SECTION 7
REGISTRATION OF DEALERS
(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 is 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 of 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 1 [or has ceased to exist or
has failed without sufficient cause, to comply with an order
under sub-section (3-A) or with the provisions of sub-section
(3-C) or sub-section (3-E) 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.]
(5) A registered dealer may apply in the prescribed manner not later
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.
ORDER
G.S.R. 583 (E), dated 1st October, 1982 2 .-In exercise of the powers
conferred by sub-section (1) of Sec.7 of the Central Sales-tax Act, 1956 (74
of 1956), the Central Government hereby specifies the persons mentioned
in column (3) of the Schedule hereto annexed as the authorities to whom
the dealers in the State of Sikkim described in column (2) of the said
Schedule shall make application under the said section:
SCHEDULE
Description of dealer
Description of authority
1. Dealers having a single place of
business, more than one place of
business, or no fixed place of
business, in the State of Sikkim.
3(Deputy Commissioner of Commercial
'Taxes and Assistant Commissioner of
Commercial Taxes, Government of
Sikkim].
COMMENT
Scope of Sec. 7.-The Sales Tax Appellate Tribunal seems to have
misunderstood the scope of the power of the assessing authority under Sec.14(7)
of the Kerala General Sales-tax Act and under Sec. 7 of the Central Sales-tax Acc
as also the Bench decision of the Kerala High Court in Natarajan Chettiar's case.
The words "good and sufficient reasons" in the context of Sec. 14(7) of the Act only
mean "appropriate" or "suitable" or "satisfactory" or "fit" and enough or adequate
reasons for cancelling the registration. The Sales Tax Appellate Tribunal was in
1. Subs. by Act 61 of 1972, Sec.4, for "or has ceased to exist" (w.e.f. 1st April, 1973).
2. Published in the Gazette of India, Extraordinary, Pt. II, Sec. 3 (i), dated 1st October, 1982.
3. Subs. by G.S.R. 661 (E), dated 22nd August, 1983, published in the Gazette of India,
Extraordinary, Pt. II, Sec. 3 (i), dated 22nd August, 1983.
1988 (69) S.T.C. 153.
SECTION 7 _ REGISTRATION OF DEALERS 19
{(1) either on the application of the dealer to whom it has been
granted or. where no such application has been made. alter
due notice to the dealer. be amended by the authority granting
it if he is satisfied that by reason of the re stored dealer having
changed the name, place or nature of his uslness or the class
or classes of goods in which he carries on business or for any
other reason the certificate of 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 I[or has ceased to exist or
has failed without sufficient cause. to comply with an order
under sub-section (ii-A) or with the revisions of sub—section
(3-0 or sub-section (Ii-E) 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]
[5) A registered dealer may apply in me prescribed manner not later
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.
' ORDER
G.S.R. 583 (E), dated lst October, 19822.—ln exercise of the powers
conferred by subsection (1) of Sec.7 ofthe Central Sales-tax Act. 1956 (74
of 1956). the Central Government hereby specifies the persons mentioned
in column (3] of the Schedule hereto annexed as the authorities to whom
the dealers in the State of Sikkim described in column (2) of the said
Schedule shall make application under the said section:
SCHEDULE
StNo. Description or dealer Description of authority
1 2 ' 3
1. Dealers having a single place of 3[Deputy Commissioner of Commercial
business, more than one place of 'Taxes and Assistant Commissioner of
business. or no fixgd place of Commercial Taxes. Government of
business. in the State of Sikkim. Sikklmli
COMMENT
Scope of Sec. 7.—The Sales Tax Appellate ’n1bunal seems to have
misunderstood the scope of the power of the assessing authority under Sec. 14m
ofthe Kerala General Sales-tax Act and under Sec, 7 of the Central Sales-tax Act
as also the Bench decision ol‘ the Kerala High Court in Natamjan Chznmr’s case.
The words "good and sufficient reasons" in the context at Sec, 14(7) of the Act only
mean"appropr1atc" or "suitable" or "satisfacta " or “fit" and enough or adequate
. reasons for cancelling the registration. The es Tax Appellate Tribunal was in
l. Subs. by Act 61 of 1972, Seed, for "or has ceased to exist" (w.e.i. lst April, 1973).
’ 2. Published in the Gazette a/lndill, Extraordinary, Pt. 11, Sec. 3(1'), dated lst October, 1982.
-_ a. Subs. is 6.5.11, 661 (E), dated 22nd August, 1933, published in the 5mm of 1mm,
. Ext imry, Pt. 11, Sec. 3(i),darad 12nd August was.
‘ A 1988 (69) SIC. 153.
CENTRAL SALES-TAX ACT,1956
SECTION 8
error in distinguishing the judgment of the High Court in Natarajan Chettiar's case, t
by referring to a few isolated passages out of context and even without endeavouring
to understand the ratio of the decision. This is also a clear legal error. This er ror
has led to a wrong approach to the entire question and the resultant conclusion.
The Court set aside the common order of the Appellate Tribunal and remitted the
matter to the Sales Tax Appellate Tribunal for a fresh consideration n accordance
with law and in the light of the observations contained hereinabove.
8. Rates of tax on sales in the course of inter-State trade or
commerce.— 3 [(1) Every dealer, who in the course of inter-State trade or
commerce-
(a) sells to a Government any goods; or
(b) sells to a registered dealer other than the Government goods
of the description referred to in sub-section (3);
4 [shall be liable to pay tax under this Act, with effect from such date
as may be notified by the Central Government in the Official Gazette for
this purpose, which shall be two per cent. of his turnover 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, or, as the case may be, under any
enactment of that State imposing value added tax, whichever is lower:
PROVIDED THAT the rate of tax payable under this sub-section by a
dealer shall continue to be four per cent. of his turnover, until the rate of
two per cent. takes effect under this subsection.]
(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 °[at twice the
rate] applicable to the sale or purchase of goods inside the
appropriate State; 6[* * *]
(b) in the case of goods other than declared goods, shall be
calculated at the rate of 7[ten per cent.] or at the rate applicable
to the sale or purchase of such goods inside the appropriate
State, 8 [whichever is higher; and]
—9[(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 Cl. (a) or Cl. (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, 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
1. 1988 (69) S.T.C. 153.
2. Deputy Commissioner of Sales Tax (Law), Board of Revenue (Taxes), Ernakulam v. Imperial
Trading Company, 1990 (76) S.T.C. 183 at pp. 191, 192 (Ker.); Instant, Auto Colour Lab. v.
S.T.O., S.T.I. 1991 All. 15.
3.
Subs. by Act 31 of 1958, Sec.5, for sub-sections (1) to (4) (w.e.f. 1st October, 1958).
4. Subs. by the Finance Act, 2003 (32 of 2003), Sec. 162, dated 14th May, 2003.
5.
Subs. by Act 25 of 1975, Sec. 38, for "at the rate" (w.e.f. 1st July, 1975).
6.
The word "and" omitted by Finance Act, 2002, (20 of 2002), Sec. 152 (ii) (a).
7. Subs. by Act 8 of 1963, Sec.2, for "seven per cent." (w.e.f. 1st April, 1963).
8.
Subs. for words "whichever is higher" by Finance Act, 2002 (20 of 2002), Sec. 152 (ii)(b).
9. Subs. for certain words by Finance Act, 2002 (20 of 2002), Sec. 152(ii)(c).
10 CENTRAL SALES-TAX ACT, 1956 SECI'ION I
error in distinguishing the judgment of the High Court in Natcmyan Chemor's case.I
by referring to a few isolated assages out ol'context and even without endeavouring
to understand the ratio of e decision. This is also a clear legal error. This error
has led to a wron approach to the entire question and the resultant conclusion.
The Court set asi e the common order of the Ap ellate Tribunal and remitted the
matter to the Sales Tax Appellate Tribunal for a esh consideration in accordance
with law and in the light 0 the observations contained hereinabove.
8. Rates of tax on sales in the course of inter-State trade or
commerce— 3[(1) Every dealer. who in the course of inter-State trade or
commerce—
(a) sells to a Government any goods: or
(b) sells to a registered dealer other than the Government goods
of the description referred to in subsection [3):
4[shall be liable to pay tax under this Act, with efl'ect from such date
as may be notified by the Central Government in the Official Gazette for
this purpose. which shall be two per cent. of his turnover 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. or. as the case may be. under any
enactment of that State imposing value added tax. whichever is lower;
PROVIDED THAT the rate of tax payable under this sub-section by a
dealer shall continue to be four per cent. of his turnover. until the rate of
two per cent. takes effect under this subsection]
(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 5[at twice the
rate] applicable to the sale or purchase of goods inside the
appropriate State: Sl‘ " ‘l .a
(b) in the case of goods other than declared goods. shall b
calculated at the rate of 7[ten per cent.] or at the rate applicable
to the sale or purchase of such goods inside the appropriate
State. 3[whichever is higher: and]
—9[(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 Cl. (a) or Cl. {12), 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. in
fact. may not be so liable under that law.
Explanation—For the purposes of this sub—section. 3 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
. 1988(69)S.T.C. 153.
Deputy Commissioner ofSales Tax (law), Board of Revenue (Taxes), Emakulam 0. Imperial
Tradjn Company, 1990 (75) are. 103 at pp. 191, 192 (Ken); Instant, Auto Colour Lab. v.
5.1.0., 11.199] All. 15.
Subs. by Act 31 of 1953, Sec.5, for sub-sections 11) to (4) (wet. is) October, 1958).
Subs. by the Finance Act, 2003 (32 oi 2003), s“. 162, dated 140i May, 2003.
Subs. by Act 25 of 1975, See. 38, for "at the rate“ (mi. lst July, 1975).
The word "and" omitted by Finance Act, 2002. (20 of 2002), Sec.151(ii)(i).
Subs by Act a of 1963, Socl, for "seven r cent," (we! lsi A ril, 1903).
Subs. iorwosds "whichever is higher“ g; Finance Act, 2002 En 011002 , Sec.152 (mo).
Subs. for certain words by Finance An, 2002 (20 of 2002), Sec. 526%).
.m-I
Wng‘P‘PE"
SECTION 8 RATES OF TAX ON SALES IN THE COURSE OF INTER-STATE
21
TRADE OR COMMERCE
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:]
1[(2-A)[*
*
*
*
*]
2 [(3) The goods referred to in Cl. (b) of sub-section (1)--
3 [(3) *
*
*
*
*
*]
(b) 4[* * *] are goods of the class specified in the certificate of
registration of the registered dealer purchasing the goods as
being intended for resale 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 5[in the
tele- communications network or] in mining or in the generation
or distribution of electricity or any other form of power;
(c) 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:
(d) 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 6[* * * *] Cl.(b) or for the packing of
any containers or other materials specified in the certificate of
registration referred to in Cl. (c).
(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 a 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:]
7 [PROVIDED THAT the declaration referred to in C1.(a) is furnished
within the prescribed time or within such further time as that authority
may, for sufficient cause. permit.]
3 [(5) Notwithstanding anything contained in this section. the State
Government may, 9[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,-
1. Sub-section (2-A) omitted by Finance Act, 2002 (20 of 2002), Sec. 152(iii)
2. Subs. by Act 31 of 1958, Sec.5, for sub-sections (1) to (4) (w.e.f. 1st October, 1958).
3. Clause (a) omitted by Act 8 of 1963, Sec.2 (w.e.f 1st April, 1963).
4. Certain words omitted by Sec.2, ibid.
5. Ins. by Finance Act, 2002 (20 of 2002), Sec. 152(iv).
6. The words, brackets and letter "CI. (a) or" omitted by Act 8 of 1963, Sec.2 (w.e.f. 1st April,
1963).
7. Ins. by Act 61 of 1972, Sec.5 (w.e.f. 1st April, 1973).
8. Subs. by ibid., for sub-section (5).
9. Ins. by Finance Act, 2002 (20 of 2002), Sec. 152 (v)(a).
r
i. t
MON 3 RATES or TAX ON SALES IN THE COURSE or lNTER-STATE 21
i; TRADE OR COMMERCE
“ 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 goodszl
l[(2_A)[» o a . O]
2“3) The goods referred to in Cl. (b) of subsection (1)—
Sua) t t o t t t]
(b) 4P ‘ '] are goods of the class 5 ecified in the certificate of
registration of the registered dca er purchasing the goods as
being intended for resale by him or subriect to an rules made
by the Central Government in this beha i', for use y him in the
manufacture or processing of goods for sale or [in the
telecommunications network or] in mini or in the generation
or distribution of electricity or any other arm of power:
(c) 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:
((1) 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 51‘ ‘ ‘ ‘] Ci.(b) or for the packing of
any containers or other materials specified in the certificate of
registration referred to in Cir (c).
(4) The provisions of subsection (1) shall not apply to any sale in the
worst: 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 sigied b the registered dealer to
whom the goods are sol , ntaini bed articul '
inapreseribedforrn Ed» ,. , 0 ~
or
(b) if the goods are sold to the Government, not being a re istered
dealer. a certificate in the prescribed form duly tilled an signed
by a duly authorised officer of the Government]
7[PROVlDED THAT the declaration referred to in C110) is furnished
within the prescribed time or within such further time as that authority
may. for suflicient cause. permit-l
8[(5) Notwithstanding anything cbntained in this section, the State
Government may‘ 9[on the fulfilment of the requirements laid down in
subsection”) 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.—
Sub-section (Z-A) omitted by Finance Act, 2M2 (20 of 2002), 52c 152(1'1'i')
Subs. by Act 3| 0| 1958, Sech, for sub-sections (l) to (4) (wet. is! October, 1958),
Clause (a) omitted by Act 8 of 1963, 5K1 (w.c.f lst April, l963}.
Certain words omitted by 59:2. ihld,
Ins. by Finance Act, 1002 (20 of 2002), Sec. 152(iu).
The words, brackets and letter "Cl. (ill or" omitted by Act 8 of 1963, Secl (wet. lst April,
1963).
Ins. by Act 6] 0(1972,Seci5(w e.f. 15! April, 1973),
Subs. by I'biuL, for sub-section (5),
1113. by Finance Act, 2001 (20 of 2002), Sec. 151(vliu)r
perry-4 grasses,»
CENTRAL SALES-TAX ACT,1956
SECTION 8
(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, 'Ito 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 2 [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 glass
of persons as may be specified in the notification, no tax under
this Act shall he 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.]
3 1(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,
re-conditioning, 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;]
(7) The goods referred 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 4[prescribed authority
referred to in sub-section (4) a declaration in the prescribed manner on the
prescribed form obtained from the authority specified by the Central
Government under sub-section (6)], duly filled in and signed by the
registered dealer to whom such goods are sold.
Explanation.—For the purposes of sub-section (6), the expression
"special economic zone" has the meaning assigned to it in Cl. (iii) to
Explanation 2 to the proviso to Sec. 3 of the Central Excise Act, 1944 (1 of
1944).
COMMENTS
Certificate of registration.—The blending of ore in the course of loading
through the mechanical ore handling plant amounted to "processing of ore within
the meaning of Sec. 8 (3) (b) and Rule 13 of the Central Sales-tax Act and the
mechanical ore handling plant fell within the description of "machine y, plant,
equipment" used in the processing of ore for sale. It must, therefore, follow as a
1.
Ins. by Finance Act, 2002 (20 of 2002), Sec. 152 (v)(b).
2.
Ins. by ibid.
3. Subs. by Finance (No. 2) Act, 2004, (23 of 2004), Sec. 118, dated 10th September, 2004.
4. Subs. for the words, brackets and figures "authority referred to in sub-section (6) a
declaration in the prescribed manner on the prescribed form obtained from the authority
referred to in sub-section (5)", by Finance (No. 2) Act, 2004 (23 of 2004), Sec. 118, dated 10th
September, 2004.
22 CENTRAL SALES-TAX ACT, 1956 SECTION B
(n) 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. 1[to a registered
dealer or the Govemment] 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:
(17) that in respect of all sales of code or sales of such classes of
goods as may be specified in e notification, vghich are made.
in the course of inter—State trade or commerce [to a registered
dealer or the Government} by an dealer having his place of
business in the State or by any c ass 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 ill or sub-section (2) as may be mentioned in the
notification]
We) Notwithstanding anythin contained in this section. no tax under
this Act shall be payable by any dea er in respect of sale of any goods made
by such dealer. in the course of inter»$tate trade or commerce. to a
registered'dealer for the purpose of setting up. operation. maintenance.
manufacture. trading. production, processing. assembling. repairing.
reconditioning. re- engineering. packagng or for use as packing material
or packing accessories in an unit located in an special economic zone. or
for development, operation and maintenance 0 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 behalfci 1‘
(7] The goods referred 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 oods made in the course of inter-State tra e or commerce unless
the dea er selling such oods furnishes to the [prescribed authority
referred to in sub-section 4) a declaration in the prescribed manner on the
prescribed form obtained from the authority specified by the Central
Government under sub—section (6)1, duly filled in and signed by the
registered dealer to whom such goods are sold. .
Ewlanatiort—For the purposes of sub-section (6). the ex ression
"special economic zone" has the meaning assigned to it in C. [iii] to
Explanation 2 to the proviso to Sec. 3 of the Central Excise Act. 1944 (l of
1944).
COMMENTS
Certificate of registration—The blending of ore in the course of loading
through the mechanical are handling plant amounted to "processing of are within
the meaning of Sec. 8 (3) (b) and Rule i3 of the Central Sales-tax Act and the
mechanical orc handling plant fell within the description of "machine?" plant,
equipment" used in the processing of ore for sale. it must. therefore. {01 w as a
1 his by Finance Act, 2002 (20 (#1002), Sect 152(1))(b).
2, Ins. by ibid.
3. Subs. by Finance (No. 2) Act, 2004, (23 of 2004), Set. 118, dated 10th September, 20%
4 Subs. for the words, brackets and figures "authority referred in in subsection (6) a
declaration in the prescribed manner on the pmuribed form obtained from the authority
referred in in sub-section (5)", by Finance (No. 1) Act, 2004 (23 of 2004), Sec. 118, dated 10th
September, 2004.
SECTION 8 RATES OF TAX ON SALES IN THE COURSE OF INTER-STATE
23
TRADE OR COMMERCE
necessary corollary that if any items of goods were purchased by the assessee as
being intended for use as "machinery, plant, equipment, tools, spare parts, stores,
accessories, fuel or lubricants" for the mechanical ore handling plant, they would
be eligible for inclusion in the certificate of registration of the assessee.
Scope .—The requirement of Sec. 8 (3)(b) and Rule 15 is that the goods must
be purchased for use "in mining" and not used "in the business of mining". It is
only the item of goods purchased by the assessee for the use in the actual mining
operation which are eligible for inclusion in the certificate of registration under this
head and these would not include goods purchased by the assessee for use in the
operation subsequent to the stacking of the ore at the mining site. Where a dealer
is engaged both in mining operation as also in processing the mine ore for sale, the
two processes being inter-dependent, it would be essential for carrying on the
operation of processing that the ore should be carried from the mining site meant
for sale, the two processes being inter-dependent, it would be essential for carrying
on the operation of processing that the ore should be carried from the mining site
where the mining operation comes to end to the place where the processing is carried
on and that would clearly be an integral part of the operation of processing, and if
any machinery, vehicles, barges and other items of goods are used for carrying the
ore from the mining site to the place of processing, they would clearly be goods used
in processing ore for sale. 2
Estoppel—Applicability of.—It appears that a circular was issued by the
Additional Sales Tax Commissioner, U.P., dated 26th August, 1992 in which it was
mentioned that while calculating the Central Sales-tax the additional sales-tax will
not be taken into consideration. Since the department itself had decided that the
additional sales tax under the U.P., Sales-tax Act will not be taken into consideration
for calculating the Central Sales-tax, it is not open to the department, as long as
this circular is in force, to urge that additional sales-tax has also to be added while
calculating the Central Sales-tax. The department having taken a particular stand
through the aforesaid circular cannot be permitted to turn around and deny the
benefit to the applicant so long as this circular is in force. However, once the circular
is withdrawn the additional tax has to be added from the date of such with4rawal. 3
Rate of tax payable under Sec. 8 (2) (b).—The rate of tax under Sec. 8 (2) of the
Central Sales-tax Act cannot be confined to the rate contemplated under Sec. 15
alone. The tax under Sec. 8 of the Central Sales-tax Act has to be paid at a rate
determined on the combined reading of Secs. 15 and 16 of the Haryana Sales-tax
Act. 4
Public interest—Explained.—The public interest, as referred to in sub-section
(5) of Sec. 8 of the Act, will certainly include the public interest of the State
concerned. If the reduction of the rate of tax results in increase of revenue and of
industrial activities, providing employment in the industry as well as in the mining
of limestone, it cannot be said that the notification was not issued in the public
interest. 5
No public interest in withholding the benefit for short period—Notification
quashed.—The notification of 7th May, 1990 issued under the Central Sales-tax Act
was withdrawn on 26th July, 1991. In the light of this fact, the Apex Court said
that there was no pubic interest in withholding the benefit of the Incentive Scheme
granting exemption from Central Sales-tax from oil industries for the short period
of 7th May, 1990 to 26th July, 1991. In the case of the notification of 7th May, 1990
1. Chowgule & Co. (P) Ltd. v. Union of India, 1981 (47) S.T.C. 124 at p. 132: A.I.R. 1981 S.C. 1014;
Hira Sugar Industries v. C.S.T., 1993 S.T.J. 209 (All.).
2. Ibid. at p. 132 : A.I.R. 1981 S.C. 1014; Hira Sugar Industries v. C.S.T., 1993 S.T.J. 209 (All.).;
Bahubali Plastic (P) Ltd. v. State of U.P., 1993 S.T.J. 8 (All.); N.J. Devani Builders Pvt. Ltd. v.
S.T.O., 1995 (99) S.T.C. 506 (Guj.).
3. U.P. Ceramics & Potteries Ltd. v. CS.T.,S.T.1. 1992 All. 443 at pp. 444, 445.
4. Sidwal Refrigeration Ind. (P.) Ltd. v. State of Punjab, 1993 (89) S.T.C. 97 at pp. 99, 100, 101
(P.& H.); Tamil Nadu Small Scale Industries, Co-operative Society Ltd. v. State of Tamil Nad u,
1994 (19) S.T.J. 99 at p. 100.
5. Shree Digvijay Cement Co. Ltd. v. State of Rajasthan, A.I.R. 2000 S.C. 680 atp. 690.
SECTION B RATES OF TAX ON SALES IN THE COURSE OF INTER-STATE Z1
TRADE 0R COMMERCE
necessary corollary that ii‘ any items 0! goods were purchased by the sssessee as
being intended for use as 'machine ..plant equipment tools. spare parts stores.
accessories fuel or lubricants“ for t e mechankal ore handling plant. they would
be eligible for inclusion in the certificate of registration of the assesses
Scope .—The requirement oi’ Sec 8 [3)(b) and Rule 15 is that the goods must
be purchased for use "in mining" and not used "in the business of mining'l It is
only the item of goods purchased by the assesses {or the use in the actual mining
operation which are eligible for inclusion in the certificate of registration under this
head and these would not include goods purchased by the assessee for use in the
(mention subsequent to the stacking of the are at the mining site. Where a dealer
is engaged both in mining operation as also in processing the mine ore for sale. the
two processes being interdependent it would be essential for carrying on the
operation of processing that the ore should be carried from the mining site meant
for sale. the two processes being inter-dependent. it would be essential for carrying
on the operation of processing that the ore should be carried from the mining site
where the mining operation comes to end to the place where the processing is carried
on and that would clearly be an integral pan of the operation of processing. and ii
any machinery. vehicles. barges and other items of goods are used for carrying the
ore from the mining site to the place of processing. they would clearly be goods used
in processing are for sale.2
Estoppel—Applicability 0L~lt appears that a circular was issued by the
Additional Sales Tax Commissioner. U.P.. dated 26th August. 1992 in which it was
mentioned that while calculating the Central Sales-tax the additional sales-tax will
not be taken into consideration. Since the department itself had decided that the
additional sales taxunder the U.P.. Sales-tax Act will notbe taken into consideration
for calculating the Central Sales-tax. it is not open to the department. as long as
this circular is in force. to urge that additional sales-tax has also to he added while
calculating the Central Sales-tax. The department having taken a particular stand
through the aforesaid circular cannot be permitted to turn around and deny the
benefit to the applicant so long as this circular is in force. However. once the ctrculaE
is withdrawn the additional tax has to be added from the date of such withdrawal.
Rate of tax payable under Sec. 8 i2) (bi—The rate ol tax under Sec. 8 (2] of the
Central Sales-tax Act cannot be confined to the rate contemplated under Sec. 15
alone, The tax under Sec. 8 of the Central Sales-tax Act has to be paid at a rate
d8l€4flflin8d on the combined reading of Secs. 15 and 18 of the Haryana Sales-Lax
Act.
Publicinterest—Explainedi—The public interest. as referred to in sub-section
i5! of See. 8 of the Act. will certainly include the public interest of the State
concerned. if the reduction of the rate of tax results In increase of revenue and of
i industrial activities. providing employment in the industry as well as in the mining
of limestone. it cannot be said that the notification was not issued in the public
interest“ ,
No public interest in withholding the benefit for short period—Notification
quashedrThe notification of 7th May. 1990 issued under the Central Sales-tax Act
was withdrawn on 26th July. 1991. in the light of this (act. the Apex Court said
that there was no pubic interest in withholding the benefit of the incentive Scheme
granting exemption from Central Sales tax from oil industries for the short period
I 81'7th May. 1990 to 26th July. 1991 in the case ofthe notification of 7th May l990
ihowgulekCo. ( 5 Ltd v. Urtim’ioflndia,1981l (M47)..STC 124atp. 132: A l. R. 198155. 1014;
Hira Sugar industries 1) C. S T, 19935
2. Ilnd. at 1321AIK1981 .C. lOl-i; ta 25v at Alllndustt'iesv. C.S.T. 1993 ST] 209 (All),
Bahuba Y Plastic (P) Ltd. tr. State otU P..1993E.T..] 8 (All. ); NJ. Devani Builders Pvt Ltd v
5...,TO 1995(99)S.TC. 506(Cuj).
3. UP. Ceramics & Potteries Ltd. v. C.S.T.,5,T.l. 1992 All. 443 at pp. 444, 445.
' i. Sidwal Refrigeration Ind. (E) Ltd. E. State oi Punjab, 1993 (39) S,T.C. 97 at pp. 99, 100, 101
(F.&H.);Tamii NaduSrnall Scalelndustries,Co—operative50dety Ltd. It Stated Tamil Nadir.
1994(19)s.'r.1.99 at p. 100,
a Shree Digviiay Cement Cor mi u. 5m: of Rajasthan, MR. 2000 so 680 mp. 690.
SECTION 8 RATES OF TAX ON SALES IN THE COURSE OF INTER-STATE
23
TRADE OR COMMERCE
necessary corollary that if any items of goods were purchased by the assessee as
being intended for use as "machinery, plant, equipment, tools, spare parts, stores,
accessories, fuel or lubricants" for the mechanical ore handling plant, t j1-ley would
be eligible for inclusion in the certificate of registration of the assessee.
Scope .—The requirement of Sec. 8 (3)(h) and Rule 15 is that the goods must
be purchased for use "in mining" and not used "in the business of mining". It is
only the item of goods purchased by the assessee for the use in the actual mining
operation which are eligible for inclusion in the certificate of registration under this
head and these would not include goods purchased by the assessee for use in the
operation subsequent to the stacking of the ore at the mining site. Where a dealer
is engaged both in mining operation as also in processing the mine ore for sale, the
two processes being inter-dependent, it would be essential for carrying on the
operation of processing that the ore should be carried from the mining site meant
for sale, the two processes being inter-dependent, it would be essential for carrying
on the operation of processing that the ore should be carried from the mining site
where the mining operation comes to end to the place where the processing is carried
on and that would clearly be an integral part of the operation of processing, and if
any machinery, vehicles, barges and other items of goods are used for carrying the
ore from the mining site to the place of processing, they would clearly be goods used
in processing ore for sale. 2
Estoppel—Applicability of.—It appears that a circular was issued by the
Additional Sales Tax Commissioner, U.P., dated 26th August, 1992 in which it was
mentioned that while calculating the Central Sales-tax the additional sales-tax will
not be taken into consideration. Since the department itself had decided that the
additional sales tax under the U.P., Sales-tax Act will not be taken into consideration
for calculating the Central Sales-tax, it is not open to the department, as long as
this circular is in force, to urge that additional sales-tax has also to be added while
calculating the Central Sales-tax. The department having taken a particular stand
through the aforesaid circular cannot be permitted to turn around and deny the
benefit to the applicant so long as this circular is in force. However, once t)Ze circular
is withdrawn the additional tax has to he added from the date of such withdrawal. 3
Rate of tax payable under Sec. 8 (2) (b).—The rate of tax under Sec. 8 (2) of the
Central Sales-tax Act cannot be confined to the rate contemplated under Sec. 15
alone. The tax under Sec. 8 of the Central Sales-tax Act has to be paid at a rate
determined on the combined reading of Secs. 15 and 16 of the Haryana Sales-tax
Act. 4
Public interest—Explained.--The public interest, as referred to in sub-section
(5) of Sec. 8 of the Act, will certainly include the public interest of the State
concerned. If the reduction of the rate of tax results in increase of revenue and of
industrial activities, providing employment in the industry as well as in the mining
of limestone, it cannot be said that the notification was not issued in the public
interest. 5
No public interest in withholding the benefit for short period—Notification
quashed.—The notification of 7th May, 1990 issued under the Central Sales-tax Act
was withdrawn on 26th July, 1991. In the light of this fact, the Apex Court said
that there was no pubic interest in withholding the benefit of the Incentive Scheme
granting exemption from Central Sales-tax from oil industries for the short period
of 7th May, 1990 to 26th July, 1991. In the case of the notification of 7th May, 1990
1. Chowgule & Co. (P) Ltd. v. Union of India, 1981 (47) S.T.C. 124 at p. 132: A.I.R. 1981 S.C. 1014;
Hira Sugar Industries v. C.S.T., 1993 S.T.J. 209 (All.).
2. Ibid. at p. 132 : A.I.R. 1981 S.C. 1014; Hira Sugar Industries v. C.S.T., 1993 S.T.J. 209 (All.).;
Bahubali Plastic (P) Ltd. v. State of U.P., 1993 S.T.J. 8 (All.); N.J. Devani Builders Pvt. Ltd. v.
S.T.O., 1995 (99) S.T.C. 506 (Cuj.).
3.
U.P. Ceramics & Potteries Ltd. v. C.S.T.,S.T.I. 1992 All. 443 at pp. 444, 445.
4. Sidwal Refrigeration Ind. (P.) Ltd. v. State of Punjab, 1993 (89) S.T.C. 97 at pp. 99, 100, 101
(P.& H.); Tamil Nadu Small Scale Industries, Co-operative Society Ltd. v. State of Tamil Nadu,
1994 (19) S.T.J. 99 at p. 100.
5. Shree Digvijay Cement Co. Ltd. v. State of Rajasthan, A.I.R. 2000 S.C. 680 at-13. 690.
3mlON B RATES OF TAX ON SALES IN THE COURSE OF INTERSTATE Z1
TRADE 0R COMMERCE
necessary corollary that if any items of goods were purchased by the assessee as
being intended {or use as "machinery. plant. equipment. tools. spare parts. stores.
accessories. fuel or lubricants" for e mechanical ore handling plant. they would
be eligible for inclusion in the ceriiilcate of registration oi the assessee.
Scope .—The requirement of Sec. 8 (31(1)) and Rule 15 is that the goods must
be purchased for use "in mining" and not used "in the business of mining“. It is
only the item ol‘ goods purchased by the assessee for the use in the actual mining
operation which are eligible for inclusion in the certificate oi’ registration underthis
head and these would not include goods purchased by the assessee {or use in the
operation subsequent to the stacking of the are at the mining site. Where a dealer
is engaged both in mining operation as also in processing the mine ore for sale. the
two processes being inter-dependent. it would be essential for can'ying on the
operation of processing that the ore should be carried from the mining site meant
{or sale. the two processes being inter-dependent. it would be essential for carrying
on the operation of processing that the ore should be carried from the mining site
where the mining operation comes to end to the place where the processing is carried
on and that would clearly be an integral part of the operation of processing. and if
any machinery. vehicles. barges and other items of goods are used for carrying the
ore from the mining site to the place of processing. they would clearly be goods used
in processing are for sale.
Estoppel-Applicability oi.~lt appears that a circular was issued by the
Additional Sales Tax Commissioner. U.P.. dated 26m August. 1992 in which it was
mentioned that while calculating the Central Sales-tax the additional sales-tax will
not be taken into consideration. Since the department itself had decided that the
additional sales tax under the U.P.. Salcsntax Act will not be taken into consideration
for calculating the Central Sales-tax. it is not open to the department, as long as
this circular is in force. to urge that additional sales-tax has also to be added while.
calculating the Central Sales-tax. The department having taken a particular stand
through the aforesaid circular cannot be permitted to tum around and deny the
benefit to the applicant so long as this circular is in force. However. once the circula
is withdrawn the additional tax has to be added from the date of such withdrawal.
Rate of tax payable under Sec. 3 (2) (bk—The rate of tax under Sec. 8 (2) of the
Central Sales-tax Act cannot be confined to the rate contemplated under Sec, 15
alone. The tax under Sec. 8 of the Central SalesAtax Act has to be paid at a rate
determined on the combined reading of Secs. 15 and 16 of the Haryana Sales-tax
Act.
Public interesl~Explained.—The public interest. as referred to in sub-section
[5) of Sec. 8 of the Act. will certainly include the public interest of the State
concerned. lithe reduction of the rate of tax results in increase of revenue and of
industrial activities. providing employment in the industry as well as in the mining
of limest no. it cannot be said that the notification was not issued in the publk~
interest.
No public interest in withholding the benefit for short period—Notification
qu'aslred.—-The notification of 7th May. 1990 issued under the Central Sales-tax Act
was wiLhdrawn on 26th July. 1991. in the light of this fact, the Apex Court said
that there was no pubic interest in withholding the benefit of the incentive Scheme
granting exemption from Central Sales-tax from oil industries for the short period
of7i.h May. l990 to 26th July. 1991. In the case of the notification 0! 7th May. 1990
.1. chwgule ECO. (P) Ltd. 111 Union of India, 19131 (47) 510124 at p. 131: AlR. 1931 5.01014;
, Hira Sugar industries 11. c.s.1‘., 1993 5.11. 209 (A11).
2*. 11.11. at . 132 : Ark 1951 5.5, 1014; Him Su ar Industries 11. 05.1., 1993 5.1.1.2091111 -
» Bahuba 1 Plastic (P) Ltd v. State of u.1>., 1993 r], a (1111.); NJ. Devani Builders Pvt. 1.1a. .
6.7.0., 1995 (991511: 506 (Gui. 1.
up. Ceramics i: Potteries Ltd.v.C15.T.,S.T.l. 1992 All. 443 at p 444,145.
Sidwal Refrigeration ind. (P.) Ltd. u. s to of Punjab, 1993 189 SIC. 97 at pp. 99, 100, 101
(P.&H.);TamilNadu$mall Scalelndusb'les.Co—operaiive Society LtdAv. 51m orrmu Nadu.
1994 (19) 5.1.1. 99 at p. 100.
, ‘5 Shree Digvijay Cement Co. Ltd. v. sure of Rajasthan, A.l.K 2000 SC. 680 at‘p. 690.
Fl.“
CENTRAL SALES-TAX ACT, 1956
SECTION 8-A
under the Rajasthan Sales Tax Act, no subsequent notification has been issued to
restore the benefit of the scheme to oil extraction industries. The rationale,
therefore, on the basis of which the notification of 7th May, 1990 under the Central
Sales Tax Act was set aside, is not available while considering the notification of
7th May. 1990 under the Rajasthan Sales Tax Act. '
Under notification case of exemption clearly made out.—Liability to pay tax
arose on commencement of production and business on 10th January, 1984
whereafter exemption from payment of sales tax was claimed under the notification.
Without regard to the fact whether the assessing authority was entitled to go behind
the certificate of eligibility issued by the Directorate of Industries, the entitlement
of the respondent for exemption from payment of tax under the notification was
clearly made out. '
3 [8-A. 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:
rate of tax x aggregate of sale prices .
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-
(i) within a period of three months from the date of delivery
of the goods, in the case of goods returned before the 44th
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 price.]
1.
State of Rajasthan v. Mahaveer Oil Industries, AIR. 1999 S.C. 2302 at p. 2305: 1999 (4) S.C.C.
357; Digvijay Cement Co. Ltd. v. State of Rajasthan, 1999 (4) S.C.C. 330 at p. 330.
2.
Commissioner of Sales Tax, M.P. v. Madhya Bharat Papers Ltd., A.I.R. 2000 S.C. 667 at pp.
670, 671 : J.T. 2000 (1) S.C. 174.
3.
Ins. by Act 28 of 1969, Sec.5 (retrospectively).
14 CENTRAL SALES-TAX ACT, 1956 SECHON S-A
under the Rajasthan Sales Tax Act. no subsequent notification has been issued to
restore the benefit of the scheme to oil extraction industries. The rationale.
therefore. on the basis of which the notification of 7th May. 1990 under the Central
Sales Tax Act was set aside. is not available while considering the notification of
7th May. 1990 under the Rajasthan Sales Tax Act.1
Under notification case or exemption clearly made out—Liability to pay tax
arose on commencement of production and business an 10th January. 1984
whereafter exemption from payment of sales tax was claimed under the notification.
Without regard to the fact whether the assessing authority was entitled to go behind
the certificate of eligibility issued by the Directorate of industries. the entitlement
of the respondent for exemption from payment of tax under the notification was
clearly made out.
3“LA. Determination of trimmer—(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:
rate of tax x aggregfle of sale prjg§ _
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—
{0 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. 1965.
(it) 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. rte-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 (ll. in determining the
turnover of a dealer for the purposes of this Act. no deduction shall be made
from the aggregate of the sale price]
1. State of Rajasthan v. Maliaveer on industries, A.I.R. 1999 so m2 3: .205: 1999 (4; s.c.c.
357; Digvi y Cement Co. Lthv. State of Rajasthan, 1999 (4) s.c.c. 3 at p. 330.
2. Commissioner of Sales Tax, Ml". x». Madhya Bhamt Papers Ltd. R. 2000 s.c. 667 at pp.
670,671:].T.2000(1)S.C.174.
3. ins. by A1328 0; 1969, Sees (retrospectively),
SECTION 9
LEVY AND COLLECTION OF TAX AND PENALTIES
COMMENT
Trade discount.—The amount allowed as trade discount could not be included
in the taxable turnover. 1
2 [ 3 [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 Cl. (a) or Cl. (b) of Sec.
3 shall be levied by the Government of India and the tax so levied shall be collected
by that Government in accordance with the provisions of sub-section (2), in the State
from which the movement of the goods commenced:
4[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 Sec. 6. the tax shall be levied and collected-
(a) where such subsequent sale has also 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 CI. (a) of sub-section (4) of Sec.
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.]
(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
5 [interest or penalty], payable by a dealer under this Act as if the tax or
41interest or penalty] payable by such a dealer under this Act is a:tax or
4 1interest or penalty] payable under the 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, e [refunds, re-assess, penalties) 7 1charging 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 provision for all or any of the matters specified in
this sub-section.
1. Deputy Commissioner of Agricultural Income-tax, and Sales-tax (Law) Board of Revenue
(Taxes), Ernakulam v. Aluminium Industries Ltd., Kundara, A.I.R. 1980 S.C. 839 at p. 839.
2. Subs. by Act 31 of 1958, Sec. 6, for the original Sec. 9 (w.e.f. 1st October, 1958).
3. Subs. by Act 28 of 1969, Sec. 6, for Sec. 9 (retrospectively).
4. Subs. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 6 (w.e.f. 7th September,
1976).
5. Subs. by Finance Act, 2000 (No. 10 of 2000), Sec. 1 19 for "penalty" (w.e.f. 12th May, 2000).
6. Subs. by Act 61 of 1972, Sec. 6, for "refunds, penalties" (w.e.f. 1st April, 1973).
7. Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 6 (w.e.f. 7th September,
1976).
‘ mlON 9 LEVY AND COLLECTION OFTAX AND PENALTIES 15
COMMENT
Trade discount.—The amount allowed as trade discount could not be included
in the taxable tumuver.
2I3I9J. 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
liner-State trade or commerce, whether such sales fall within Cli (a) or Cl. (b) of Sec.
fishall be levied by the Covemment of India and the tax so levied shall be collected
by that Government in accordance with the provisions of sub-section (2), in the State
from which the movement of the goods commenced:
”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 some goods and being also a sale which does not fall
within sub-section (2) of Sec. 6, the tax shall be levied and collected—
10} where such subsequent sale has also 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 Cl. (:1) of sub-section (4) of Sec.
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]
(2] Subject to the other provisions of this Act and the rules made
thereunder. the authorities for the time being empowered to assess.
Xe-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. I've-assess. collect and enforce payment of tax. including any
5]interest or penalty]. payable by a dealer under this Act as if the tax or
“unionist or penalty] payable by such a dealer under this Act is a’tax or
4{interest or penalty] payable under the 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 oi‘the State; and the provisions of such law,
including provisions relating to returns. provisional assessment. advance
payment of tax. registration of Lhe 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 lax in the event of the dissolution of such firm or
partition of such famil l recovery of tax from third parties. appeals. reviews.
, aevisionsmefcrcnccs. lrefunds. re-assess. penalties) 7Ichargingorpayment
bfinterest]. compounding of offences and treatinent of documents furnished
:1 bye dealer as confidential. shall apply accordingly:
‘ PROVIDED THAT if in any State or part thereof there is no general
halos—tax law in force. the Central Govemmeni may by niles made in this
this sub—section.
‘ Deputv Commissioner of Agricultural Incumeiax. and Salestax (law) Board of Revenue
(Taxes), Ernakulam v. Aluminium Industries ml, Kundara, Am 19le sc. 339 at p. 839.
Subs. by Act 31 of 1955, Sec, o, {m the original Sec. 9 (wet. lstOciober, 1955).
Subs. by Act 23 of 196‘), Sec. 6, for Sec. 9 (retrospectlvely).
53:5). by Central Saleslax (Amendment) An, 1975 (103 of 197m, Sec. 6 (ml. 7m September,
1 a .
Subs. by Finance Act, 2000 (No. 10 of zonal, Sec. 119 for "penalty" (w.eif.12th May, 2000),
Subs. by Act 61 of 19715.2(. 6, for "refunds, pennlues" (wet. 15! April, 1973).
. h; by Central Sales-Lax (Amendment) Act, 1976 (103 of 1976), Sec. 5 (wet. 7m September.
1 a).
CENTRAL SALES-TAX ACT,1956
SECTION 9
1 [(2-A) All the 2 [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 punishment for an offence but
excluding the provisions relating to matter provided for in Sees. 10 and 10-A
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 process 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.]
3 [(2-B) 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 clue 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.]
(3) The proceeds in any financial year of any tax, 4 [including any
interest or penalty], levied and collected under this Act in any State (other
than a Union ten-itory) on behalf of the Government of India shall be
assigned to that State and shall be retained by it; and the proceeds
attributable to Union territories shall form part of the Consolidated Fund
of India.]
COMMENTS
Imposition of penalty.—It is possible that even where the incorrectness of the
return is claimed to be due to want of care on the part of the assessee and there is
no reasonable explanation forthcoming from the assessee for such want of care. the
Court may, infer deliberations and the return may be liable to be branded as a false
return. But where the assessee does not include a particular item in the taxable
turnover under a bona . fide belief that he is not liable so to include it. it would not
be right to condemn the return as a "false" return inviting imposition of penalty.
Therefore, in the instant case, it was held that the assessee could not be said o
have filed "false" returns when it did not include the amount of freight in the taxable
turnover shown in the returns and the Assistant Commissioner of Sales-tax was
not justified in imposing penalty on the assessee under Sec. 43 of the Madhya
Pradesh General Sales-tax Act, 1958 and Sec. 9, sub-section (2) of the Central
Sales-tax Act, 1956. '
Refund of tax not allowed.—Inspite of the order of the Apex Court. the
appellant has not produced any material to indicate that the burden of the tax was
not passed on to the consumers, so that the appellant could claim refund of the tax
which was paid under protest. This alone is sufficient to disentitle the appellant to
claim the refund after the decision in Ma fatted Industries Ltd. v.Union of India. 6
1. Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 6 (w.e.f. 7th September,
1976)..
2.
Subs. by Finance Act, 2000 (No. 10 of 2000), Sec. 119, for the words "provisions relating to
offences and penalties" (w.e.f. 12th May, 2000).
3.
Ins. by Finance Act, 2000 (No. 10 of 2000), Sec. 119.
4.
Subs. by ibid, for "including any penalty".
5.
Cement Marketing Co. of India Ltd. v. Assistant Commissioner of Sales-tax, Indore, A.I.R.
1980 S.C. 346 at p. 348.
6.
J.T. 1999 (4) S.C. 283; Bombay Tyres International Ltd. v. Collector of Central Excise, Indore,
LT. 1998 (4) S.C. 437 at p. 437.
26 CENTRAL SALES~TAX ACT. 1956 SECTION 9
1[(Z-A) All the 2[provisions relating to offences. interest and penalties]
Including provisions relating to penalties in lieu of prosecution for an
ofl‘ence or in addition to the penalties or punishment for an offence but
excluding the provisions relating to matter provided for in Sees. 10 and lO-A
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 process connected with
such assessment. re-assessment. collection or enforcement of payment as
if the tax under this Act were a tax under such sales~mx law.‘
3[(2*B] lf 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 [or 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.]
(3) The proceeds in any financial year of any tax. 4[including any
interest or 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
attributable to Union territories shall form part of the Consolidated Fund
of india.l
COMMENTS
imposition ofpenalty.—It is possible that even where the incorrectness or the
return is claimed to be due to want of care on the part of the assessee and there is
no reasonable explanation forthcoming from the assessee for such wanl ofcare. the
Court may. inier deliberations and the return may be liable in he branded as a false
return. But where the assessee does not include a particular item in the taxable
turnover under a bonnflde belief that he is not liable so to include it. it would not
be right to condemn the return as a "false“ return inviting imposition of penalty.
Therefore. in the instant case. it was held that the assessce could not be said to
have tiled "false" returns when it did not include the amount of freight in the taxable
rumover shown in the returns and the Assistant Commissioner of Sales-tax was
not justified in imposing penalty on the assessee under Sec 43 of the Madhya
Pradesh General Sales»tax Act. 1958 and Sec. 9. sub-section [2] of the Central
Sales-tax Act. 1956.5
Refund of lax not allowedilnspite of the order of the Apex Court. the
appellant has not produced any material to indicate that the burden of the tax was
not passed on to the consumers. so that the appellant could claim refund ofthe tax
which was paid under protest. This alone is sufficient to disentitle the appellant to
claim the refund after the decision in Mnfarini Industries Ltd. v.Union of India.6
1. $63), Central Sales-tax (Amendment) Act, 1976 (103 0(1976), Sec. 6 (Wei. 7th September,
Subs. by Finance Act, 2000 (No. li) of 2000), Sec. “9. for the words "provisions relating to
offences and penalties" (wet. 12th May, 2000).
Ins. by Finance Act, 2000 (No. 10 of 2000). Sec. ll9.
Subs. by x‘bid. ior"including any penalty".
Cement Marketing Co. of India Ltd. 1). Assistant Commissioner of Sales-tax, Indore, ALRi
1980 sc. 346 «mm.
yr, 1999 (4) ac. 233; Bombay Tyres international Ltd, a. Collector at Central Excise, Indore.
1.7. 1998 (4) 511.437 atp. 43 .
PM”? E"
5"
Applicability.—According to the Central Sales-tax Act. 1956. a dealer was to
be assessed in respect of his transactions in the State from which the movement of
goods of the assessee commenced. But the authorities who are empowered to assess
such tax while making the said assessment on behalf on the Government of India
would be determined in accordance with the Central Sales-tax law of the appropriate
State where such movement takes place. As in the instant case. the movement of
the assessee's goods took place from the State of Bihar the relevant provision
applicable to this case is rule 12 of the Central Sales-tax Rules, 1957. In view of
the said rule the provisions of Bihar Sales-tax Act. 1959. and the rules framed
thereunder would govern the field in the instant case. Therefore, in the instant case,
as the movement of the goods took place in the State of Bihar for the purpose of
making assessment under Central Sales-tax Act, the provisions of Bihar Sales-tax
Act, 1959, would apply. '
Constitutional validity of sub-section (2-A) of Sec. 9 as amended by the Central
Sales-tax (Amendment) Act,1976.—There is no dispute in this case about the validity
of the tax payable under the Act during the period between 1st January, 1957 and
the date of commencement of the Amending Act. It has to be presumed that all the
tax has been collected by the dealers from their customers. There is also no dispute
that the law required the dealers to pay the tax within the specified time. The dealers
had also the knowledge of the provisions relating to penalties in the general
Sales-tax laws of their respective States. It was only owing to the deficiency in the
Act pointed out by the Supreme Court in Khemka & Co. v. State of Maharashtra.2
the penalties became not payable. In this situation, where the dealers have utilized
the money which should have been paid to the Government and have committed
default performing their duties, if Parliament calls upon them to pay penalties in
accordance with the law as amended with retrospective effect it cannot be said that
there has been any unreasonable restriction imposed on the rights guaranteed
under Art. 19 (1) (I) and (g) of the Constitution even though the period of
retrospectivity is nearly nineteen years. Sub-section (3) of Sec. 9 of the Amending
Act which provides that the provisions contained in sub-section (2) thereof would
not prevent a person from questioning the imposition or collection of any penalty
or any proceeding, act or thing in connection therewith or for claiming any refund
in accordance with the Act as amended by the Amending Act read with sub-section
(1) of Sec. 9 of the Amending Act. Explanation to sub-section (3) of Sec. 9 of the
Amending Act also provides for exclusion of the period between 27th February.
1975. i.e. the date on which the judgment in Khemka & Co. v. State of Maharashtra3
was delivered up to the date of the commencement of the Amending Act in
computing the period of limitation for questioning any order levying penalty. In
those proceedings the authorities concerned are sure to consider all aspects of the
case before passing orders levying penalties. The contention that the impugned
provision is violative of Art. 19 (1) (J) and (g) of the Constitution. has, therefore, to
be rejected. 4
Once a sale is prima facie found to be an inter-State sale, the tax shall be
collected in the State from which the movement of the goods commenced in view of
Sec. 9 (1) of the Central Sales Tax Act. 1956. Thus, in the case of inter-State sale,
any act to realise tax from citizen under the State Sales-tax Act, will be ultra vires
being in violation of the fundamental rights guaranteed under Art. 19(1)(g) of the
Constitution. A citizen who is aggrieved will have a right to seek relief by a petition
under Art. 226 of the Constitution of India. 5
1. Assistant Superintendent of Sales-tax v. Sunil Kumar Roy, 1978 Tax.L.R. 2146 at p. 2148;
Selected Brick Co. v. C.S.T., U.P., S.T.I., 1993 All. 126; Krishna Nand Garg v. C.S.T., S.T.I., 1992
All. 299; C.S.T. v. Neelam Pencil Factory, S.T.I. 1991 All. 164.
2.
1975 U.P.T.C. 378: 1975 (35) S.T.I. 571 (S.C.): 1975 (3) S.C.R. 753.
3.
1975 (35) S.T.C. 571 (S.C.): 1975 (3) S.C.R. 753.
4. Shiv Dutt Rai Fateh Chand v. Union of India, 1983 U.P.T.C. 920 at pp. 943, 944: Birendra Singh
and Co. v. C.S.T., 1994 U.P.T.C. 177 at p. 179; Chhote Lal Jai Prakash v. C.S.T., 1994 U.P.T.C.
85 at p: 87.
5. Guljag Industries Ltd. v. State of Rajasthan, (2003) 129 S.T.C. 3 at p. 12 (Raj.).
SECTION 4
LEVY AND COLLECTION OF TAX AND PENALTIES 27
' SECTION 9 LEVY AND COLLECTION OF TAX AND PENALTIES 27
Applicability.—ACCOYdlng to the Central Sales-tax Act. 1956. a dealer was to
beassessed in respect of his transactions in the State from which the movement of
goods of the assessee commenced. But the authorities who are empowered to assess
'such tax while making the said assessment on behali on the Government of india
would be determined in accordance with the Central Sales-tax law of the appropriate
State where such movement takes place. As in the instant case. the movement of
the assossee's goods took place from the State of Bihar the relevant provision
applicable to this case is mic 12 oi the Central Sales—tax Rules. 1957. In View of
the said rule the provisions of Bihar Sales-tax Act. 1959. and the rules framed
thereunder would govern the field in the instant case. Therefore. in the instant case.
as the movement of the goods took place in the State of Bihar {or the purpose of
making assessment under Central SalesAtax Act. the provisions of Bihar Sales-tax
Act. 1959 would apply ‘
Constitutional validity of sub-section (2« A) of Sec. 9 as amended by the Central
filler-tax (Amendment) Act,1976.—There is no dispute in this case about the validity
of the tax payable under the Act during the period between is! January. 1957 and
the date of commencement of the Amending Act. It has to be presumed that all the
tax has been collected by the dealers from their customers. There is also no dispute
that the law required the dealers to pay the tax within the specified time. The dealers
had also the knowledge of the provisions relating to penalties in the general
Sales-tax laws of their respective States. it was only owing to the deficiency in th
Let pointed out by the Supreme Court in Khemka 8:. Co. v. Slate of Maharashtra.
' the penalties became not payable. in this situation. where the dealers have utilized
the money which should have been paid to the Government and have committed
' ‘ default perfomling their duties. ii Parliament calls upon them to pay penalties in
accordance with the law as amended with retrospective eil'ecl it cannot be said that
there has been any unreasonable restriction imposed on the rights guaranteed
under Art. 19 [1] (fl and I9} of the Constitution even though the period of
reimspectiviiy is nearly nineteen years. Subsection [3) of Sec. 9 of the Amending
Act which provides that the provisions contained in sub-section [2) thereo; would
not preveui a person from questioning the imposition or collection of any penalty
or any proceeding, not or thing in connection therewith or for claiming any refund
in accordance with the Act as amended by the Amending Act read with subsection
ll] of Sec. 9 of the Amending Act Explanation to sub section (3) of Sec. 9 of the
Amending Act also provides for exclusion of the period between 27th February.
l975 Le. the date on which the judgment in Khemka& Co. v. State of Maharashtra
‘ was delivered up to Llie date of the commencement of the Amending Act in
L Computing the period of limitation for questioning any order levying penalty. In
’ lime proceedings the authorities concerned are sure to consider all aspects of the
use before passing orders levying penalties. ’l11e contention that the impugned
_provision is violative of Art. 19 ill (I) and (9} of the Constitution. has. therefore. to
‘be rejected.
Once a sale is primnfacie found to be an inter-State sale. the iax shall be
_ inflected in the State from which the movement of the goods commenced in view of
M. 9 (ll of the Central Sales Tax Act. 1956. Thus. in the case of interstate sale.
.., act to realise tax from citizen under the State Sales tax Act. will be ultra wires
in violation of the fundamental rights guaranteed under Art 19(1)qu of the
stitution. A citizen who is aggrieved willshave a right to seek relief by a petition
‘ merArt .226 of the Constitution of india.
Assistant Su erintendeni of Salesvtax v. Sunil Kumar Roy, 1978 Tax. L R 2146 at .2148;
SelectedBrlcECo. l'}. C.5T. U...1’ 5...,Tl 1993A“. 116; KrishnaNandCargu. C..ST., S. .l., 1991
All. 299' C.$.T. :V. Neelam PencilFactmg', STI 1991All.164.
IWSUPTC 378:1975(35)S.Tl 571( C) 975(3)S..CR 753
1975(35)5.TC. 571 (SC): 1975(3)SCR 753
ShivDutt RalFaiehChandU. Union ollndia I983U.FT..C 920alpp.943.944: Eirendra Sin
and Co v. C.5.T., 1994U.P...TC 1773tp 179; Chhoielallail’rakashlr CST 1994UWI’T
85am: .87.
Guijapg industries Ltd. 17. sum of Rajasthan, (2003) 129 s
.3 .i p. 12 (Raj).
CENTRAL SALES-TAX ACT, 1956
SECTION 9-A
Jurisdiction to tax turnover.—The assessee was a dealer in coal. The dispute
in the case relates to sales effected by transfer or documents of title to the goods
during their movement from the colliery outside U.P. The assessee's contention was
that since he was not a dealer registered under the Central Sales tax Act, the
assessing officer had no jurisdiction to tax the assessee. The assessing officer relying
on the amendment made in Sec. 9 of the Central Sales-tax Act by Amending Act
No. 103 of 1976 rejected this contention of the assessee. Assistant Commissioner
(Judicial) as well as the Additional. Judge (Revision) following the decision in the
case of Commissioner of Sales-tax v. Sadanand Arya Coal Depot, ' held that the
amendment was not of retrospective nature and did not confer jurisdiction on the
assessing officer to tax the turnover. In view of the decision of the High Court in the
case of Commissioner of Sales-tax v. Sadanand Arya Coal Depot, 2 the judgment of
the Additional. Judge (Revision) suffers from no defect. 3
Exempted unit—Deposit of tax.—In the instant case, the memorandum of
appeal was accompanied by an application under Sec. 20(5) of the Punjab General
Sales Tax Act, 1948. requesting the appellate authority to entertain the appeal
without prior payment of the tax. A similar application was filed under Sec. 9(2) of
Central Sales Tax Act. 1956. The appellate authority without considering the fact
that the petitioner was an exempted unit disallowed the request of the petitioner
and required it to deposit different sums of money. Held, it is more than clear that
the petitioner is an exempted unit and the period of exemption was not yet over nor
had the amount been exhausted and, therefore, the High Court held that the
authorities below were not justified in requiring the petitioner to deposit the
assessed amount before entertaining its appeals. 4
Rejection of Account Books as it was not maintained in accordance with Sec. 12 (2)
of the U.P. Sales Tax Act—Not proper.—Merely because the account books were not
accepted for purpose of U.P. Sales tax Act as up-to-date stock Register was not
maintained as required under Sec. 12 (2) of the U.P. Sales tax Act. The account
books under the Central Sales tax cannot be rejected, there was no material
indicated in the order of the Tribunal for rejection of account books. Unless there
was a suppression made by the assessee in the inter-State sale, the account books
rejected under the U.P. Sales Tax Act cannot be a ground for rejecting the books of
account under the Central Sales Tax Act. 5
'[9-A. 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 thereunder.]
' [9-B. 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.]
1.
1976 U.P.T.C. 816.
2. Ibid.
3. Commissioner of Sales-tax v. Atma Ram and Sons, 1983 U.P.T.C. 1027 at p. 1028.
4.
Samra Steel Products (P.) Ltd. v. Excise & Taxation Officer-Cum-Assessing Authority,
(2003) 129 S.T.C. 25 at p. 26-27 (P. & H.).
5.
Anand Bartan Udyog v. C.S.T., S.T.I., 1993 S.T.J. 132 at p. 138.
6.
Subs. by Act 31 of 1958, Sec. 6, for the original section.
7.
Ins. by Act 61 of 1972, Sec. 7 (w.e.f. 1st April, 1973).
18 CENTRAL SALES-TAX ACT, 1956 SECTION 9-A
Jurisdiction to tax turnover.—The assessee was a dealer in coal. The dispute
in the case relates to sales effected by transfer or documents of title to the goods
during their movement from the colliery outside UP. The assessee's contention was
that since he was not a dealer registered under the Central Sales tax Act. the
assessing officer had no jurisdiction to tax the assessee. The assessing offlcer relying
on the amendment made in Sec. 9 of the Central Sales~tax Act by Amending Act
No. 103 of 1976 rejected this contention of the assessee. Assistant Commissioner
[Judicial] as well as the Additional. Judge (Revision) following the decision in the
case of Commissioner of Salas-tux v. Sadanwid Arya Coal Depot] held that the
amendment was not of retrospective nature and did not confer jurisdiction on the
assessing officer to tax the turnover. In view of the decision of the High Court in the
case of Commissioner of Sales-tax v. Sadancmd Arya Coat Depot.2 the judgment of
the Additional. Judge (Revision) suflers from no detect.a
Exempted unit—Depositnf tax.‘lrt the instant case, the memorandum of
appeal was accompanied by an application under Sec. 20(5)} of the Punjab General
Sales Tax Act. 1948. requesting the appellate authority to entertain the appeal
without prior payment of the tax. A similar application was filed under Sec. 9(2) of
Central Sales Tax Act. 1956. The appellate authority without considering the fact
that the petitioner was an exempted unit disallowed the request of the petitioner
and required it U) deposit different sums of money. Held. it is more than clear that
the petitioner is an exempted unit and the period of exemption was not yet over nor
had the amount been exhausted and. therefore. the High Court held that the
authorities below were not justified in requiring the petitioner to deposit the
assessed amount before entertaining its appeals.
Rejection of Account Books as it was not maintained in accordance with Sec. 12 (2)
oi the UP. Sales Tax Art—Not propen—Merely because the account books were not
accepted for purpose of UP. Sales tax Act as uprto~date stock Register was not
maintained as required under Sec. 12 (2] of the U. . Sales tax Act. The account
books under the Central Sales tax cannot be rejected. there was no material
indicated in the order of the Tribunal for rejection of account books. Unless there
was a suppression made by the assessee in the inter-State sale, the account books
rejected under the UP. Sales Tax Act cannot be a ground for rejecting the books of
account under the Central Sales Tax Act.5
[9-A. 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 interistate 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 thereunder.]
’l9-B. Rounding off of tax, etc.#The amount of tax. interest. penalty.
fine or any other sum payable. and the. amount oflrefund due. under the
provisions of this Act shall be rounded oif 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 to 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 interstate trade or
commerce ]
l. (i.
2. 1m
1 Commissioner of Sales-tax v. Atma Ram and Sons, 1953 U.P.T.C. 1027 at p. 1025.
4. Samra Steel Products (e) Ltd. v. Excise & Taxation Officer-Cum-Assessing Authority,
(2093) 129 s.r.c. 25 at p. 16-27(1). a: m.
5, Annmi Barton Udyo' v. C.S.T., 51.1., 199 n. 132 at p. 135.
5. Subs. by Act 31 of 19 Mac. 6, for theor nalsech'on.
7. ins. by Act 51 of 1972, Sec. 7 (wet. lst April, 1973).
SECTION 10
PENALTIES
10. Penalties.—If any person-
(a) furnishes a certificate or declaration under sub-section (2) of
Sec. 6 or sub-section (1) of Sec. 6-A or sub-section (4) [or
sub-section (8)1 of Sec. 8. which he knows, or has reason to
believe, to be false; or 1
(act) fails to get himself registered as required by Sec. 7 or fails to
comply with an order under sub-section (3-A) or with the
requirements of sub-section (3-C) or sub-section (3-E) of that
section;]
(b) being a registered dealer, falsely represents when purchasing
any class of goods that goods of such 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
2 [C1. (b) or Cl. (c) or Cl. (d)] of sub-section (3) 3 [or sub-section(6)]
of Sec. 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) 4[or sub-section(8)1 of Sec. 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
thereunder;
5[W collects any amount by way of tax in contravention of the
provisions contained in Sec. 9-A; ]
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.
COMMENTS
Penalty imposed by the Sales-tax Officer—Whether could be set aside.—In the
instant case it is admitted to the parties that none appeared before the Tribunal at
the time of hearing of the appeal. It was submitted that the Tribunal while reversing
the order of the Assistant Commissioner (Judicial) has not taken into account three
facts which were taken into account by the Assistant Commissioner (Judicial);
Firstly, that the assessee had shown the sale of photographic goods in the first-three
quarterly returns submitted by it; secondly the fact that the registration certificate
issued to the applicant was not cancelled for which a notice was issued, which was
modified by order, dated 17th February, 1981 and not earlier and thirdly, the
assessee never claimed that it was doing service work and not job work. Since the
assessee was not represented before the Tribunal, the said facts could not be
brought to the notice of the Tribunal, but since the Tribunal was reversing the
findings of the Assistant Commissioner (Judicial), it was expected to have adverted
to all the materials on record and that having not been done by the Tribunal, it
appears that the appeal has not been properly disposed of. The order passed by the
Tribunal was set aside and it was directed to decide the appeal afresh in the light
1. Ins. by Finance Act, 2002 (20 of 2002), Sec. 153 (i).
2. Subs. by Act 61 of 1972, Sec. 8, for "CI. (b)" (w.e.f. 1st April, 1973).
3.
Ins. by Finance Act, 2002 (20 of 2002), Sec. 153 (ii).
4. Ins. by Finance Act, 2002 (20 of 2002), Sec. 153 (iii).
5. Ins. by Act 31 of 1958, Sec. 7 (w.e.f. 1st October, 1958).
“SWITCH 10 PENALTIES 19
10. Penalties—If any person—
(a) furnishes a certificate or declaration under sub-section (2} of
Sec. 6 or sub-section (1] of Sec. 6A or sub-section (4) [or
sub-section (8)1 of Sec. 8. which he knows. or has reason to
believe. to be false; or 1
(an) fails to get himself registered as required by Sec. 7 or fails to
comply with an order under sub-section (3A) or with the
requirements of subsection (3-C] or sub-section (S—E] of that
sectionzl
(b) being a registered dealer. falsely represents when purchasing
any class of goods that goods of such 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 {or any of the purposes specified in
2[C1. (b) or Cl. (c) or Cl. (11)] of sub-section (3) 3[or sub-sectioniall
of Sec, 8 fails. without reasonable excuse. to make use of the
goods for any such purpose:
(‘2) has in his possession any form prescribed for the purpose of
sub— section (4] “[or subvsection(8)] of Sec. 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 mles made
thereunder:
5m) collects any amount by way of tax in contravention of the
‘ provisions contained in Sec. 9A: 1 ,
he shall be punishable with simple imprisonment which may extend to six
months. or with line. or with both; and when the oiience is a continuing
offence. with a daily fine which may extend/t9 fifty rupees for every day
during which the offence continues. /’
COMMENTS
Penalty imposed by the Sales-tax Officer—Whether could be set aside—In the
instant case it is admitted to the parties that none appeared before the Tribunal at
the time of hearing, of the appeal. it was submitted that the Tribunal while reversing
the order of the Assistant Commissioner (Judicial) has not taken into account three
. facts which were taken into account by the Assistant Commissioner (Judicial):
i Fhsilg. that the assessee had shown the sale of photographic goods in the firstAthrec
» Quarterly returns submitted by it: secondly the fact that the registration certificate
issued to the applicant was not cancelled for which a notice was issued. which was
modified by order. dated 17th February. 1981 and not earlier : and thirdly. the
assesses: never claimed that it was doing service work and not job work. Since the
assesses was not represented before the Tribunal. the said facts could not be
2] brought to the notice of the Tribunal. but since the Tribunal was reversing the
Wings of the Assistant Commissioner (Judicial). it was expected to have advertcd
‘ all the materials on record and that having not been done by the Tribunal. it
V ppcars that the appeal has not been properly disposed of. The order passed by the
‘mbunal ms set aside and it was directed to decide the appeal afresh in the light
Inn. by Finance Acl, 1002 (20 of 1002), Sec. 153 (ill
Subs. by Act 61 of 1972, Sec. 5, for "Cl. [17]" {w.e.f. lst April, 1973).
his. by Finance Act, 2002 (20 of 2002). Sec. 153 (ii).
Ina. by Finance Act, 2002 (10 of 2002), Sec. 153 (ML
Ins. by Act 31 of1958, Sec. 7 (w.e.l. lst October, l958).
CENTRAL. SALES-TAX ACT, 1956
SECTION 10-A
of the observation made and also after affording an opportunity of hearing to the
assessee.
Imposition of penalty—Sustainability of.—The assessee in the instant case,
purchased certain goods ex U.P. and furnished Form C in pursuance of certain
works contract. It delivered these goods to others and did not utilise them itself.
The law as such at the relevant time was that when an assessee entered into works
contract in pursuance of the said contract and delivered goods to others, it
amounted to contract of sale. The High Court has so decided in the case of
Commissioner of Sales tax v. Ram Singh and Sons, 2 decided on 29th January, 1975.
So at the time when the assessee entered into the transactions in question it could
reasonably think that it entered into the sales in Uttar Pradesh. The law laid down
by the High Court has been differently interpreted by the Supreme Court in Ram
Singh and Sons v. Commissioner of Sales-tax' decided on 7th December, 1978. The
Supreme Court held that on a works contract entered into there is no sale. On the
basis of this declaration of law a penalty has been imposed on the assessee. At the
time when the assessee furnished Form C it was not uilty as the law was unsettled.
Thus, the order imposing the penalty was set aside.
5 [10-A. Imposition of penalty in lieu of prosecution.—6 [( 1)] If any person
purchasing goods is guilty of an offence under Cl. (b) or Cl. (c) or Cl. (d) of
Sec. 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 to writing,
impose upon him by way of penalty a sum not exceeding one-and-a-half
times 7[the tax which would have been levied under sub-section (2) of Sec.
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 Sec. 10 shall
be instituted in respect of the same facts on which a penalty has been
imposed under this section.]
8 [(2) 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 Sec. 9-
(a) in the case of an offence falling under Cl. (b) or Cl. (d) of
Sec. 10, in the State in which the person purchasing the goods
obtained the form prescribed for the purposes of Cl. (a) of
sub-section (4) of Sec. 8 in connection with the purchase of
such goods;
(b) in the case of an offence falling under ,Cl. (c) of Sec. 10, in the
State in which the person purchasing the goods should have
registered himself if the offence had not been committed.].
11. Cognizance of offences.—(1) No Court shall take cognizance of any
offence punishable under this Act or the rules made thereunder except with
previous sanction of the Government within the local limits of whose
jurisdiction the offence has been committed or of such officer of that
Government as it may, by general or special order, specify in this behalf;
1.
Sandev v. Commissioner of Sales tax, U.P., 1986 A.T.J. 148 at p. 150.
2.
1975 U.P.T.C. 133.
3.
1979 U.P.T.C. 548.
4.
Ram Singh and Sons v. Commissioner of Sales-tax, U.P. 1983 U.P.T.C. 964 at pp. 964, 965.
5.
Ins. by Act 31 of 1958, Sec. 8 (w.e.f. 1st October, 1958).
6.
Section 10-A re-numbered as sub-section(l) of that section by Act 28 of 1969, Sec. 7 (w.e.f. 1st
October, 1958).
7.
Subs. by Act 61 of 1972, Sec. 9, for certain words (w.e.f. 1st April, 1973).
8.
Ins. by Act 28 of 1969, Sec. 7 (w.e.f. 1st October, 1958).
JO CENTRAL SA LES-TAX ACT, 1955 SECTION IWA
of the nbslervation made and also after affording an opportunity of hearing to the
355055863.
Imposition of penalty—Sustainability oft—The assessee in the instant case.
purchased certain goods ex U.P. and furnished Form C in pursuance of certain
works contract. It delivered these goods to others and did not utilise them itself.
The law as such at the relevant time was that when an assessee entered tnto works
contract In pursuance of the said contract and delivered goods to others. it
amounted to contract of sale. The High Court has so decided in the case of
Commissioner of Sales taxv. Rom Singh and Sons.2 decided on 29th January. 1975.
So at the time when the assessee entered into the transactions in question it could
reasonably think that it entered into the sales in Uttar Pradesh. The law laid down
by the High Court has been differently inte reted by the Supreme Court in Ram
Singh and Sons v. Commissioner of SolesAt decided on 7th December, 1978. The
Supreme Court held that on a works contract entered into there is no sale. 0n the
basis at this declaration of law a penalty has been imposed on the assessee. At the
Lime when the assessee furnished Form C It was not guilty as the law was unsettled.
Thus. the order imposing the penalty was set aside.
f’[10-A. Imposition of penalty in lieu ofprosecution.—s{(1]] if any person
purchasing goods is guilty of an offence under Cli {b} or Cl. (c) or Cl. (d) of
Sect 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 to writing,
impose upon him by way of penalty 2: sum not exceeding one-and-a-hali'
times 7[the tax which would have been levied under sub—Section (2) of Sec.
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 Sec. 10 shall
be instituted in respect of the same facts on which a penalty has been
imposed under this section.l "‘
“[(2) The penalty imposed upon any dealer under sub-section (1) shall
be collected by the Government of india in the manner provided in
sub»sectlun (2) of Sec. 9—-
la] in the case of an oflence falling under CI. (b) or Cl. ((1) of
Sec. 10. in the State in which the person purchasing the goods
obtained the form prescribed for the purposes of Cl. {(1) of
subsection [4) of Sec. 8 in connection with the purchase of
such goods:
(b) in the case of an offence falling under Cl. (C) of Sec. 10. in the
State in which the person purchasing the goods should have
registered himself if the offence had not been committed).
ii. Cognizance of offences.~(l] No Court shall take cognizance of any
offence punish able under this Act or the rules made thereunder except with
previous sanction of the Government within the local limits of whose
jurisdiction the offence has been committed or of such ofllcer of that
Government as it may. by general or special order. specify in this behalf;
Sahdev v ommissioner of Salfi tax, U.P., 1986 All. 148 at p 150.
1975 UP 1 .
197‘) UP 0548.
Ram Singh and Sons v. Commissioner of Sales-tax, LLP. 1983 U.F.T,C. 964 at pp. 964, 965.
Ins. by Act 31 oi1955, Sec. 8 (wet. lst October, 1958).
Section lO—A revnumbeted as sub-section“) of that section by Act 28 ohm, Sec. 7 (weft lst
October. 1955i
Subs. by Act 61 at 1972, Sec. 9, for cemin words (wet. lst April, l973).
Ins. by Act 28 of l969, Sec. 7 (Wet. lsi October. 1958).
90>: .W-uwwr
SECTION 13
POWER TO MAKE RULES
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 congizable and
bailable.
12. Indemnity.—No suit. prosecution or other legal proceeding shall
lie against any officer of Government for anything which is in good faith
done or intended to be done under this Act or the rile; made thereunder.
13. Power to make rules.-(1) The Central Government may, by notifi-
cation 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;
I ((aa)the form and the manner for furnishing declaration under
sub-section (8) of Sec. 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 2[under
Cl. (c) of sub-section (1) of Sec. 8-A] 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;
3[(d) the form in which and the particulars to be contained in any
declaration or certificate to be given under this Act 2 [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 ruining or in
the generation or distribution of electricity or any other form
of power:
(j) the matters in respect of which provisions may be made under
the proviso to 4[sub-section (2)] pf Sec. 9;
(g) the fees payable in respect of applications under this Act.]
5 [(h) the proper functioning of the Authority constituted under
Sec.19:
(i) the salaries and allowances payable to, and the term and
conditions of service of, the Chairman and Members under
sub-section (3) of Sec. 19;
(j) any other matter as may be prescribed.]
6 [(2) Every rule made by the Central Government under sub-section
1. Ins. by Finance Act, 2002 (20 of 2002), Sec. 154 (an).
2. Ins. by Act 61 of 1972, Sec. 10 (w.e.f. 1st April, 1973).
3. Subs. by Act 31 of 1958, Sec. 9, for "CI. (d)" (w.e.f. 1st October, 1958).
4. Subs. by Act 28 of 1969, Sec. 8 for "sub-section (3)" (retrospectively).
5. Ins. by (Amendment) Act 2001, (41 of 2001), Sec. 2.
6. Subs. by Act 61 of 1972, Sec. 10, for "sub-section (2)" (w.e.f. 1st April, 1973).
sacrum 13 POWERTOMAKE RULES ' 31
and no Court inferior to that of a Presidency Magistrate or a Magistrate of
the first class shall try any such offence.
[2) All oflences punishable under this Act shall be congizablc and
‘bailablei
, 12.1ndemnity.-No suit. prosecution or other legal proceeding shall
' Be against any officer of Government for anything 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 Govemmenl. may by notifi-
" cation in the official Gazette. make rules providing for»
la) the manner in which applications for registration may be made
under this Act. the particulars to be contained therein. the
procedure for Lhe grant of such registration. the circumstances
in which registration may be refused and the form in which the
certificate of registration may be given:
l[lotcihl'te form and the manner for furnishing declaration under
sub-section [8) of Sec. 8:]
(b) the period of turnover. the manner in which the tumover in
relation to the sale of any goods under this Act shall be
determined. and the deductions which may be made 2[under
Cl. (c) of sub-section (1) of Sec. S-Al 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:
3|(d) the form in which and the particulars to be contained in any
declaration or certificate to be given under this Act thfie State
of origin of such form or certificate and the time within which
any such certificate or declaration shall be produced or
furnishedzl
(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:
(/7 the matters in respect of which provisions may be made under
the proviso to 4lsub-sectlon (2)] of Sec. 9;
(g) the fees payable in respect of applications under this Act]
5[(11) the proper functioning of the Authority constituted under
Sec. 1 9:
(U the salaries and allovmnces payable to. and the term and
conditions of service of, the Chairman and Members under
sub-section (3) of Sec. 19:
(i) any other matter as may be prescribed]
51(2) Every rule made by the Central Government under sub—section
. Ins. by Finance Act, 2002 (20 of 2002), 52:. 154 (ML
[fishy Act 6] of 1972, Sec. l0 (Wei. lst April, 973).
fiubs. by Art 310F1958, Sec. 9, for "CI, (dl' (w.c.f. lst October, 1953).
‘ Subs. by Act 28 of 1969, Sec. 8 for "sub-section (3)" (retrospectively).
I”. b (Amendment) Act 2001.011 of 2001). Sec. 2.
m by Act 61 of 1972, Sec. 10, for ”subsection (2)" (wet. lst April, 1973).
CENTRAL SALES-TAX ACT,1956
SECTION 13
(1) shall be laid, as soon as may be after it is made, before each House of 1
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 session or 1
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 tile particulars to be
contained in such lists;
1 [(aa)the manner in which security may be furnished under
sub-section (2-A) or sub-section (3-A) or sub-section (3-C) of
Sec. 7 and the manner in which and the time within which any
deficiency may be made up under sub-section (3-E) 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 purchases, sales and deliveries of goods 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 times 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;
2 1(e) the authority from whom, the conditions subject to which and
the fees subject to payment of which, any form of certificate
prescribed under Cl.(a) of the first proviso to sub-section (2) of
Sec. 6 or of declaration prescribed under sub-section (1) of Sec.
6-A or sub-section (4) of Sec. 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 (3-H) of Sec. 7, the
1. Ins. by Act 61 of 1972, Sec. 10 (w.e.f. 1st April, 1973).
2. Subs. by ibid, Sec. 10, for CI. (e) (w.e.f. 1st April, 1973).
31 CENTRAL SALES-TAX ACT, 1956 SECTION 13
[1) shall be laid. as soon as may be alter 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 session 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 eiiect 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 mles. not inconsistent with the
provisions of this Act and the rules made under subsection (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 lime, and the particulars to be
contained in such lists:
llfaaithe manner in which security may be furnished under
sub—section (Z—Al or sub-section {Ci-A) or sub-section (3»C) of
Sec. 7 and the manner in which and the time within which any .
deficiency may be made up under subsection (ti-E) of that
section. 1
(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 fumishing of any information relating to the stocks of
goods. oi'purchases. sales and deliveries of goods 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 times for the purposes of searching for any such
books. accounts or documents kept or suspected to be kept in
such premises and the sLizure of such books. accounts or
documents:
2We) the authority from whom. the conditions subject to which and
the fees subject to payment of which. any form of certificate
prescribed under Cl.(aJ of the first proviso to sub-section (2) of
Sec. 6 or of declaration prescribed under sub-section (1) of Sec.
6A or sub-section (4) of Sec. 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 :
(eel the form and manner in which. and the authority to whom, an
appeal may be preferred under sub-section (SAHI of Sec. 7. the
1. Ins. by Act 61 of 1972,30C. 10 (w.o.f. lst April, 1973).
2. Subs. by ihi'd, Sec. 10, for C1. if) (wet. is: April, 1973).
SECTION 14 CERTAIN GOODS TO BE OF SPECIAL IMPORTANCE IN INTER-
33
STATE TRADE OR COMMERCE
procedure to be followed in hearing such appeals and the fees
payable in respect of such appeals;]
(t) 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 a 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;
(g) the time within which, the manner in which and 1 [the authorities
to whom] any change in the ownership of any business or in 2 [the name,
place or nature] of any business carried on by any dealer shall be
furnished.
(5) In making any rule under this section 3[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.
CHAPTER 1V
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:
4 [(i) Cereals, that is to say,-
(i)
paddy (Oryza sativa L);
(ii) rice (Oryza sativa L);
(iii) wheat (Triticurn uulgare, T. Compacturn, T. Sphaerococcum,
T. Durum, T. Aestivum, L.T. Discoccum);
(iv) jowar or milo (Sorghum uulgare pers);
(u) bajra (Pennisetum typhoideum L);
(vi) maize (Zea mays D);
(vii) ragi (Elusine coracana gaertn):
(viii) kodon (Paspaulm scrobiculatum L);
(ix) kutki (Panicum miliare L);
(x) barley (Hordeum uulgare L);
5 [6 [(i-a)]
coal, including coke in all its forms, but excluding
charcoal:
PROVIDED THAT during the period commencing on 23rd day
of February, 1967 and ending with the date of commencement of
Sec. 11 of the Central Sales-tax (Amendment) Act, 1972 (61 of
1. Subs. by Act 31 of 1958, Sec. 9 for the authorities to which" (w.e.f. 1st October, 1958).
2. Subs. by ibid., Sec. 9 for "the nature" (w.e.f. 1st October, 1958).
3. Subs. by Act 61 of 1972, Sec. 10, for "the State Government" (w.e.f. 10th April, 1973).
4. Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec.7.
5. Subs. by Act 61 of 1972, Sec. 11, for Cl. (i) (retrospectively).
6. Re-numbered by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 7.
mar: 14 CERTAIN Goons TO BE OF SPECIAL IMPORTANCE IN iNTEii- 33
STATE TRADE 0R COMMERCE
procedure to be followed in hearing such appeals and the fees
payable in respect of such appealsd
(I) 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 a 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:
{9) the time within which. the manner in which and 1[the authonues
to whom] any change in the oumership of any business or in 2[the name.
place or nature] of any business carried on by any dealer shall be
furnished.
[5) In making any rule under this section 3[the Central Government
or. as the case may be. the State Government] may direct that a breach
thermf 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.
CHAPTER IV
GOODS OF SPECIAL IMPORTANCE IN INTER—STATE
TRADE 0R COMMERCE
‘14. Certain goods to be of special importance in inter-Slate trade or
humane—it is hereby declared that the following goods are of special
importance in inter-State trade or commerce:
4W Cereals. that is to say.— a
(f) paddy (Oryza satioa L]:
(ti) rice (Oryza satiua L):
(iii) wheat (’nmeum uulgare. T. Compaction. T. Sphaerococcuni.
T. Dumm. T. Aestivum. LT. Discomurn):
(in) jowar or mile (Sorghum uulgare pers):
(u) bajra [Pennisetum typhoideum L):
(111‘) maize (Zea mays D);
(uiU ragl (EliLsine coraoana gaertn):
(uiiu kodon (Paspaulm scrabiculatum L):
(DC) kutki (Panlcum mill'are L);
(x) barley [Hordeum vulgare L):
5lelii~a)l coal. including coke in all its forms. but excluding
charcoal:
PROVIDED THAT during the period commencing on 23rd day
of February. 1967 and ending with the date of commencement of
Sec. 11 of the Central Sales-tax (Amendment) Act. 1972 (61 of
Subs. by Act 31 of 1958. Sec, 9 for "the authorities to which" (wet 1st October, 1958).
Subs. by “1111.. Sec. 9 for "the nature" (w.e.f. Ist October, 1958).
Subs by Act 61 (#1972, Sec. 10. for "the State Government" (wet. 10th April, 1973).
[as by Central Sales-tax (Amendment) Act. 1976 (103 of1976).5ec.7.
‘ Subs by Act 51 of 1972. Sec 11, forCl (0(th .
Remunbered by Central Sales- tax (Amendment Act. V12,76 (103 of 1W6),Seci 7.
CENTRAL SALES-TAX ACT, 1956
SECTION 14
1972), this clause shall have effect subject to the modification that
the words but excluding charcoal" 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;
1 ((ii-a)cotton fabrics covered under heading Nds. 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, 2 [58.06], 59.01. 59.03. 59.06 and 60.01 of the Schedule
to the Central Excise Tariff Act, 1985 (5 of 1986).
(ii-b) cotton yarn, but not including cotton yarn waste;]
3[(ii-c)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
subjected to all or any of the following processes:
(1) Decantation;
(2) de-salting;
(3) dehydration;
(4) stabilization in order to normalize the vapour pressure;
(5) elimination of very light fraction with a view of 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 the
above-mentioned processes;
(7) any other minor process (including addition of pour point
depressants or flow improvers) which does not change the
essential character of the substance];
4 [(ii-d) Aviation Turbine Fuel sold to a Turbo-Prop Aircraft.
Explanation,—For the purpose of this clause, "Turbo- Prop
Aircraft" means an aircraft deriving thrust, mainly from propeller.
which may be driven by either ' urbine engine or piston engine].
(iii) hides and skins, whether in a raw or dressed state;
5 [(iv) iron and steel, that is to say,-
(i) 6[pig iron, sponge iron and] cast iron including 7 [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);
1. Subs. by Finance Act, 1988 (26 of 1988), Sec. 85 (a), for item (ii-a) as amended by Act 14 of 1961,
Sec. 14.
2.
Ins. by Finance Act, 1989 (13 of 1989), Sec. 50 (a).
3.
Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976).
4. Ins. by Finance Act, 2001 (14 of 2001, Sec. 139 (a).
5. Subs. by Act 61 of 1972, Sec. 11, for Cl. (iv) (w.e.f. 1st April, 1973).
6.
Subs. for words "pig iron and" by Finance Act, 2001 (14 of 2001) l,Sec.139 (b).
7. Subs. by Act 38 of 1978, Sec. 3 and Second Schedule.
34
CENTRAL SALESJ'AX ACT, 1956 SECTION M i
1972). this clause shall have eifect subject to the modification that
the words "but excluding charcoal" shall be omittedil
(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:
1( {[111} cotton fabrics covered under heading Nos. 5205. 52.06. 52.07.
52.08. 52.09. 52.10. 52.11. 52.12. 58.01. 58.02. 58.03. 58.04.
58.05. 2[58.06]. 59.01. 59.03. 59.06 and 60.01 ofthe Schedule
to the Central Excise Tariff Act. 1985 (5 of 1986).
(it»b} cotton yarn. but not including cotton yarn wasted
3I!ii—C)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
subjected in all or any of the following processes:
[1) Decantation:
(2) de-salting:
(3) dehydration:
(4] stabilization in order to normalize the vapour pressure:
(5) elimination of very light fraction with a View of 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 the
above-mentioned processes:
(7) any other minor process (including addition of pour point
depressants or flow improvers) which does not change the
essential character of the substance]:
4[(ii<d) Aviation 'hirbtne Fuel sold to a TurbovProp Aircraft.
Explanation—For the purpose of this clause. ”l‘urbo— Prop
Aircraft" means an aircraft deriving thrust. mainly from propeller.
which may be driven by either ‘urbine engine or piston engine].
{iii} hides and skins. whether in a raw or dressed state:
5[{iu) iron and steel. that is to say.—
(i) 5[pig iron. sponge iron and] cast iron including 7[ingot
moulds. bottom plates] tron scrap. cast iron scrap,
runner scrap and iron skull scrap:
(ii) steel semis (ingots. slabs. blooms and billets of all
qualities. shapes and sizes):
1 SEES. by Finance Act, 1988 (26 of—1988), Sec. 85 In), for item (if—a) as amended by Act 14 of1961,
Neweww
Sec 14.
lns. by Finance Act,1989(13 (#1989), Sec 500!)
Ins by Central Sales- tax (Amendment)Act.1976(103 011976).
lns. by Finance Act, 2001 (M of 2001,5ec.139 (a).
Subs by Act 61 of lQTZ, Sec. 11 for Cl. (11)) (w. cf. lst April, 1973).
Subs. for words' lg iron and“ b Finance Act. 2001 (M 012001)aSec.139(b).
Subs by Act 380 1978 Sec 3 an Second Schedule.
SECTION 14 CERTAIN GOODS TO BE OF SPECIAL IMPORTANCE IN INTER
35
STATE TRADE OR COMMERCE
(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 structurals (angles, joists, channels, tees, sheet
piling sections, Z sections or any other rolled sections);
(vi) sheets, hoops, strips and skelp, both black and
galvanized, 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 tinfree
plates:
(xiii) fish plate bars, bearing plate bars. crossing sleeper bars.
fish plates, bearing plates, crossing sleepers and pressed
steel sleepers, heavy and light crane rails:
(xiv) wheels. tyres, axles and wheel sets;
(xv) wire rods and wires—rolled, drawn, galvanised
aluminised, tinned or coated such as by copper;
(xvi) defectives, rejects, cuttings or end pieces of any of the
above categories;]
1 [(v) jute that is to say, the fibre extracted from plants belonging to
the species Corchoaus capsularies and Corchorns olitorious and
the fibre known as mesta or bimli extracted from plants of the
species Hibiscus cannabinus and Hibiscus sabdartffa-
Varaltissima and the fibre known as Sunn or Sunn-hemp
extracted from plants of the species Crotalariajuncea whether
baled or otherwise;]
2 1(vi) oilseeds, that is to say,-
(i) groundnut or peanut (Arachis hypogaea);
(ii) sesamum or til (Sesamum orientate);
(iii) cotton seed (Gossypium Spp.);
(iv) soyabean (Glycine seja);
(v) rapeseed and mustard-
(1) torta (Brassica campestris var toria);
(2) rai (Brassica juncea);
(3) jamba—Taramira (Eruca Sativa);
Subs. by Act 61 of 1972, Sec. 11, for Cl. (v) (w.e.f. 1st April, 1973).
Subs. by Sec. 11, ibid., for Cl. (vi).
SECTION 14 CERTAIN GOODS TO BE OF SPECiAL IMPORTANCE IN INTER 35
(ii!)
(in)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(Xi)
(xii)
(xiii)
f (m)
(xv)
{xvi}
(U
(ii)
(iii)
{in}
(v)
STATE TRADE on COMMERCE
skelp bars. tin bars. sheet bars. hoe-bars and sleeper
bars:
steel bars (rounds. rods. squares. flats. octagons and
hexagons. plain and ribbed or twisted. in coil form as well
as straight lengths):
steel structurals (angles. joists. channels. tees. sheet
piling sections. Z sections or any other rolled sections):
sheets. hoops. strips and skeip. both black and
galvanized. hot. and cold rolled. plain and corrugated. in
all qualities. in straight lengths and in coil form. as rolled
and in rivetted condition:
plates both plain and chequered in all qualifies:
discs. rings. forgings. and steel castings:
tool. alloy and special steels of any of the above categories:
steel melting scrap in all forms including steel skull.
tumings and borings:
steel tubes. both welded and seamless. of all diameters
and lengths. including tube iittlngs:
tinvpiates. both hot dipped and electrolytic and tinfree
plates:
fish plate bars. bearing plate bars. crossing sleeper bars.
fish plates. bearing plates. crossing sleepers and pressed
steel sleepers. heavy and light crane rails:
wheels. tyres. axles and wheel sets:
wire rods and wires—roiled. drawn. galvanised
aluminised. tinned or coated such as by copper:
defectives. rejects. cuttings or end pieces of any of the
above categoricsfl
K[(u) jute that is to say. the fibre extracted from plants belonging to
the species Corehoaus cupstLlan'es and Corclwrus olimn'ous and
the fibre known as mesta or blmli extracted from plants of the
species Hibiscus cannablnus and Hibiscus sabdw-tfl'a—
Varalthslma and the ilbre known as Sunn or Sunn- hemp
extracted from plants of the species Crotalariajuncea whether
baled or otherwise: l
2[(m') oilseeds. that is to say.—
groundnut or peanut (Arachis hypogaea):
sesamurn or [1'1 [Sesamurn orientalel:
cotton seed [Gossyplum Sppl.
soyabean [Glyctne seja):
rapeseed and mustard—
lll torta (Brassi‘oa campestris var toriaJ:
l2} rai {Brassicajimcea}:
(3] jamba—Taramira (Eruca Sutton):
i Subs. by Act 61 of 1972 Sec. 11 (0:0. (wtwgJ istAprii, 1973).
Subs. bySec. ll ibid, lorCl. (vi)
CENTRAL SALES-TAX ACT, 1956
SECTION 14
(4) sarson, yellow and brown (Brassica campestris
varsarson):
(5) banarsi rai or true mustard (Brassica nigra):
(vi) linseed (Linum usitatissimum);
(vii) castor (Ricinus cornmunis);
(viii) coconut (i.e. copra excluding tender coconuts) (Cocos
mucifera);
(ix) sunflower (Helianthus annus);
(x) nigar seed (Guizotia abyssinica);
(xi) Neem, vepa (Azadirachta indica):
(xii) mahua illupai, Ippe (Madhuca indica M. Latifolia, Bassia,
latifolia and Madhuca longifolia syn. M. Longifolia);
(xiii) karanja, pongam, honga (Pangantia pinnata syn. P.
Glabra);
(xiv) kusurn (Schleichera oleosa, syn. S. Triujuga):
(xv) punna, undi (Calophyllurn inophyllum):
(xvi) kokum (Carcinia indica);
(xvii) sal (Shorea roubsta);
(xviii) tung (Aleurites fordii and A. Montana);
(xix) red palm (Elaeis guinensis);
(xx) safflower (Carthanus tinctorius);)
1 [(vi-a)
pulses, that is to say,-
(i) gram or gulab gram (Cicerarietinum L);
(ii) tur or arhar (Cajanus cajan);
(iii) moong or green gram (Phaseolus aureus);
(iv) masur or lentil (Lens esculenta rvloench, Lens cultnaris
Medic) ;
(v) urad or black gram (Phaseolus Mungo);
(vi) moth (Phaseolus aconitifolius Jacq);
(vii) lakh or khesari (Lathyrus sativus L.))
2[(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, 3 [58.06), 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, cigarettes
1. Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 7.
2.
Subs. by Finance Act, 1988 (26 of 1988), Sec. 85 (b), for item (vii), (viii), (ix) and (x).
3.
Lis. by Finance Act, 1989 (13 of 1989), Sec. 50 (a).
l
3.
CENTRAL SALESvTAX ACT, 1956 SECI'ION ‘M
(4) sarson. yellow and brown [Brassfca campeslrls
unrsarson):
(5) banarsl ral or true mustard {Brassica nigra):
{vi} linseed [Llnum usitatlsslmum);
(vii) caster (Rxlcinus conmtum's):
(viii) coconut (Le. copra excluding tender coconuts] {Cocos
rnuclferu):
(ix) sunflower (Helianthus annus):
(x) nigar seed (Guizotia abyssinlca):
(xi) Neem. vepa (Azadirachlalndica):
{xii} mahua lllupal. lppe (Madth lndlca M. Latyblla. Bassla.
(invalid and Madhuca langy’olla syn. M. longlfolia]:
(xiii) karanja. pongam. honga (Pangamla pl‘nnma syn. P.
Glabra):
(xlu) kusum {Schlel‘chera oleosu, syn. S. THujuga):
(xv)
punna. undl (CalophyllLun inophyllum):
(xvi) kokum (Camlnla indica):
(xviv 5a] {Shared raubsta);
(will) Lung (Aleun‘lesfordii and A. Montana):
(xix) red palm (ElaeLs guinensLS):
(xx) safflower (Carthanus [hateful-5):]
‘Uui-a} pulses. that Is to say.~«
(1) gram or gulab gram (Cicemrietinum L); "
(ii) mr or arhar (Czy‘anus cajan};
(iii) moong or green gram [Phasealus aureus):
(iv) masur or lentll (Lens esculeum Moerlch. Lens culinaris
Media:
(1:) urad or black gram (Phaseolus Mungal:
(vi) moth [Phaseolus amniq‘falius Jacq):
(vii) lakh or khesan' (Lalhyrus sattuus LJl _
2[(uli) man-made fabrles covered under heading Nos. 54.08.
54.09. 54.10. 54.11. 54112. 55.07. 55.08. 55.09.
55.10. 55.11. 55.12. 58.01. 58.02. 58103. 58.04.
58105. 3[58.06]. 53101. 59.02. 59103. 59.05. 59.06.
and 60,01 of the Schedule to the Central Excise Tanfl‘
Act. 1985 (5 of 1986);
(viii) sugar covered under sub-headmg Nos. 1701.20.
1701.31. 1701.39 and 1702.110fthe Schedule to the
Central Excise TariffAct. 1985 (5 of 1986]:
(ix) unmanufactured tobacco and tobacco refuse covered
under sub-heading No. 2401,00, cigars and chemots
of tobacco covered under headmg N 0. 24.02. cigarettes
. Ins. by Central Sales—tax (Amendment) Act, 1976 (103 011976), Sec. 7.
2.
Subs. 1) Finance Act, 1988 (26 011938), Sec. 85111)] for item Iuii}, (viii), (ix! and (x).
km by lnance Act,1989(13 011959), Serial-1).
SECTION 14 CERTAIN GOODS TO BE OF SPECIAL IMPORTANCE IN INTER-
37
STATE TRADE OR COMMERCE
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 1 [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 (5 of
1986)].
(xi) 2[* * *]
COMMENTS
Whether copra powder is declared commodity.—The dispute in the present
case was regarding rate of tax. According to respondent copra powder was taxable
at 5 per cent. and according to the department it was taxable at 8 per cent. since
it was an undeclared commodity. In first appeal filed by the respondent. assessee
Assistant Commissioner (Judicial), accepted the copra powder as declared
commodity. The revenue feeling aggrieved filed second appeal. The Tribunal rightly
in second appeal held that copra powder is a declared commodity under Sec. 14
(iv) of the Central Sales-tax Act. 3
"That is to say".—The expression "that is to say" employed in the definition in
the statute with reference to oil seeds is exhaustive and is not illustrative. 4
Whether mattar is declared goods under Sec. 14 of the Central Sales-tax Act.—All
the authorities in the present case have held that mattar was not a declared
commodity and, therefore, imposed tax on the turnover of mattar. The short
question involved in the instant revision is as to whether mattar is declared goods
under Sec. 14 of the Central Sales-tax Act and therefore, it was not liable to
additional tax of 1 per cent. It is impossible to point out any illegality or'error which
may warrant interference by High Court in the present revision and the view taken
by the Tribunal that mattar was not a declared commodity under Sec. 14 of the
Sales-tax is wholly correct. 5
Declared goods taxed at a single point. The goods" being declared goods, they
can only be taxed at a single point, that is, only one sale in the State can be subjected
to tax.
Cast iron.—If molten metal is poured into a mould, what comes out may be
regarded as a casting. Even then such iron casting in its solid form must be treated
as "cast iron" in Sec. 14 (iv) of the Central Sales-tax Act. To repeat, the test is whether
the goods in question are being bought and sold, i.e. dealt with an understood, in
commercial parlance as cast iron or as different goods, e.g. manhole covers, pipes,
motor parts etc. 7
1. ' Subs. by Finance Act, 1989 (13 of 1989) Sec. 50 (b), for the word and figures "and 2404.50".
2. Item (xi) omitted by Act 19 of 1968, Sec. 43.
3. Commissioner of Sale tax, Uttar Pradesh v. Suraj Narain Suresh Chandra, 1986 A.T.J. 478 at
p. 479.
4. Sait Rikhaji Furtarnal v. State of A.P., A.I.R. 1991 S.C. 354: 1991 Supp. (1) S.C.C. 202; State of
Bihar v. Universal Hydrocarbons Co. Ltd., A.I.R. 1995 S.C. 991 at p.995; Gopuram Gram Min
Co. v. State of A.P., 1998 (8) S.C.C. 668 at p. 670.
5. Nav Bharat Dal Mill v. Commissioner of Sales-tax, Uttar Pradesh, 1986 A.T.J. 360 at p. 380;
State of Bihar v. Universal Hydrocarbons Co. Ltd., A.I.R. 1995 S.C. 991 at p. 994.
6. Shanmuga Traders v. State of Tamil Nadu, 1998 (5) S.C.C. 349 at p. 354.
7. Vasantham Foundry v. Union of India, A.I.R. 1995 S.C. 2400 at p. 2405.
' $3CHON I4 CERTAIN GOODS TO BE OF SPECIAL lMPORTAN CE 1N INTER- 37
’ STATE TRADE OR COMMERCE
and eigarillos 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 “2404.50 and 2404.60]
of the Schedule to the Central Excise Tariil' 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 (5 of
1986)].
(X1) 21. o :1
COMMENTS
Whether copra pawderis declared commodity—The dispute in the present
case was regarding late of tax. According to respondent copra powder was taxable
at 5 per cent. and according to the department it was taxable at 8 per cent. since
it was an undeclared commodity. in llrst appeal filed by the respondenLassessee
Assistant Commissioner [Judicial]. accepted the copra powder as declared
commodity. The revenue feeling aggrieved illed second appeal. The 'n-tbunal rightly
in second appeal held that copra powder is a declared commodity under Sec. 14
an) of me Central Sales-lax Act.“
"That is to say".—The expression "that is to say" employed in the definition In
the statute with reference to oil seeds is exhaustive and is not illustrative.
Whether matter is declared goods under Sec. ‘14 of the Central Sales~tax ACL-All
the authorities in the present case have held that manor was not a declared
commodity and. therefore. imposed tax on the turnover of mortar. he short
question involved in the instant revision is as to whether nutter is declared goods
under Seem of the Central SalesAtax Act and therefore. it was not liable to
additional tax of l per cent. It is impossible to point out any illegality ofierror which
may warrant interference by High Court in the present revision and the view taken
by the Tribunal that mattasr was not a declared commodity under Sec. 14 of the
Sales-tax is wholly correct.
Declared goods taxed at a single Winn—The goods being declared goods. they
can only be taxed at a single point. that is. only one sale in the State can be subjected
to tax.
Cast iron—[f molten metal is poured into a mould. what comes out may be
regarded as a casting. Even then such iron casting in its solid form must be treated
as "cast iron” in Sec. 14 (in) of the Central Sales<tax Act. To repeat. the testis whether
the goods in question are being bought and sold. Le. dealt with an understood. in
commercial parlance as cast iron or as different goods. eg. manhole covers. pipes.
motor parts etc.
Subs. by Finance Act, 1989 (13 of I989) Sec 50 ( b), (or the word and figures "and 2404.50".
Item (11') omitted by Act 19 011968, See. 43.
Commissioner of Sale tax, Uttar Pradah v. Suraj Nanin Suresh Chandra, 1986 A.T.]. 478 at
. 479.
it lehaji Furlarnal v. State of AP. [11.12.1991 S.C. 354:19915u . (l) S.C.C. 202; State of
Bihar 1:. Universal H drourbonsC Lt , A R. 1995 5C. 991 at p. 5; Gopurarn Gram Min
Co. v. State of A. 998 (8) SOC. 663 at p.
Nov Bharat Dal v. Commissioner of Salesvtax, Uttar Pradesh, 1986 A.T.]. 360 at p. 380;
State of Bihar v. Universal Hydrocarbons Co. Ltd., A.l.R. 1995 S.C.9913tp.994.
Shanmup Traders v. State of Tamil Nadu, 1998 (5) S.C.C. 349 at p. 354.
Vasnntham Foundry o. Union of India, A.l.R. 1995 SC. 2400 at p. 2405.
:5 V’r’r‘
sew
CENTRAL SALES-TAX ACT,1956
SECTION 15
Calcined petroleum coke.—Once the entry is "coke in all its forms" irrespective
of the fact raw petroleum coke loses its original identity or in the process of
manufacture "Calcined Petroleum Coke" out of the purview of this entry. In more
or less identical situation it was held that petroleum coke is one form of coal
governed by the expression "coal" within Sec. 14 (i-a) of the Act. l
Watery coconuts are declared goods.—Schedule III consists of declared goods
under the provisions of Sec. 14 of the Central Sales-tax Act. 1956. and are common
throughout India and more than 4 per cent. tax could not be levied.
It is, thus, clear, that the water coconuts are within the original entry No. 5
of the Third Schedule. Once the goods were covered by entry No. 5 of the Third
Schedule they automatically excluded by the definition of entry No. 10 of the Second
Schedule. Therefore the goods are not liable to tax additionally, as they are covered
by entry No. 5 of the Third Schedule they automatically excluded by the definition
of entry No. 5 of the Third Schedule. 2
Hides and skins separate commercial commodity.—Merely because different
goods or commodities are listed together in the same sub-heading or sub-item in
Sec. 14 cannot mean that they are regarded as one and the same item. Whenever
the Legislature wanted different goods placed in the same entry to be regarded as
a single commodity it expressly provided for the same. Dressed hides and skins is
a separate commercial commodity which emerges after raw hides and skins has
been subjected to manufacturing process and, therefore, Sec. 14 (iii) deals with two
different types of goods which unlike the case of pulses referred to in Sec. 15 (d), is
not regarded by the Act as one and the same commodity. 3
[15. 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 authorizes 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 5 [four
per cent.] of the sale or purchase price thereof. 6[* * *];
(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, 7 [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 8[shall be reimbursed
to 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;]
9 [(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 Cl. (i) of Sec. 14, the tax leviable on rice
procured out of such paddy shall be reduced by the amount of
tax levied on such paddy;
1.
State of Bihar v. Universal Hydrocarbons Co. Ltd., A.I.R. 1995 S.C. 991 at pp. 993, 994.
2.
State of A.P. v. Kavali Venkata Ramanaiah & Sons., 1993 (89) S.T.C. 175 at pp. 175,176 (A.P.).
3. TVL K.A.K. Anwar & Co. v. State of Tamil Nadu, 1998 (1) S.C.C. 437 at p. 448.
4.
Subs. by Act 31 of 1958, Sec. 11, for the former Sec. 15 (w.e.f. 1st October, 1958).
5.
Subs. by Act 25 of 1975, Sec. 38, for "three per cent." (w.e.f. 1st July, 1975).
6. The words "and such tax shall not be levied at more than one stage" omitted by Finance
Act, 2002 (20 of 2002), Sec. 155.
7. Subs. by Act 61 for 1972, Sec. 12, for "the tax so levied" (w.e.f. 1st April, 1973).
8. Ibid., for "shall be refunded to such persons."
9.
Ins. by Central Sales-tax (Amendment) Act, 1976 (103 of 1976), Sec. 8.
,—
38 CENTRAL SALES-TAX ACT, 1956 SECTION 15
Calcined petroleum coke—Once the entry is "coke in all its forms" irrespective
of the {act raw petroleum coke loses its original identity or in the process of
manufacture “Calclncd Petroleum Cake" out of the purview of this entry. in more
or less identical situation it was held that petroleum coke is one form of coal
governed by the expression "coal" within Sec. 14 {mi of the Act.‘
Watery coconuts aredeclared goods—Schedule III consists of declared goods
under the provisions ofScc. 14 of the Central Sales-tax Act. 1956. and are common
throughout lndla and more than 4 per cent. tax could not be levied.
ii is. thus. clear. that the water coconuts are within the angina! entry No, 5
of the Third Schedule, Once the goods were covered by entry No, 5 of the Third
Schedule they automatically excluded by the definition of entry No 10 of the Second
Schedule. Therefore the goods are not liable to tax additionally. as they are covered
by entry No. 5 of the Third Schedule they automatically excluded by the dcllnitlon
of entry No. 5 of the Third Schedule?
Hides and skins separate commercial commodity.~Merely because dill'erent
goods or commodities are listed together in the same sub-heading or subrlicm In
Sec. 14 cannot mean that they are regarded as one and the same item. Whenever
the [legislature wanted different goods placed in the same entry to be regarded as
a single commodity it expressly provided for the same. Dressed hides and skins is
a separate commerclal commodity which emerges after raw hides and skins has
been subjected to manufacturing process and. therefore. Sec. l4 (iii) deals with two
dill’erent types of goods which unlike the case of pulses referred to in Sec. 15 {d}. is
not re arded by the Act as one and the same commodity.
[‘15. Restrictions and conditions in regard to tax on sale or purchase of
declared goods within a Slate—Every sales—tax law of a State shall. in so far
as it imposes or authorizes 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 5[four
per cent.] of the sale or purchase price thereof. 6l‘ ' 'l:
{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. 7land tax has been pald 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 6[shall be reimbursed ‘
to 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:]
9[(CJ where a tax has been levied under that law in respect of the
sale or purchase inslde the State of any paddy referred to in
sub-clause (0 of Cl. (i) of Sec. 14, the tax Icviable on rice
procured out of such paddy shall be reduced by the amount of
tax levied on such paddy:
. State at Bihar U. Universal Hydrocarbons Co. Ltd, AIR. 1995 SC. 991 at pp. 993, 994,
State of AJ’. iI. Kavali Venkata Ramanaiah 8: Sons, 1993 (89) S.T.C. l75 at pp. 175, 176 (AR).
TVL K.A.K. Anwar 6: Co. v. State of Tamil Nadu, F393 (l) S.C.C. 437 at p. 448.
Subs. by Act 31 of l958, Sec. ll, lot the former Sec. 15 (w.e.l. lst October, I958).
Subs by Act 25 of1975. Scc. 38, for "three per cent.“ (wet. lst July, 1975).
The words "and such tax shall nol be levied at more than one stage" omitted by Finance
AcL 2002 (20 of 2002), Sec. 155.
Subs. by Act 61 for 1972, Sec. 12, {or “the tax so levied" (wet. lst April, 1973),
lliiriu for “shall be refunded to such persons."
ins. by Central Szilesrtax (Amendment) Act, 1976 (103 of 1976), Sec. ii.
998 oupvw
SECTION 16
DEFINITIONS
I [(ca)where a tax on sale or purchase of paddy referred to in
sub-clause (f) of Cl. (i) of Sec. 14 is leviable under the law and
the rice procured out of such paddy is exported out of India,
then, for the purposes of sub-section (3) of Sec. 5. the paddy
and rice shall be treated as a single commodity;]
(d) each of the pulses referred to in Cl. (vi-a) of Sec. 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 that law.]
COMMENTS
Assessment order—When could be quashed.—Bright-bars are declared goods
within the meaning of the provisions of the Bengal Finance (Sales Tax) Act, 1941,
as extended to Delhi. They were assessed to sales-tax under the said Act for the
assessment years 1973-74 and 1974-75. The petitions were filed to quash the
assessment orders for the two years on the ground that the assessment made under
Sec. 5(2) (a) (ii) of the State Act is bad since it is inconsistent with the provisions of
Sec. 15 (a) of the Central Sales-tax Act. 1956 and violative of Art. 286 (3) of the
Constitution of India. An identical challenge fell for consideration before the
Supreme Court in Govind Saran Ganga Saran v.Comrnissioner. Sales-tax.2 The
challenge was upheld and assessment order in that case was set aside. Section 15
(a) of the Central Act provides that every sales-tax law of State shall be subject to
the restriction and condition that the tax payable under that law, on any declared
goods, shall not exceed 3 per cent. of the sale or purchase price thereof and that
such tax shall not be levied at more than one stage. Section 5 (a) (ii) of the Bengal
Finance (Sales Tax) Act. 1941, does not contain any guideline as to the stage at
which sales tax has to be levied upon a declared goods inside the State. It is the
omission in this section of this important pre-requisite of Sec. 15 of the Central Act
that persuaded the Supreme Court to set aside the assessment in the case referred
above. The State Sales tax Act, as applied to the Union Territory of Delhi, was
amended by Parliament in 1959 and Sec. 5 (A) was inserted empowering the Chief
Commissioner to specify, by notification in the official Gazette, the point in the series
of sales by successive dealers at which any goods or class of goods can be taxed.
The Supreme Court observed that no notification was brought to its notice. In the
absence of any notification. the assessment orders challenged in the petitions have
to he quashed. 3
Benefit of adjustment of tax.—Clause (i) of Art. 286 protects sale or purchase
which take place (a) outside the State or (b) in the course of import of goods into or
export of the goods out of the territory of India, from a State Law imposing or
authorising imposition of a tax. Clause (c) of Sec. 15 of Central Sales tax Act directs
that where in respect of sale or purchase of paddy, tax has been levied in a State,
then the tax leviable on the rice procured out of such paddy shall be reduced by
the amount of tax levied on such paddy. 4
5[CI-IAPTER V
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;
1. Ins. by Act 33 of 1996, Sec. 87 (w.e.f. 28th September, 1996).
2. A.I.R. 1985 S.C. 1041: 1985 (Supp.) S.C. (205: 1985 S.C.C. (Tax) 447; Larsen & Toubro Ltd. v.
State of Tamil Nadu, 1993 (88) S.T.O. 289 (Mad.).
3. Rajasthan Commercial Corporation v. Sales-tax Commissioner, 1986 (4) S.C.C. 350 at p. 351.
4. Satnam Overseas (Export) v. State of Haryana, A.I.R. 2003 S.C. 66 at p. 82.
5. Ins. by Act 61 of 1972, Sec. 13 (w.e.f. 1st April, 1973).
SECTION 16 DEFIN lTlONS 39
l[(co)where a tax on sale or purchase of paddy referred to in
sub»clause (l) oi'Cl. {i} of Sec. 14 is leviahle under the law and
the rice procured out of such paddy is exported out of India.
then. for the purposes of sub-section [3) of Sec. 5. the paddy
and rice shall be treated as a single commodityd
((1) each of the pulses referred to in Cl. (vial) of Sec. 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 that law.]
COMMENTS
Assessment order—When could be quashed,—~Bright—bars are declared goods
within the meaning of the provisions of the Bengal Finance (Sales Tax) Act. l94].
as extended to Delhi. They were assessed to sales-tax under the said Act {or the
assessment years 1973-74 and 1974-75. The petitions were filed to quash the
' assessment orders for the two years on the ground ihat the assessment made under
‘ Sec. 5(2) (111 (ill of the State Act is bad since it is inconsistent with the provisions of
Sec. 15 (a) Of the Central Salethax Act. l956 and violative of Art. 286 (3] of the
Constitution of India. An identical challenge fell for consideration before the
' Supreme Court in Goutud Saran Gringo Saran LLCommissioner. Sales-tax.2 The
challenge was upheld and assessment order in that case was set aside. Section 15
lot) of the Central Act provides that every sales~tax law of State shall be subject to
'. the restriction and condition that the tax payable under that law. on any declared
goods. shall not exceed 3 per cent. of the sale or purchase price thereof and that
, such tax shall not be levied at more than one stage. Section 5 {a} (it) of the Bengal
some {sales Tax] Act. 1941. does not contain any guideline as to the stage at
which sales tax has to be levied upon a declared goods inside the State. It is the
omission in this section oi'this important prerequisite of Sec. 15 of the Central Act
that persuaded the Supreme Court to set aside the assessment in the case referred
above. The State Sales tax Act. as applied to the Union Territory of Delhi. was
. Amended by Parliament in 1959 and Sec. 5 (A) was inserted empowering the Chief
Commissioner to specify. by notification in the oiliclal Gazette. the point in the series
vofsales by successive dealers at which any goods or class of goods can be taxed.
The Supreme Court observed that no notification was brought to its notice. In the
absence of any Ipottl‘ication, the assessment orders challenged in the petitions have
'18: be quashed,
Benefit otadiustmentoftax.—Clause (u arm. 286 protects sale or purchase
WEI] take place {a} Outside the State or lb} in the course of import of goods into or
“easport of the goods out of the territory of India. from a State Law imposing or
Louthorising imposition (its tax. Clause [c] of Sec. 15 of Central Sales tax Act directs
i’ twhere in respect of sale or purchase of paddy, tax has been levied in a State.
i .. the tax levtable on the rice procured out of such paddy shall be reduced by
the amount of tax levied on such paddy.
5[CHAPTER v
LIABILITY 1N 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:
. by Act 33 of 1996, Sec. 57 (wet. 23th September. 1996).
A.I.R. 1985 S.C. 1041: 1985 (Supp) S.C. (205: 1985 S.C.C, (Tax) “7; Larsen & Totlbrc Ltd. in.
State of Tamil Nndu, 1993 (88) SIG. 2239 (Mad).
Raiasthan Commercial Corporation v. Sales-tax Commissioner. 1986 (4) S.C.C. 350 a! p. 35].
53mm Overseas (Export) at State of Hays-n, ALR. 2003 S.C. 66 at p. 82.
ins. by Act 61 of 1972, Sec. 13 (wet. lst April, 1973).
CENTRAL SALES-TAX ACT,1956
SECTION 17
(b) "company". and "private company" have the meanings
respectively assigned to them by Cis. (i) and (iii ;) of sub-section
(1) of Sec. 3 of the Companies Act, 1956 (1 of 1956).
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 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 sets aside such
amount, shall not part with any of the assets of the company or the
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.—Notwith-
standing anything contained in the Companies Act, 1956 (1 of 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
Ml CENTRAL SALES-TAX ACT, “56 SECI lON
{b} "company". and "private company? have the meanin
respectively assigned to them by Clsi {i} and (iii) of sub-secti
(l) oi'Sec, 3 of the Companies Act. 1956 (l of 1956).
17. Company in liquidation—41) Every person—
[aJ 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 llquldator. gt
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 iii. notify to the ilquidator 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 suilicient to provide for any tax which is then. or is likely
thereafter to become. payable by 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 subsection (2) and on being so notified. shall set aside an
amount equal to the amount notified and. until he so sets aside sudj’
amount, shall not part with any of the assets of the company or the
properties in his hands:
PROVIDED THAT nothing contained in this subsection 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 payabl
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 windingup of the company as are in the opinion!
of the appropriate authority reasonable.
(4) if the liquidator fails to give the nodce 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 lit
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 liquidstor
under this subsection 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 iri‘
force.
18‘ Liability of directors of private company in liquidation—Notwith-
standing anything contained in the Companies Act. 1956 (l of 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
SECTION 21
PROCEDURE ON RECEIPT OF APPLICATION
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.
1 [CHAPTER VI
AUTHORITY TO SETTLE DISPUTES IN COURSE OF INTER- STATE
TRADE OR COMMERCE
19. Central Sales Tax Appellate Authority.-(1) The Central Government
shall constitute, by notification in the Official Gazette, an Authority to settle
inter-State disputes falling under 2[Sec. 6-A read with Sec. 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.
(3) The salaries and allowances payable to, and the terms and
conditions of 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.
20. Appeals.-(1) The provisions of this Chapter shall apply to appeals filed
by the aggrieved dealer against any order of the assessing authority made under
3[Sec. 6-A read with Sec. 9] 4[of this Act, which relates to any dispute concerning
the sale of goods effected in the course of inter-State trade or commerce.]
(2) Notwithstanding anything contained in the general sales tax laws,
the Authority shall adjudicate an appeal filed by a dealer 5[under
sub-section (1) within forty-five days from the date on which order referred
to in that sub-section is served on him:
PROVIDED THAT the Authority may entertain any appeal after the
expiry of the said period of forty-five days, but not later than sixty 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.]
s[*
*
*
*]
(4) The application shall be made in quadruplicate and be
accompanied by a fee of five thousand rupees.
1. Ins. by Central Sales-tax (Amendment) Act, (41 of 2001), Sec. 3.
2. Subs for the words, figures and letter "Sec. 6-A or Sec. 9" by Finance (No. 2) Act, 2004 (23
of 2004), Sec. 119 (a), dated 10th September, 2004.
3. Subs. for the words, figures and letter " Sec. 6-A or Sec. 9" by Finance (No. 2) Act, 2004 (23
of 2004) Sec. 119 (b), dated 10th September, 2004 (w.e.f. 17th March, 2005).
4. Subs. for the words "Sec. 9 of this Act" by Finance Act, 2003 (32 of 2003), Sec. 163 (a), dated
14th May, 2003 (w.e.f. 17th March, 2005).
5. Subs. by the Finance Act, 2003 (32 of 2003), Sec. 163 (b), dated 14th May, 2003 (w.e.f. 17th
March, 2005).
6. Sub-section. (3) of Sec. 20 omitted by Finance Act, 2003 (32 of 2003), Sec. 163 (c), dated 14th
May, 2003 (w.e.f. 17th March, 2005).
SECTION 21 PROCEDURE ON RECEIPT OF APPLICATION 41
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.
‘[CHAI’1"ER v1
AUTHORITY TO SETTLE DISPUTES IN COURSE OF INTER- STATE
TRADE 0R COWERCE
19. Central Sales Tax Appellate Authority—(1) The Central Government
shall constitute, by notification in the Official Gazette, an Authority to settle
‘ inter‘State disputes falling under2[5ec. 6—A read with Sect 9] of this Act, to be known
as "the Central Sales Tax Appellate Authority (hereinafter referred to as the
Authori )".
(2 The Authority shall consist of the {allowing 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 Govemment not below
the rank of Additional Secretary, who is an expert in sales-tax
matters.
(3] The salaries and allowances payable to. and the terms and
conditions of service of. the Chairman and Members shall be such as may
be prescribed.
(4) The Central Government shall provide the Authority with such
ofiicers and staff as may be necessary for the efficient exercise of the powers
of the Authority under this Act.
a
20. Appeals—(1) The provisions of this Chapter shall apply to appeals filed
the aggrieved dealer against any order of the assessing authority made under
3 Sec. 6vA read with Sec. 9] 4[of this Act, which relates to any dispute concerning
the sale of goods effected in the course of intervState trade or commerce]
(2) Notwithstanding anything contained in the general sales tax laws.
the Authority shall adjudicate an appeal filed by a dealer 5[under
sub-section (1] within fortyvflve days from the date on which order referred
to in that sub-section is served on him:
PROVIDED THAT the Authority may entertain any appeal after the
urpiry of the said period of forty~iive days. but not later than sixty days from
the date of such service. if it is satisfied that the appellant was prevented
by suig‘icient cause from filing the appeal in time.]
[- o n e]
(4) The application shall be made in quadruplicate and be
mompanled by a fee of live thousand rupees.
Inn. by Central Saleedax (Amendment) Act. (41 012001). Sec. 3.
Subs for the words, fi tires and letter "Sec. 6A or Sec. 9" by Finance (No. 2) Act, 2004 (23
of 2004), Sec. 1'19 (a), fled 10!}: September, 1004.
Subs. [or the words, figures and letter “ Sec. 6—A or Sec. 9" by Finance (No. 1) Act! 2004 (23
of 2004) Sec. 119 (b), daled 10th September, 2004 (wet. 17th March, 2005).
4. Subs. for the words "Sec. 9 of this Act" by Finance Act. 2003 (32 of 2003), See 163 (a), dated
Nth May, 2003 (w.e.f. 17th March, 2005).
5. Subs. by the Finance Act, 1003 (32 of 2003), Sec. 163 (b), dated lllh May, 2003 (wet. 17th
March, 1005).
6. Sub-section. (3) of Sec. 20 omitted by Finance Act, 2003132 of 2003), Set. 163 (c), dated 14th
May, 2005 (wet. 17th March, 2005).
separ-
-