Meghalaya act 001 of 2005 : The Meghalaya Tax (On Luxuries) Act, 2005 (Act No. 1 of 2005)

Section 1.Short title, extent and commencement

1(1) This Act may be called the Meghalaya Tax (On Luxuries) Act, 2004.

(2) It extends to the whole of Meghalaya.

(3) It shall come into force on such date as the State Government may, by notification, appoint.

Section 2.Definitions

In this Act, unless there is anything repugnant in the subject or context-

(a) Act means the Meghalaya Tax (On Luxuries) Act, 2004,

(b) Licence Stockist means a stockist to whom a licence has been granted under sub-section (4) of Section 6;

(d) Notification means notification published in the Official Gazette;

(e) Prescribed means prescribed by Rules made under this Act;

(f) Prescribed Authority means the Commissioner of Taxes appointed under sub-section (1) of Section 8 of the Meghalaya Sales Tax Act (Assam Act XVII of 1947 as adapted by Meghalaya);

(g) Schedule means the Schedule appended to this Act;

(h) State Government means the Government of the State of Meghalaya;

(i) Stock of luxuries means the quantity of luxuries received by a stockist;

(j) Stockist means a person who has in customary course of business, in his possession of, or control over, a stock of luxuries, whether manufactured, made or possessed by him in Meghalaya or brought by him into Meghalaya either on his own account or on account of others, from any place outside Meghalaya;

(k) Tax means the tax payable under this Act;

(l) Turnover of stock of luxuries in relation to a stockist in respect of any period as prescribed or part thereof, means the aggregate of the value of stock of luxuries;

(m)Value of Stock of Luxuries means

i) In respect of any Stockist a manufacturer of any of the luxuries, the value of such luxuries calculated at the ex-factory price at the time of receipt of entry thereof in his stock and the amount of excise duty and of transport and insurance charges if any paid or payable by him;

ii) In respect of any stockist being an important of any of the luxuries, the value of such luxuries calculated at the price thereof as per consignors bill, invoice or consignment note or other document of like nature and shall include-

(ia) excise duty and central sales tax, if any, paid or payable on such luxuries by the manufacture or importer thereof as the case may be; and

(ib) transport charges and insurance charges if any for carrying such luxuries to any premises, godown, warehouse or any other place for delivery to a wholesaler, dealer, retailer, distributor or any other person, and

(n) Year means the year commencing on the first day of April and ending on the 31st day of March.

Section 3.Taxing Authority

(1) The State Government shall appoint the Prescribed Authority and such other persons as appointed under subsection (1) of Section 8 of the Meghalaya Sales Tax Act, (Assam Act XVII of 1947 as adapted by Meghalaya) to assist the Prescribed Authority for carrying out the purpose of this Act with area or areas as specified under the said Act over which such persons have been exercising jurisdiction.

(2) Persons appointed under sub-section (1) shall exercise such powers as may be conferred and such duties as may required by or under this Act.

(3) The Prescribed Authority and the persons appointed under sub-section (1) shall be deemed to the public servants within the meaning of Section 21 of Indian Penal Code.

(4) Subject to such conditions and restrictions as may be prescribed, the Prescribed Authority may, by order in writing, delegate any of its powers and duties under this Act.

(5) No suit, prosecution or other proceedings shall lie against the Prescribed Authorities or the persons appointed under sub-section (1) for anything which is in good faith done or intended to be done under this Act or the Rules made there under.

Section 4.Incidence of Tax

Every stockist shall be liable to pay on his turnover of stock of luxuries of such rate, not exceeding twenty percentum, as the State Government may, by notification fix in this behalf and different rates may be fixed for different class or classes of luxuries.

Section 5.Levy of Tax

The tax payable by a stockist under this Act shall be levied on his turnover of stock of luxuries during any period as prescribed.

Section 6.Licence

(1) No Stockist shall, while being liable to pay luxuries tax under Section 4, hold any stock of luxuries in any premises, godown, warehouse or any other place in Meghalaya unless he obtains, on application, a licence in the prescribed form.

(2) If a stockist fails to obtain a licence under sub-section:- Within the period of one month of the commencement of this Act, or within a period of seven days from the date of his liability under Section 4, whichever is later, the Prescribed Authority may, after giving him reasonable opportunity of being heard, impose, by way of penalty a sum being not less than five thousand rupees and not more than ten thousand rupees for each month of delay in obtaining the licence and direct the stockist by a notice to pay the amount of such penalty into a Government Treasury within the date specified in the notice:

Provided that no penalty under this sub-section shall be imposed in respect of the same fact for which a prosecution has been instituted and no prosecution would lie vice-versa.

(3) Every stockist required to obtain a licence under subsection (1) shall make an application in this behalf in the prescribed manner to the prescribed Authority.

(4) If the Prescribed Authority is satisfied that the application for licence is in order, it shall subject to such conditions and restrictions and in such manner as may be prescribed, grant the applicant a licence in the prescribed form.

(5) Where a stockist makes an application for licence under sub-section (3) within the period referred to in sub-section (2) such stockist shall be deemed to have completed with the provisions of sub-section (1) of this application.

(6) Where a licence has been granted to a stockist under subsection (4) the Prescribed Authority may, if in its opinion it is necessary or expedient so to do for the proper realisation of recovery of the tax under this Act, at any time while such licence is in force, by an order in writing and for reasons to be recorded therein, require the stockist to furnish within such period and in such manner as may be prescribed, a security for the payment of the tax payable by him under this Act;

Provided that no order shall be passed under this subsection without giving the stockist an opportunity of being heard.

(7) The Prescribed Authority may, on application or otherwise, from time to time, amend the licence of a stockist.

(8) Where the liability of stockist to whom a licence has been granted under sub-section (4) to pay the tax under this Act has ceased, such licence may, on application by him, be cancelled by the Prescribed Authority in the manner as may be prescribed.

(9) A licence granted to a stockist under sub-section (4) may be cancelled by the Prescribed Authority after due notice to such stockist if it is satisfied that he has failed to pay the tax, penalty or interest payable under this Act or to furnish the security under sub-section (6);

Provided that the licence so cancelled may be restored if the stockist to whom the licence was granted pays the arrears tax, penalty and interest and furnished a receipt challan therefore;

Section 7.Returns and Payment of Tax

(1) Every licensed stockist shall furnish returns of turnover of stock of luxuries to the Prescribed Authority, in such manner, for such period or periods and by such date or date or dates as may be prescribed.

(2) Before any licensed stockist furnishes the returns under sub-section (1) he shall in the prescribed manner, pay into a Government Treasury the full amount of tax due from him under this Act according to such returns and shall furnish along with each such returns a receipt from such Treasury, showing the payment of such amount.

Section 8.Interest

(1) If the amount of tax payable under Section 5 in respect of any periods not paid by the Stockist referred to in Section 7 by the date prescribed under that Section, such stockist shall pay a simple interest at the rate of two perecntum for each English Calendar month of default from the first day of such month next following the date as prescribed to the last day of the month prior to the month in which such tax is fully paid or unto the month prior to the month of assessment under Section 9 in respect of such period, whichever is earlier, often so much of the amount of tax payable by him according to the return, where return is furnished, or according to such assessment where return is not furnished, as remains unpaid at the end of each such month of default.

(2) Where a stockist fails to make payment of any tax payable after assessment made under sub-section (1) of this Section by the date specified in the notice issued under Section 9 for payment thereof, he shall pay a simple interest at the rate of two percentum for each English Calendar month of default from the first day of such month next following the date specified in such notice to the last day of the month prior to the month of full payment of such tax, or up to the month prior to the month of commencement of proceedings under sub-section (10) of Section 9, whichever is earlier, upon so much of the amount of tax due from him according to such notice as remain unpaid at the end of each such month of default.

(3) Where as a result of an order under Section 14, the amount of tax on which interest was payable this Section is modified, the interest shall be payable on the modified amount.

(4) A stockist liable to pay interest under sub-section (1) or sub-section (2) shall pay into a Government Treasury the amount of such interest in such manner and by such date or dates as may be prescribed.

(5) Notwithstanding anything contained in sub-section (1) or sub-section (2), no interest shall be payable in such cases or under such circumstances, and subject to such conditions, if any, as may be prescribed.

(6) The State Government shall in the prescribed manner, pay a simple interest at the rate of two percentum for each English Calendar month of delay in making refund of luxury tax paid in excess which arises out of an order passed under Section 4, from the first day of such manner next following the expiry of three months from the date of passing of such order to the last day of the month prior to the month in which the refund is made upon the amount of tax refundable to him according to such order.

(7) In calculating the interest payable under this Section, the amount of tax in respect of which such interest is to be calculated shall be rounded off to the nearest multiple of one hundred and for this purpose, where such amount contains as part of one hundred rupees. If such part is fifty rupees or more, it shall be increased to one hundred rupees and if such part is less than fifty rupees, it shall be ignored.

Section 9.Assessment of tax, imposition of penalty and determination of interest

(1) If no return is furnished a licence stockist in respect of any period by the prescribed date, or if the Prescribed Authority is not satisfied that the return furnished is correct and complete, the Prescribed Authority shall proceed in such manner as may be prescribed to assess to the best of its judgement the amount of tax from the licensed stockist in respect of a year comprising all such periods and in making such assessment, shall give the licensed stockist a reasonable opportunity of being heard and in the case of failure by a licensed stockist to submit in respect of any period a return accompanied by a receipt from a Government Treasury as required under Section 7 by the prescribed date, the Prescribed Authority may, if he is satisfied that the default was made without reasonable cause for such period, direct that the licensed shall pay, by way of penalty, in addition to the amount of tax so assessed in respect of such period, a sum not exceeding that amount.;

Provided that no penalty under this sub-section shall be directed to be paid in respect of the fact for which a prosecution under clause (c) of sub-section (1) of Section 17 has been instituted and no prosecution would be vice versa.

(2) If, upon information, the Prescribed Authority is satisfied that any stockist who has been liable to pay under Section 4 has failed to obtain licence, or has not been granted licence, the Prescribed Authority shall proceed in such manner as may be prescribed to assess to the best of its judgement the amount of tax due from such stockist in respect of any period or part thereof during which such stockist has either failed to obtain licence, or has been granted licence, after giving him a reasonable opportunity of being heard.

(3) No assessment under sub-section (1) shall be made after the expiry of two years, and no assessment under subsection (2) shall be made after expiry of six years, from the end of the year in respect of which or part of which the assessment is made.

(4) In computing the period limited by sub-section (3) for making any assessment under sub-section (1) or subsection (2), the period during which the Prescribed Authority is restrained from commencing or continuing any proceeding for such assessment by an order of any Court shall be excluded.

(5) Where the Prescribed Authority is satisfied that a stockist is liable to pay interest under Section 8, it shall, in such manner as may be prescribed, determine the amount of interest payable by such stockist and if, on such determination, any additional amount is found to be payable by the stockist. or any excess amount is found to be refundable to the stockist, the Prescribed Authority shall issue a notice, in the prescribed manner, to such stockist directing him to pay such additional amount or informing him of the amount of excess payment, as the case may be.

(6) No determination under sub-section (5) of the interest payable under sub-section (1) of Section 8 shall be made after the expiry of one year from the date of assessment of tax under sub-section (1) in respect of period for which such determination is made.

(7) Where there is an apparent mistake in the determination of interest under sub-section (5), the Prescribed Authority may; on its own motion or upon application made by a stockist, within six months from the date of determination rectify the amount of interest payable by such stockist and issue a fresh notice in the prescribed manner.

(8) The amount of tax due from a stockist upon assessment made under sub-section (1) or sub-section (2), as the case may be, shall together with any penalty directed to be paid under subsection (1), be paid by the stockist into a Government Treasury by such date as may be specified in a notice by the Prescribed Authority for this purpose and the due date to be so specified shall not ordinarily be less than thirty days from the date of service of such notice.

(9) The amount of interest that may become due from a stockist upon determination under sub-section (5) shall be paid by the stockist into a Government Treasury by such date as may be specified in the notice issued under the sub-section by the Prescribed Authority and the date to be so specified shall not ordinarily be less than thirty days from the date of service of such notice.

(10) Any amount of tax, penalty or interest which remain unpaid after the date specified in the notice under sub-section (8) or sub-section (9) shall be recoverable as an arrear of land revenue, as if it were payable to the Collector.

Section 10.Refund

The prescribed Authority shall, in the prescribed manner, refund to a stockist any amount of tax, penalty or interest paid by such stockist in excess of the amount due from him under this Act, either by cash payment or by deduction from or adjustment in the amount of tax, penalty or interest due in respect of any other period.

Section 11.Accounts

Every stockist shall maintain and keep true and up-to-date account of the quantity and value of luxuries held in stock by him and vended, supplied or distributed by him during the period as prescribed and also keep documents in support of other charges, duties and tax paid or payable by him, and if the Prescribed Authority considers that such account is not sufficiently clear or intelligible to enable him to make a proper check of the return referred to in section 7, he may require such stockist to keep such accounts as he may direct.

Section 12.Production and inspection of accounts and search of premises.

(1) The Prescribed Authority may, subject to such conditions as may be prescribed, require any person (a) To produce any accounts, registers of documents before it and explain them;

(b) To furnish any information in relation to manufacture, import, use or sale and stock of luxuries and relating to any other matter, as may be deemed necessary for the purposes of this Act.

(2) All accounts, registers and documents and luxuries kept in any place of business of a stock shall, at all reasonable times, be open to inspection by the Prescribed Authority.

(3) If the Prescribed Authority, or any person appointed under sub-section (1) of Section 3 to assist it, has reason to suspect that any stockist is attempting to evade payment of tax, he may enter into and search any place of business and for reasons to be recorded in writing, seize such accounts, registers or documents of the stockist as may be necessary, for determination of hability to pay tax by such stockist or for assessment of such tax or for determination of interest or for any other purposes as may be required by or under this Act,

(4) The Prescribed Authority, or any person appointed under sub-section (1) of Section 3 shall grant a receipt for any accounts, registers or documents seized by him and shall retain any of such accounts, registers or documents only for period as may be necessary for examination thereof or for prosecution or for any other purpose of this Act:

Provided that no accounts, registers or documents seized by the Prescribed Authority, shall be retained for any period exceeding one year from the date of seizure unless such Authority records, in writing, reasons therefore, but where seizure is made by any person appointed under sub-section (1) of section 3 to assist the Prescribed Authority, such person shall not retain any of the accounts, registers or documents seized by him under sub-section (3) for any period exceeding one year from the date of seizure unless he records, in writing, the reasons for further retention and obtains sanction of the Commissioner in writing in this behalf.

Section 13.Search and seizure

(1) If the Prescribed Authority, or any person appointed under sub-section (1) of Section 3 to assist him has reasons to believe that a person is holding a stock of any of the luxuries manufactured by him in Meghalaya or brought by him into Meghalaya from any place outside Meghalaya in any premises and that he is attempting to evade payment of tax, such Authority, or the person appointed under sub-section (1) of Section 3 to assist it may, subject to such conditions and restrictions as may be prescribed enter into such premises and conduct search therein and seize such luxuries to secure payment of tax that may become payable on assessment under Section 9. (2) While making seizure the Prescribed Authority or the person who seizes luxuries, shall grant a receipt thereof in the prescribed manner; Provided that when the Prescribed Authority, or the person appointed under sub-section (1) of Section 3 to assist it, thinks it necessary not to seize such luxuries for the time being, he shall seal in the prescribed manner any room, godown or warehouse on any container found within such premises. (3) Until the amount of tax that may be assessed under subsection (2) of Section 9 is paid together with penalty, if any, what may be directed to be paid under sub-section (2) of Section 6 the luxuries so seized shall be retained; Provided that where a stockist furnished a security or bank guarantee to secure payment of the tax pending determination of such tax under sub-section (2) of Section 9. The luxuries so seized shall be retained. (4) If a stockist fails to pay the amount of tax as may become payable under Section 5 or due from him under section 9 and penalty payable under sub-section (2) of Section 6 if any within such period as may be prescribed the luxuries so seized shall subject to such condition and restrictions and in such manner as may be prescribed be sold in open auction or otherwise by the Prescribed Authority, and the sale proceeds thereof shall be remitted to a Government Treasury after deducting there from the incidental expenses if any: (5) The amount of tax due from a stockist after assessment under section 9 together with penalty, if any that may be directed to be paid under sub-section (2) of Section 6 shall be recovered out of the sale proceeds of the luxuries sold under sub-section (4) and the balance amount of the sale proceeds if any shall be refunded to such stockist in the prescribed manner on application made by him within the period as prescribed.

Section 14.Appeal, Revision, and Review.

(1) Any stockist may in the prescribed manner appeal to such Review. Authority as may be prescribed hereinafter referred to as the Appellate Authority, against any order of assessment determination of interest, or imposition of penalty under Section 9 within such time as may be prescribed. Provided that no appeal shall be entertained by the Appellate Authority unless it is satisfied that such amount of tax, interest or penalty, as the case may be, as the appellate may admit to be due from him has been paid. (2) Subject to such rules of procedure as may be prescribed and for reasons to be recorded in writing, the Appellate Authority of any appeal under sub-section (1) may be order- (a) Confirm, set aside or annual the assessment; or (b) Reduce or enhance the amount of tax, or (c) Modify any order pertaining to interest or penalty. (3) Subject to such rules as may be prescribed and for reasons to be recorded in writing- (a) The Prescribed Authority may, on its own motion, revise any assessment made or order passed by a person appointed under sub-section (1) of Section 3 to assist it; (b) The Prescribed Authority may, upon application, revise any order, other than an order referred to in clause (c) and an order against which an appeal lies under sub-section (1) passed by a person appointed under sub-section (1) of Section 3 to assist it. (c) The Board may, upon application, revise a final appellate or revisional order from an order of assessment of tax, determination of interest or imposition of penalty, under Section 9. (4) Subject to such rules as may be prescribed and for reason to be recorded in writing- (a) Any order of assessment or other order passed under this Act or the rules made there under by the Prescribed Authority or any person appointed under sub-section (1) of Section 3 to assist it, may be reviewed by it or the person passing such order, upon application or of its or his own motion, and (b) The Board may review any order passed by it, either on its own motion or on application. (5) Before any order is passed under this section, any person who is likely to be affected thereby adversely shall be given a reasonable opportunity of being heard.

Section 15.Bar to certain proceedings

No assessment made and no order passed under this Act or the Rule made there under by the Prescribed Authority, or any person appointed under sub-section (1) of Section 3 to assist it and no order passed under this Act or the rules made there under shall be called in question in any civil court, and save as otherwise in section 14, no appeal or application for revision or review shall lie against any such assessment or order.

Section 16.Power to take evidence

The Board, the Prescribed Authority or any person appointed under sub-section (1) of Section 3 to assist the Prescribed Authority shall, for the purpose of this Act, have the power as are vested in a court under the Court of Civil Procedure, 1908, (Central Act 5 of 1908) when trying a suit, in respect of the following matters, namely:- (a) Enforcing the attendance of any person and examining him on oath or affirmation; (b) Compelling the production of documents; and (c) Issuing commissions for the examination of witness; and any proceeding under this Act before the Board, the Prescribed Authority or any person appointed under subsection (1) of Section 3 to assist the Commissioner shall be deemed to be a judicial proceeding within the meaning of Section 193 and Section 228 and for the purpose of Section 196 of the Indian Penal Code (Central Act 45 of 1860).

Section 17.Offences, penalties

(1) Whoeverand prosecution. (a) Fails to furnish the security demanded under subsection (6) of Section 6; (b) Fails to pay the full amount of tax payable for any period in accordance with the provisions of Section 7; (c) Fails without reasonable cause to furnish return under Section 7; (d) Submit false return; (e) Fails to make payment of interest payable under subsection (1) of Section 8; (f) Fails to comply with provision of Section 11; or (g) Refuses to comply with any requirements under subsection (1) of Section 12; 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 one, with a daily fine not exceeding one hundred rupees during the period of continuance of the offence. (2) Whoever holds a stock of luxuries in contravention of the provisions of sub-section (1) of Section 6 shall be punishable with imprisonment which may extend to one year or with minimum fine of fine thousand rupees or with both and when offence is a continuing one, with a daily fine not exceeding one hundred rupees during the period of continuance of the offence. (3) Whoever obstructs the Prescribed Authority or any person appointed under sub-section (1) of Section 3 to assist it making inspection, search or seizure under Section 12 or Section 13, shall be punishable with imprisonment of either description for a term which may extend to three months or with fine which may extend to five hundred rupees or with both. (4) Whoever abets any of the offences referred to in subsection (2) or sub-section (3) shall, if the act abetted is committed in consequence of the abetment, be punished with the punishment provided for the offence. (5) In any prosecution for an offence under this Act which require a culpable mental state on the part of the accused, the court shall presume the existence of such culpable mental until the contrary is proved. Explanation:- For the purpose of the sub-section. “Culpable mental state” shall include intention, motive, knowledge of a fact and belief in, or reason to believe, a fact. (6) No court shall ‘take cognizance of any offence under sub- section (1) sub-section (2), sub-section (3) or sub-section (4) or the rules made under this Act except with the previous sanction of the Prescribed Authority and no court inferior to the court of a Metropolitan Magistrate or (7) The offence punishable under sub-section (1), sub-section (2) or sub-section (4) shall be cognizable and bailable and the offence punishable under sub-section (3) shall be cognizable and non-bailable.

Section 18.Liability to prosecution

i) Where an offence under this Act has been committed by a stockist every person at the time the offence was committed, was in charge of the business of the stockist and was responsible to the stockist for the conduct of the business of the stockist as well the stockist, shall be deemed to be guilty of the offence and shall be proceeded against and punished accordingly; Provided that noting contained in this sub-section shall render any such person liable to any punishment provided under this Act, if he proves that the offence was committed without his knowledge or that exercised all due diligence to prevent the commission of the offence; ii) Notwithstanding anything contained in sub-section (1), where an offence under this Act, has been committed by a stockist, being a company within the meaning of the Companies Act, 1956 and it is proved that the offence has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer, as the case may be, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Section 19.Compounding of Offences

(1) Subject to such conditions as may be prescribed, any offences person alleged to have committed an offence referred to in clause (f) or clause (g) of sub-section (1) or subsection (2), of Section 17 may, either before or after the commencement of any proceedings in respect of such offence, at his option, compound such offence by paying to Prescribed Authority such sum, not exceeding twenty thousand rupees, as may be determined by the Prescribed Authority. (2) On full payment of such sum as may be determined by the Commissioner under sub-section (1); (a) No proceeding shall be commenced against the person as aforesaid; or (b) If any proceedings have already been commenced against such person, such proceedings shall not be proceeded with; (c) If such person undertakes to comply with the requirements of the provisions contained in sub-sec-tion (1) of Section 6, Section 11 or sub-section (1) of Section 12, as the case may be, within such period as the Prescribed Authority may direct.

Section 20.Power to make rules

(1) The State Government may, by notification, make Rules for carrying out the provisions of this Act. (2) In particular, and without prejudice to the generally of the foregoing power, such Rules may provide for all or any of the following matters, namely:- (a) The procedure for and other matters (including provisions of payment of fees) incidental to, the disposal of appeal, revision and review under Section 14; (b) Any other matter which may be, or is required to be, prescribed under this Act. (3) In making any Rule, the State Government may direct that a breach thereof shall be punishable with fine not exceeding five hundred rupees and when the offence is a continuing one, with a daily fine not exceeding twenty five rupees during the continuance of the offence.

Section 21.Power to remove difficulties

If any difficulty arises in giving effect to any of the provision of this Act, the State Government may, by order, do anything which appears to it to be necessary or expedient of the purposes of removing the difficulty: Provided that no such order shall be made after expiry of a period of two years from the date of commencement of this Act.