Central Sales Tax (Amendment) Act, 20051
| [Act 3 of 2006] | [16th January, 2006] |
2[Repealed by Act 4 of 2018, S. 3 and Sch. II]
An Act further to amend the Central Sales Tax Act, 1956
Be it enacted by Parliament in the Fifth-sixth Year of the Republic of India as follows:-
1 Received the assent of the President on 16-1-2006 and published in the Gazette of India, Extra., Part II, Section 1, dated 17-1-2006, pp. 1-3, No. 3.
2 Repealed by Act 4 of 2018, S. 3 and Sch. II, dated 8-1-2018.
Prefatory Note-Statement of Objects and Reasons.-The Central Sales Tax is levied under the provisions of the Central Sales Tax Act, 1956, on the sale of goods in the course of inter-State trade or commerce. However, the Central Sales Tax is not leviable when the movement of the goods from one State to another is occasioned not by way of sale but by reason of consignment or stock transfer. The distinction between a sale and a consignment or stock transfer often gives rise to disputes. These disputes essentially involve the dealer and the State Governments of the originating as well as the destination States. The Hon'ble Supreme Court had observed in the case of Ashok Leyland Limited v. Union of India and Others [(1997) 9 Supreme Court Cases 10], that, there was no provision for any central mechanism in the Central Sales Tax Act, 1956 to resolve such disputes ands suggested that such central mechanism be created for this purpose. Accordingly, a new Chapter VI, viz., "Authority to settle disputes in course of inter-State trade or commerce" was inserted in the Central Sales Tax Act, 1956, by the Central Sales Tax (Amendment) Act, 2001. The said Chapter provides for setting up of a Central Sales Tax Appellate Authority. The provisions of the said Chapter were brought into force on the 17th March, 2005 by a notification. Further, on the same date, a notification was issued in exercise of powers under Section 24 (1) read with Section 19(1) of the Central Sales Tax Act, 1956, to the effect that the Authority for Advance Rulings constituted under the Income Tax Act, 1961 shall also function as the Central Sales Tax Appellate Authority. However, certain difficulties have been observed in the functioning of the Authority for Advance Rulings as the Central Sales Tax Appellate Authority and the Authority has suggested some amendments to the Central Sales Tax Act, 1956, with a view to facilitate smooth functioning of the Authority. Accordingly, it is proposed to amend the Central Sales Tax Act, 1956.
2. The sailent features of the proposed amendment Bill are as follows:-
(i) amendment of Section 19 to enable the Government to appoint the Chairman and the Member (Legal) of the Authority for Advance Rulings as the Chairman and Member (Legal) of the Central Sales Tax Appellate Authority. It is also proposed to insert a new Section 19-A to provide that the proceedings before the Authority shall not be questioned or invalidated due to any vacancy or defect in the constitution of Authority. These proposals are for providing operational flexibility in the constitution and functioning of the Authority;
(ii) amendment of Section 20 to provide that appeals before the Central Sales Tax Appellate Authority lie only against the orders of the "highest appellate authority" in a State and not against the orders of the Assessing Authority. This will not only facilitate smooth functioning of the Central Sales Tax Appellate Authority, as the cases will come up before the Authority only after initial screening at State level, but will also be helpful to the dealers, as the appellate mechanism in the States will continue to remain available to them;
(iii) amendment of Section 20 to increase the time limit for filing of appeal before the Central Sales Tax Appellate Authority from forty-five days to ninety days, with the power to the Central Sales Tax Appellate Authority to condone the delay of up to sixty days, as against fifteen days at present. This is to ensure that the aggrieved persons from various parts of the country get adequate time to file appeals;
(iv) amendment of Section 20 to allow the State Governments also to file appeals before the Central Sales Tax Appellate Authority, in case they feel aggrieved against the orders of the "highest appellate authority" of the State. Presently, only dealers are entitled to file appeals before the Central Sales Tax Appellate Authority;
(v) consequential amendment has also been proposed in Section 25 to transfer proceedings pending before the Central Sales Tax Appellate Authority, which have already been filed against the orders of the authorities lower than the "highest appellate authority" in the State, back to the appellate authorities in the States.
4. The Bill seeks to achieve the above objects.
1. Short title and commencement.- (1) This Act may be called the Central Sales Tax (Amendment) Act, 2005.
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
2. Amendment of Section 19.- In the Central Sales Tax Act, 1956 (74 of 1956) (hereinafter referred to as the principal Act), in Section 19, after sub-section (2), the following sub-section shall be inserted, namely:-
"(2-A) 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 (43 of 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. Insertion of new Section 19-A.- After Section 19 of the principal Act, the following section shall be inserted, namely:-
"19-A. 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.".
4. Substitution of new section for Section 20.- For Section 20 of the principal Act, the following section shall be substituted, namely:-
‘20. Appeals.-(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 6-A read with Section 9.
Explanation.-For the purposes 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 (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.’.
5. Amendment of Section 21.- In Section 21 of the principal Act,-
(i) in sub-section (2), for the words "assessing authority", the words "highest appellate authority" shall be substituted;
(ii) in sub-section (5), for the words "appellant and to the assessing authority", the words "appellant, assessing authority, respondent and highest appellate authority of the State Government concerned" shall be substituted.
6. Amendment of Section 22.- In Section 22 of the principal Act, for sub-section (1-A), the following sub-section shall be substituted, namely:-
"(1-A) 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.".
7. Substitution of new section for Section 25.- For Section 25 of the principal Act, the following section shall be substituted, namely:-
"25. 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.".
8. Amendment of Section 26.- In Section 26 of the principal Act, the words "or Union territory" shall be omitted.