and the fibre known as mesta or bimli extracted from plants of the species Hibiscus cannabinus and Hibiscus sabdariffa- Varaltissima and the fibre known as Summ or Sunn-hemp extracted from plants of the species Crotalaria Juncea whether baled or otherwise; ]
104A(va) Liquified Patroleum Gas for domestic use
105 (vi) Oilseeds, that is to say:-
(i) Groundnut or peanut (Arachis hypogaea);
(ii) Sesamum or Til (Sesamum orientale);
(iii) Cotton seed (Gossypium Spp);
(iv) Soyabean (Glycine seja);
(v) Rapseed and Mustared
1. Torta (Brassica campestris var toria);
2. Rai (Brassica juncea);
3. Jamba-Taramira(Eruca Saatiya);
4. Sarson, yellow and brown (Brassica campestris var sarson);
5. Banarsi Rai or True Mustured (Brassica nigra);
(vi) Linseed (Linum usitatissimum);
(vii) Castor (Ricinus communis);
(viii)Coconut (i.e. Copra excluding tender coconuts)
(Cocosnucifers);
(ix) Sunflower (Helianthus annus);
(x) Nigar seed (Guizotia abyssinica);
(xi) Neem, vepa (Azadirachta indica);
(xii) Mahua, illupai, Ippe (Medhuca indica M. Latifolia, Bassia, Latifolia and Madhuca longifolia syn. M. Longifolia);
(xiii) Karanja; Pongam, Honga (Pongamia pinnata syn.P. Glabra);
(xiv) Kusum (Schleichera oleosa, syn S. Trijuga);
(xv) Punna, Undi (Calophyllum inophyllum);
(xvi) Kokum (Carcinia indica);
(xvii) Sal (Shorea robusta);
(xviii) Tung (Aleurites fordii and A.montanna)
(xix) Red palm (Elaeis guinensis);
(xx) Safflower (Carthanus tincotorius);
106 (via) pulses, that is to say:-
(i) gram or gulab (Cicerarietinum L.); 106 (via) pulses, that is to say:-
(ii) tur or arhar (Cajanus cajan);
(iii) moong or green gram (Phaseolus aureus);
(iv) masuri or lentil (Lens esculenta Moench, Lens culinaris Mdeic);
(v) urad or black gram (Phaseolus mungo);
(vi) moth (Phaseolus aconitifolius Jacq);
(vii) lakh or khesari (Lathyrus sativus L.);
107 (vii) man-made fabrics covered under heading Nos. 54.08, 54.09, 54.10, 54.11, 54.12, 55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05, [58.06]108, 59.01, 59.02, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985; ( 5 of 1986)
(viii) sugar covered under sub-heading Nos. 1701.20, 1701.31, 1701.39 and 1702.11 of the Schedule to the Central Excise Tariff Act, 1985; (5 of 1986)
(ix) unmanufactured tobacco and tobacco refuse covered under sub-heading No. 2401.00, cigars and cheroots of tobacco covered under heading No.24.02, cigarette and cigarillos of tobacco covered under sub heading Nos. 2403.11 and 2403.21 and other manufactured tobacco covered under sub-heading Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 109 [2404.50 and 2404.60], of the Schedule to the Central Excise Tariff Act, 1985; (5 of 1986)
(x) woven fabrics of wool covered under heading Nos.51.06, 51.07, 58.01, 58.02, 58.03 and 58.05 of the Schedule to the Central Excise Tariff Act, 1985. 110 [****]
[93.Ins.by Act 103 of 1976, sec.7, (w.e.f.7.9.1976)]
[94.Subs.by Act 61 of 1972, sec.11, for clause (i) (retrospectively)]
[95.Clause (i) renumbered as clause (ia) by Act 103 of 1976, sec.7, (w.e.f.7.9.1976)) Note : Clause (i) was renumbered as clause (i-a) as so renumbered clause (i) relating to “cerals” was inserted vide Act No.103 of 1976 w.e.f 7.9.1976. the original clause (i) related to “Coal, including cokde in all its forms”. Because of the decision of the Supreme Court in 19 STC 469 in which it was held that coal includes charcoal, the entry was subs. Excluding charcoal except for the period specified vide Act No.61 of 1972.
[96.Item (iia) ins.by Act 16 of 1957, sec.3 and Subs.by Act 31 of 1958, sec.10 (w.e.f.1.10.1958) and again subs. by Act 26 of 1988, sec.84 (w.e.f 13/5/88)] and previous (ii-a) reads as follows : cotton fabrics as defined in item 19 of the First schedule to the Central Excises and Salt Act, 1944.
[97.Ins.by Act 13 of 1989, sec.50 (w.e.f.12.5.1989)]
[98.Ins.by Act 31 of 1958, sec.10, (w.e.f.1.10.1958)]
[99.Ins.by Act 103 of 1976, sec.7 (w.e.f.7.9.1976)]
[100.Ins.by Act 14 of 2001, sec.139 (w.e.f.11.5.2001)]
[101.Subs.by Act 61 of 1972, sec.11, for clause (iv) (w.e.f.1.4.1973)]
[102.Subs.by Act 14 of 2001, sec.139, for “Pig Iron and “
[103.Subs.by Act 38 of 1978, sec.3 and sche2, for “ingot moulds bottom plates”]
[104.Subs.by Act 61 of 1972, sec.11, for clause (v) (w.e.f.1.4.1973)]
[104A Ins. By Finance Act 2006 (w.e.f 1.3.2006)]
[105.Subs.by Act 61 of 1972, sec.11, for clause (vi) (w.e.f.1.4.1973)]
[106.Ins.by Act 103 of 1976, sec.7 (w.e.f 7.9.1976)]
[107.Ins.by Act 31 of 1958, sec.10 (w.e.f 1.10.1958) and subs.by Act 26 of 1988, sec.85 (w.e.f.13.5.1988)
[108.Ins.by Act 13 of 1989, sec.50.
[109.Subs.by Act 13 of 1989, sec.50 for “and 2404.50” (w.e.f.12.5.1989)]
[110.Item (xi), i.e., “Silk fabrics, as defined in item No.20 of the first schedule to the Central Excises and Salt Act, 1944 (1 of 1944)” was omitted by Act 19 of 1968, sec.43 (w.e.f.11.5.1968) thereby allowing the states to levy state tax on them]
11115. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State
Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, be subject to the following restrictions and conditions, namely:-
(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall not exceed 112 [four percent] of the sale or purchase price thereof 113 [****]
(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any declared goods and such goods are sold in the course of inter-State trade or commerce, 114 [and tax has been paid under this Act in respect of the sale of such goods in the course of inter-State trade or commerce, the tax levied under such law] 115 [shall be reimbursed to the person making such sale in the course of inter-State trade or commerce] in such manner and subject to such conditions as may be provided in any law in force in that State;
116[(c) where a tax has been levied under that law in respect of the sale or purchase inside the State of any paddy referred to in sub-clause (i) of clause (i) of section 14, the tax leviable on rice procured out of such paddy shall be reduced by the amount of tax levied on such paddy;]
117[(ca) Where a tax on sale or purchase of paddy referred to in sub-clause(i) or clause(i) of section 14 is leviable under that law and the rice procured out of such paddy is exported out of India, then for the purposes of sub section (3) of Section 5, the paddy and rice shall be treated as a single commodity.]
(d) each of the pulses referred to in clause (vi-a) of section 14, whether whole or separated, and whether with or without husk, shall be treated as a single commodity for the purposes of levy of tax under this law.
[111.Subs.by Act 31 of 1958, sec.11, for section 15 (w.e.f.1.10.1958)]
[112.Subs.by Act 25 of 1975, sec.38, for “three percence” (w.e.f 1.7.1975)]
[113.The words “and such tax shall not be levied at more than one stage” were omitted by Act 20 of 2002, sec.155 (w.e.f 13.5.2002)]
[114.Subs.by Act 61 of 1972, sec.12, for “the tax so levied” (w.e.f 1.4.1973)]
[115.Subs.by Act 61 of 1972, sec.12, for “shall be refunded to such person” (w.e.f.1.4.1973)]
[116.Ins.by Act 103 of 1976, sec.8, (w.e.f.7.9.1976)]
[117.Ins.by Act 33 of 1996, sec.87 (w.e.f 28.9.1996)]
CHAPTER V 118
LIABILITY IN SPECIAL CASES
16. Definitions.- In this Chapter,-
(a) ''appropriate authority'', in relation to a company means the authority competent to assess tax on the company;
(b) ''company'' and ''private company'' have the meanings respectively assigned to them by clauses (i) and (iii) of sub-section (1) of section 3 of the Companies Act, 1956.
(b) ''company'' and ''private company'' have the meanings respectively assigned to them by clauses (i) and (iii) of sub-section (1) of section 3 of the Companies Act, 1956.
[118.Ins.by Act 61 of 1972, sec.13 (w.e.f.1.4.1973) and this chapter deals with the procedure for collection of tax in the event of liquidation of a company]
17. Company in liquidation
(1) Every person (a) who is the liquidator of any company which is being wound up, whether under the orders of a court or otherwise; or (b) who has been appointed the receiver of any assets of a company, (hereinafter referred to as the liquidator) shall, within thirty days after he has become such liquidator, give notice of his appointment as such to the appropriate authority.
(2) The appropriate authority shall, after making such inquiry or calling for such information as it may deem fit, notify to the liquidator within three months from the date on which he receives notice of the appointment of the liquidator the amount which, in the opinion of the appropriate authority would be sufficient to provide for any tax which is then, or is likely thereafter to become, payable by the company.
(3) The liquidator shall not part with any of the assets of the company or the properties in his hands until he has been notified by the appropriate authority under sub-section (2) and on being so notified, shall set aside an amount equal to the amount notified and, until he so set aside such amount, shall not part with any of the assets of the company or properties in his hands:
Provided that nothing contained in this sub-section shall debar the liquidator from parting with such assets or properties in compliance with any order of a court or for the purpose of the payment of the tax payable by the company under this Act or for making any payment to secured creditors whose debts are entitled under law to priority of payment over debts due to Government on the date of liquidation or for meeting such costs and expenses of the winding up of the company as are in the opinion of the appropriate authority reasonable.
(4) If the liquidator fails to give the notice in accordance with sub-section (1) or fails to set aside the amount as required by, or parts with any of the assets of the company or the properties in his hands in contravention of the provisions of sub-section (3), he shall be personally liable for the payment of the tax which the company would be liable to pay:
Provided that if the amount of any tax payable by the company is notified under sub-section (2), the personal liability of the liquidator under this sub-section shall be to the extent of such amount.
(5) Where there are more liquidators than one, the obligations and liabilities attached to the liquidator under this section shall attach to all the liquidators jointly and severally.
(6) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force.
18. Liability of directors of private company in liquidation
Notwithstanding anything contained in the Companies Act, 1956 when any private company is wound up after the commencement of this Act, and any tax assessed on the company under this Act for any period, whether before or in the course of or after its liquidation, cannot be recovered, then, every person who was a director of the private company at any time during the period for which the tax is due shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
119CHAPTER VI
Authority to settle disputes in course of inter-state trade or commerce
19. CENTRAL SALES TAX APPELLATE AUTHORITY
19. (1) The central Government shall constitute, by notification in the Official Gazette, an Authority to settle inter-State disputes falling under 120[section 6A read with section 9] of this Act, to be known as " the Central Sales Tax Appellate Authority (hereinafter referred to as the Authority)".
(2) The Authority shall consist of the following Members appointed by the Central Government, namely:-
(a) a Chairman, who is a retired Judge of the Supreme Court, or a retired Chief Justice of a High Court;
(b) an officer of the Indian Legal Service, who is, or is qualified to be, an Additional Secretary to the Government of India; and
(c) an officer of a State Government not below the rank of Secretary or an officer of the Central Government not below the rank of Additional Secretary, who is an expert in sales tax matters.
121[(2A) Notwithstanding anything contained in sub-section (2), the Chairman or a member holding a post as such in the Authority for Advance Rulings appointed under clause (a) or clause (c), as the case may be, of sub-section (2) of section 245-O of the Income-Tax Act, 1961 may, in addition to his being the Chairman or a Member of that Authority, be appointed as the Chairman or a Member, as the case may be, of the Authority under this Act.]
(3) The salaries and allowances payable to, and the terms and conditions or service of, the Chairman and Members shall be such as may be prescribed.
(4) The Central Government shall provide the Authority with such officers and staff as may be necessary for the efficient exercise of the powers of the Authority under this Act.
[119. Chapter VI (containing Sections 19 to 26) ins. by Act 41 of 2001, sec.3 (w.e.f.1.4.1973)]
120. Subs. for the words, “Section 6A or Section 9” by Section 119(b) of Act 23 of 2004 (w.e.f. commencement of Act 41 of 2001)
121. Ins. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006 )]
122[19A. Vacancies etc., not to invalidate proceedings
“No proceeding before the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority”.]
[122. Ins. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006 )]
20. Appeals
123[(1) The provisions of this Chapter shall apply to appeals filed by any aggrieved person against any order of the highest appellate authority of a state, made under section 6A read with section 9.
Explanation: For the purpose of this section and sections 21, 22 and 25 “highest appellate authority of a state” means any authority or tribunal or court (except the High Court) established or constituted under the general sales tax law of a State, by whatever name called.
(2) Notwithstanding anything contained in the general sales tax law of a state, the Authority shall adjudicate an appeal filed under sub section (1).
(3) An appeal under sub-section (1) may be filed within ninety days from the date on which the order referred to in that sub-section is served on any aggrieved person :
Provided that the Authority may entertain any appeal after the expiry of the said period of ninety days, but not later than one hundred and fifty days from the date of such service, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.
Provided further that the authority may entertain any appeal from an aggrieved person within sixty days from the commencement of the Central Sales Tax Act (Amendment) Act, 2005, where such aggrieved person had the right to file an appeal against the order of the highest appellate authority of the state under sub-section (1) as it stood immediately before the commencement of the said act, but has not availed of the right to file the appeal during the period commencing on and from the 3rd day of December, 2001 and ending with the 16th day of March, 2005.
(4) The application shall be made in quadruplicate and be accompanied by a fee of five thousand rupees.]
[123. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) The previous sub sections 1, 2 and 3 of Sec.20 are read as follows : (1) The provisions of this chapter shall apply to appeals filed by the aggrieved dealer against any order of the assessing authority made under section 6A or section 9 of this Act. (2) Notwithstanding any thing contained in the general sales tax laws, the authority shall adjudicate an appeal filed by a dealer aggrieved against any order of the assessing authority rejecting his claim under section 6A or section 9 of this Act. (3) An appeal against the order of the assessing authority rejecting the claim of the dealer under section 6A or section 9 of this Act may be filed by the aggrieved dealer within forty five days from the date on which the order is served on him. Provided that the authority may entertain any appeal after expiry of the said period of forty five days, but not later than sixty days, from the date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. (4) The application shall be made in quadruplicate and be accompanied by a fee of five thousand rupees.]
21. Procedure on receipt of application
(1) On receipt of an appeal, the Authority shall cause a copy thereof to be forwarded to the assessing authority concerned and to call upon it to furnish the relevant records:
Provided that such records shall, as soon as possible, be returned to the assessing authority.
(2) The Authority shall adjudicate and decide upon the appeal filed against an order of the 124[highest appellate authority].
(3) The Authority, after examining the appeal and the records called for, by order, either allow or reject the appeal:
Provided that no appeal shall be rejected unless an opportunity has been given to the appellant of being heard in person or through a duly authorised representative.
Provided further that whether an appeal is rejected or accepted, reasons for such rejection or acceptance shall be given in the order,
(4) The Authority shall make an endeavour to pronounce its order in writing within six months of the receipt of the appeal.
(5) A copy of every order made under sub-section (3) shall be sent to the 125[appellant, assessing authority, respondent and highest appellate authority of the State Government concerned].
[124. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006 ) for words “assessing authority”]
[125. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) for words “appellant and to the assessing authority”]
22. Powers of the Authority
(1) The Authority shall have the same powers as are vested in a court under the Code of Civil Procedure, 1908, while trying a suit in respect of the following matters, namely:-
(a) enforcing the attendance of any person, examining him on oath or affirmation;
(b) compelling the production of accounts and documents;
(c) Issuing the commission for the examination of witnesses;
(d) the reception of evidence on affidavits;
(e) any other matter which may be prescribed.
126[(1A) the Authority may grant stay of the operation of the order of the highest appellate authority against which the appeal is filed before it or order the pre-deposit of the tax before entertaining the appeal and while granting such stay or making such order for the pre-deposit of the tax, the Authority shall have regard, if the assessee has made pre-deposit of the tax under the general sales tax law of the state concerned, to such pre-deposit or pass such appropriate order as it may deem fit.]
(2) Every proceeding before the Authority shall be deemed to be a judicial proceeding within the meaning of section 193 and 228 of the Indian Penal Code and the Authority shall be deemed to be a civil court for the purpose of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
[126. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006 )]
23. Procedure of authority
The Authority shall, subject to the provisions of this Chapter, have power to regulate its own procedure in all matters arising out of the exercise of powers under this Act.
24. The Authority for Advance Rulings to function as authority under this Act
(1) Notwithstanding anything contained in any other law for the time being in force and in section 19 of this Act, the Authority for Advance Rulings constituted under section 245-O of the Income Tax Act, 1961 shall be notified by the Central Government in the Official Gazette, with such modifications as may be necessary, to make its composition in conformity with section 19 of this Act, as the Authority under this Act till such time an Authority is constituted under that section.
(2) On and from the date of the constitution of the Authority in accordance with the provisions of section 19 of this Act, the proceedings pending with the Authority for Advance Rulings shall stand transferred to the Authority constituted under that section from the stage at which such proceedings stood before the date of constitution of the said Authority.
12725. Transfer of pending proceedings:
[(1) on and from the commencement of the Central Sales Tax (Amendment)Act’2005, all appeals (except appeals against orders of the highest appellate authority of the state) pending before the Authority notified under sub-section (1) of Section 24 shall stand transferred together with the records thereof to the highest appellate authority of the concerned state.
(2) such highest appellate authority of the state to which such appeal has been transferred under sub-section (1) on receipt of such records shall proceed to deal with such appeal so far as may be in the same manner as in the case of an appeal filed before such highest appellate authority of the state according to the general sales tax law of the appropriate state, from the stage which was reached before such transfer or from any earlier stage or de novo as such highest appellate authority of the state may deem fit:
Provided that where the highest appellate authority finds that the appellant has not availed of the opportunity of filing first appeal before the appellate authority, such case shall be forwarded to such authority.]
[127. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) The previous section 25 of read as follows : On and from the date when the Authority is constituted under section 19, every appeal arising out of the provisions contained in this chapter (i) which is pending immediately before the constitution of such authority before the appellate authority constituted under the general sales tax law of a state or of the state or of the union territory, as the case may be; or (ii) which would have been required to be taken before such appellate authority, shall stand transferred to such authority on the date on which it is established. ]
26.Applicability of Orders passed:
An order passed by the Authority under this Chapter shall be binding on 128[each State Government concerned, the assessing authorities and other authorities created by or under any law relating to general sales tax, in force for the time being in any State 129(***)].
[128. Subs. by Act 23 of 2004, Sec. 109 (F) for “the assessing authorities”, w.e.f. the commencement of the Act 41 of 2001)]
[129. The words, “or Union Territory 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006 )]
Subscribe to:
Posts (Atom)