Central Sales Tax Act, 1956- Sections 14 to 26

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.

14. Certain goods to be of special importance in inter-State trade or commerce.—[i][* * *]

15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State.

15. Restrictions and conditions in regard to tax on sale or purchase of declared goods within a State.—[ii][* * *]

Chapter V

LIABILITY IN SPECIAL CASES

16. Definitions.

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 (1 of 1956).

17. Company in liquidation.

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 sets aside such amount, shall not part with any of the assets of the company or the properties in his hands:

Provided that nothing contained in this sub-section shall debar the liquidator from parting with such assets or properties in compliance with any order of a court or for the purpose of the payment of the tax payable by the company under this Act or for making any payment to secured creditors whose debts are entitled under law to priority of payment over debts due to Government on the date of liquidation or for meeting such costs and expenses of the winding up of the company as are in the opinion of the appropriate authority reasonable.

(4) If the liquidator fails to give the notice in accordance with sub-section (1) or fails to set aside the amount as required by, or parts with any of the assets of the company or the properties in his hands in contravention of the provisions of sub-section (3), he shall be personally liable for the payment of the tax which the company would be liable to pay:

Provided that if the amount of any tax payable by the company is notified under sub-section (2), the personal liability of the liquidator under this sub-section shall be to the extent of such amount.

(5) Where there are more liquidators than one, the obligations and liabilities attached to the liquidator under this section shall attach to all the liquidators jointly and severally.

(6) The provisions of this section shall have effect notwithstanding anything to the contrary contained in any other law for the time being in force.

18. Liability of directors of private company in liquidation.

18. Liability of directors of private company in liquidation.—Notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), when any private company is wound up after the commencement of this Act,

and any tax assessed on the company under this Act for any period, whether before or in the course of or after its liquidation, cannot be recovered, then, every person who was a director of the private company at any time during 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.

[iii][Chapter V-A

APPEALS TO THE HIGHEST APPELLATE AUTHORITY OF THE STATE

18-A. Appeals to highest appellate authority of State.

18-A. Appeals to highest appellate authority of State.—(1) Notwithstanding anything contained in a State Act, any person aggrieved by an order made by the assessing authority under sub-section (2) of Section 6-A, or an order made under the provisions of sub-section (3) of that section, may, notwithstanding anything contained in the general sales tax law of the appropriate State, prefer an appeal to the highest appellate authority of the State against such order:

Provided that any incidental issues including the rate of tax, computation of assessable turnover and penalty may be raised in such appeal.

(2) An appeal under sub-section (1) shall be filed within sixty days from the date on which the order referred to in that sub-section is communicated to the aggrieved person:

Provided that any appeal forwarded by the highest appellate authority of a State to the first appellate authority under the proviso to sub-section (2) of Section 25 and pending before such authority immediately before the appointed day shall be transferred, on such appointed day, to the highest appellate authority of the State and the same shall be treated as an appeal filed under sub-section (1) and dealt with accordingly.

Explanation.—For the purposes of this sub-section, “appointed day” means such date as the Central Government may, by notification in the Official Gazette, appoint.

(3) The highest appellate authority of a State may, after giving both the parties an opportunity of being heard, pass appropriate order.

(4) The highest appellate authority of the State may, as far as practicable, hear and decide such appeal within a period of six months from the date of filing of the appeal.

(5) Notwithstanding anything contained in a State Act, the highest appellate authority of a State may, on the application of the appellant and after considering relevant facts, including the deposit of any amount towards local or Central Sales Tax in other States on the same goods, pass an order of stay subject to such terms and conditions as it thinks fit, and such order may, inter alia, indicate the portion of tax as assessed, to be deposited prior to admission of the appeal.

Explanation.—For the purposes of this section and Sections 20, 21, 22 and 25 “highest appellate authority of a State”, with its grammatical variations, 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.]

[iv][Chapter VI

AUTHORITY TO SETTLE DISPUTES IN COURSE OF INTER-STATE TRADE OR COMMERCE

19. Central Sales Tax Appellate Authority.

19. Central Sales Tax Appellate Authority.—(1) The Central Government shall constitute, by notification in the Official Gazette, an Authority to settle inter-State disputes falling under Section 6-A [v][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.

[vi][(2-A) Notwithstanding anything contained in sub-section (2), the Chairman or a Member holding a post as such in the Authority for Advance Rulings appointed under clause (a) or clause (c), as the case may be, of sub-section (2) of Section 245-O of the Income Tax Act, 1961 (43 of 1961) may, in addition to his being the Chairman or a Member of that Authority, be appointed as the Chairman or a Member, as the case may be, of the Authority under this Act.]

(3) The salaries and allowances payable to, and the terms and conditions of service of, the Chairman and Members shall be such as may be prescribed.

(4) The Central Government shall provide the Authority with such officers and staff as may be necessary for the efficient exercise of the powers of the Authority under this Act.

[vii][19-A. Vacancies etc., not to invalidate proceedings.—No proceeding before the Authority shall be questioned or shall be invalid on the ground merely of the existence of any vacancy or defect in the constitution of the Authority.]

20. Appeals.

[viii][20. Appeals.—[ix][(1) An appeal shall lie to the authority against any order passed by the highest appellate authority of a State under this Act determining issues relating to stock transfers or consignments of goods, insofar as they involve a dispute of inter-State nature.]

(2) Notwithstanding anything contained in the general sales tax law of a State, the Authority shall adjudicate an appeal filed under sub-section (1).

(3) An appeal under sub-section (1) may be filed within ninety days from the date on which the order referred to in that sub-section is served on any aggrieved person:

Provided that the Authority may entertain any appeal after the expiry of the said period of ninety days, but not later than one hundred and fifty days from the date of such service, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time:

Provided further that the Authority may entertain any appeal from an aggrieved person within sixty days from the commencement of the Central Sales Tax (Amendment) Act, 2005, where such aggrieved person had the right to file an appeal against the order of the highest appellate authority of the State under sub-section (1) as it stood immediately before the commencement of the said Act, but has not availed of the right to file the appeal during the period commencing on and from the 3rd day of December, 2001 and ending with the 16th day of March, 2005.

(4) The application shall be made in quadruplicate and be accompanied by a fee of five thousand rupees.]

21. Procedure on receipt of application.

21. Procedure on receipt of application.—(1) On receipt of an appeal, the Authority shall cause a copy thereof to be forwarded to the [x][assessing authority concerned as well as to each State Government concerned with the appeal and to call upon them to furnish the relevant records:

Provided that such records shall, as soon as possible, be returned to the assessing authority or such State Government concerned, as the case may be.]

(2) The Authority shall adjudicate and decide upon the appeal filed against an order of the [xi][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 [xii][, and also to [xiii][each] State Government concerned with the appeal of being heard.]

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 [xiv][appellant, assessing authority, respondent and highest appellate authority of the State Government concerned].

22. Powers of the 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 (5 of 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 commission for the examination of witnesses;

(d) the reception of evidence on affidavits;

(e) any other matter which may be prescribed.

[xv][(1-A) The Authority may grant stay of the operation of the order of the highest appellate authority against which the appeal is filed before it or order the [xvi][deposit] of the tax before entertaining the appeal and while granting such stay or making such order for the [xvii][deposit] of the tax, the Authority shall have regard, if the assessee has made [xviii][deposit] of the tax under the general sales tax law of the State concerned, to such [xix][deposit] or pass such appropriate order as it may deem fit.]

[xx][(1-B) The authority may issue direction for refund of tax collected by a State which has been held by the authority to be not due to that State, or alternatively, direct that State to transfer the refundable amount to the State to which Central Sales Tax is due on the same transaction:

Provided that the amount of tax directed to be refunded by a State shall not exceed the amount of Central Sales Tax payable by the appellant on the same transaction.]

(2) Every proceeding before the Authority shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code, 1860 (45 of 1860) and the Authority shall be deemed to be a civil court for the purposes of Section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973 (2 of 1974).

23. Procedure of the Authority.

23. Procedure of the Authority.—The Authority shall, subject to the provisions of this chapter, have power to regulate its own procedure in all matters [xxi][, including stay of recovery of any demand] arising out of the exercise of powers under this Act.

24. Authority for Advance Rulings to function as the Authority under this Act.

24. Authority for Advance Rulings to function as the 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 (43 of 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.

25. Transfer of pending proceedings.

[xxii][25. Transfer of pending proceedings.—(1) On and from the commencement of the Central Sales Tax (Amendment) Act, 2005, all appeals (except appeals against orders of the highest appellate authority of the State) pending before the Authority notified under sub-section (1) of Section 24 shall stand transferred together with the records thereof to the highest appellate authority of the concerned State.

(2) Such highest appellate authority of the State to which such appeal has been transferred under sub-section (1) on receipt of such records shall proceed to deal with such appeal so far as may be in the same manner as in the case of an appeal filed before such highest appellate authority of the State according to the general sales tax law of the appropriate State, from the stage which was reached before such transfer or from any earlier stage or de novo as such highest appellate authority of the State may deem fit:

[xxiii][* * *]]

26. Applicability of order passed.

26. Applicability of order passed.—An order passed by the Authority under this chapter shall be binding on [xxiv][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 [* * *][xxv].]

[disclaimer]