An Act to formulate 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 into or export from ndia, to pro!ide for the le!", collection and distri#ution of taxes on sales of goods in the course of inter-Stale trade or commerce and to declare certain goods to #e of special importance of inter-State trade or commerce and specif" the restrictions and conditions to which State laws imposing taxes on the sale or purchase of such goods of special importance shall #e su#$ect% &e it enacted #" 'arliament in the Se!enth (ear of the )epu#lic of ndia as follows*- C+A'T,) 1 - '),-./A)( Short title, extent and commencement% 1% 011 This Act ma" #e called the Central Sales Tax Act, 1956% 021 t extends to the whole of ndia% 031 t shall come into force on such date as the Central 4o!ernment ma", #" noti5cation in the 67cial 4a8ette, appoint, and di9erent dates ma" #e appointed for di9erent pro!isions of this Act% :e5nitions 2% n this Act, unless the context otherwise re;uires,- 0a1 <appropriate State< means- 0i1 in relation to a dealer who has one or more places of #usiness situate in the same State, that State= 0ii1 in relation to a dealer who has places of #usiness situate in di9erent States, e!er" such State with respect to-the place or places of #usiness situate within its territor"= 1 >0aa1 <#usiness< includes- 0i1, an" trade, commerce or manufacture, or an" ad!enture or concern in the nature of trade, commerce or manufacture, whether or not such trade, commerce, manufacture, ad!enture or concern is carried on with a moti!e to make gain or pro5t and whether or not an" gain or pro5t accrues from such trade, commerce, manufacture, ad!enture or concern = and 0ii1 an" transaction in connection with, or incidental or ancillar" to, such trade, commerce, manufacture, ad!enture or concern= 0a#1 <crossing the customs frontiers of ndia< means crossing the limits of the area of a customs station in which imported goods or export goods are ordinaril" kept #efore clearance #" customs authorities% ,xplanation * ?or the purposes of this clause, <customs station< and % customs authorities< shall ha!e the same meanings as in the Customs Act, 1962 052 of 19621@= 2 >0#1 <dealer< means an" person who carries on 0whether regularl" or otherwise1 the #usiness of #u"ing, selling, suppl"ing or distri#uting goods, directl" or indirectl", for cash or for deferred pa"ment, or for commission, remuneration or other !alua#le consideration, and includes- 0i1 a local authorit", a #od" corporate, a compan", an" co-operati!e societ" or other societ", clu#, 5rm, +indu undi!ided famil" or other association of persons which carries on such #usiness = 0ii1 a factor, #roker, commission agent, del credere agent, or an" other mercantile agent, #" whate!er name called, and whether of the same description as herein#efore mentioned or not, who carries on the #usiness of #u"ing, selling, suppl"ing or distri#uting goods #elonging to an" principal whether disclosed or not= and 0iii1 an auctioneer who carries on the #usiness of selling or auctioning goods #elonging to an" principal, whether disclosed or not and whether the o9er of the intending purchaser is accepted #" him or #" the principal or a nominee of the principal% ,xplanation 1* ,!er" person who acts as an agent, in an" State, of a dealer residing outside that State and #u"s, sells, supplies, or distri#utes, goods in the State or acts on #ehalf of such dealer as- 0i1 a mercantile agent as de5ned in the Sale of 4oods Act, 193A 03 of 193A1, or 0ii1 an agent for handling of goods or documents of title relating to goods, or 0iii1 an agent for the collection or the pa"ment of the sale price of goods or as a guarantor for such collection or pa"ment, and e!er" local #ranch or o7ce in a State of a 5rm registered outside that State or a compan" or other #od" corporate, the principal o7ce or head;uarters whereof is outside that State, shall #e deemed to #e a dealer for the purposes of this Act% ,xplanation 2* A 4o!ernment which, whether or not in the course of #usiness, #u"s, sells, supplies or distri#utes, goods, directl" or otherwise, for cash or for deferred pa"ment or for commission, remuneration or other !alua#le consideration, shall, except in relation to an" sale, suppl" or distri#ution of surplus, un-ser!icea#le or old stores or materials or waste products or o#solete or discarded machiner" or parts or accessories thereof, #e deemed to #e a dealer for the purposes of this Act=@ 0c1 <declared goods< means goods declared under section 1B to #e of special importance in inter-State trade or commerce= (d) <goods< includes all materials, articles, commodities and all other kinds of mo!a#le propert", #ut does not include newspapers, actiona#le claims, stocks, shares and securities= C+A'T,) 2 - ?6).C-AT6/ 6? ')/C'-,S ?6) :,T,).//4 D+,/ A SA-, 6) 'C)C+AS, 6? 466:S TAE,S '-AC, / T+, C6C)S, 6? /T,)-STAT, T)A:, 6) C6..,)C, 6) 6CTS:, A STAT, 6) / T+, C6C)S, 6? .'6)T 6) ,F'6)T Dhen is a sale or purchase of goods said to take place n the course of interState trade or commerce% 3% A sale or purchase of goods shall #e deemed to take place in the course of inter-State trade or commerce if the sale or purchase- 0a1occasions the mo!ement of goods from one State to another= or 0#1 is e9ected #" a transfer of documents of title to the goods during their mo!ement from one State to another% ,xplanation 1 * Dhere goods are deli!ered to a carrier or other #ailee for transmission, the mo!ement of the goods shall, for the purposes of clause 0#1, #e deemed to commence at the time of such deli!er" and terminate at the time when deli!er" is taken from such carrier or #ailee% ,xplanation 2 * Dhere the mo!ement of goods commences and terminates in the same State it shall not #e deemed to #e a mo!ement of goods from one State to another #" reason merel" of the fact that in the course of such mo!ement the goods pass through the territor" of an" other State% Dhen is a sale or purchase of goods said to take place outside a State% B% 011 Su#$ect to the pro!isions contained in section 3, when a sale or purchase of goods is determined in accordance with su#-section 021 to take place inside a State, such sale or purchase shall #e deemed to ha!e taken place outside all other States% 021 A sale or purchase of goods shall #e deemed to take place inside a State, if the goods are within the State- 0a1 in the case of speci5c or ascertained goods, at the time the contract of sale is made, an 0#1in the case of unascertained or future goods, at the time of their appropriation to the contract of sale #" the seller or #" the #u"er, whether assent of the other part" is prior or su#se;uent to such appropriation% ,xplanation * Dhere there is a single contract of sale or purchase of goods situated at more places than one, the pro!isions of this su#- section shall appl" as if there were separate contracts in respect of the goods at each of such places Dhen is a sale or purchase of goods said to take place in the course of mport or export% 5% 011 A sale or purchase of goods shall #e deemed to take place in the course of the export of the goods out of the territor" of ndia onl" if the sale or purchase either occasions such export or is e9ected #" a transfer of documents of title to the goods after the goods ha!e crossed the customs frontiers of ndia% 021 A sale or purchase of goods shall #e deemed to take place in the course of the import of the goods into the territor" of ndia onl" if the sale or purchase either occasions such import or is e9ected #" a transfer of documents of title to the goods #efore the goods ha!e crossed the customs frontiers of ndia% >031 /otwithstanding an"thing contained in su#-section 011, the last sale or purchase of an" goods preceding the sale or purchase occasioning the export of those goods out of the territor" of ndia shall also #e deemed to #e in the course of such export, if such last sale or purchase took place after, and was for the purpose of compl"ing with, the agreement or order for or in relation to such export% C+A'T,) ll - /T,)-STAT, SA-,S TAF -ia#ilit" to tax on inter-State sales% 6% 011 Su#$ect to the other pro!isions contained in this Act, e!er" dealer shall, with e9ect from such date as the Central 4o!ernment ma", #" noti5cation in the 67cial 4a8ette, appoint, not #eing earlier than thirt" da"s from the dateof such noti5cation, #e lia#le to pa" tax under this Act on all sales of goods other than electrical energ" e9ected #" him in the course of interStatetrade or commerce during an" "ear on and from the date so noti5ed* 3 >'ro!ided that a dealer shall not #e lia#le to pa" tax under this Act on an" sale of goods which, in accordance with the pro!isions of su#- section 031 of section 5, is a sale in the course of export of those goods out of the territor" of ndia%@ 01A1 A dealer shall #e lia#le to pa" tax under this Act on a sale of an" goods e9ected #" him in the course of inter-State trade or commerce notwithstanding that no tax would ha!e #een le!ia#le 0whether on the seller or the purchaser1 under the sales tax law of the appropriate State if that sale had taken place inside that State% 021 /otwithstanding an"thing contained in su#-section 011 or su#- section 0A1, where a sale of an" goods in the course of inter-State trade or commerce has either occasioned the mo!ement of such goods from one State to another or has #een e9ected #" a transfer of documents of title to such goods during their mo!ement from one State to another, an" su#se;uent sale during such mo!ement e9ected #" a transfer of documents of title to such goods,- 0a1 to the 4o!ernment, or 0#1 to a registered dealer other than the 4o!ernment, if the goods are of the description referred to in su#-section 031 of section G, shall #e exempt from tax under this Act* 'ro!ided that no such su#se;uent sale shall #e exempt from tax under this su#-section unless the dealer e9ecting the sale furnishes to the prescri#ed authorit" in the prescri#ed manner and within the prescri#ed time or within such further time as that authorit" ma", for su7cient cause, permit,- 0a1 a, certi5cate dul" 5lled and signed #" the registered dealer from whom the goods were purchased containing the prescri#ed particulars in a prescri#ed form o#tained from the prescri#ed authorit"= and 0#1 if the su#se;uent sale is made- 0i1 to a registered dealer, a declaration referred to in clause 0a1 of su#- section 0B1 of section G, or 0ii1 to the 4o!ernment, not #eing a registered dealer, a certi5cate referred to in clause 0#1 of su#-section 0B1 of section G 'ro!ided further that it shall not #e necessar" to furnish the declaration or the certi5cate referred to in clause 0#1 of the preceding pro!iso in respect of a su#se;uent sale of goods if,- 0a1 the sale or purchase of such goods is, under the sales tax law of the appropriate State exempt from tax generall" or is su#$ect to tax generall" at a rate which is lower than B >four@ per cent 0whether called a tax or fee or #" an" other name1= and 0#1 the dealer e9ecting such su#se;uent sales pro!es to the satisfaction of the authorit" referred to in the preceding pro!iso that such sale is of the nature referred to in clause 0a1 or clause 0#1 of this su#-section% &urden of proof, etc%, in case of transfer of goods claimed otherwise than #" wa" of sale% 6A% 011 Dhere an" dealer claims that he is not lia#le to pa" tax under this Act, in respect of an" goods, on the ground that the mo!ement of such goods from one State to another was occasioned #" reason of transfer of such goods #" him to an" other place of his #usiness or to his agent or principal, as the case ma" #e, and not #" reason of sale, the #urden of pro!ing that the mo!ement of those goods was so occasioned shall #e on that dealer and for this purpose he ma" furnish to the assessing authorit", within the prescri#ed timeor within such further time as that authorit" ma", for su7cient cause, permit, a declaration, dul" 5lled and signed #" the principal o7cer of the other place of #usiness, or his agent or principal, as the case ma" #e, containing the prescri#ed particulars in the prescri#ed form o#tained from the prescri#ed authorit", along with the e!idence of despatch of such goods% 021 f the assessing authorit" is satis5ed after making such in;uir" as he ma" deem necessar" that the particulars contained in the declaration furnished #" a dealer under su#-section 011 are true, he ma", at the time of, or at an" time #efore, the assessment of the tax pa"a#le #" the dealer under this Act, make an order to that e9ect and thereupon the mo!ement of goods to which the declaration relates shall #e deemed for the purpose of this Act to ha!e #een occasioned otherwise than as a result of sale% ,xplanation * n this section, <assessing authorit"<, in relation to a dealer, means the authorit" for the time #eing competent to assess the tax pa"a#le #" the dealer under this Act% )egistration of dealers% H% 011 ,!er" dealer lia#le to pa" tax under this Act shall, within such time as ma" #e prescri#ed for the purpose, make an application for registration under this Act to such authorit" in the appropriate Stale as the Central 4o!ernment ma", #" general or special order, specif", and e!er" such application shall contain such particulars as ma" #e prescri#ed% 021 An" dealer lia#le to pa" tax under the sales tax law of the appropriate State, or where there is no such law in force in the appropriate State or an" part thereof, an" dealer ha!ing a place of #usiness in that State or part, as the case ma" #e, ma", notwithstanding that he is not lia#le to pa" tax under this Act, appl" for registration under this Act to the authorit" referred to in su#-section 011, and e!er" such application shall contain such particulars as ma" #e prescri#ed% ,xplanation* ?or the purposes of this su#-section, a dealer shall #e deemed to #e lia#le to pa" tax under the sales tax law of the appropriate State notwithstanding that under such law a sale or purchase made #" him is exempt from tax or a refund or re#ate of tax is admissi#le in respect thereof% 02A1 Dhere it appears necessar" to the authorit" to whom an application is made under su#-section 011 or su#-section 021 so to do for the proper realisation of the tax pa"a#le under this Act or for the proper custod" and use of the forms referred to in clause 0a1 of the 5rst pro!iso to su#-section 021 of section 6 or su#-section 011 of section 6A or clause 0a1 of su#-section 0B1 of section G, he ma", #" an order in writing and for reasons to #e recorded therein, impose as a condition for the issue of a certi5cate of registration a re;uirement that the dealer shall furnish in the prescri#ed manner and within such time as ma" #e speci5ed in the order such securit" as ma" #e so speci5ed, for all or an" of the aforesaid purposes% 031 f the authorit" to whom an application under su#-section 011 or su#section 021 is made is satis5ed that the application is in conformit" with the pro!isions of this Act and the rules made thereunder and the condition, if an", imposed under su#-section 02A1, has #een complied with, he shall register the applicant and grant to him a certi5cate of registration in the prescri#ed form which shall specif" the class or classes of goods for the purposes of su#-section 011 of section G% 03A1 Dhere it appears necessar" to the authorit" granting a certi5cate of registration under this section so to do for the proper realisation of tax pa"a#le under this Act or for the proper custod" and use of the forms referred to in su#-section 02A1, he ma", at an" time while such certi5cate is in force, #" an order in writing and for reasons to #e recorded therein, re;uire the dealer, to whom the certi5cate has #een granted, to furnish within such time as ma" #e speci5ed in the order and in the prescri#ed manner such securit", or, if the dealer has alread" furnished an" securit" in pursuance of an order under this su#- section or su#-section 02A1, such additional securit", as ma" #e speci5ed in the order, for all or an" of the aforesaid purposes% 5 >03&1 /o dealer shall #e re;uired to furnish an" securit" under su#- section 02A1 or an" securit" or additional securit" under su#-section 03A1 unless he has #een gi!en an opportunit" of #eing heard% 03&&1 The amount of securit" which a dealer ma" #e re;uired to furnish under su#-section 02A1 or su#-section 03A1 or the aggregate of the amount of such securit" and the amount of additional securit" which he ma" #e re;uired to furnish under su#-section 03A1, #" the authorit" referred to therein, shall not exceed- 0a1 in the case of a dealer other than a dealer who has made an application, or who has #een registered in pursuance of an application, under su#-section 021, a sum e;ual to the tax pa"a#le under this Act, in accordance with the estimate of such authorit", on the turno!er of such dealer for the "ear in which such securit" or, as the case ma" #e, additional securit" is re;uired to #e furnished= and 0#1 in the case of a dealer who has made an application, or who has #een registered in pursuance of an application, under su#-section 021, a sum e;ual to the tax le!ia#le under this Act, in accordance with the estimate of such authorit" on the sales to such dealer in the course of inter-State trade or commerce in the "ear in which such securit" or, as the case ma" #e, additional securit" is re;uired to #e furnished, had such dealer #een not registered under this Act%@ 03C1 Dhere the securit" furnished #" a dealer under su#-section 02A1 or su#- section 03A1 is in the form of a suret" #ond and the suret" #ecomes insol!ent or dies, the dealer shall, within thirt" da"s of the occurrence of an" of the aforesaid e!ents, inform the authorit" granting the certi5cate of registration and shall within ninet" da"s of such occurrence furnish a fresh suret" #ond or furnish in the prescri#ed manner other securit" for the amount of the #ond% 03:1 The authorit" granting the certi5cate of registration ma" #" order and for good and su7cient cause forfeit the whole or an" part of the securit" furnished #" a dealer,- 0a1 for realising an" amount of tax or penalt" pa"a#le #" the dealer= 0#1 if the dealer is found to ha!e misused an" of the forms referred to in su#-section 02A1 or to ha!e failed to keep them in proper custod" * 'ro!ided that no order shall #e passed under this su#-section without gi!ing the dealer an opportunit" of #eing heard% 03,1 Dhere #" reason of an order under su#-section 03:1, the securit" furnished #" an" dealer is rendered insu7cient, he shall make up the de5cienc" in such manner and within such time as ma" #e prescri#ed% 03?1 The authorit" issuing the forms referred to in su#-section 02A1 ma" refuse to issue such forms to a dealer who has failed to compl" with an order under that su#-section or su#-section 03A1, or with the pro!isions of su#-section 03C1 or su#-section 03,1, until the dealer has complied with such order or such pro!isions, as the case ma" #e% 0341 The authorit" granting a certi5cate of registration ma", on application #" the dealer to whom it has #een granted, order the refund of an" amount or part thereof deposited #" the dealer #" wa" of securit" under this section, if it is not re;uired for the purposes of this Act% 03+1 An" person aggrie!ed #" an order passed under su#-section 02A1, su#section 03A1, su#-section 03:1 or su#-section 0341 ma", within thirt" da"s of the ser!ice of the order on him, #ut after furnishing the securit", prefer, in such form and manner as ma" #e prescri#ed, an appeal against such order to such authorit" 0hereafter in this section referred to as the <appellate authorit"<1 as ma" #e prescri#ed* 'ro!ided that the appellate authorit" ma", for su7cient cause, permit such person to present the appeal- 0a1 after the expir" of the said period of thirt" da"s = or 0#1 without furnishing the whole or an" part of such securit"% 03-1 The procedure to #e followed in hearing an" appeal under su#- section 03+1, and the fees pa"a#le in respect of such appeals shall #e such as ma" #e prescri#ed% 03I1 The order passed #" the appellate authorit" in an" appeal under su#section 03+1 shall #e 5nal% 0B1 A certi5cate of registration granted under this section ma"- 0a1 either on the application of the dealer to whom it has #een granted, or, where no such application has #een made, after due notice to the dealer, #e amended #" the authorit" granting it if he is satis5ed that #" reason of the registered dealer ha!ing changed the name, place or nature of his #usiness or the class or classes of goods in which he carries on #usiness or for an" other reason the certi5cate of registration granted to him re;uires to #e amended= or 0#1 #e cancelled #" the authorit" granting it where he is satis5ed, after due notice to the dealer to whom it has #een granted, that he has ceased to carr" on #usiness or has ceased to exist or has failed without su7cient cause, to compl" with an order under su#-section 03A1 or with the pro!isions of su#-section 03C1 or su#-section 03,1 or has failed to pa" an" tax or penalt" pa"a#le under this Act, or in the case of a dealer registered under su#-section 021 has ceased to #e lia#le to pa" tax under the sales tax law of the appropriate State or for an" other su7cient reason% 051 A registered dealer ma" appl" in the prescri#ed manner not later than six months #efore the end of a "ear to the authorit" which granted his certi5cate of registration for the cancellation of such registration, and the authorit" shall, unless the dealer is lia#le to pa" tax under this Act, cancel the registration accordingl", and where he does so, the cancellation shall take e9ect from the end of the "ear% )ates of tax on sales in the course of inter-State trade or commerce% G% 011 ,!er" dealer, who in the course of inter-State trade or commerce- 0a1 sells to the 4o!ernment an" goods= or 0#1sells to a registered dealer other than the% 4o!ernment goods of the description referred to in su#-section 031 = shall #e lia#le to pa" tax under this Act, which shall #e 6 >four@ pet% cent of his turno!er% 021 The tax pa"a#le #" an" dealer on his turno!er in so far as the turno!er or an" part thereof relates to the sale of goods in the course of inter-State trade or commerce not falling within su#-section 011- 0a1 in the case of declared goods, shall #e calculated H >at twice the rate@ applica#le to the sale or purchase of such goods inside the appropriate State= and 0#1 in the case of goods other than declared goods, shall #e calculated at the rate of ten per cent or at the rate applica#le to the sale or purchase of such goods inside the appropriate State, whiche!er is higher= and for the purpose of making an" such calculation an" such dealer shall #e deemed to #e a dealer lia#le to pa" tax under the sales tax law of the appropriate State, notwithstanding that he, in fact ma" not #e so lia#le under that law% 02A1 /otwithstanding an"thing contained, in su#-section 01A1 of section 6 or su#-section 011 G >or clause 0#1 of su#-section 021@ of this section, the tax pa"a#le under this Act #" a dealer on his turno!er in so far as the turno!er or an" part thereof relates to the sale of an" goods, the sale or, as the case ma" #e, the purchase of which is, under the sales tax law of the appropriate State, exempt from tax generall" or su#$ect to tax at a rate which is lower than Ga >four@ per cent 0whether called a tax or fee or #" an" other name1, shall #e nil, or as the case ma" #e, shall #e calculated at the lower rate% ,xplanation * ?or the purposes of this su#-section a sale or purchase of goods shall not #e deemed to #e exempt from tax generall" under the sales tax law of the appropriate State if under that law the sale or purchase of such goods is exempt onl" in speci5ed circumstances or under speci5ed conditions or the tax is le!ied on the sale or purchase of such goods at speci5ed stages or otherwise than with reference to the turno!er of the goods% 031 The goods referred to in clause 0#1 of su#-section 011- 0a1 JJ JJ JJ 0#1 are goods of the class or classes speci5ed in the certi5cate of registration of the registered dealer purchasing the goods as #eing intended for re-sale #" him or su#$ect to an" rules made #" the Central 4o!ernment in this #ehalf, for use #" him in the manufacture of processing ofK goods for sale or in mining or in the generation or distri#ution ofK electricit" or an" other 1-orm of power= 0c1 are containers or other materials speci5ed in the certi5cate of registration of the registered dealer purchasing the goods, #eing containers or materials intended for #eing used for the packing of goods for sale= 0d1 are containers or other materials used for the packing of an" goods or classes of goods speci5ed in the certi5cate of registration referred to in clause 0#1 or for the packing of an" containers or other materials speci5ed in the certi5cate of registration referred to in clause 0c1% 0B1 The pro!isions of su#-section 011 shall not appl" to an" sale in the course of inter-State trade or commerce unless the dealer selling the goods furnishes to the prescri#ed authorit" in the prescri#ed manner- 0a1 a declaration dul" 5lled and signed #" the registered dealer to whom the goods are sold containing the prescri#ed particulars in a prescri#ed form o#tained from the prescri#ed authorit"= or 0#1 if the goods are sold to the 4o!ernment, not #eing a registered dealer, a certi5cate in the prescri#ed form dul" 5lled and signed #" a dul" authorised o7cer of the 4o!ernment* 'ro!ided that the declaration referred to in clause 0a1 is furnished within the prescri#ed time or within such further time as that authorit" ma", for su7cient cause, permit% 051 /otwithstanding an"thing contained in this section, Kthe State 4o!ernmentK ma", if it is satis5ed that it is necessar" so to do in the pu#lic interest, #" noti5cation in the 67cial 4a8ette and su#$ect to such conditions as ma" #e speci5ed therein, direct,- 0a1that no tax under this Act shall #e pa"a#le #" an" dealer ha!ing his place of #usiness in the State in respect of the sales #" him, in the course of inter-State trade or commerce, from an" such place of #usiness of an" such goods or classes of goods as ma" #e speci5ed in the noti5cation, or that the tax on such sales shall #e calculated at such lower rates than those speci5ed in su#-section 011 or su#-section 021 as ma" #e mentioned in the noti5cation= 0#1 that in respect of all sales of goods or sales of such classes of goods as ma" #e speci5ed in the noti5cation, which are made, in the course of inter-State trade or commerce, #" an" dealer ha!ing his place of #usiness in the State or #" an" class of such dealers as ma" #e speci5ed in the noti5cation to an" person or to such class of persons as ma" #e speci5ed in the noti5cation, no tax under this Act shall #e pa"a#le or speci5ed the tax on such sales shall #e calculated at such lower rates than those speci5ed in su#-section 011 or su#-section 021 as ma" #e mentioned in the noti5cation% :etermination of turno!er% GA% 011 n determining the turno!er of a dealer for the purpose of this Act, the following deductions shall #e made from the aggregate of the sale prices, namel"*- 0a1 the amount arri!ed at #" appl"ing the following formula rate of tax F aggregate of sale prices ------------------------------------------------------- 1AA plus rate of tax 'ro!ided that no deduction on the #asis of the a#o!e formula shall #e made if the amount #" wa" of tax collected #" a registered dealer, in accordance with the pro!isions of this Act, has #een otherwise deducted from the aggregate of sale prices% ,xplanation* Dhere the turno!er of a dealer is taxa#le at di9erent rates, the aforesaid formula shall #e applied separatel" in respect of each part of the turno!er lia#le to a di9erent rate of tax = 0#1 the sale price of all goods returned to the dealer #" the purchasers of such goods- 0i1 within a period of three months from the date of deli!er" of the goods, in the case of goods returned #efore-the 1Bth da" of .a", 1966= 0ii1 within a period of six months from the date of deli!er" of the goods, in the case of goods returned on or after the 1Bth da" of .a", 1966* 'ro!ided that satisfactor" e!idence of such return of goods and of refund or ad$ustment in accounts of the sale price thereof is produced #efore the authorit" competent to assess or, as the case ma" #e, re- assess the tax pa"a#le #" the dealer under this Act= and 0c1 such other deductions as the Central 4o!ernment ma", ha!ing regard to the pre!alent market conditions, facilit" of trade and interests of consumers, prescri#e% 021 Sa!e as otherwise pro!ided in su#-section 011, in determining the turno!er of a dealer for the purposes of this Act, no deduction shall #e made from the aggregate of the sale prices% -e!" and collection of tax and penalties% 9% 011 The tax pa"a#le #" an" dealer under this Act on sales of goods e9ected #" him in the course of inter-State trade or commerce, whether such sales fall within clause 0a1 or clause 0#1 of section 3, shall #e le!ied #" the 4o!ernment of ndia and the tax so le!ied shall #e collected #" that 4o!ernment in accordance with the pro!isions of su#- section 021, in the State from which the mo!ement of the goods commenced* 9 >'ro!ided that, in the case of a sale of goods during their mo!ement from one State to another, #eing a sale su#se;uent to the 5rst sale in respect of the same goods and #eing also a sale which does not fall within su#-section 021 of section 6, the tax shall #e le!ied and collected- 0a1 where such su#se;uent sale has #een e9ected #" a registered dealer, in the State from which the registered dealer o#tained or, as the case ma" #e, could ha!e o#tained, the form prescri#ed for the purposes of clause 0a1 of su#-section 0B1 of section G in connection with the purchase of such goods, and 0#1 where such su#se;uent sale has #een e9ected #" an unregistered dealer in the State from which such su#se;uent sale has #een e9ected%@ 021 Su#$ect to the other pro!isions of this Act and the rules made there- under, the authorities for the time #eing empowered to assess, re- assess, collect and enforce pa"ment of an" tax under the general sales tax law of the appropriate State shall, on #ehalf of the 4o!ernment of ndia, assess, reassess, collect and enforce pa"ment of tax, including an" penalt", pa"a#le #" a dealer under this Act as if the tax or penalt" pa"a#le #" such a dealer under this Act is a tax or penalt" pa"a#le under the general sales tax law of the State = and for this purpose the" ma" exercise all or an" of the powers the" ha!e under the general sales tax law of the State= and the pro!isions of such law, including pro!isions relating to returns, pro!isional assessment, ad!ance pa"ment of tax, registration of the transferee of an" #usiness, imposition of the tax lia#ilit" of a person carr"ing on #usiness on the transferee of, or successor to, such #usiness, transfer of lia#ilit" of an" 5rm or +indu undi!ided famil" to pa" tax in the e!ent of the dissolution of such 5rm or partition of such famil", reco!er" of tax from third parties, appeals, re!iews, re!isions, references, refunds, re#ates, penalties, 9a >charging or pa"ment of interest,@ compounding of o9ences and treatment of documents furnished #" a dealer as con5dential, shall appl" accordingl"* 'ro!ided that if in an" State or part thereof there is no general sales tax law in force, the Central 4o!ernment ma", #" rules made in this #ehalf make necessar" pro!ision for all or an" of the matters speci5ed in this su#-section% 9# >02A1 All the pro!isions relating to o9ences and penalties 0including pro!isions relating to penalties in lieu of prosecution for an o9ence or in addition to the penalties or punishment for an o9ence #ut excluding the pro!isions relating to matters pro!ided for in sections 1A and 1AA1 of the general sales tax law of each State shall, with necessar" modi5cations, appl" in relation to the-assessment, re-assessment, collection and the enforcement of pa"ment of an" tax re;uired to #e collected under this Act in such State or in relation to an" process connected with such assessment, re-assessment, collection or enforcement of pa"ment as if the tax under this Act were a tax under such sales tax law%@ 031 The proceeds in an" 5nancial "ear of an" tax, including an" penalt", le!ied and collected under this Act in an" State 0other than a Cnion Territor"1 on #ehalf of the 4o!ernment of ndia shall #e assigned to that State and shall #e retained #" it = and the proceeds attri#uta#le to Cnion Territories shall form part of the Consolidated ?und of ndia% Collection of tax to #e onl" #" registered dealers% 9A% /o person who is not a registered dealer shall collect in respect of an" sale #" him of goods in the course of inter-State trade or commerce an" amount #" wa" of tax under this Act, and no registered dealer shall make an" such collection except in accordance with this Act and the rules made thereunder% )ounding o9 of tax, etc% 9&% The amount of tax, interest, penalt", 5ne or an" other sum pa"a#le, and the amount of refund due, under the pro!isions of this Act shall #e rounded o9 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 5ft" paise or more, it shall #e increased to one rupee and if such part is less than 5ft" paise, it shall #e ignored* 'ro!ided that nothing in this section shall appl" for the purpose of collection #" a dealer of an" amount #" wa" of tax under this Act in respect of an" sale #" him of goods in the course of inter-State trade or commerce% 'enalties% 1A% f an" person- 0a1 furnishes a certi5cate or declaration under su#-section 021 of section 6 or su#-section 011 of section 6A or su#-section 0B1 of section G, which he knows, or has reason to #elie!e, to #e false= or 0aa1 fails to get himself registered as re;uired #" section H, or fails to compl" with an order under su#-section 03A1 or with the re;uirements of su#-section 03C1 or su#-section 03,1, of that section= or 0#1 #eing a registered dealer, falsel" represents when purchasing an" class of goods that goods of such class are co!ered #" his certi5cate of registration= or 0c1 not #eing a registered dealer, falsel" represents when purchasing goods in the course of inter-State trade or commerce that he is a registered dealer= or 0d1 after purchasing an" goods for an" of the purposes speci5ed in clause 0#1 or clause 0c1 or clause 0a1 of su#-section 031 of section G fails, without reasona#le excuse, to make use of the goods for an" such purpose= or 0e1 has in his possession an" form prescri#ed for the purpose of su#- section 0B1 of section G which has not #een o#tained #" him or #" his principal or #" his agent in accordance with the pro!isions of this Act or an" rules made thereunder= or 0f1 collects an" amount #" wa" of tax in contra!ention of the pro!isions contained in section 9A, he shall #e punisha#le with simple imprisonment which ma" extend to six months, or with 5ne or with #oth = and when the o9ence is a continuing o9ence, with a dail" 5ne which ma" extend to 5ft" rupees for e!er" da" during which the o9ence continues% mposition of penalt" in lieu of prosecution% 1AA% 011 f an" person purchasing goods is guilt" of an o9ence under clause 0#1 or clause 0c1 or clause 0a1 of section 1A, the authorit" who granted to him or, as the case ma" #e, is competent to grant to him a certi5cate of registration under this Act ma", after gi!ing him a reasona#le opportunit" of #eing heard,#" order in writing, impose upon him #" wa" of penalt" a sum not exceeding one% and a half times the tax which would ha!e #een le!ied under su#-section 021 of section G in respect of the sale to him of the goods, if the sale had #een a sale falling within that su#-section* 'ro!ided that no prosecution for an o9ence under section 1A shall #e instituted in respect of the same facts on which a penalt" has #een imposed under this section% 021 The penalt" imposed upon an" dealer under su#-section 011 shall #e collected #" the 4o!ernment of ndia in the manner pro!ided in su#- section 021 of section 9- 0a1 in the case of an o9ence falling under clause 0#1 or clause 0a1 of section 1A, in the State in which the person purchasing% the goods o#tained the form prescri#ed for the purposes of clause 0a1 of su#- section 0B1 of section G in connection with the purchase of such goods= 0#1 in the case of an o9ence falling under clause 0c1 of section 1A, in the State in which the person purchasing the goods should ha!e registered himself if the o9ence had not #een committed% Cogni8ance of o9ences% 011 /o Court shall take cogni8ance of an" o9ence punisha#le under this Act or the rules made thereunder except with the pre!ious sanction of the 4o!ernment within the local limits of whose $urisdiction the o9ence has #een committed or of such o7cer of that 4o!ernment as it ma", #" general or special order, specif" in this #ehalf = and no Court inferior to that of a 'residenc" .agistrate or a .agistrate of the 5rst class shall tr" an" such o9ence% 021 All o9ences punisha#le under this Act shall #e cogni8a#le and #aila#le% ndemnit"% 12% /o suit, prosecution or other legal proceeding shall lie against an" o7cer of 4o!ernment for an"thing which is in good faith done or intended to #e done under this Act or the rules made thereunder% 'ower to make rules% 13% 011 The Central 4o!ernment ma", #" noti5cation in the 67cial 4a8ette, make rules pro!iding for- 0a1 the manner in which applications for registration ma" #e made under this Act, the particulars to #e contained therein, the procedure for the grant of such registration, the circumstances in which registration ma" #e refused and the form in which the certi5cate of registration ma" #e gi!en= 0#1 the period of turno!er, the manner in which the turno!er in relation to the sale of an" goods under this Act shall #e determined, and the deductions which ma" #e made under clause 0c1 of su#-section 011 of section GA in the process of such determination= 0c1 the cases and circumstances in which, and the conditions su#$ect to which, an" registration granted under this Act ma" #e cancelled= 0d1 the form in which and the particulars to #e contained in an" declaration or certi5cate to #e gi!en under this Act the State of origin of such form or certi5cate and the time within which an" such certi5cate or declaration shall #e produced or furnished= 0e1 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 distri#ution of electricit" or an" other form of power= 0f1 the matters in respect of which pro!ision ma" #e made under the pro!iso to su#-section 021 of section 9= 0g1 the fees pa"a#le in respect of applications under this Act% 021 ,!er" rule made #" the Central 4o!ernment under su#-section 011 shall #e laid, as soonKas ma" #e after it is made, #efore each +ouse of 'arliament while it is in session, for a total period of thirt" da"s which ma" #e comprised in one session or in two or more successi!e sessions, and if, #efore the expir" of the session immediatel" following the session or the successi!e sessions aforesaid #oth +ouses agree in making an" modi5cation in the rule or #oth +ouses agree that the rule should not #e made, the rule shall there-after ha!e e9ect onl" in such modi5ed form or #e of no e9ect, as the case ma" #e= so, howe!er, that an" such modi5cation or annulment shall #e without pre$udice to the !alidit" of an"thing pre!iousl" done under that rule% 031 The State% 4o!ernment ma" make rules, not inconsistent with the pro!isions of this Act and the rules made under su#-section 011, to carr" out the purposes of this Act% 0B1 n particular and without pre$udice to the powers conferred #" su#- section 031, the State 4o!ernment ma" make rules for all or an" of the following purposes, namel"*- 0a1 the pu#lication of lists of registered dealers, of the amendments made in such lists from time to time, and the particulars to #e contained in such lists= 0aa1 the manner in which securit" ma" #e furnished under su#- section 02A1 or su#-section 03A1 or su#-section 03C1 of section H and the manner in which and the time within which an" de5cienc" ma" #e made up under su#section 03,1 of that section= 0#1 the form and manner in which accounts relating to sales in the course of inter-State trade or commerce shall #e kept #" registered dealers= 0c1 the furnishing of an" information relating to the stocks of goods of, purchases, sales and deli!eries of #ooks #", an" dealer or an" other information relating to his #usiness as ma" #e necessar" for the purposes of this Act = 0d1 the inspection of an" #ooks, accounts or documents re;uired to #e kept under this Act, the entr" into an" premises at all reasona#le times for the purposes of searching for an" such #ooks, accounts or documents kept or suspected to #e kept in such premises and the sei8ure of such #ooks, accounts or documents= 0e1 the authorit" from whom, the conditions su#$ect to which and the fees su#$ect to pa"ment of which an" form of certi5cate prescri#ed under clause 0a1 of the 5rst pro!iso to su#-section 021 of section 6 or of declaration prescri#ed under su#-section 011 of section 6A or su#- section 0B1 of section G ma" #e o#tained, the manner in which such forms shall #e kept in custod" and records relating thereto maintained and the manner in which an" such form ma" #e used and an" such certi5cate or declaration ma" #e furnished= 0ee1 the form and manner in which, and the authorit" to whom, an appeal ma" #e preferred under su#-section 03+1 of section H, the procedure to #e followed in hearing such appeals and the fees pa"a#le in respect of such appeals= 0f1 in the case of an Cndi!ided +indu ?amil", association, clu#, societ", 5rm or compan" or in the case of a person who carried on #usiness as a guardian or trustee or otherwise on #ehalf of another person, the furnishing of a declaration stating the name of the person who shall #e deemed to #e the manager in relation to the #usiness of the dealer in the State and the form in which such declaration ma" #e gi!en= and 0g1 the time within which, the manner in which and the authorities to whom an" change in the ownership of an" #usiness or in the name, place or nature of an" #usiness carried on #" an" dealer shall #e furnished% 051 n making an" rule under this section the Central 4o!ernment or, as the case ma" #e, the State 4o!ernment ma" direct that a #reach thereof shall #e punisha#le with 5ne which ma" extend to 5!e hundred rupees and when the o9ence is a continuing o9ence, with a dail" 5ne which ma" extend to 5ft" rupees for e!er" da" during which the o9ence continues%
C+A'T,) L - 466:S 6? S',CA- .'6)TA/C, / /T,)-STAT, T)A:, 6) C6..,)C, Certain goods to #e of special importance n nter-State trade or commerce% 1B% t is here#" declared that the following goods are of special importance in inter-State trade or commerce*- 1A >0i1 Cereals, that is to sa",- 0i1 padd" 06r"8a sati!a -%1= 0ii1 rice 06r"8a sati!a -%1= 0iii1 wheat 0Triticum !ulgar, T% compactum, T% sphaerococcum, T% edurum, T aesti!um -% T% dicoccum1= 0i!1 $owar or milo 0Sorghum !ulgare 'ers1= 0!1 #a$ra 0'ennisetum t"phoideum -%1= 0!i1 mai8e 0Mea ma(s -%1 0!ii1 ragi 0eleusine coracana 4aertn%1= 0!iii1 kodon 0paspalum scro#iculatum -%1= 0ix1 kutki 0'anicum miliare -%1 = 0x1 #arle" 0+ordeum !ulgare -%1 =@ 11 >0ia1@ coal, including coke in all its forms, #ut excluding charcoal* 'ro!ided that during the period commencing on the 23rd da" of ?e#ruar", 196H and ending with the date of commencement of section 11 of the Central Sales Tax 0Amendment1 Act, 19H2 061 of 19H21, this clause shall ha!e e9ect su#$ect to the modi5cation that the words <#ut excluding charcoal< shall #e omitted= 0ii1 cotton, that is to sa", all kinds of cotton 0indigenous or imported1 in its unmanufactured state, whether ginned or unginned, #aled, pressed or otherwise, #ut not including cotton waste= 12 >0iia1 cotton fa#rics co!ered under heading /os% 52%A5, 52%A6, 52%AH, 52%AG, 52%A9, 52%1A, 52%11, 52%12, 5G%A1, 5G%A2, 5G%A3, 5G%AB, 5G%A5, 13 >5G%A6,@ 59%A1, 59%A3, 59%A5, 59%A6 and 6A%A1 of the Schedule to the Central ,xcise Tari9 Act, 19G5 05 of B 9G61=@ 0ii#1 cotton "arn, #ut not including cotton "arn waste= 1B >0iic1 crude oil, that is to sa", crude petroleum oils and crude oils o#tained from #ituminous minerals 0such as shale, calcareous rock, sand1, whate!er their composition, whether o#tained from normal or condensation oil-deposits or #" the destructi!e distillation of #ituminous minerals and whether or not su#$ected to all or an" of the following processes*- 011 decantation= 021 de-salting = 031 deh"dration 0B1 sta#ilisation in order to normalise the !apour pressure= 051 elimination of !er" light fractions with a !iew to returning them to the oil-deposits in order to impro!e the drainage and maintain the pressure= 061 the addition of onl" those h"drocar#ons pre!iousl" reco!ered #" ph"sical methods during the course of the a#o!e mentioned processes= 0H1 an" other minor process 0including addition of pour point depressants or Now impro!ers1 which does not change the essential character of the su#stance=@ 0iii1 hides and skins, whether in a raw or dressed state=K 0i!1 iron and steel, that is to sa",- 0i1 pig iron and cast iron including 15 lingot moulds, #ottom plates@, iron scrap, cast iron scrap, runner scrap and iron skull scrap= 0ii1 steel semis 0ingots, sla#s, #looms and #illets of all ;ualities, shapes and si8es1= 0iii1 skelp #ars, tin #ars, sheet #ars, hoe-#ars and sleeper #ars= 0i!1 steel #ars 0rounds, rods, s;uares, Nats, octagons and hexagons, plain and ri##ed or twisted, in coil form as well as straight lengths1 = 0!1 steel structurals 0angles, $oists, channels, tees, sheet piling sections, M sections or an" other rolled sections1= 0!i1 sheets, hoops, strips and skelp, #oth #lack and gal!anised, hot and cold rolled, plain and corrugated, in all ;ualities, in straight lengths and in coil form, as rolled and in ri!eted condition = 0!ii1 'lates #oth plain and che;uered in all ;ualities 0!iii1 discs, rings, forgings and steel castings = 0ix1 tool, allo" and special steels of an" of the a#o!e categories= 0x1 steel melting scrap in all forms including steel skull, turnings and #orings= 0xi1 steel tu#es, #oth welded and seamless, of all diameters and lengths, including tu#e 5ttings = 0xii1 tin-plates, #oth hot dipped and electrol"tic and tinfree plates= 0xiii1 5sh plate #ars, #earing plate #ars, crossing sleeper #ars, 5sh plates, #earing plates, crossing sleepers and pressed steel sleepers, rails--- hea!" and light crane rails= 0xi!1 wheels, t"res, axles and wheel sets= 0x!1 wire rods and wires-rolled, drawn, gal!anised, aluminised, tinned or coated such as #" copper= 0x!i1 defecti!es, re$ects, cuttings or end pieces of an" of the a#o!e categories= 0!1 $ute, that is to sa", the 5#re extracted-from plants #elonging to the species Corchorus capsularies and Corchorus olitorius and the 5#re known as mesta or #imli extracted from plants of the species +i#iscus canna#inus and +i#iscus sa#dari9a-Lar altissima and the 5#re known as Sunn or Sunnhemp extracted from plants of the species Crotalaria $uncea whether #aled or otherwise= 0!i1 6ilseeds, that is to sa",- 0i1 4roundnut or 'eanut 0Arachis h"pogaea1= 0ii1 Sesamum or Til 0Sesamum orientale1= 0iii1 Cotton seed 04oss"pium Spp%1= 0i!1 So"a#ean 04l"cine seia1= 0!1 )apeseed and .ustard 011 Toria 0&rassica campestris !ar toria1= 021 )ai 0&rassica $uncea1= 031 Iam#a-Taramira 0,ruca Sati!a1= 0B1 Sarson, "ellow, and #rown 0&rassica campestris !ar sarson1 051 &anarsi )ai or True .ustard 0&rassica nigra1= 0!i1 -inseed 0-inum usitatissimum1= 0!ii1 Castor 0)icinus communis1= 0!iii1 Coconut 0i%e%, Copra excluding tender coconuts1 0Coconucifera1= 0ix1 SunNower 0+elianthus annus1 = 0x1 /igar seed 04ui8otia a#"ssinica1 0xi1 /eem, !epa% 0A8adirachta indica1= 0xii1 .ahua, illupai, ppe 0.adhuca indica .% -atifolia, &assia, -atifolia and .adhuca longilolia s"n% .% -ongifolia1= 0xiii1 Earan$a, 'ongam, +onga 0'ongamia pinnata s"n% '% 4la#ra1= 0xi!1 Eusurn 0Schleichera oleosa s"n% S% Tri$uga1= 0x!1 'unna, Cndi 0Caloph"llum inoph"llum1= 0x!i1 Eokum 0Corcinia indica1= 0x!ii1 Sal 0Shorea ro##usta1= 0x!iii1 Tung 0Aleurites fordii and A% montana1= 0xix1 )ed palm 0,laeis guinensis1= 0xx1 SaOower 0Carthanus tinclorius1= 16 >0!ia1 pulses, that is to sa",- 0i1 gram or gula# gram 0Cicerarietinum -%1= 0ii1 tur or arhar 0Ca$anus ca$an1= 0iii1 moong or green gram 0'haseolus aureus1= 0i!1 masur or lentil 0-ens esculenta .oench, -ens culinarie .edic1= 0!1 urad or #lack gram 0'haseolus mungo1= 0!i1 moth 0'haseolus aconitifolius Iac;1= 0!ii1 lakh or Ehesari 0-ath!ros rati!us -%1 1H >0!ii1 man-made fa#rics co!ered under heading /os% 5B%AG, 5B%A9, 5B%1A, 5B%11, 5B%12, 55%AH, 55%AG, 55%A9, 55%1A, 55%11, 55%12, 5G%A1, 5G%A2, 5G%A3, 5G%AB, 5G%A5, 1G >5G%A6,@59%A1, 59%A2, 59%A3, 59%A5, 59%A6 and 6A%A1 of the Schedule to the Central ,xcise Tari9 Act, 19G5 05 of 19G61= 0!iii1 sugar co!ered under su#-heading /os% 1HA1%2A, 1HA1%31, 1HA1%39 and 1HA2%11 of the Schedule to the Central ,xcise Tari9 Act, 19G5 05 of 19G61 = 0ix1 unmanufactured to#acco and to#acco refuse co!ered under su#- heading /o% 2BA1%AA, cigars and cheroots of to#acco co!ered under heading /o% 2B%A2, cigarettes and cigarillos of to#acco co!ered under su#-heading /os% 2BA3%11 and 2BA3%21, and other manufactured to#acco co!ered under su#-heading /os% 2BAB%11, 2BAB%12, 2BAB%13, 2BAB%19, 2BAB%21, 2BAB%29, 2BAB%31, 2BAB%39, 2BAB%B1 19 >, 2BAB%5A and 2BAB%6A@, of the Schedule to the Central ,xcise Tari9 Act, 19G5 05 of 19G61= 0x1 wo!en fa#rics of wool co!ered under heading /os% 51%A6, 51%AH, 5G%A1, 5G%A2, 5G%A3 and 5G%A5 of the Schedule to the Central ,xcise Tari9 Act, 19G5 05 of 19G61%@ )estrictions and conditions in regard to tax on sale or purchase of declared goods within a State% 15% ,!er" sales tax law of a State shall, insofar as it imposes or authorises the imposition of a tax on the sale or purchase of declared goods, #e su#$ect to the following restrictions and conditions, namel" *- 0a1 the tax pa"a#le under that law in respect of an" sale or purchase of such goods inside the State shall not exceed 2A >four@ per cent of the sale or purchase price thereof, and such tax shall not #e le!ied at more than one stage= 0#1 where a tax has #een le!ied under that law in respect of the sale or purchase inside the State of an" declared goods and such goods are sold in the course of inter-State trade or commerce, and tax has #een paid under this Act in respect of the sale of such goods in the course of interState trade or commerce, the tax le!ied under such law shall #e reim#ursed to the person making such sale in the course of inter-State trade or commerce in such manner and su#$ect to such conditions as ma" #e pro!ided in an" law in force in that State= 21 >0c1where a tax has #een le!ied under that law in respect of the sale or purchase inside the State of an" padd" referred to in su#-clause 0i1 of clause 0i1 of section 1B, the tax le!ia#le on rice procured out of such padd" shall #e reduced #" the amount of tax le!ied on such padd"= 21a >0ca1 where a tax on sale or purchase of padd" referred to in su#- clause 011 of clause 011 of section 1B is le!ia#le under that law and the rice procured out of such padd" is exported out of ndia, then, for the purposes of su#section 031 of section 5, the padd" and rice shall #e treated as a single commodit"%@ 0d1 each of the pulses referred to in clause 0!ia1 of section 1B, whether whole or separated, and whether with or without husk, shall #e treated as a single commodit" for the purposes of le!" of tax under that law%@ C+A'T,) 5 - -A&-T( / S',CA- CAS,S :e5nitions% 16% n this Chapter,- 0a1 <appropriate authorit"<, in relation to a compan", means the authorit" competent to assess tax on the compan"= 0#1 <compan"< and <pri!ate compan"< ha!e the meanings respecti!el" assigned to them #" clauses 0i1 and 0iii1 of su#-section 011 of section 3 of the Companies Act, 1956 01 of 19561% Compan" n li;uidation% 1H% 011 ,!er" person- 0a1 who is the li;uidator of an" compan" which is #eing wound up, whether under the orders of a Court or otherwise= or 0#1 who has #een appointed the recei!er of an" assets of a compan" 0hereinafter referred to as the li;uidator1 shall, within thirt" da"s after he has #ecome such li;uidator, gi!e notice of his appointment as such to the appropriate authorit"% 021 The appropriate authorit" shall, after making such in;uir" or calling for such information as it ma" deem 5t, notif" to the li;uidator within three months from the date on which he recei!es notice of the appointment of the li;uidator the amount which, in the opinion of the appropriate authorit" would #e su7cient to pro!ide for an" tax which is then, or is likel" thereafter to #ecome pa"a#le #" the compan"% 031 The li;uidator shall not part with an" of the assets of the compan" or the properties in his hands until he has #een noti5ed #" the appropriate authorit" under su#-section 021 and on #eing so noti5ed, shall set aside an amount e;ual to the amount noti5ed and, until he so sets aside such amount, shall not part with an" of the assets of the compan" or the properties in his hands* 'ro!ided that nothing contained in this su#-section shall de#ar the li;uidator from parting with such assets or properties in compliance with an" order of a Court or for the purpose of the pa"ment of the tax pa"a#le #" the compan" under this Act or for making an" pa"ment to secured creditors whose de#ts are entitled under law to priorit" of pa"ment o!er de#ts due to 4o!ernment on the date of li;uidation or for meeting such costs and expenses of the winding up of the compan" as are in the opinion of the appropriate authorit" reasona#le% 0B1 f the li;uidator fails to gi!e the notice in accordance with su#- section 011 or fails to set aside the amount as re;uired #", or parts with an" of the assets of the compan" or the properties in his hands in contra!ention of the pro!isions of su#-section 031, he shall #e personall" lia#le for the pa"ment of the tax which the compan" would #e lia#le to pa"* 'ro!ided that if the amount of an" tax pa"a#le #" the compan" is noti5ed under su#-section 021, the personal lia#ilit" of the li;uidator under this su#section shall #e to the extent of such amount% 051 Dhere there are more li;uidators than one, the o#ligations and lia#ilities attached to the li;uidator under this section shall attach to all the li;uidators $ointl" and se!erall"% 061 The pro!isions of this section shall ha!e e9ect notwithstanding an"thing to the contrar" contained in an" other law for the time #eing in force% -ia#ilit" of directors of pri!ate compan" in li;uidation% 1G% /otwithstanding an"thing contained in the Companies Act, 1956 01 of 19561, when an" pri!ate compan" is wound up after the commencementof this Act, and an" tax assessed on the compan"- under this Act for an" period, whether #efore or in the course of or after its li;uidation, cannot #e reco!ered, then, e!er" person who was a director of the pri!ate compan" at an" time during the period for which the tax is due shall #e $ointl" and se!erall" lia#le for the pa"ment of such tax unless he pro!es that the non-reco!er" cannot #e attri#uted to an" gross neglect, misfeasance or #reach of dut" on his part in relation to the a9airs of the compan"%