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INDIAN BARE ACTS

THE CENTRAL SALES TAX ACT, 1956

THE CENTRAL SALES TAX ACT, 1956

Sansad Bhavan, parliament building of India.

Sansad Bhavan, parliament building of India. (Photo credit: Wikipedia)

THE CENTRAL SALES TAX ACT, 1956
INTRODUCTION
By the constitution (Sixth Amendment) Act’1956, certain amendments were made in the
constitution, whereby (a) taxes on sales or purchase of goods in the course of interstate trade or
commerce were brought expressly within the purview of the legislative jurisdiction of Parliament, (b)
restrictions could be imposed on the powers of State legislatures with respect to the levy of taxes on the
sale or purchase of goods within the state where the goods are of special importance in inter-state trade
commerce. To provide for the legislation authorized by the Constitution as amended by the said
Amendment Act of 1956 the Central Sales Tax Bill was introduced in the Parliament.
STATEMENT OF OBJECTS AND REASONS
In the interest of the national economy of India certain amendments were undertaken in
the Constitution by the Constitution (Sixth Amendment) Act’1956, whereby –
(a) taxes on sales or purchases of goods in the course of interstate trade or commerce were
brought expressly within the purview of the legislative jurisdiction of Parliament.
(b) Restrictions could be imposed on the powers of State legislatures with respect to the levy of
taxes on the sale or purchase of goods within the state where the goods are of special
importance in interstate trade or commerce.
The amendments at the same time authorized Parliament to formulate principles for
determining when a sale or purchase takes place in the course of interstate trade or commerce or in the
course of export or import or outside a state in order that the legislative spheres of parliament and the
State legislatures become clearly demarcated. In the case of goods of special importance in interstate
trade or commerce, a law of Parliament is to lay down the restrictions and conditions subject to which
any State law may regulate the tax on sales or purchases of such goods in the state.
2. This Bill seeks to provide for the legislation authorised by the Constitution as amended
above with a view to enabling the State Governments to raise additional revenues by levying tax on
interstate transactions which are at present immune from tax under their respective sales tax laws. After
taking into account the recommendations of the Taxation Enquiry Commission and in consultation with
the States the Government of India were of the view that the following principles should govern the
scheme of the detailed legislation on the three inter-related subjects;
(i) The Central Government should authorise the State Government to impose on behalf of
the Central Government tax on the sale or purchase of goods in the course of interstate trade or
commerce. The Central legislation should also delegate to the states the Central Government’s power to
levy and collect the tax and for this purpose prescribe the same system of registration, assessment, etc., as
prevails in the States concerned under their own sales tax system.
(ii) An important aspect of the Central legislation will be concerned with the definition of
the locale of sales for the purpose of defining in detail the relative jurisdiction, firstly of the Union and
the States, and secondly, of the State inter se. It is therefore, necessary that the law should define clearly,
with specific reference to sales tax the circumstances in which a sale or purchase becomes taxable by a
particular state and no other. It should also define for the purpose of the Constitutional restrictions on the
State’s power to impose a tax under Item 54 of the State list, when a sale or purchase of goods may be
said to take place: (a) in the course of export out of India,
(b) in the course of import into India and
(c) in the course of inter-state trade or commerce.
(iii) The Central legislation should provide for the declaration of certain commodities which
are in the nature of raw materials and of special importance in inter-state trade or commerce and lay
down the restrictions and conditions as to the rate, system of levy and other incidents of tax subject to
which the States may impose tax on the sale or purchase thereof.
3. Necessary provisions have, therefore, been made in the different Chapters of this Bill
incorporating the principles stated above.
LIST OF AMENDMENT ACTS
1. The Central Sales Tax (Amendment) Act, 1957 (16 of 1957)
2. The Central Sales Tax (Amendment) Act, 1958 ( 5 of 1958)
3. The Central Sales Tax (Second Amendment) Act, 1958 (31 of 1958)
4. The Repealing and Amending Act’ 1960 (58 of 1960)
5. The Finance Act’ 1961 (14 of 1961)
6. The Central Sales Tax (Amendment) Act, 1963 (8 of 1963)
7. The Finance Act’ 1966 (13 of 1966)
8. The Finance Act’ 1968 (19 of 1968)
9. The Central Sales Tax (Amendment) Act, 1969 (28 of 1969)
10. The Central Sales Tax (Amendment) Act, 1972 (61 of 1972)
11. The Finance Act’ 1975 (25 of 1975)
12. The Central Sales Tax (Amendment) Act, 1976 (103 of 1976)
13. The Repealing and Amending Act’ 1978 (58 of 1960)
14. The Finance Act’ 1988 (26 of 1988)
15. The Finance Act’ 1989 (13 of 1989)
16. The Finance (No.2) Act’ 1996 (33 of 1996)
17. The Finance Act’ 2000 (10 of 2000)
18. The Finance Act’ 2001 (14 of 2001)
19. The Central Sales Tax (Amendment) Act, 2001 (41 of 2001)
20. The Finance Act’ 2002 (20 of 2002)
21. The Finance Act’ 2002 (32 of 2003)
22. The Finance (No.2) Act’2004 (23 of 2004)
23. The Finance Act’2005 (35 of 2005)
24. The Central Sales Tax (Amendment ) Act, 2006 (3 of 2006) INDEX
Central Sales Tax Act (C.S.T. Act) (1956)
Sr.
No
Section
Number Section Name P.No.
1 1 Short tile, extent and commencement
2 2 Definitions
3 3 When is a sale or purchase of goods said to take place in the course of interstate
trade or commerce
4 4 When is a sale or purchase of goods said to take place outside a State
5 5 When is a sale or purchase of goods said to take place in the course of import or
export. –
6 6 Liability to tax on inter-State sales.
7 6A Burden of proof, etc., In case of transfer of goods claimed otherwise than by way
of sale.-
8 7 Registration of dealers
9 8 Rates of tax on sales in the course of inter-State trade or commerce
10 8A Determination of turnover
11 9 Levy and collection of tax and penalties
12 10 Penalties
13 11 Cognizance of offences
14 12 Indemnity
15 13 Power to make rules
16 14 Certain goods to be of special importance in Inter-State trade or commerce
17 15 Restrictions and conditions in regard to tax on sale or purchase of declared goods
within a State
18 16 Liability in special cases : Definitions
19 17 Company in liquidation
20 18 Liability of directors of private company in liquidation
21 19 Central Sales Tax Appellate Authority
22 20 Appeals
23 21 Procedure on receipt of application
24 22 Powers of the Authority
25 23 Procedure of Authority
26 24 The Authority for Advance Rulings
27 25 Transfer of pending proceedings
28 26 Applicability of order passed THE CENTRAL SALES TAX ACT, 19561
(74 of 1956)
(21st December, 1956)
[1. The Act has been extended to Goa, Daman and Diu (with modifications) by Reg.12 of 1962, sec3 and sch.. to Kohima and
Mokokchung districts of Nagaland (as in force on 5-8-1971) by Act 61 of 1972, sec.14(1) (w.e.f 30-11-1972). The
amendments made to the Act by Act 61 of 1972, came into force in the said districts (w.e.f.1.4.1973) (vide sec.14 (2), Act 61
of 1972)].
An Act to formulate principals for determining when a sale or purchase of goods takes
place in the course of inter-State trade or commerce or outside a State or in the course of import into or
export from India, to provide for the levy, collection and distributions of taxes on sales of goods in the
course of inter-State trade or commerce and to declared certain goods to be of special importance in
inter-State trade or commerce and specify the restrictions and conditions to which laws imposing taxes
on the sale or purchase of such goods of special importance shall be subject.
Be it enacted by Parliament in the Seventh Year of the Republic of India as follows :-
CHAPTER I
PRELIMINARY
1. Short tile, extent and commencement: –
(1) This Act may be called The Central Sales Tax Act, 1956.
(2) It extends to the whole of India.2[****]
(3) It shall come into force on such 3
date as the Central Government may, by notification if the Official
Gazette, appoint, and different dates may be appointed for different provisions of this Act.
[2. The words “except the state of Jammu and Kashmir” omitted by Act 5 of 1958.Sec2 (w.e.f.13.3.1958)].
[3. Came into force on 5-1-1957, all sections except section 15, vide S.R.O 78, dated 4/1/1957, Gazette of India Extra, 1957
Pt.II, Section 3, P.57, and s-15 w.e.f 1-10-1958 vide Notification No.G.S.R.897, Dt.23-9-1958, Gazette of India, extraordinary,
1958, Pt.II, Section 3(i) p.476.]
2. Definitions:- In this Act, unless the context otherwise requires,-
(a) ”appropriate State” means –
(i) In relation to a dealer who has one or more places of business situated in the same State, that
State;
(ii) In relation to a dealer who has 4
places of business situate in different States, every such State
with respect to the place or places of business situate within its territory; 5 [***]
[4. The words, “one or more” omitted by Act 31 of 1958, Sec. 2 (w.e.f. 1.10.1958)]
[5. Explanation omitted by Act 31 of 1958, Sec. 2, lbid (w.e.f. 1.10.1958)]
6
(aa) ”business” includes-
(i) any trade, commerce or manufacture, or any adventure or concern in the nature of trade,
commerce or manufacture, whether or not such trade, commerce, manufacture, adventure
or concern is carried on with a motive to make gain or profit and whether or not any gain
or profit accrues from such trade, commerce, manufacture, adventure or concern; and
(ii) any transaction in connection with, or incidental or ancillary to, such trade, commerce,
manufacture, adventure or concern;
6
(ab) ”crossing the customs frontiers of India” means crossing the limits of the area of a customs station in
which imported goods or export goods are ordinarily kept before clearance by customs authorities.
Explanation:- For the purposes of this clause, ‘ ‘custom station” and ” customs authorities” shall have the
same meanings as in the Customs Act, 1962 (52 of 1962);
[6. Inserted by Act 103 of 1976, Sec. 2 (w.e.f. 7.09.1976)]
7
(b) ”dealer” means any person who carries on (whether regularly or otherwise) the business of buying,
selling, supplying or distributing goods, directly or indirectly, for cash, or for deferred payment, or for
commission, remuneration or other valuable consideration, and includes-
(i) a local authority, a body corporate, a company, any co-operative society or other society, club,
firm, Hindu undivided family or other association of persons which carries on such business;
(ii) a factor, broker, commission agent, del credere agent, or any other mercantile agent, by
whatever name called, and whether of the same description as herein before mentioned or not, who
carries on the business of buying, selling, supplying or distributing goods belonging to any principal
whether disclosed or not; and
(iii) an auctioneer who carries on the business of selling or auctioning goods belonging to any
principal, whether disclosed or not and whether the offer of the intending purchaser is accepted by him or
by the principal or a nominee of the principal.
Explanation-1 – Every person who acts as an agent, in any State, of a dealer residing outside that State
and buys, sells, supplies or distributes, goods in the State or acts on behalf of such dealer as –
(i) a mercantile agent as defined in the Sale of Goods Act, 1930,(3 of 1930) or
(ii) an agent for handling of goods or documents of title relating to goods, or
(iii) an agent for the collection or the payment of the sale price of goods or as a guarantor for such a
collection or payment, and every local branch or office in a State of a firm registered outside that State or a company or
other body corporate, the principal office or headquarters whereof is outside that State, shall be deemed
to be a dealer for the purposes of this Act.
Explanation-2 – A Government which, whether or not in the course of business, buys, sells, supplies or
distributes goods, directly or otherwise for cash or for deferred payment or for commission, remuneration
or other valuable consideration, shall except in relation to any sale, supply or distribution of surplus,
unserviceable or old stores or materials or waste products or obsolete or discarded machinery or parts or
accessories thereof, be deemed to be a dealer for the purposes of this Act;
[7. Subs. by Act 103 of 1976, Sec. 2 for clause (b) (w.e.f. 7.09.1976)]
(c) ”declared goods” means goods declared under section 14 to be of special importance in inter-State
trade or commerce;
(d) ”goods” includes all materials, articles, commodities and all other kinds of movable property, but does
not include newspapers, actionable claims, stocks, shares and securities;
8
[(dd) ”place of business” includes-
(i) in any case where a dealer carries on business through an agent (by whatever name called), the
place of business of such agent;
(ii) a warehouse, godown, or other place where a dealer stores his goods; and
(iii) a place where a dealer keeps his books of account;]
[8. Ins. by Act 31 of 1958, Sec. 2 (w.e.f. 01.10.1958)]
(e) ”prescribed” means prescribed by rules made under this Act;
(f) ”registered dealer” means a dealer who is registered under sec.7;
9
(g) ”sale” with its grammatical variations and cognate expressions, means any transfer of property in
goods by one person to another for cash or for deferred payment or for any other valuable consideration,
and includes ,-
(i) a transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred
payment or other valuable consideration;
(ii) a transfer of property in goods (whether as goods or in some other form) involved in the execution
of a works contract;
(iii) a delivery of goods on hire-purchase or any system of payment by installments;
(iv) a transfer of the right to use any goods for any purpose (whether or not for a specified period) for
cash, deferred payment or other valuable consideration;
(v) the supply of goods by any unincorporated association or body of persons to a member thereof for
cash, deferred payment or other valuable consideration; (vi) a supply, by way of or as a part of any service or in any other manner whatsoever, of goods, being
food or any other article for human consumption or any drink(whether or not intoxicating), where
such supply or service, is for cash, deferred payment or other valuable consideration,
[but does not include a mortgage or hypothecation of or a charge or pledge on goods].
[9. Subs. by Act 20 of 2002, Sec. 50 for clause (g) (w.e.f. 13.05.2002). The earlier section read as follows : “(g) “Sale” with
its grammatical variations and cognate expressions, means any transfer of property in goods by one person to another for
cash or for deferred payment or for any other valuable consideration, and includes a transfer of goods on hire-purchase or
other system of payment by installments, but does not include a mortgage or hypothecation of or a charge or pledge on
goods.”]
(h) ”sale price” means the amount payable to a dealer as consideration for the sale of any goods, less any
sum allowed as cash discount according to the practice normally prevailing in the trade, but inclusive of
any sum charged for anything done by the dealer in respect of the goods at the time of or before the
delivery thereof other than the cost of freight or delivery or the cost of installation in cases where such
cost is separately charged;
10[“Provided that in the case of a transfer of property in goods (whether as goods or in some other form)
involved in the execution of a works contract, the sale price of such goods shall be determined in the
prescribed manner by making such deduction from the total consideration for the works contract as may
be prescribed and such price shall be deemed to be the sale price for the purposes of this clause.]
[10. Ins. by Act 35 of 2005, Sec. 89(a) (w.e.f.1.4.2005)]
11 [(i) “sales tax law” means any law for the time being in force in any State or part thereof which
provides for the levy of taxes on the sale or purchase of goods generally or on any specified goods
expressly mentioned in that behalf and includes value added tax law, and ‘general sales tax law’ means
any law for the time being in force in any State or part thereof which provides for the levy of tax on the
sale or purchase of goods generally and includes value added tax law;]
[11. Subs. by Act 35 of 2005, Sec. 89 (b) for clause (i) (w.e.f.1.4.2005) The previous sub-section (i) read as follows : (i) “sales
tax law” means any law for the time being in force in any state or part thereof which provides for the levy of taxes on
the sale or purchase of goods generally or on any specified goods expressly mentioned in that behalf, and “General Sales
Tax Law” means the law for the time being in force in any state or part thereof which provides for the levy of tax on the
sale or purchase of goods generally]
(j) ”turnover” used in relation to any dealer liable to tax under this Act means the aggregate of the sale
prices received and receivable by him in respect of sales of any goods in the course of inter-State trade or
commerce made during any prescribed period 12[and determined in accordance with the provisions of this
Act and the rules made there under;]
[12. Subs. by Act 28 of 1969, Sec. 2, for the words “and determined in the prescribed manner” (w.e.f 1.10.1958)]
13(ja) ‘works contract’ means a contract for carrying out any work which includes assembling,
construction, building, altering, manufacturing, processing, fabricating, erection, installation, fitting out,
improvement, repair or commissioning of any movable or immovable property;
[13. Ins. by Act 35 of 2005, Sec. 89 (c) (w.e.f.1.4.2005)]
(k) ‘‘Year”, in relation to a dealer, means the year applicable in relation to him under the general sales
tax law of the appropriate State, and where there is no such year applicable, the financial year. CHAPTER II
FORMULATION OF PRINCIPLES FOR DETERMINING WHEN A SALE OR PURCHASE OF
GOODS TAKES PLACE IN THE COURSE OF INTER-STATE TRADE OR COMMERCE OR
OUTSIDE A STATE OR IN THE COURSE OF IMPORT OR EXPORT
3. When is a sale or purchase of goods said to take place in the course of inter-State trade or
commerce:-
A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce
if the sale or purchase-
a. occasions the movement of goods from one State to another; or
b. is effected by a transfer of documents of title to the goods during their movement from one State to
another.
Explanation1. – Where goods are delivered to a carrier or other bailee for transmission, the movement of
the goods shall, for the purposes of clause (b), be deemed to commence at the time of such delivery and
terminate at the time when delivery is taken from such carrier or bailee.
Explanation2. – Where the movement of goods commences and terminates in the same State it shall not
be deemed to be a movement of the goods from one State to another by reason merely of the fact that in
the course of such movement the goods pass through the territory of any other State.
4. When is a sale or purchase of goods said to take place outside a State
(1) Subject to the provisions contained in section 3, when a sale or purchase of goods is determined in
accordance with sub-section (2) to take place inside a State, such sale or purchase shall be deemed to
have taken place outside all other States.
(2) A sale or purchase of goods shall be deemed to take place inside a State, if the goods are within the
State-
(a) in the case of specific or ascertained goods, at the time of the contract of sale is made; and
(b) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale
by the seller or by the buyer, whether assent of the other party is prior or subsequent to such
appropriation.
Explanation:- Where there is a single contract of sale or purchase of goods situated at more places than
one, the provisions of this sub-section shall apply as if there were separate contracts in respect of the
goods at each of such places.
5. When is a sale or purchase of goods said to take place in the course of import or export
(1) A sale or purchase of goods shall be deemed to take place in the course of the export of the goods out
of the territory of India only if the sale or purchase either occasions such export or is affected by a
transfer of documents of title to the goods after the goods have crossed the customs frontiers of India. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods
into the territory of India only if the sale or purchase either occasions such import or is effected by a
transfer of documents of title to the goods before the goods have crossed the customs frontiers of India.
14[(3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods
preceding the sale or purchase occasioning the export of those goods out of the territory of India shall
also be deemed to be in the course of such export, if such last sale or purchase took place after, and was
for the purpose of complying with, the agreement or order for or in relation to such export.]
[14. Inserted by Act 103 of 1976 Sec. 3 (w.e.f. 01.04.1976)].
15[(4) The provisions of sub-section (3) shall not apply to any sale or purchase of goods unless the dealer
selling the goods furnishes to the prescribed authority in the prescribed manner a declaration duly filled
and signed by the exporter to whom the goods are sold in a prescribed form obtained from the prescribed
authority.]
[15. Inserted by Act 35 of 2005 Sec. 90 (w.e.f.1.4.2005)].
16[(5) Notwithstanding anything contained in sub-section (1), if any designated Indian carrier purchases
Aviation Turbine Fuel for the purposes of its international flight, such purchase shall be deemed to take
place in the course of the export of goods out of the territory of India.
Explanation: For the purposes of this sub-section, ‘designated Indian carrier’ means any carrier which
the Central Government may, by notification in the Official Gazette, specify in this behalf. ]
[16. Inserted by Act 35 of 2005 Sec. 90 (w.e.f. )].
CHAPTER III
INTER-STATE SALES TAX
6. Liability to tax on inter-State sales
17[(1) Subject to the other provisions contained in this Act, every dealer shall, with effect from such
18date as the Central Government may, by notification in the Official Gazette, appoint, not being earlier
than thirty days from the date of such notification, be liable to pay tax under this Act on all sales 19[of
goods other than electrical energy] effected by him in the course of inter-State trade or commerce during
any year on and from the date so notified:
20[Provided that a dealer shall not be liable to pay tax under this Act on any sale of goods which,
in accordance with the provisions of sub-section (3) of section 5 is a sale in the course of export of those
goods out of the territory of India.]
[17. Section 6 renumbered as sub section (1) of that section by Act 31 of 1958, sec.5 (w.e.f 1.10.1958)]
[18. 1st July 1957, vide S.R.O.940-A, dated 26th March 1957, published in the Gazette of India, extra 1957, Pt.II, sec.3
p.1233/1]
[19.Ins.by Act 61 of 1972, sec.2 (w.e.f.1.4.1973)]
[20.Ins.by Act 103 of 1976, sec.4 (w.r.e.f.1.4.1976)] 21[(1A) A dealer shall be liable to pay tax under this Act on a sale of any goods effected by him, in the
course of inter-State trade or commerce notwithstanding that no tax would have been leviable (whether
on the seller or the purchaser) under the sales tax law of the appropriate State if that sale had taken place
inside that State.]
[21.Ins.by Act 28 of 1969, sec.3 (w.e.f.1.10.1958)]
22(2) Notwithstanding anything contained in sub-section (1) or sub-section (1A), where a sale of any
goods in the course of inter-State trade or commerce has either occasioned the movement of such goods
from one State to another or has been effected by a transfer of documents of title to such goods during
their movement from one State to another, any subsequent sale during such movement effected by a
transfer of documents of title to such goods,-
(a) to the Government, or
(b) to a registered dealer other than the Government, if the
goods are of the description referred to in sub-section
(3) of section 8
shall be exempt from tax under this Act:
Provided that no such subsequent sale shall be exempt from tax under this sub-section unless the
dealer effecting the sale furnishes to the prescribed authority in the prescribed manner and within the
prescribed time or within such further time as that authority may, for sufficient cause, permit,-
(a) a certificate dully filled and signed by the registered dealer from whom the goods were
purchased containing the prescribed particulars in a prescribed form obtained from the
prescribed authority; and
(b) If the subsequent sale is made-
(i) to a registered dealer, a declaration referred to in clause (a) of sub-section (4) of
section 8, or
(ii) to the Government, not being a registered dealer, a certificate referred to in clause
(b) of sub-section (4) of section 8:
Provided further that it shall not be necessary to furnish the declaration or the certificate referred to in
clause (b) of the preceding proviso in respect of a subsequent sale of goods if :-
(a) the sale or purchase of such goods is, under the sales tax law of the appropriate State, exempt
from tax generally or is subject to tax generally at a rate which is lower than 23[four per cent]
(whether called a tax or fee or by any other name); and
(b) the dealer effecting such subsequent sale proves to the satisfaction of the authority referred to
in the preceding proviso that such sale is of the nature referred to in clause (a) or clause (b) of
this sub-section.
[22. Subs.by Act 61 of 1972, sec.2, for sub-section (2) (w.e.f.1.4.1973)]
[23. Subs.by Act 25 of 1975, sec.38, for “three percent” (w.e.f.1.7.1975)]
24[(3) Notwithstanding anything contained in this Act, no tax under this Act shall be payable by any
dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce,
to any official, personnel, consular or diplomatic agent of- (i) any foreign diplomatic mission or consulate in India; or
(ii) the United Nations or any other similar international body, entitled to privileges under any
convention or agreement to which India is a party or under any law for the time being in
force, if such official, personnel, consular or diplomatic agent, as the case may be, has
purchased such goods for himself or for the purposes of such mission, consulate, United
Nations or other body.
(4) The provisions of sub-section (3) shall not apply to the sale of goods made in the course of interState trade or commerce unless the dealer selling such goods furnishes to the prescribed authority a
certificate in the prescribed manner on the prescribed form duly filled and signed by the official,
personnel, consular or diplomatic agent, as the case may be.]
[24. Subs.by Act 35 of 2005, sec.91(w.e.f ). Sub section (3) was inserted first by Act 32 of 2003, sec.161
(w.e.f.14.5.2003)]
25[6A. Burden of proof, etc., In case of transfer of goods claimed otherwise than by way of sale
(1) Where any dealer claims that he is not liable to pay tax under this Act, in respect of any goods, on the
ground that the movement of such goods from one State to another was occasioned by reason of transfer
of such goods by him to any other place of his business or to his agent or principal, as the case may be
and not by reason of sale, the burden of proving that the movement of those goods was so occasioned
shall be on that dealer and for this purpose he may furnish to the assessing authority, within the
prescribed time or within such further time as that authority may, for sufficient cause, permit, a
declaration, duly filled and signed by the principal officer of the other place of business, or his agent or
principal, as the case may be, containing the prescribed particulars in the prescribed form obtained from
the prescribed authority, along with the evidence of dispatch of such goods 26[and if the dealer fails to
furnish such declaration, then, the movement of such goods shall be deemed for all purposes of this Act
to have been occasioned as a result of sale.]
(2) If the assessing authority is satisfied after making such inquiry as he may deem necessary that the
particulars contained in the declaration furnished by a dealer under sub-section (1) are true, he may, at the
time of, or at any time before, the assessment of the tax payable by the dealer under this Act, make an
order to that effect and thereupon the movement of goods to which the declaration relates shall be
deemed for the purposes of this Act to have been occasioned otherwise than as a result of sale.
Explanation.- In this section, ” assessing authority”, in relation to a dealer, means the authority for the
time being competent to assess the tax payable by the dealer under this Act.]
[25. Ins.by Act 61 of 1972, sec.3 (w.e.f.1.4.1973)]
[26. Ins.by Act 20 of 2002, sec.151 (w.e.f.13.5.2002)]
7. Registration of dealers
(1) Every dealer liable to pay tax under this Act, shall within such time as may be prescribed for the
purpose, make an application for registration under this Act to such authority in the appropriate State as
the Central Government may, by general or special order, specify, and every such application shall
contain such particulars as may be prescribed. 27[(2) Any dealer liable to pay tax under the sales tax law of the appropriate State, or where there is no
such law in force in the appropriate State or any part thereof, any dealer having a place of business in that
State or part, as the case may be, may, notwithstanding that he is not liable to pay tax under this Act,
apply for registration under this Act to the authority referred to in sub-section (1), and every such
application shall contain such particulars as may be prescribed.
Explanation.- For the purpose of this sub-section, a dealer shall be deemed to be liable to pay tax under
the sales tax law of the appropriate State notwithstanding that under such law a sale or purchase made by
him is exempt from tax or a refund or rebate of tax is admissible in respect thereof.]
[27. Subs.by Act 31 of 1958, sec.4, for sub-section (2) (w.e.f.1.10.1958)]
28[(2A) Where it appears necessary to the authority to whom an application is made under sub-section (1)
or sub-section (2) so to do for the proper realisation of the tax payable under this Act or for the proper
custody and use of the forms referred to in clause (a) of the first proviso to sub-section (2) of section 6 or
sub-section (1) of section 6A or clause (a) of the sub-section (4) of section 8, he may, by an order in
writing and for reasons to be recorded therein, impose as a condition for the issue of a certificate of
registration a requirement that the dealer shall furnish in the prescribed manner and within such time as
may be specified in the order such security as may be so specified, for all or any of the aforesaid
purposes.]
[28. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
(3) If the authority to whom an application under sub-section (1) or sub-section (2) is made is satisfied
that the application is in conformity with the provisions of this Act and the rules made thereunder 28A[and
the condition, if any, imposed under sub-section (2A), has been complied with], he shall register the
applicant and grant to him a certificate of registration in the prescribed form which shall specify the class
or classes of goods for the purposes of sub-section (1) of section 8.
[28A. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
29[(3A) Where it appears necessary to the authority granting a certificate of registration under this section
so to do for the proper realisation of tax payable under this Act or for the proper custody and use of the
forms referred to in sub-section (2A), he may, at any time while such certificate is in force, by an order in
writing and for reasons to be recorded therein, require the dealer, to whom the certificate has been
granted, to furnish within such time as may be specified in the order and in the prescribed manner such
security, or, if the dealer has already furnished any security in pursuance of an order under this subsection or sub-section (2A), such additional security, as may be specified in the order, for all or any of the
aforesaid purposes.]
[29. Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
30[(3B) No dealer shall be required to furnish any security under sub-section (2A) or any security or
additional security under sub-section (3A) unless he has been given an opportunity of being heard.
(3BB) The amount of security which a dealer may be required to furnish under sub-section (2A) or subsection (3A) or the aggregate of the amount of such a security and the amount of additional security
which he may be required to furnish under sub-section (3A), by the authority referred to therein shall not
exceed- (a) in the case of a dealer other than a dealer who has made an application, or who has been
registered in pursuance of an application, under sub-section (2), a sum equal to the tax payable under this
Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in
which such security or, as the case may be, additional security is required to be furnished,and
(b) in the case of a dealer who has made an application, or who has been registered in pursuance of
an application, under sub-section (2), a sum equal to the tax leviable under this Act, in accordance with
the estimate of such authority on the sales to such dealer in the course of inter-State trade or commerce in
the year in which such security or, as the case may be, additional security is required to be furnished, had
such dealer been not registered under this Act.]
[30. Sub section (3B) Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973) and thereafter sub section (3B) in the present form and sub
section (3BB) were Subs. by Act 103 of 1976, sec.5 (w.e.f.7.9.1976)]
30A[(3C) Where the security furnished by the dealer under sub-section (2A) or sub-section (3A) is in the
form of a surety bond and the surety becomes insolvent or dies, the dealer shall, within thirty days of the
occurrence of any of the aforesaid events, inform the authority granting the certificate of registration and
shall within ninety days of such occurrence furnish a fresh surety bond or furnish in the prescribed
manner other security for the amount of the bond.
(3D) The authority granting the certificate of registration may by order and for good and sufficient cause
forfeit the whole or any part of the security furnished by a dealer-
(a) for realizing any amount of tax or penalty payable by the dealer,
(b) if the dealer is found to have misused any of the forms referred to in sub-section (2A) or to have
failed to keep them in proper custody:
Provided that no order shall be passed under this sub-section without giving the dealer an opportunity of
being heard.
(3E) Where by reason of an order under sub-section (3D), the security furnished by any dealer is rendered
insufficient, he shall make up the deficiency in such manner and within such time as may be prescribed.
(3F) The authority issuing the forms referred to in sub-section (2A) may refuse to issue such a forms to a
dealer who has failed to comply with an order under that sub-section or sub-section (3A), or with the
provisions of sub-section (3C) or sub-section (3E), until the dealer has complied with such order or such
provisions as the case may be.
(3G) The authority granting a certificate of registration may, on application by the dealer to whom it has
been granted, order the refund of any amount or part thereof deposited by the dealer by way of security
under this section, if it is not required for the purposes of this Act.
(3H) Any person aggrieved by an order passed under sub-section (2A), sub-section (3A), sub-section
(3D) or sub-section (3G) may, within thirty days of the service of the order on him, but after furnishing
the security, prefer, in such form and manner as may be prescribed, an appeal against such order to such
authority (hereinafter in this section referred to as the ” appellate authority”) as may be prescribed:
Provided that the appellate authority may, for sufficient cause, permit such person to present the appeal,- (a) after the expiry of the said period of thiry days; or
(b) without furnishing the whole or any part of such security.
(3I) The procedure to be followed in hearing any appeal under sub-section (3H), and the fees payable in
respect of such appeals shall be such as may be prescribed.
(3J) The order passed by the appellate authority in any appeal under sub-section (3H) shall be final.]
[30A. Sub sections 3(C) to 3(J) were inserted by Act 61 of 1979 (w.e.f.1.4.1973)]
31[(4) A certificate of registration granted under this section may-
(a) either on the application of the dealer to whom it has been granted or, where no such application has
been made, after due notice to the dealer, be amended by the authority granting it if he satisfied that by
reason of the registered dealer having changed the name, place or nature of his business or the class or
classes of goods in which he carries on business or for any other reason the certificate or registration
granted to him requires to be amended; or
(b) be cancelled by the authority granting it where he is satisfied, after due notice to the dealer to whom it
has been granted, that he has ceased to carry on business 32[or has ceased to exist or has failed without
sufficient cause to comply with an order under sub-section (3A) or with the provisions of sub-section
(3C) or sub-section (3E) or has failed to pay any tax or penalty payable under this Act, or in the case of a
dealer registered under sub-section (2) has ceased to be liable to pay tax under the sales tax law of the
appropriate State or for any other sufficient reason]].
[31. Subs.by Act 31 of 1958, sec.4, for sub-section (4) (w.e.f. 1.10.1958)]
[32. Subs. for words “or has ceased to exist” Ins.by Act 61 of 1972, sec.4 (w.e.f.1.4.1973)]
(5) A registered dealer may apply in the prescribed manner not latter than six months before the end of a
year to the authority which granted his certificate of registration for the cancellation of such registration,
and the authority shall, unless the dealer is liable to pay tax under this Act, cancel the registration
accordingly, and where he does so, the cancellation shall take effect from the end of the year.
8. Rates of tax on sales in the course of inter-State trade or commerce
33[(1) Every dealer, who in the course of inter-State trade or commerce
(a) sells to the Government any goods; or
(b) sells to a registered dealer other than the Government,
goods of the description referred to in sub-section (3)
33Ashall be liable to pay tax under this Act, which shall be 33B[four per cent] of his turnover 34[or at the
rate applicable to the sale or purchase of such goods inside the appropriate State under the sales tax law
of that State, whichever is lower].
Provided that the rate of tax payable under this sub-section by a dealer shall continue to be
four percent, of his turnover, until the rate of two percent takes effect under this sub-section.]
[33. Subs. by Act 31 of 1958, sec.5, for sub-sections (1) to (4) (w.e.f. 1.10.1958)] [33A.Subs.by Act 32 of 2003, sec.162, for certain words (w.e.f 14.5.2003) (see Annexe)
[33B.Subs.by Act 25 of 1975 (w.e.f.1.7.1975)]
[34.Ins.by Act 20 of 2002 (w.e.f.13.5.2002)]
(2) The tax payable by any dealer on his turnover in so far as the turnover or any part thereof relates
to the sale of goods in the course of inter-State trade or commerce not falling within sub-section (1)-
(a) in the case of declared goods, shall be calculated 35(at twice the rate) applicable to the sale or
purchase of such goods inside the appropriate State 36
(b) in the case of goods other than declared goods, shall be calculated at the rate of 37(ten per cent) or
at the rate applicable to the sale or purchase of such goods inside the appropriate State,38
whichever is higher and ;
39[(c) in the case of goods, the sale or, as the case may be, the purchase of which is, under the sales tax law
of the appropriate State, exempt from tax generally shall be nil,
and for the purpose of making any such calculation under clause(a) or clause (b), any such dealer shall
be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate State,
notwithstanding that he, if in fact, may not be so liable under that law.
Explanation: For the purposes of this sub-section, a sale or purchase of any goods shall not be deemed to
be exempt from tax generally under the sales tax law of the appropriate State if under that law the sale or
purchase of such goods is exempt only in specified circumstances or under specified conditions or tax is
levied on the sale or purchase of such goods at specified stages or otherwise than with reference to the
turnover of the goods.]
[35.Subs.by Act 25 of 1975, sec.38, for “at the rate” (w.e.f.1.7.1975)]
[36.The word “and” omitted by Act 20 of 2002, sec.152]
[37.Subs.by Act 8 of 1963, sec.2, for “seven percent” (w.e.f.1.4.1963)]
[38.Subs.by Act 20 of 2002, sec.152, for “whichever is higher” (w.e.f 13.5.2002)]
[39.Subs.by Act 20 of 2002, sec.152, for the portion “and for the purpose of making any such calculation any such dealer shall
be deemed to be a dealer liable to pay tax under the sales tax law of the appropriate sate, notwithstanding that he, in fact, may
not be so liable under that law”]
40(2A)
[40.Sub section (2A) omitted by Act 20 of 2002, sec.152. The previous Sec.2(A) read as follows :- “(2A) Notwithstanding
anything contained in sub section (1A) of Sec.6 or Sub Section (1) or clause (b) of sub section (2) of this section, the tax
payable under this act by a dealer on his turnover in so far as the turnover or any part thereof relates to the sale of any goods,
the sale or, as the case may be, the purchase of which is, under the sales tax law of the appropriate state, exempt from tax
generally or subject to tax generally at a rate which is lower than 4% whether called a tax or fee or by any other name, shall be
nil, or as the case may be, shall be calculated at the lower rate.
Explanation : for the purpose of this sub section, a sale or purchase of any goods shall not be deemed to be exempt from tax
generally under the sales tax law of the appropriate state if under that law the sale or purchase of such goods is exempt only in
specified circumstances or under specified conditions or the tax is levied on the sale or purchase of such goods at specified
stages or otherwise than with reference to the turnover of the goods.]
(3) The goods referred to in clause (b) of sub-section (1)-
(a) 41Omitted
(b) 42are goods of the class or classes specified in the certificate of registration of the registered dealer
purchasing the goods as being intended for re-sale by him or subject to any rules made by the
Central Government in this behalf, for use by him in the manufacture or processing of goods for sale or 43[in the telecommunications network or] in mining or in generation or distribution of
electricity or any other form of power.
(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 clause (b) or for the packing of any containers or other
materials specified in the certificate of registration referred to in clause(c).
[41.Clause (a) omitted by Act 8 of 1963, sec.2 (w.e.f.1.4.1963)]
[42.The words “in the case of goods others than declared goods” omitted by Act 8 of 1963, sec.2 (w.e.f.1.4.1963)]
[43.Ins.by Act 20 of 2002, sec.152 (w.e.f.13.5.2002)]
[Note: Sub section (3) was Subs. by Act No.31 of 1958. By Act No.8 of 1963, sec.2 (w.e.f 1.4.1963) clause (a) was omitted
and in clause (b), the words “in the case of goods other than declared goods” were omitted. In clause (d) the words “clause (a)
or” were omitted.]
44(4) The provisions of sub-section (1) shall not apply to any sale in the course of inter-State trade or
commerce unless the dealer selling the goods furnishes to the prescribed authority in the prescribed
manner-
(a) a declaration duly filled and signed by the registered dealer to whom the goods are sold
containing the prescribed particulars in the prescribed form obtained from the prescribed
authority; or
(b) if the goods are sold to the Government, not being a registered dealer, a certificate in the
prescribed form duly filled and signed by a duly authorised officer of the Government.
[44.Subs. by Act 31 of 1958 (w.e.f 1.10.1958)]
45 [Provided that the declaration referred to in clause (a) is furnished within the prescribed time or within
such further time as that authority may, for sufficient cause, permit.]
[45.Ins.by Act 61 of 1972, sec.5 (w.e.f 1.4.1973)]
46 [(5) Notwithstanding anything contained in this section, the State Government may],
47[on the fulfilment
of the requirements laid down in sub-section(4) by the dealer] if it is satisfied that it is necessary so to do
in the public interest, by notification in the Official Gazette, and subject to such conditions as may be
specified therein direct-
(a) that no tax under this Act shall be payable by any dealer having his place of business in the State
in respect of the sales by him, in the course of inter-State trade or commerce, 48[to a registered dealer or
the Government] from any such place of business of any such goods or classes of goods as may be
specified in the notification, or that the tax on such sales shall be calculated at such lower rates than those
specified in sub-section (1) or sub-section (2) as may be mentioned in the notification;
(b) that in respect of all sales of goods or sales of such classes of goods as may be specified in the
notification, which are made, in the course of inter-State trade or commerce, 49[to a registered dealer or
the Government] by any dealer having his place of business in the State or by any class of such dealers as
may be specified in the notification to any person or to such class of persons as may be specified in the
notification, no tax under this Act shall be payable or the tax on such sales shall be calculated at such lower rates than those specified in sub-section (1) or sub-section (2) as may be mentioned in the
notification.
[46. Subs.by Act 61 of 1972, sec.5, for sub section (5) (w.e.f 1.4.1973)]
[47. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
[48. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
[49. The bracketed words inserted by Act No.20 of 2002 (w.e.f.13.5.2002)]
50 [(6) Notwithstanding anything contained in this section, no tax under this Act shall be payable by any
dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce
to a registered dealer for the purpose of setting up operation, maintenance, manufacture, trading,
production, processing, assembling, repairing, reconditioning, re-engineering, packaging or for use as
packing material or packing accessories in an unit located in any special economic zone or for
development, operation and maintenance of Special Economic zone by the developer of the Special
Economic zone, if such registered dealer has been authorised to establish such unit or to develop, operate
and maintain such Special Economic Zone by the authority specified by the Central Government in this
behalf.]
[50.Subs.by Act 23 of 2004, sec.118, for Notwithstanding anything contained in this section, no tax under this Act shall be
payable by any dealer in respect of sale of any goods made by such dealer, in the course of inter-State trade or commerce to a
registered dealer for the purpose of manufacture, production, processing, assembling, repairing, reconditioning, re-engineering,
packaging or for use as trading or packing material or packing accessories in an unit located in any special economic zone, if
such registered dealer has been authorised to establish such unit by the authority specified by the Central Government in this
behalf.]
(7) The goods referred to in sub-section (6) shall be the goods of such class or classes of goods as
specified in the certificate of registration of the registered dealer referred to in that sub-section.
(8) The provisions of sub-sections (6) and (7) shall not apply to any sale of goods made in the course of
inter-State trade or commerce unless the dealer selling such goods furnishes to the 51[prescribed authority
referred to in sub-section (4), a declaration in the prescribed manner on the prescribed form obtained
from the authority specified by Central Government under sub-section (6)], duly filled in and signed by
the registered dealer to whom such goods are sold.
Explanation.- For the purpose of sub-section (6), the expression “special economic zone” has the meaning
assigned to it in clause (iii) to Explanation 2 to the proviso to section 3 of the Central Excise Act, 1944.
[51. Subs. by Sec.108(b) of Act 23 of 2004 for “authority referred in sub section (6), a declaration in the prescribed manner on
the prescribed form obtained from the authority referred to in sub section (5) (w.e.f.10.9.2004)]
52 [8A. Determination of turnover
(1) In determining the turnover of a dealer for the purpose of this Act, the following deductions shall
be made from the aggregate of the sale prices, namely:-
(a) the amount arrived at by applying the following formula-
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 14th day of May, 1966;
(ii) within a period of six months from the date of delivery of the goods, in the case of
goods returned on or after the 14th day of May, 1966:
Provided that satisfactory evidence of such return of goods and of refund or adjustment in accounts of the
sale price thereof is produced before the authority competent to assess or, as the case may be, re-assess
the tax payable by the dealer under this Act; and
(c) such other deductions as the Central Government may, having regard to the prevalent market
conditions, facility of trade and interests of consumers, prescribe.
(2) Save as otherwise provided in sub-section (1), in determining the turnover of a dealer for the purposes
of this Act, no deduction shall be made from the aggregate of the sale prices.]
[52. Ins.by Act 28 of 1969, sec.5 (w.e.f.5.1.1957)]
53 9. Levy and collection of tax and penalties
(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of interState trade or commerce, whether such sales fall within clause (a) or clause (b) of section 3, shall be
levied by the Government of India and the tax so levied shall be collected by the Government in
accordance with the provisions of sub-section (2), in the State from which the movement of the goods
commenced.
54&55 [Provided that, in the case of a sale of goods during their movement from one State to another, being a
sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall
within sub-section (2) of section 6, the tax shall be levied and collected
(a) where such subsequent sale has been effected by a registered dealer, in the State from which the
registered dealer obtained or, as the case may be, could have obtained, the form prescribed for the
purposes of clause (a) of sub-section (4) of section 8 in connection with the purchase of such goods, and,
(b) where such subsequent sale has been effected by an unregistered dealer in the State from which
such subsequent sale has been effected.]
[53. Subs.by Act 31 of 1958, Sec.6 and again Subs.by Act 28 of 1969, Sec.6 (w.e.f.5.1.1957)]
[54&55. Subs.by Act 103 of 1976, sec.6, for the proviso (w.e.f.7.9.1976)]
(2) Subject to the other provisions of this Act and the rules made thereunder, the authorities for the time
being empowered to assess, re-assess, collect and enforce payment of any tax under general sales tax law
of the appropriate State shall, on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any 56 interest or penalty], payable by a dealer under this Act as if the tax or
57[interest or penalty] payable by such a dealer under this Act is a tax or 58[interest or penalty] payable
under general sales tax law of the State; and for this purpose they may exercise all or any of the powers
they have under the general sales tax law of the State; and the provisions of such law, including
provisions relating to returns, provisional assessment, advance payment of tax registration of the
transferee of any business, imposition of the tax liability of a person carrying on business on the
transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to
pay tax in the event of the dissolution of such firm or partition of such family, recovery of tax from third
parties, appeals, reviews, revisions, references, 59[refunds, rebates, penalties], 60[charging or payment of
interest], compounding of offences and treatment of documents furnished by a dealer as confidential,
shall apply accordingly:
Provided that if in any State or part thereof there is no general sales tax law in force, the Central
Government may, by rules made in this behalf make necessary provisions for all or any of the matters
specified in this sub-section.
[56. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[57. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[58. Subs.by Act 10 of 2000, sec.119, for penalty (w.e.f.12.5.2000)]
[59. Subs.by Act 61 of 1972, sec.6, for “refunds, penalties” (w.e.f.1.4.1973]
[60. Ins.by Act 103 of 1976, sec.6 (retrospectively)]
61 [(2A) All the 62[provisions relating to offences, interest and penalties] (including provisions relating to
penalties in lieu of prosecution for an offence or in addition to the penalties or punishments for an offence
but excluding the provisions relating to matters provided for in section 10 and 10A) of the general sales
tax law of each State shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of any tax required to be collected under this Act
in such State or in relation to any processes connected with such assessment, re-assessment, collection or
enforcement of payment as if the tax under this Act were a tax under such sales tax law.]
[61. Ins.by Act 103 of 1976, sec.6 (retrospectively)]
[62. Subs.by Act 10 of 2000, sec.119, for “provisions relating to offences and penalties” (w.e.f. 12.5.2000)]
63 [(2B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay
interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the
provisions relating to due date for payment of tax, rate of interest for delayed payment of tax, of the
general sales tax law of each state, shall apply in relation to due date for payment of tax, rate of interest
for delayed payment of tax, and assessment and collection of interest for delayed payment of tax under
this Act in such states as if the tax and the interest payable under this Act were a tax and an interest under
such sales tax law.]
[63. Ins.by Act 10 of 2000, sec.119 (w.e.f.12.5.2000)]
(3) The proceeds in any financial year of any tax, 64[including any interest or penalty] including any
penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the
Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributes
to Union Territories shall form part of the Consolidated Funds of India.
[64. Subs. by Act 10 of 2000, sec.119, for “including any penalty” (w.e.f.12.5.2000)] 65Validation of Section 9
(1) The provisions of Section 9 of the Central Sales Tax’1956 (hereafter in this section
referred to as the Central Sales Tax Act) shall have effect, and shall be deemed always to have had effect,
as if that section also provided –
(a) That all the provisions relating to interest of the general sales tax law of each state shall, with
necessary modifications, apply in relation to –
(i) the assessment, re-assessment, collection and enforcement of payment of any
tax required to be collected under the Central Sales Tax Act, in such State;
and
(ii) any process connected with such assessment, re-assessment, collection or
enforcement of payment; and
(b) that for the purpose of the application of the provisions of such law, the tax under the Central
Sales Tax Act shall be deemed to be tax under such law.
(2) Notwithstanding anything contained in any judgment, decree or order of any court,
tribunal or other authority, general sales tax law of any State imposed or purporting to have been imposed
in pursuance of the provisions of Section 9 of the Central Sales Tax Act, and all proceedings, acts or
things taken or done for the purposes of, or in relation to the imposition or collection of such interest,
before the commencement of this section, shall for all purposes, be deemed to be and to have always been
imposed, taken or done as validly and effectively as if the provisions of sub-section (1) had been in force
when such interest was imposed or proceedings or acts or things were taken or done and, accordingly;
(a) no suit or other proceedings shall be maintained or continued in, or before, any court,
tribunal or other authority for the refund of any amount received or realized by way of
such interest;
(b) no court, tribunal or other authority shall enforce any decree or order directing the
refund of any amount received or realized by way of such interest;
(c) where any amount which had been received or realized by way of such interest is
refunded before the date on which the Finance Act’2000 receives the assent of the
President and such refund would not have been allowed if the provisions of subsection (1) had been in force on the date on which the order for such refund was
passed, the amount so refunded may be recovered as an arrear of tax under the Central
Sales Tax Act;
(d) any proceeding, act or thing which could have been validly taken, continued or done
for the imposition of collection of such interest at any time before the commencement
of this section if the provisions of sub-section (1) had then been in force but which had
not been taken, continued or done, may after such commencement, be taken, continued
or done.
(3) Nothing in sub-section (2) shall be construed as preventing any person
(a) from questioning the imposition or collection of any interest or any proceedings, act or
thing in connection therewith; or
(b) from claiming any refund,
in accordance with the provisions of the Central Sales Tax Act, read with sub-section (1).
Explanation :- For this purposes of this section, “general sales tax law” shall have the same meaning
assigned to it in the Central Sales Tax Act.
(65.Validation by section 120 of Act 10 of 2000, dt.12/5/2000) 66 9A. Collection of tax to be only by registered dealers
No person who is not a registered dealer shall collect in respect of any sale by him of goods in the course
of inter-State trade or commerce any amount by way of tax under this Act, and no registered dealer shall
make any such collection except in accordance with this Act and the rules made there under.
[66.Ins.by Act 31 of 1958, sec.6 (w.e.f.1.10.1958)]
67 9B. Rounding off of tax, etc.
The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund due, under
the provisions of this Act shall be rounded off to the nearest rupee and, for this purpose, where such
amount contains a part of a rupee consisting of paise, then, if such part is fifty paise or more, it shall be
increased to one rupee and if such part is less than fifty paise it shall be ignored.
Provided that nothing in this section shall apply for the purpose of collection by a dealer of any amount
by way of tax under this Act in respect of any sale by him of goods in the course of inter-State trade or
commerce.
[67. Ins.by Act 61 of 1972 (w.e.f.1.4.1973)]
10. Penalties
If any person-
68 [(a) furnishes a certificate or declaration under sub-section (2) of section 6 or sub-section (1) of section 6A
or sub-section (4) 69[or sub-section (8)] of section 8, which he knows, or has reason to believe, to be
false; or
(aa) fails to get himself registered as required by section 7 or fails to comply with an order under subsection (3A) or with the requirements of sub-section (3C) or sub-section (3E), of that section,]
(b) being a registered dealer, falsely represents when purchasing any class of goods that goods of such a
class are covered by his certificate of registration, or
(c) not being a registered dealer, falsely represents when purchasing goods in the course of inter-State
trade or commerce that he is a registered dealer; or
(d) after purchasing any goods for any of the purposes specified in 70clause (b) or clause(c) or clause (d)
of sub-section (3) 71[or sub-section (6)] of section 8 fails, without reasonable excuse to make use of the
goods for any such purpose,
(e) has in his possession any form prescribed for the purpose of sub-section (4) 72[or sub-section (8)]of
section 8 which has not been obtained by him or by his principal or by his agent in accordance with the
provisions of this Act or any rules made there under:
73 [(f) collects any amount by way of tax in contravention of the provisions contained in section 9A,]he shall be punishable with simple imprisonment which may extend to six months or with fine or with
both, and when the offence is a continuing offence, with a daily fine which may extend to fifty rupees for
every day during which the offence continues.
[68.Subs.by Act 61 of 1972, sec.8, for clause (a) w.e.f. 1.4.1973]
[69.Ins.by Act 20 of 2002, sec.153 ]
[70.Subs.by Act 61 of 1972, sec.8, for “clause(b)” (w.e.f.1.4.1973)]
[71.Ins.by Act 20 of 2002, sec.153]
[72.Ins.by Act 20 of 2002, sec.153]
[73.Ins.by Act 31 of 1958, sec.8, (w.e.f. 1.10.1958)]
74 10A. Imposition of penalty in lieu of prosecution
75 [(1) If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause(d) of
section 10, the authority who granted to him or, as the case may be, is competent to grant to him a
certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by
order in writing, impose upon him by way of penalty a sum not exceeding one and a half times 76 [the tax
which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the
goods, if the sale had been a sale falling within that sub-section.]
Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same
facts on which a penalty has been imposed under this section.]
(2)77[The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of
India in the manner provided in sub-section (2) of section 9-
(a) in the case of an offence falling under clause (b) or clause (d) of section 10, in the State in which the
person purchasing the goods obtained the form prescribed for the purposes of clause (a) of sub-section (4)
of section 8 in connection with the purchase of such goods,
(b) in the case of an offence falling under clause (c) of section 10, in the State in which the person
purchasing the goods should have registered himself if the offence had not been committed.]
[75.Sec.10A renumbered as sub section (1) of that section by Act 28 of 1969, sec.7 (w.e.f.1.10.1958)]
[76.Subs.by Act 61 of 1972, Sec.9, for “ the tax would have been levied under this Act in respect of the sale to him of the
goods if the offence has not been committed”(w.e.f.1.4.1973)]
[77.Ins.by Act 28 of 1969, sec.7 (w.e.f.1.10.1958)]
11. Cognizance of offences
(1) No court shall take cognizance of any offence punishable under the Act or the rules made thereunder
except with the previous sanction of the Government within the local limits of whose jurisdiction the
offence has been committed or such officer of that Government as it may, by general or special order,
specify in this behalf; and no court inferior to that of a presidency magistrate or a magistrate of the first
class shall try any such offence.
(2) All offences punishable under this Act shall be cognizable and bailable.
12. Indemnity
No suit, prosecution or other legal proceeding shall lie against any officer of Government for any-thing
which is in good faith done or intended to be done under this Act or the rules made thereunder. 13. Power to make rules
(1) The Central Government may, by notification in the Official Gazette, make rules providing for-
(a) the manner in which applications for registration may be made under this Act, the particulars to be
contained therein, the procedure for the grant of such registration, the circumstances in which registration
may be refused and the form in which the certificate of registration may be given;
78(aa) The manner of determination of the sale price and the deductions from the total consideration for a
works contract under the proviso to clause (h) of section2;
79[
80(ab) the form and the manner for furnishing declaration under sub-section (8) of section 8; ]
(b) the period of turnover, the manner in which the turnover in relation to the sale of any goods under this
Act shall be determined, and the deductions which may be made 81[under clause (c) of sub-section (1) of
section 8A] in the process of such determination;
(c) the cases and circumstances in which, and the conditions subject to which, any registration granted
under this Act may be cancelled;
82 [(d) the form in which and the particulars to be contained in any declaration or certificate to be given under
this Act, 83[the State of origin of such form or certificate and the time within which any such certificate
or declaration shall be produced or furnished]
(e)the enumeration of goods or class of goods used in the manufacture or processing of goods for sale or
in mining or in the generation or distribution of electricity or any other form of power;
(f)the matters in respect of which provisions may be made under the proviso to 84[sub-section (2)] of
section 9;
(g)the fees payable in respect of applications under this Act.
85 [(h)the proper functioning of the authority constituted under Section 19.
(i)the salaries and allowances payable to , and the terms and conditions of service of, the Chairman and
Members under sub-section (3) of section 19.
(j) any other matter as may be prescribed.]
86 [(2) Every rule made by the Central Government under sub-section (1) shall be laid as soon as may be after
it is made, before each House of Parliament, while it is in session, for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the
session immediately following the sessions or the successive sessions aforesaid, both Houses agree in
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such modified form or be of no effect, as the case may be; so however, that
any such modification or annulment shall be without prejudice to the validity of anything previously done
under that rule.]
(3)The State Government may make rules, not inconsistent with the provisions of this Act and the rules
made under sub-section (1), to carry out the purposes of this Act. (4)In particular and without prejudice to the powers conferred by sub-section (3), the State Government
may make rules for all or any of the following purposes namely:-
(a) the publication of lists of registered dealers, of the amendments made in such lists from
time to time, and the particulars to be contained in such lists;
87 [(aa) the manner of determination of the sale price and the deductions from the total
consideration for a works contract under the proviso to clause (h) of section 2;”.
88 (ab) the manner in which security may be furnished under sub-section (2A) or sub-section (3A) or
sub-section (3C) of section 7 and the manner in which and the time within which any deficiency
may be made up under sub-section (3E) of that section;]
(b) the form and manner in which accounts relating to sales in the course of inter-State trade
or commerce shall be kept by registered dealers;
(c) the furnishing of any information relating to the stocks of goods of, purchase, sales and
deliveries of books by any dealer or any other information relating to his business as may
be necessary for the purposes of this Act;
(d) the inspection of any books, accounts or documents required to be kept under this Act, the
entry into any premises at all reasonable time for the purposes of searching for any such
books, accounts or documents kept or suspected to be kept in such premises and the
seizure of such books, accounts or documents;
89[(e) the authority from whom, the conditions subject to which and the fees subject to payment of
which any form of certificate prescribed under clause (a) of the first proviso to sub-section
(2) of section 6 or of declaration prescribed under sub-section (1) of section 6A or subsection (4) of section 8 may be obtained, the manner in which such forms shall be kept in
custody and records relating thereto maintained and the manner in which any such form
may be used and any such certificate or declaration may be furnished;
(ee) the form and manner in which, and the authority to whom, an appeal may be preferred under
sub-section (3H) of section 7, the procedure to be followed in hearing such appeals and the
fees payable in respect of such appeals;]
(e) in the case of an undivided Hindu family, association, club, society, firm or company or in
the case of a person who carries on business as guardian or trustee or otherwise on behalf
of another person, the furnishing of a declaration stating the name of the person who shall
be deemed to be the manager in relation to the business of the dealer in the State and the
form in which such declaration may be given,
(f) the time within which, the manner in which and the 90 [authorities to whom] any change
in the ownership of any business or in 91 [the name, place, or nature] of any business
carried on by any dealer shall be furnished.
(5) In making any rule under this section 92 [the Central Government, or, as the case may be, the State
Government] may direct that a breach thereof shall be punishable with fine which may extend to five
hundred rupees and when the offence is a continuing offence, with a daily fine which may extend to fifty
rupees for every day during which the offence continues. [78.Previous clause (aa) shall be relettered as clause (ab) and before clause (ab) as so relettered, clause (aa) inserted by Act 35
of 2005, sec.92 (w.e.f ) Previous clause (aa) of Sec.13(1) is read as follows : “The manner in which security may be
furnished under sub section (2A) or sub section (3A) or sub section (3C) or section (7) and the manner in which and the time
within which any deficiency may be made up under sub section (3E) of that section”.]
[79.Previous clause (aa) relettered as clause (ab) and before clause (ab) as so relettered, clause (aa) inserted by Act 35 of 2005,
sec.92 (w.e.f )
[80.Ins.by Act 20 of 2002, Sec.154 as clause (aa)]
[81.Ins.by Act 61 of 1972, sec.10(w.e.f. 1.4.1973)]
[82.Subs.by Act 31 of 1958, Sec.9, for clause (d) (w.e.f 1.10.1958)]
[83.Ins.by Act 61 of 1972, sec.10 (w.e.f.1.4.1973)]
[84.Subs.by Act 28 of 1969, Sec.8, for “sub-section (3) “(retrospectively)]
[85.Ins.by Act 41 of 2001, sec.2]
[86.Subs.by Act 61 of 1972, Sec.10, for sub section (2) (w.e.f.1.4.73)]
[87.Previous clause (aa) relettered as the present clause (aa) and the present clause (aa) inserted by sec.92 of Act 35 of 2005]
[88.Previous clause (aa) relettered as the present clause (aa) and the present clause (aa) inserted by sec.92 of Act 35 of 2005]
[89.Subs.by Act 61 of 1972, sec.10, for clause (c) (w.e.f.1.4.1973).
[90.Subs.by Act 31 of 1958, sec.9, for “the authorities to which” (w.e.f.1.10.1958)]
[91.By Act 31 of 1953, sec.9, for “the nature” (w.e.f 1.10.1958)]
[92.By Act 61 of 1972, sec.10, for “the State Government” (w.e.f.1.4.1973)]
CHAPTER IV
GOODS OF SPECIAL IMPORTANCE IN INTER-STATE TRADE OR COMMERCE.
14. Certain goods to be of special importance in Inter-State trade or commerce.-
It is hereby declared that the following goods are of special importance in inter-State trade or commerce:-
93 [(i) cereals, that is to say .-
(i) paddy (Oryza sativa L);
(ii) rice (Oryza sativa L.);
(iii) wheat (Triticum vulgare, T.compactum, T.sphaerococcum. T. durum, T. aestivum L.T.
discoccum);
(iv) jowar or milo (Sorghum vulgare pers);
(v) bajara (Pennisetum typhoideum L.);
(vi) maize (Zea malys D.);
(vii) ragi (Eleusine coracana Gaertn.);
(viii) kodon (Paspalum scrobiculatum L.);
(ix) kutki (Panicum miliare L.);
(x) barely (Hordeum vulgare L.); ]
94[
95(ia)] coal, including coak in all its forms, but excluding char-coal:
Provided that during the period commencing on the 23rd day of February, 1967 and ending with the date
of commencement of section 11 of the Central Sales Tax (Amendment) Act, 1972, this clause shall have
effect subject to the modification that the words ”but excluding char-coal” shall be omitted;](ii) cotton, that is to say, all kinds of cotton (indigenous or imported in its unmanufactured state, whether
ginned or unginned baled pressed or otherwise, but not including cotton waste:;
96 (iia) cotton fabrics covered under heading Nos. 52.05, 52.06, 52.07, 52.08,52.09, 52.10, 52.11, 52.12,
58.01, 58.02, 58.03, 58.04, 58.05, 97 [58.06], 59.01, 59.03, 59.05, 59.06 and 60.01 of the Schedule to the
Central Excise Tariff Act, 1985;
98 [(iib) cotton yarn but not including cotton yarn waste;]
99 [(iic) crude oil, that is to say, crude petroleum oils and crude oils obtained from bituminous minerals (
such as shale, calcareous rock, sand), whatever their composition, whether obtained from normal or
condensation oil-deposits or by the destructive distillation of bituminous minerals and whether or not
subject to all or any of the following processes:-
(1) decentration;
(2) de-salting;
(3) dehydration;
(4) stabilisation in order to normalise the vapour pressure,
(5) elimination of very light fractions with a view to returning them to the oil-deposits in order
to improve the drainage and maintain the pressure;
(6) the addition of only those hydrocarbons previously recovered by physical methods during the
course of above-mentioned processes;
(7) any other minor process (including addition of pour point depressants or flow improves)
which does not change the essential character of the substance; ]
100 [(iid) Aviation Turbine fuel sold to a Turbo-Prop Aircraft.
Explanation : For the purposes of this clause, “Turbo-Prop Aircraft” means an aircraft deriving thrust,
mainly from propeller, which may be driven by either turbine engine or piston engine.]
(iii) hides and skins, whether in a raw or dressed state;
101 [(iv) Iron and steel i.e. to say:-
(i) 102 [pig iron sponge iron and] cast iron including 103[ingot moulds, bottom plates], iron
scrap, cast iron scrap, runner scrap and iron skull scrap;
(ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes);
(iii) skelp bars, tin bars, sheet bars, hoe-bars and sleeper bars;
(iv) steel bars (rounds, rods, squares, flats, octagons and hexagons, plain and ribbed or twisted,
in coil form as well as straight lengths);
(v) steel structural (angles, joists, channels, tees, sheet, pilling section, Z sections or any other
rolled sections);
(vi) sheets, hoops, strips and skelp, both black and galvanised, hot and cold rolled, plain and
corrugated in all qualities, in straight lengths and in coil form, as rolled and in rivetted
condition;
(vii) plates both plain and chequered in all qualities;
(viii) discs, rings, forgings and steel castings; (ix) tool, alloy and special steels of any of the above categories;
(x) steel melting scrap in all forms including steel skull, turnings and borings;
(xi) steel tubes both welded and seamless, of all diameters and lengths including tube fittings;
(xii) tin-plates, both hot dipped and electrolytic and tin-free plates;
(xiii) fish plates bars, bearing plates bars, crossing sleeper bars, fish plates, bearing plates,
crossing sleepers and pressed steel sleepers, rails-heavy and light crane rails;
(xiv) wheels, tyres, axels and wheels sets;
(XV) wire rods and wire-rolled, drawn, galvanised, aluminised, tinned or coated such as by
copper;
(xvi) defectives, rejects, cuttings or end pieces of any of the above categories; ]
104 [(v) jute, that is to say, the fibre extracted from plants belonging to the species corchorus
capsularies, and Corchorus olitorius and the fibre known as mesta or bimli extracted from plants of the
species Hibiscus cannabinus and Hibiscus sabdariffa- Varaltissima and the fibre known as Summ or
Sunn-hemp extracted from plants of the species Crotalaria Juncea whether baled or otherwise; ]
104A(va) Liquified Patroleum Gas for domestic use
105 (vi) Oilseeds, that is to say:-
(i) Groundnut or peanut (Arachis hypogaea);
(ii) Sesamum or Til (Sesamum orientale);
(iii) Cotton seed (Gossypium Spp);
(iv) Soyabean (Glycine seja);
(v) Rapseed and Mustared
1. Torta (Brassica campestris var toria);
2. Rai (Brassica juncea);
3. Jamba-Taramira(Eruca Saatiya);
4. Sarson, yellow and brown (Brassica campestris var sarson);
5. Banarsi Rai or True Mustured (Brassica nigra);
(vi) Linseed (Linum usitatissimum);
(vii) Castor (Ricinus communis);
(viii)Coconut (i.e. Copra excluding tender coconuts)
(Cocosnucifers);
(ix) Sunflower (Helianthus annus);
(x) Nigar seed (Guizotia abyssinica);
(xi) Neem, vepa (Azadirachta indica);
(xii) Mahua, illupai, Ippe (Medhuca indica M. Latifolia, Bassia, Latifolia and Madhuca
longifolia syn. M. Longifolia); (xiii) Karanja; Pongam, Honga (Pongamia pinnata syn.P. Glabra);
(xiv) Kusum (Schleichera oleosa, syn S. Trijuga);
(xv) Punna, Undi (Calophyllum inophyllum);
(xvi) Kokum (Carcinia indica);
(xvii) Sal (Shorea robusta);
(xviii) Tung (Aleurites fordii and A.montanna)
(xix) Red palm (Elaeis guinensis);
(xx) Safflower (Carthanus tincotorius);
106 (via) pulses, that is to say:-
(i) gram or gulab (Cicerarietinum L.);
(ii) tur or arhar (Cajanus cajan);
(iii) moong or green gram (Phaseolus aureus);
(iv) masuri or lentil (Lens esculenta Moench, Lens
culinaris Mdeic);
(v) urad or black gram (Phaseolus mungo);
(vi) moth (Phaseolus aconitifolius Jacq);
(vii) lakh or khesari (Lathyrus sativus L.);
107 (vii) man-made fabrics covered under heading Nos. 54.08, 54.09, 54.10, 54.11, 54.12, 55.07, 55.08,
55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05, [58.06]108, 59.01, 59.02, 59.03, 59.05, 59.06
and 60.01 of the Schedule to the Central Excise Tariff Act, 1985; ( 5 of 1986)
(viii) sugar covered under sub-heading Nos. 1701.20, 1701.31, 1701.39 and 1702.11 of the Schedule to
the Central Excise Tariff Act, 1985; (5 of 1986)
(ix) unmanufactured tobacco and tobacco refuse covered under sub-heading No. 2401.00, cigars and
cheroots of tobacco covered under heading No.24.02, cigarette and cigarillos of tobacco covered
under sub heading Nos. 2403.11 and 2403.21 and other manufactured tobacco covered under sub-heading
Nos. 2404.11, 2404.12, 2404.13, 2404.19, 2404.21, 2404.29, 2404.31, 2404.39, 2404.41, 109 [2404.50 and
2404.60], of the Schedule to the Central Excise Tariff Act, 1985; (5 of 1986)
(x) woven fabrics of wool covered under heading Nos.51.06, 51.07, 58.01, 58.02, 58.03 and 58.05 of the
Schedule to the Central Excise Tariff Act, 1985.
110 [****]
[93.Ins.by Act 103 of 1976, sec.7, (w.e.f.7.9.1976)]
[94.Subs.by Act 61 of 1972, sec.11, for clause (i) (retrospectively)]
[95.Clause (i) renumbered as clause (ia) by Act 103 of 1976, sec.7, (w.e.f.7.9.1976)) Note : Clause (i) was renumbered as
clause (i-a) as so renumbered clause (i) relating to “cerals” was inserted vide Act No.103 of 1976 w.e.f 7.9.1976. the original
clause (i) related to “Coal, including cokde in all its forms”. Because of the decision of the Supreme Court in 19 STC 469 in
which it was held that coal includes charcoal, the entry was subs. Excluding charcoal except for the period specified vide Act
No.61 of 1972.
[96.Item (iia) ins.by Act 16 of 1957, sec.3 and Subs.by Act 31 of 1958, sec.10 (w.e.f.1.10.1958) and again subs. by Act 26 of
1988, sec.84 (w.e.f 13/5/88)] and previous (ii-a) reads as follows : cotton fabrics as defined in item 19 of the First schedule to
the Central Excises and Salt Act, 1944. [97.Ins.by Act 13 of 1989, sec.50 (w.e.f.12.5.1989)]
[98.Ins.by Act 31 of 1958, sec.10, (w.e.f.1.10.1958)]
[99.Ins.by Act 103 of 1976, sec.7 (w.e.f.7.9.1976)]
[100.Ins.by Act 14 of 2001, sec.139 (w.e.f.11.5.2001)]
[101.Subs.by Act 61 of 1972, sec.11, for clause (iv) (w.e.f.1.4.1973)]
[102.Subs.by Act 14 of 2001, sec.139, for “Pig Iron and “
[103.Subs.by Act 38 of 1978, sec.3 and sche2, for “ingot moulds bottom plates”]
[104.Subs.by Act 61 of 1972, sec.11, for clause (v) (w.e.f.1.4.1973)]
[104A Ins. By Finance Act 2006 (w.e.f 1.3.2006)]
[105.Subs.by Act 61 of 1972, sec.11, for clause (vi) (w.e.f.1.4.1973)]
[106.Ins.by Act 103 of 1976, sec.7 (w.e.f 7.9.1976)]
[107.Ins.by Act 31 of 1958, sec.10 (w.e.f 1.10.1958) and subs.by Act 26 of 1988, sec.85 (w.e.f.13.5.1988)
[108.Ins.by Act 13 of 1989, sec.50.
[109.Subs.by Act 13 of 1989, sec.50 for “and 2404.50” (w.e.f.12.5.1989)]
[110.Item (xi), i.e., “Silk fabrics, as defined in item No.20 of the first schedule to the Central Excises and Salt Act, 1944 (1 of
1944)” was omitted by Act 19 of 1968, sec.43 (w.e.f.11.5.1968) thereby allowing the states to levy state tax on them]
11115. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State
Every sales tax law of a State shall, in so far as it imposes or authorises the imposition of a tax on the sale
or purchase of declared goods, be subject to the following restrictions and conditions, namely:-
(a) the tax payable under that law in respect of any sale or purchase of such goods inside the State shall
not exceed 112 [four percent] of the sale or purchase price thereof 113 [****]
(b) where a tax has been levied under that law in respect of the sale or purchase inside the State of any
declared goods and such goods are sold in the course of inter-State trade or commerce, 114 [and tax has
been paid under this Act in respect of the sale of such goods in the course of inter-State trade or
commerce, the tax levied under such law]
115 [shall be reimbursed to the person making such sale in the
course of inter-State trade or commerce] in such manner and subject to such conditions as may be
provided in any law in force in that State;
116[(c) where a tax has been levied under that law in respect of the sale or purchase inside the State of any
paddy referred to in sub-clause (i) of clause (i) of section 14, the tax leviable on rice procured out of such
paddy shall be reduced by the amount of tax levied on such paddy;]
117[(ca) Where a tax on sale or purchase of paddy referred to in sub-clause(i) or clause(i) of section 14 is
leviable under that law and the rice procured out of such paddy is exported out of India, then for the
purposes of sub section (3) of Section 5, the paddy and rice shall be treated as a single commodity.]
(d) each of the pulses referred to in clause (vi-a) of section 14, whether whole or separated, and whether
with or without husk, shall be treated as a single commodity for the purposes of levy of tax under this
law.
[111.Subs.by Act 31 of 1958, sec.11, for section 15 (w.e.f.1.10.1958)]
[112.Subs.by Act 25 of 1975, sec.38, for “three percence” (w.e.f 1.7.1975)]
[113.The words “and such tax shall not be levied at more than one stage” were omitted by Act 20 of 2002, sec.155 (w.e.f
13.5.2002)] [114.Subs.by Act 61 of 1972, sec.12, for “the tax so levied” (w.e.f 1.4.1973)]
[115.Subs.by Act 61 of 1972, sec.12, for “shall be refunded to such person” (w.e.f.1.4.1973)]
[116.Ins.by Act 103 of 1976, sec.8, (w.e.f.7.9.1976)]
[117.Ins.by Act 33 of 1996, sec.87 (w.e.f 28.9.1996)]
CHAPTER V 118
LIABILITY IN SPECIAL CASES
16. Definitions.- In this Chapter,-
(a) ”appropriate authority”, in relation to a company means the authority competent to assess tax on the
company;
(b) ”company” and ”private company” have the meanings respectively assigned to them by clauses (i) and
(iii) of sub-section (1) of section 3 of the Companies Act, 1956.
[118.Ins.by Act 61 of 1972, sec.13 (w.e.f.1.4.1973) and this chapter deals with the procedure for collection of tax in the event
of liquidation of a company]
17. Company in liquidation
(1) Every person (a) who is the liquidator of any company which is being wound up, whether under the
orders of a court or otherwise; or (b) who has been appointed the receiver of any assets of a company,
(hereinafter referred to as the liquidator) shall, within thirty days after he has become such liquidator,
give notice of his appointment as such to the appropriate authority.
(2) The appropriate authority shall, after making such inquiry or calling for such information as it may
deem fit, notify to the liquidator within three months from the date on which he receives notice of the
appointment of the liquidator the amount which, in the opinion of the appropriate authority would be
sufficient to provide for any tax which is then, or is likely thereafter to become, payable by the company.
(3) The liquidator shall not part with any of the assets of the company or the properties in his hands until
he has been notified by the appropriate authority under sub-section (2) and on being so notified, shall set
aside an amount equal to the amount notified and, until he so set aside such amount, shall not part with
any of the assets of the company or properties in his hands:
Provided that nothing contained in this sub-section shall debar the liquidator from parting with such
assets or properties in compliance with any order of a court or for the purpose of the payment of the tax
payable by the company under this Act or for making any payment to secured creditors whose debts are
entitled under law to priority of payment over debts due to Government on the date of liquidation or for
meeting such costs and expenses of the winding up of the company as are in the opinion of the
appropriate authority reasonable.
(4) If the liquidator fails to give the notice in accordance with sub-section (1) or fails to set aside the
amount as required by, or parts with any of the assets of the company or the properties in his hands in
contravention of the provisions of sub-section (3), he shall be personally liable for the payment of the tax
which the company would be liable to pay: Provided that if the amount of any tax payable by the company is notified under sub-section (2), the
personal liability of the liquidator under this sub-section shall be to the extent of such amount.
(5) Where there are more liquidators than one, the obligations and liabilities attached to the liquidator
under this section shall attach to all the liquidators jointly and severally.
(6) The provisions of this section shall have effect notwithstanding anything to the contrary contained in
any other law for the time being in force.
18. Liability of directors of private company in liquidation
Notwithstanding anything contained in the Companies Act, 1956 when any private company is wound up
after the commencement of this Act, and any tax assessed on the company under this Act for any period,
whether before or in the course of or after its liquidation, cannot be recovered, then, every person who
was a director of the private company at any time during the period for which the tax is due shall be
jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be
attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the
company.
119CHAPTER VI
AUTHORITY TO SETTLE DISPUTES IN COURSE OF INTER-STATE TRADE OR
COMMERCE
19. CENTRAL SALES TAX APPELLATE AUTHORITY
19. (1) The central Government shall constitute, by notification in the Official Gazette, an Authority to
settle inter-State disputes falling under 120[section 6A read with section 9] of this Act, to be known as ”
the Central Sales Tax Appellate Authority (hereinafter referred to as the Authority)”.
(2) The Authority shall consist of the following Members appointed by the Central Government,
namely:-
(a) a Chairman, who is a retired Judge of the Supreme Court, or a retired Chief Justice of a
High Court;
(b) an officer of the Indian Legal Service, who is, or is qualified to be, an Additional Secretary
to the Government of India; and
(c) an officer of a State Government not below the rank of Secretary or an officer of the Central
Government not below the rank of Additional Secretary, who is an expert in sales tax
matters.
121[(2A) Notwithstanding anything contained in sub-section (2), the Chairman or a member holding a post as
such in the Authority for Advance Rulings appointed under clause (a) or clause (c), as the case may be, of
sub-section (2) of section 245-O of the Income-Tax Act, 1961 may, in addition to his being the Chairman
or a Member of that Authority, be appointed as the Chairman or a Member, as the case may be, of the
Authority under this Act.](3) The salaries and allowances payable to, and the terms and conditions or service of, the Chairman and
Members shall be such as may be prescribed.
(4) The Central Government shall provide the Authority with such officers and staff as may be necessary
for the efficient exercise of the powers of the Authority under this Act.
[119. Chapter VI (containing Sections 19 to 26) ins. by Act 41 of 2001, sec.3 (w.e.f.1.4.1973)]
120. Subs. for the words, “Section 6A or Section 9” by Section 119(b) of Act 23 of 2004 (w.e.f. commencement of Act 41 of
2001)
121. Ins. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006)]
122[19A. Vacancies etc., not to invalidate proceedings
“No proceeding before the Authority shall be questioned or shall be invalid on the ground merely of the
existence of any vacancy or defect in the constitution of the Authority”.]
[122. Ins. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006)]
20. Appeals
123[(1) The provisions of this Chapter shall apply to appeals filed by any aggrieved person against any order
of the highest appellate authority of a state, made under section 6A read with section 9.
Explanation: For the purpose of this section and sections 21, 22 and 25 “highest appellate authority of a
state” means any authority or tribunal or court (except the High Court) established or constituted under
the general sales tax law of a State, by whatever name called.
(2) Notwithstanding anything contained in the general sales tax law of a state, the Authority shall
adjudicate an appeal filed under sub section (1).
(3) An appeal under sub-section (1) may be filed within ninety days from the date on which the order
referred to in that sub-section is served on any aggrieved person :
Provided that the Authority may entertain any appeal after the expiry of the said period of ninety days,
but not later than one hundred and fifty days from the date of such service, if it is satisfied that the
appellant was prevented by sufficient cause from filing the appeal in time.
Provided further that the authority may entertain any appeal from an aggrieved person within sixty days
from the commencement of the Central Sales Tax Act (Amendment) Act, 2005, where such aggrieved
person had the right to file an appeal against the order of the highest appellate authority of the state under
sub-section (1) as it stood immediately before the commencement of the said act, but has not availed of
the right to file the appeal during the period commencing on and from the 3rd day of December, 2001 and
ending with the 16th day of March, 2005.
(4) The application shall be made in quadruplicate and be accompanied by a fee of five thousand rupees.]
[123. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) The previous sub
sections 1, 2 and 3 of Sec.20 are read as follows : (1) The provisions of this chapter shall apply to appeals filed by the
aggrieved dealer against any order of the assessing authority made under section 6A or section 9 of this Act. (2)
Notwithstanding any thing contained in the general sales tax laws, the authority shall adjudicate an appeal filed by a dealer
aggrieved against any order of the assessing authority rejecting his claim under section 6A or section 9 of this Act. (3) An
appeal against the order of the assessing authority rejecting the claim of the dealer under section 6A or section 9 of this Act may be filed by the aggrieved dealer within forty five days from the date on which the order is served on him. Provided that
the authority may entertain any appeal after expiry of the said period of forty five days, but not later than sixty days, from the
date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. (4) The
application shall be made in quadruplicate and be accompanied by a fee of five thousand rupees.]
21. Procedure on receipt of application
(1) On receipt of an appeal, the Authority shall cause a copy thereof to be forwarded to the assessing
authority concerned and to call upon it to furnish the relevant records:
Provided that such records shall, as soon as possible, be returned to the assessing authority.
(2) The Authority shall adjudicate and decide upon the appeal filed against an order of the 124[highest
appellate authority].
(3) The Authority, after examining the appeal and the records called for, by order, either allow or reject
the appeal:
Provided that no appeal shall be rejected unless an opportunity has been given to the appellant of being
heard in person or through a duly authorised representative.
Provided further that whether an appeal is rejected or accepted, reasons for such rejection or acceptance
shall be given in the order,
(4) The Authority shall make an endeavour to pronounce its order in writing within six months of the
receipt of the appeal.
(5) A copy of every order made under sub-section (3) shall be sent to the 125[appellant, assessing
authority, respondent and highest appellate authority of the State Government concerned].
[124. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) for words
“assessing authority”]
[125. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) for words
“appellant and to the assessing authority”]
22. Powers of the Authority
(1) The Authority shall have the same powers as are vested in a court under the Code of Civil Procedure,
1908, while trying a suit in respect of the following matters, namely:-
(a) enforcing the attendance of any person, examining him on oath or affirmation;
(b) compelling the production of accounts and documents;
(c) Issuing the commission for the examination of witnesses;
(d) the reception of evidence on affidavits;
(e) any other matter which may be prescribed.
126[(1A) the Authority may grant stay of the operation of the order of the highest appellate authority against
which the appeal is filed before it or order the pre-deposit of the tax before entertaining the appeal and while granting such stay or making such order for the pre-deposit of the tax, the Authority shall have
regard, if the assessee has made pre-deposit of the tax under the general sales tax law of the state
concerned, to such pre-deposit or pass such appropriate order as it may deem fit.]
(2) Every proceeding before the Authority shall be deemed to be a judicial proceeding within the
meaning of section 193 and 228 of the Indian Penal Code and the Authority shall be deemed to be a civil
court for the purpose of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
[126. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006)]
23. Procedure of authority
The Authority shall, subject to the provisions of this Chapter, have power to regulate its own procedure in
all matters arising out of the exercise of powers under this Act.
24. The Authority for Advance Rulings to function as authority under this Act
(1) Notwithstanding anything contained in any other law for the time being in force and in section 19 of
this Act, the Authority for Advance Rulings constituted under section 245-O of the Income Tax Act,
1961 shall be notified by the Central Government in the Official Gazette, with such modifications as may
be necessary, to make its composition in conformity with section 19 of this Act, as the Authority under
this Act till such time an Authority is constituted under that section.
(2) On and from the date of the constitution of the Authority in accordance with the provisions of section
19 of this Act, the proceedings pending with the Authority for Advance Rulings shall stand transferred to
the Authority constituted under that section from the stage at which such proceedings stood before the
date of constitution of the said Authority.
12725. Transfer of pending proceedings:
[(1) on and from the commencement of the Central Sales Tax (Amendment)Act’2005, all appeals (except
appeals against orders of the highest appellate authority of the state) pending before the Authority
notified under sub-section (1) of Section 24 shall stand transferred together with the records thereof to the
highest appellate authority of the concerned state.
(2) such highest appellate authority of the state to which such appeal has been transferred under subsection (1) on receipt of such records shall proceed to deal with such appeal so far as may be in the same
manner as in the case of an appeal filed before such highest appellate authority of the state according to
the general sales tax law of the appropriate state, from the stage which was reached before such transfer
or from any earlier stage or de novo as such highest appellate authority of the state may deem fit:
Provided that where the highest appellate authority finds that the appellant has not availed of the
opportunity of filing first appeal before the appellate authority, such case shall be forwarded to such
authority.]
[127. Subs. by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-2006 (w.e.f. 01-03-2006) The previous
section 25 of read as follows : On and from the date when the Authority is constituted under section 19, every appeal arising
out of the provisions contained in this chapter (i) which is pending immediately before the constitution of such authority before
the appellate authority constituted under the general sales tax law of a state or of the state or of the union territory, as the case
may be; or (ii) which would have been required to be taken before such appellate authority, shall stand transferred to such
authority on the date on which it is established. ]26.Applicability of Orders passed:
An order passed by the Authority under this Chapter shall be binding on 128[each State Government
concerned, the assessing authorities and other authorities created by or under any law relating to general
sales tax, in force for the time being in any State 129(***)].
[128. Subs. by Act 23 of 2004, Sec. 109 (F) for “the assessing authorities”, w.e.f. the commencement of the Act 41 of 2001)]
[129. The words, “or Union Territory” were omitted by Act 3 of 2006 dated 16-01-2006 read with S.O. 134(E) dated 03-02-
2006 (w.e.f. 01-03-2006)]

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