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Preamble

The Chhattisgarh Commercial Tax Act, 1994

Tax199474 sections

Statutory text

M.P. Commercial Tax Act, 1994

(M. P. Act No. 5 of 1995) An Act to levy tax on commerce in the State of Madhya Pradesh. Be it enacted by the Madhya Pradesh Legislature in the Forty Fifth year of the Republic of India as follows : Sec. 1 : Short title, extent & commencement

(1) This Act may be called the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994.
(2) It extends to the whole of Madhya Pradesh.
(3) It shall come into force on such date as the State Government may by notification in the Official Gazette appoint and different dates may be appointed for different provisions of the Act. Sec. 2 : Definitions In this Act, unless there is anything repugnant in the subject or context -
- (a) Appellate Deputy Commissioner means an Appellate Deputy Commissioner of Commercial Tax appointed under Section 3 and includes an Additional Appellate Deputy Commissioner of Commercial Tax;
- (b) Assistant Commissioner means an Assistant Commissioner of Commercial Tax appointed under Section 3;
- (c) Business includes -
- (a) any trade, commerce, 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 irrespective of the volume, frequency, continuity or regularity of such trade, commerce, manufacture, adventure or concern; 1 Received the assent of the President on the 7.1.95; Assent first published in the Madhya Pradesh Rajpatra dt. 7.2.95. Corrigendum dated 15.11.96 published in the Madhya Pradesh

Rajpatra Part - 4 of 13.12.96. The Act has come into force w.e.f. 1.4.95.

The Act has been amended by the following Amending Acts/Ordinances :

2 Sub-section (3) substituted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.94.

3 The Act has come into force w.e.f. 1.4.95 vide Noti. No. 9, dt. 2.3.95.

and

(b) any transaction of sale or purchase of goods in connection with or incidental or ancillary to the trade, commerce, manufacture, adventure or concern referred to in sub-clause (a), that is to say -
- (i) goods of the description referred to in sub-section (3) of Section 8 of the Central Sales Tax Act, 1956 (No. 74 of 1956), whether or not they are specified in the registration certificate, if any, of the dealer under the said Act and whether or not they are in their original form or in the form of second hand goods, unserviceable goods, obsolete or discarded goods, mere scrap or waste material; and
- (ii) goods which are obtained as waste products or by-products in the course of manufacture or processing of other goods or mining or generation of or distribution of electrical energy or any other form of power;
(d) Commerce means sale or purchase of goods within the meaning of clause (29-A) of Article 366 of the Constitution of India and the expression “Commercial” shall be construed accordingly; 1[(dd) 'Commercial Tax Office' means an office of any officer appointed under section 3 of this Act.]
(e) Commercial Tax Officer means a Commercial Tax Officer appointed under Section 3 and includes an Additional Commercial Tax Officer;
(f) Commissioner means the Commissioner of Commercial Tax appointed under Section 3;
(g) Cooked food includes sweets and sweetmeats, mishri, batasha, chironji, shrikhand, rabadi, doodhpak, prepared tea and prepared coffee but excludes ice- cream, kulfi, ice-candy, non-alcoholic drink containing ice-cream, cakes, pastries, biscuits, chocolates, toffees, lozenges, peppermint drops and mawa;
(h) Dealer means any person who carries on the business of buying, selling, supplying or distributing goods, directly or otherwise, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes -
- (i) a local authority, a company, an undivided Hindu family or any society (including a co-operative society), club, firm or association which carries on such business;
- (ii) a society (including a co-operative society), club, firm or association which buys goods from, or sells, supplies or distributes goods to, its members;
- (iii) a commission agent, broker, a del-credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of the principal;
- (iv) any person who transfers the right to use any goods for any purpose, (whether or not for a specified period) in the course of business to any other person; Explanation - (I) Every person who acts as an agent of a non-resident dealer, that is as an agent on behalf of a dealer residing outside the State and buys, sells, supplies or Inserted vide MPCT (Amendment) Act. 2002 w.e.f. 13-8-2002 1 Clause (iv) inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95. distributes goods in the State or acts on behalf of such dealer as -
- (i) a mercantile agent as defined in the Indian Sale of Goods Act, 1930 (III of 1930); or
- (ii) an agent for handling 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 collection or payment, and every local branch of a firm or company situated outside the State, shall be deemed to be a dealer for the purpose of this Act.
- (II) The Central or a State Government or any of their departments or offices which, whether or not in the course of business, buy, sell, supply or distribute goods, directly or otherwise, for cash or for deferred payment, or for commission, remuneration or for other valuable consideration, shall be deemed to be a dealer for the purpose of this Act.
- (i) The expression declared goods shall have the meaning assigned to it in the Central Sales Tax Act, 1956 (No.74 of 1956);
(j) Deputy Commissioner means a Deputy Commissioner of Commercial Tax appointed under Section 3 and includes an Additional Deputy Commissioner of Commercial Tax;
(k) Goods means all kinds of movable property other than actionable claims, newspapers, stocks, shares, securities or Government stamps and includes all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of movable or immovable property, and also includes all growing crops, grass, trees, plants and things attached to, or forming part of the land which are agreed to be severed before the sale or under the contract of sale;
(l) Import means the bringing or causing to be brought of goods into the State of Madhya Pradesh from any place outside the State;
(m) Incidental goods means goods, other than raw material and packing material, referred to in clause (b) of sub-section (3) of Section 8 of the Central Sales Tax Act, 1956 (No.74 of 1956), for use by the registered dealer in the manufacture or processing of goods or in mining of or in the generation or distribution of electrical energy or any other form of power;
(n) Licence means a licence granted under the Act;
(o) Manufacture includes any process or manner of producing, collecting, extracting, preparing or making any goods, but does not include such manufacture or manufacturing process as may be notified.
(p) Place of business means any place where a dealer purchases or sells any goods or stores goods or keeps accounts of his purchases or sales or both and also includes -
- (i) the place of business of an agent where a dealer carries on business through an agent;
- (ii) any place or building whether any business is carried on therein or not, in which the person carrying on the business, states that any of his books of accounts, documents, stocks or other things, relating to his business are kept;
(q) Purchase price shall comprise of -
- (i) the amount payable by a dealer as valuable consideration for the purchase of goods ‘simpliciter’: Provided that where goods are purchased together with the packing material or container, then notwithstanding anything contained in this Act, the purchase price of such goods shall be inclusive of the price or cost or value of such packing material or container, whether such price or cost or value is paid separately or not as if such packing material or container were the goods purchased;

1 See Noti. No. 18, dt. 1.4.95.

(ii) transport costs, if any;
(iii) trade commission, if any, by whatever name called;
(iv) forwarding and handling charges, if any;
(v) insurance charges, if any;
(vi) local taxes, if any;
(vii) excise duty, if any, leviable under the Central Excise and Salt Act, 1944 (No.1 of 1944);
(viii) cost of packing, if any; and
(ix) any other charges or costs other than those specified above, if incurred or paid in respect of goods so purchased; Explanation - For the purpose of this clause “transport cost” includes such expenses as are incurred by the dealer on transportation of goods after taking delivery from the seller;

(r) Raw material means an article used as an ingredient in any manufactured goods, or an article consumed in the process of manufacture and includes fuel and lubricants required for the process of manufacture;
(s) Registered dealer means a dealer registered under this Act;
(t) Sale with all its grammatical variations and cognate expressions means any transfer of property in goods for cash or deferred payment or for 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 instalments;
- (iv) a supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;
- (v) a supply, by way of or as 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; and such transfer, delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and purchase of these goods by the person to whom such transfer, delivery or supply is made, 1[but does not include a mortgage, hypothecation, charge or pledge];
- (vi) 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; Explanation - (a) Notwithstanding anything contained in the Sale of Goods Act, 1930 (III of 1930), where a sale or purchase of goods takes place in pursuance of a contract of sale, such sale or purchase shall be deemed, for the purposes of this Act to have taken place in the State wherever the contract of sale or purchase might have 1 Subs. vide MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95. 2 Sub-clause (vi) inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95. been made, if the goods are within the State -
- (i) in the case of specific or ascertained goods, at the time the contract of sale or purchase is made; and
- (ii) in the case of unascertained or future goods, at the time of their appropriation to the contract of sale or purchase by the seller or by the purchaser, whether the assent of the other party is prior or subsequent to such appropriation; and
(b) Where there is a single contract of sale or purchase of goods situated at more places than one, the provisions of clause (a) shall apply as if there were separate contracts in respect of the goods at each of such places.
(u) Sale price means the amount payable to a dealer as valuable consideration for the sale of any goods less any sum allowed as cash discount according to ordinary trade practice but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the cost of freight or delivery or the cost of installation when such cost is separately charged; Explanation - Where goods are sold on hire purchase or any system of payment by instalments, the sale price of such goods shall be exclusive of insurance charges, interest and hire charges and such other charges as may be prescribed;
- (v) Tax means the tax payable under this Act;
(w) Taxable turnover in relation to any period means that part of a dealer’s turnover for such period which remains after deducting therefrom -
- (i) the sale price of goods declared tax free under Section 15 or exempted in whole under Section 17;
- (ii) the sale price of goods mentioned in 1[Part II to VI] of Schedule II which are in the nature of tax paid goods in the hands of such dealer;
- (iii) the sale price of unginned cotton as specified in Part I of Schedule II and such other goods in the said Part as the State Government may from time to time, by notification, specify, sold to a registered dealer who has declared in the prescribed form that the goods are for resale or for use by him in the manufacture of goods for sale by him;
- (iv) the sale price of goods specified in Part I of Schedule II other than those referred to in sub-clause (iii), sold to a registered dealer who has declared in the prescribed form that the goods are for resale by him;
- (v) the amount arrived at by applying the following formula : rate of tax X aggregate of sale prices + rate of tax

Provided that no deductions 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 such part of the turnover liable to a different rate of tax under sub-section (1) of Section 9;

(vi) such other deductions as may be prescribed. Relevant Rules & Forms : Rules 26 & 35; Forms 26, 27, 28, 29, 30 & 31
(x) Tax paid goods in relation to a dealer means any goods specified in 2[Part II to VI] of Schedule II which have been purchased by such dealer from a registered dealer inside the State of Madhya Pradesh within the meaning of Section 4 of the Central Sales Tax Act, 1956 (No.74 of 1956) except - 1 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f. 1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000. 2 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f. 1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000.
(i) the goods sale whereof by such registered dealer is exempted in whole from payment of tax subject to the condition that such exemption is available only to such registered dealer; and
(ii) the goods manufactured by a registered dealer in his new industrial unit in respect of which such dealer is availing of the facility of exemption from payment of tax in whole under any notification issued under the Act repealed by this Act or under this Act in pursuance of any scheme of the State Government formulated and enforced before or after the commencement of this Act for grant of incentives for the establishment of new industrial units in the State;

(y) Tribunal means tribunal as constituted under Section 4;
(z) Turnover used in relation to any period means the aggregate of the amount of sale prices received and receivable by a dealer in respect of any sale or supply or distribution of goods made during that period, whether or not the whole or any portion of such turnover is liable to tax but after deducting the amount, if any, refunded by the dealer to a purchaser, in respect of any goods purchased and returned by the purchaser within the prescribed period : Provided that -
- (i) in the case of sale by bonafide agriculturist as defined in clause (e) of sub- section (1) of Section 2 of the Madhya Pradesh Land Revenue Code, 1959 (No.20 of 1959), of ghee produced by himself; or
- (ii) in case of sale by a person of agricultural or horticultural produce grown by himself or grown on any land in which he has an interest whether as owner, usufructuary mortgagee, tenant or otherwise, when such produce is sold in the form in which it was produced, without being subjected to any physical, chemical or other process for being made fit for consumption save mere dehusking, cleaning, grading or sorting, the amount of consideration relating to such sales shall be excluded from his turnover; Explanation - The amount realised or realisable under Section 9-A shall be included in the turnover. Relevant Rule : Rule 36
(zz) Year means the twelve months ending on the 31st day of March. Sec. 3 : Taxing Authorities and other Officers

(1) There may be appointed a person to be the Commissioner of Commercial Tax and the following category of officers to assist him, namely :
- (a) Additional Commissioner of Commercial Tax;
- (b) Appellate Deputy Commissioner or Additional Appellate Deputy Commissioner of Commercial Tax;
- (c) Deputy Commissioner or Additional Deputy Commissioner of Commercial Tax;
- (d) Assistant Commissioner or Additional Assistant Commissioner of 1 Explanation inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95. Commercial Tax;
- (e) Commercial Tax Officer or Additional Commercial Tax Officer;
- (f) Assistant Commercial Tax Officer; and
- (g) Inspector of Commercial Tax.
(2) The Commissioner of Commercial Tax and the Additional Commissioner of Commercial Tax shall be appointed by the State Government and the other officer referred to in sub-section (1) shall be appointed by the State Government or such other authority as it may direct.
(3) The Commissioner of Commercial Tax and the Additional Commissioner of Commercial Tax shall exercise all the powers and perform all the duties conferred or imposed on the Commissioner by or under this Act, throughout the State and for this purpose any reference to the Commissioner in this Act, shall be construed as a reference to the Additional Commissioner of Commercial Tax.
(4) Other Officers referred to in sub-section (2) shall, within such areas as the appointing authority may, by general or special order specify, exercise such powers as may be conferred and perform such duties as may be imposed by or under this Act. Relevant Rule : Rule 3 Sec. 4 : Tribunal
(1) Subject to such rules as may be made in this behalf, the State Government may, by notification, with effect from a date specified therein, constitute Tribunal to exercise the powers and perform the functions conferred on the Tribunal by or under this Act.
(2) Till the date specified in the notification under sub-section (1), the Board of Revenue shall act as Tribunal for the purpose of this Act and on the date aforementioned all proceedings pending before the Board of Revenue, Madhya Pradesh, acting as Tribunal shall stand transferred to the Tribunal constituted under sub-section (1).
(3) Subject to the previous approval of the State Government, the Tribunal may, from time to time, make regulations consistent with the provisions of this Act regulating the procedure and disposal of its business. Relevant Rule : Rule 4 Sec. 5 : Incidence of taxation
(1) Every dealer whose turnover during a period of twelve months immediately preceding the commencement of this Act exceeds the limit specified in sub-section (5), shall from such commencement be liable to pay tax under this Act in respect of sales or supplies of goods effected in Madhya Pradesh.
(2) Every dealer to whom sub-section (1) does not apply shall be liable to pay tax under this Act in respect of sales or supplies of goods effected in Madhya Pradesh with effect from the date on which his turnover in a year first exceeds the limit specified in sub-section (5) but for the purpose of assessment of the tax only so much of his turnover as is in excess of such limit, shall be taken into consideration.
(3) Every dealer who is liable to pay tax under this Act shall continue to be so liable until the expiry of two consecutive years during each of which his turnover has not exceeded the limits specified in sub-section (5) and till such further period thereafter as may be prescribed and on the expiry of this later period his liability to pay tax shall cease.
(4) Every dealer whose liability to pay tax under this Act has ceased under sub- section (3) shall, if his turnover calculated from the commencement of any year again exceeds the limit specified in sub-section (5), be liable to pay tax under sub-section (2).
(5) For the purpose of this Section, the limit shall be -
- (a) in relation to a dealer who imports into the State goods other than lottery tickets of the value of not less than Rs.5, 000/- in a year - Fifty Thousand Rupees;
- (b) in relation to a dealer who manufactures in a year any goods (other than such goods as may be notified by the State Government in this behalf) of the value not less than Rs.20, 000 - Fifty Thousand Rupees.
- (c) in relation to a dealer being a co-operative society registered under any law for the time being in force relating to co-operative societies dealing exclusively in goods produced or manufactured by such society or its members without the aid of hired labour - One Lac Rupees.
- (d) in relation to a dealer who enters into a works contract and in the execution thereof supplies goods (whether as goods or in some other form) - One Lac Rupees.
- (e) in relation to a dealer not falling in clause (a), (b), (c) or (d) - One Lac Rupees.
- (f) in relation to a dealer liable to pay tax under Section 9-A - Fifty Thousand Rupees. Sec. 6 : Determination of liability to pay tax under this Act
(1) The Commissioner shall, in the prescribed manner, institute proceedings for the purpose of determining the liability of a dealer to pay tax under this Act. Such liability shall be determined by an order and such determination shall be made within a period of twelve months from the date of institution of such proceedings.
(2) Notwithstanding anything contained in sub-section (2) of Section 5, liability of a dealer to pay tax under this Act shall not be determined from a date earlier than five years prior to -
- (i) the date of institution of proceedings under sub-section (1); or
- (ii) the date of validity of the registration certificate, whichever is earlier. Relevant Rule & Form : Rule 69; Form 56 & 57 Sec. 7 : Joint and several liability of a contractor or a sub-contractor
(1) Where a dealer who carries on the business of supplying goods in the course of execution of works contract entered into by him (hereinafter referred to as a contractor) through another such dealer (hereinafter referred to as a sub-contractor) directly or otherwise, and the sub-contractor executes such works contract and each or either of them is liable to pay tax under this Act, then notwithstanding anything contained in this Act, the contractor and the sub-contractor shall be jointly and severally liable to pay tax in respect of 3[transfer of property in goods whether as goods or in some other form involved in the execution of such works contract].
(2) If the contractor proves in the prescribed manner that the tax has been paid by the sub-contractor on the turnover of goods supplied in the course of execution of the works contract, the contractor shall not be liable to pay tax again on the turnover of such goods.
(3) If the sub-contractor proves in the prescribed manner that the tax has actually been paid by the contractor on the turnover of goods supplied in the course of 1 See Noti. No. 19, dt. 1.4.95. 2 Clause (f) inserted by MPCT (Amendment) Act, 1995 w.e.f. 1.4.95. 3 Subs. by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95. execution of the works contract, the sub-contractor shall not be liable to pay tax again on the turnover of such goods.
(4) Deduction in respect of the turnover of goods supplied in the course of execution of works contract referred to in sub-section (2) or sub-section (3) shall be allowed to the contractor or to the sub-contractor on the production of proof required to be furnished under the said sub-section. Sec. 8 : Liability of a dealer registered under Central Act No. 74 of 6 to pay tax
(1) A dealer registered under the Central Sales Tax Act, 1956 (No.74 of 1956) who is not liable to pay tax under Section 5 shall nevertheless be liable to pay tax on his sales of any goods in respect of the purchases of which he has furnished a declaration under sub-section (4) of Section 8 of the said Act or on the sales of any goods in the manufacture of which such goods have been used, at the rate specified in sub-section
(1) of Section 9.
(2) Every dealer to whom sub-section (1) applies shall for the purposes of Section 26, 27, 32 and 42 be deemed to be a registered dealer. Sec. 9 : Levy of tax
(1) Subject to provisions of sub-section (2) and sub-section (3), the tax payable by a dealer under this Act shall be levied on the taxable turnover relating to goods specified in Schedule II at the rate mentioned in corresponding entry in column (3) of the said Schedule.
(2) Subject to such restrictions and conditions as may be prescribed and to the provisions of sub-clause (iii) of clause (w) of Section 2 -
- (a) the tax payable by a registered dealer on the sales of any goods specified in Schedule II except the goods specified in Schedule III, to another registered dealer for use by him inside the State -
  - (i) as raw material or as incidental goods, in the manufacture or in the processing of goods or in the mining of goods, declared tax free under Section 15 or exempted in whole under Section 17 and sold by him -
- (a) in the State of Madhya Pradesh, or
- (b) in the course of inter-State trade or commerce, or
- (c) in the course of export out of the territory of India, or
  - (ii) in the generation or distribution of electrical energy or any other form of power; shall be levied at the concessional rate of four per cent. (b)(i) the tax payable by a registered dealer on the sale of any goods specified in Schedule II except the goods specified in Schedule III, to another registered dealer holding a recognition certificate under Section 25 for use by him as raw material or as incidental goods in the manufacture or processing or mining of taxable goods other than coal; or
  - (ii) the tax payable by a registered dealer on the sale of any goods specified in Schedule II to another registered dealer holding a recognition certificate under Section 25 for use by him as raw material or incidental goods in the mining of coal, for sale by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India, shall be levied at the concessional rate of four per cent : Provided that when the tax on the sale of such raw material or incidental goods is payable under sub-section (1) at a rate lower than four per cent, the tax payable under clause (a) or clause (b) shall be calculated at such lower rate or at such other lower rate as may be notified by the State Government.

1 In sub-section (2) of Sec. 9, for the words ‘four per cent’ wherever they occur, the words ‘two per cent’ have been substituted by MPCT (Amendment) Act, 1998. But, so far the same has not been made effective. 2 See Noti. No. 20, dt. 1.4.95.

(3) Where any goods purchased by a registered dealer under clause (a) or clause (b) of sub-section (2) are used by him contrary to the purpose specified therein or in violation of the restrictions and conditions prescribed under the said sub-section such registered dealer shall be liable to pay in such manner as may be prescribed, tax or penalty, as the case may be, at the rate equal to the difference of the full rate of tax under sub-section (1) and the concessional rate of tax under sub-section (2), in respect of such goods : Provided that no tax or penalty shall be imposed on a registered dealer where any goods purchased for use by him as raw material or incidental goods under clause (a) or clause (b) of sub-section (2), are sold by him subject to such restrictions or conditions as may be prescribed, to another registered dealer who is a manufacturer of goods declared tax free under Section 15 or goods exempted in whole under Section 17, or who holds a recognition certificate under Section 25 for the purpose specified in the said clauses. Explanation - In this Section -
- (i) the expression “taxable goods” shall mean the goods liable to tax under this Act;
- (ii) the amount payable for violation of restrictions and conditions shall be by way of tax in respect of goods other than declared goods and by way of penalty in respect of declared goods. Relevant Rules & Forms : Rule 27 & 30; Form 32, 33, 34 & 35 Sec. 9-A : Tax on right to use Every dealer who transfers the right to use any goods, as the State Government may specify by notification, for any purpose, (whether or not for a specified period) to any person for cash, deferred payment or other valuable consideration in the course of his business, notwithstanding anything contained in the provisions of clause (w) of Section 2, shall on the total amount realised or realisable by him during the year by way of payment in cash or otherwise on such transfer, pay tax at the rate of four per cent on the aggregate of such amount. Sec. 9-B : Levy of tax in special circumstances
(1) Every dealer liable to pay tax under this Act, whose turnover in the year ⇒

Noti. No. 84, dt. 6.11.95 and for the period 1.4.01 to 31.3.02 see Noti. No. 23, dt. 30.3.01.

3 Section 9-B inserted by MPCT (Amendment) Act, 1997 w.e.f. 1.5.97.

4 Sub-section (1) substituted by MPCT (Amendment) Act, 1998 w.e.f. 1.4.99. Earlier to substitution sub-section (1) read as under : “Notwithstanding anything contained in clause (x) of Section 2 and sub-section (1) of Section 9, every such dealer liable to pay tax under Section 9 whose turnover in the year preceding the commencement of the Madhya Pradesh Vanijyik Kar (Sanshodhan) Adhiniyam, 1997 exceeds rupees one crore and every other dealer whose turnover in a year first exceeds rupees one crore shall, from the date of such commencement or from the date on which the turnover exceeds rupees one crore, as the case may be, be liable to pay tax on the resale of any goods specified in Part II to VII of Schedule II and such tax shall be payable on such part of his turnover in respect of the said goods at the rate specified in column (3) of the said Schedule which remains after deducting therefrom -

preceding the commencement of the Madhya Pradesh Vanijyik Kar (Sanshodhan) Adhiniyam, 1998 exceeds rupees

1[ten] lacs and every other dealer whose turnover in a year first exceeds rupees

3[ten] lacs shall, from the commencement of the aforesaid

Act or from the date on which the turnover exceeds rupees

3[ten] lacs, as the case may be, be liable to pay tax on the resale of any goods specified in

2[Part II to VI] of Schedule II at the rate of

5[4 percent in case of declared goods and 8 percent in case of goods other than declared goods] on such part of his turnover in respect of the said goods which remains after deducting therefrom -

(i) ....deleted w.e.f. 13-8-2002......
(ii) sale price of such goods at the hands of the registered dealer from whom they have been purchased;
(iii) the amount arrived at in accordance with the provisions of sub-clause (v) of clause (w) of Section 2]

(2) Every dealer who is liable to pay tax under sub-section (1) shall continue to be so liable until the expiry of two consecutive years during each of which his turnover has not exceeded the limits specified in sub-section (1) and on the expiry of such period his liability to pay tax shall cease. Sec. 10 : Levy of Purchase tax
(1) Every dealer who in the course of his business purchases any goods specified in Schedule II -
- (i) from a registered dealer in the circumstances in which no tax under Section 9 is payable by that registered dealer on the sale price of such goods; or
- (ii) from any other person; shall be liable to pay tax on the purchase price of such goods, if after such purchase the goods are not sold within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India, but are -
- (a) sold or disposed of otherwise; or
- (b) used or consumed in the manufacture or processing of other goods or used or consumed otherwise; such tax shall be levied at the same rate at which tax under sub-section (1) of Section 9 would have been levied on the sales of such goods within the State on the date of such purchase.
(2) Notwithstanding anything contained in sub-section (1) but subject to such restrictions and conditions as may be prescribed, the tax under sub-section (1) payable by a registered dealer on the goods, other than the goods specified in Schedule-III purchased by him for consumption or use by him as raw material or incidental goods in the manufacture or in the mining of goods for sale by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India or in the generation or distribution of electrical energy or any other form of power, shall be levied at the concessional rate of four per cent : ________________________________________________________________ ⇒
- (i) sale price of declared goods;
- (ii) sale price of such goods at the hands of the registered dealer from whom they have been purchased;
- (iii) amount arrived at in accordance with the provisions of sub-clause (v) of clause (w) of Section 2;
- (iv) any other deduction as may be prescribed, in such manner as may be prescribed.” Subs. for words fifty by MPCT (Amendment) Act. 2002 w.e.f. 23-4-2002 2 Subs. for the words ‘Part II to VII’ first by MPCT (Amendment) Ordinance, 1999 w.e.f. 1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000. Subs. by MPCT (Amendment) Act. 2002 w.e.f. 13-8-2002

3 In sub-section (2) of Sec. 10, for the words ‘four per cent’ wherever they occur, the words ‘two per cent’ have been substituted by MPCT (Amendment) Act, 1998. But, so far the same has not been made effective.

Provided that when the tax on the purchase of such raw material or incidental goods is payable under sub-section (1) at a rate lower than four per cent, the tax payable under this sub-section shall be calculated at such lower rate or at such other lower rate as may be notified by the State Government.

(3) No tax under this Section shall be levied in respect of any year on -
- (a) a dealer whose turnover in a year does not exceed the limit specified in sub- section (5) of Section 5;
- (b) a dealer holding a licence under Section 18 in respect of raw material and incidental goods used in that year in the manufacture of goods in respect of which he holds such licence;
- (c) a dealer in respect of the purchase price of unginned cotton as specified in Part I of Schedule-II and such other goods in the said part as the State Government may from time to time by notification specify, who has consumed or used them as raw material for the manufacture of other goods and the goods so manufactured are sold by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India;
- (d) any other dealer who has no turnover, if his aggregate of purchase prices of all the goods does not exceed fifty thousand rupees.
(4) Every dealer who has no turnover and is liable to pay tax under sub-section (1) shall, for the purpose of Sections 26, 27, 28, 32, 33 and 42, be deemed to be a registered dealer. Relevant Rules & Forms : Rule 28 & 30; Form 36 Sec. 10-A : Levy of surcharge on tax payable except on declared goods
(1) There shall be levied a surcharge on the amount of tax payable under this Act at the rate of fifteen per centum of such amount; Provided that surcharge shall not be leviable on the amount of tax as is relatable to declared goods.
(2) The surcharge levied under sub-section (1) shall be in addition to the amount of tax payable under this Act and all the other provisions of this Act, shall apply to surcharge so levied as they apply to tax. Sec. 11 : Dealer not to pass incidence of tax to agriculturists and horticulturists under certain circumstances No dealer shall collect any amount, by way of tax, from a person who sells agricultural or horticultural produce grown by himself or grown on any land in which he has an interest, whether as owner, usufructuary mortgagee, tenant or otherwise, when such produce is sold in the form in which it was produced, without being subjected to any physical, chemical or other process for being made fit for consumption save mere dehusking, cleaning, grading or sorting. Sec. 12 : Rate of tax on container or packing material Notwithstanding anything contained in 3[sub-section (1) of Section 9 or Section 9-B] ⇒ 1 See Noti. No. 21, dt. 1.4.95.

2 Sec. 10-A inserted by MPCT (Second Amendment) Act, 1997 w.e.f. 22.8.97.

3 Subs. for the words ‘sub-section (1) of Section 9’ wherever occurred in Section 12 by MPCT or sub-section (1) of Section 10 where any goods packed in any container or packing material are sold or purchased, the container or packing material in which such goods are so packed shall be deemed to have been sold or purchased along with such goods and the tax under [sub-section (1) of Section 9 or Section 9-B] or sub-section (1) of Section 10 shall be leviable on the sale or purchase of such container or packing material at the rate of tax, if any, applicable to the sale, or as the case may be, the purchase of the goods themselves :

Provided that no tax under [sub-section (1) of Section 9 or Section 9-B] or sub-

section (1) of Section 10 shall be leviable where the container or packing material is sold or purchased along with the goods declared tax-fee under Section 15 or exempted in whole from payment of tax under Section 17. Sec. 13 : Set off or refund of tax in respect of tax paid goods in certain circumstances

(1) Subject to such restrictions and conditions as may be prescribed a set off, as provided in this Section shall be granted in such manner as may be prescribed, to a registered dealer in respect of tax paid goods in the circumstances specified below -
- (a) when a registered dealer purchases any tax paid goods, other than the goods specified in Schedule-III, which have borne tax under * [sub-section (1) of Section 9 or Section 9-B] at full rate exceeding the concessional rate of four per cent or exceeding such other concessional rate as may be notified by the State Government in respect of such goods as raw material or incidental goods and subsequently consumes or uses such goods as raw material or incidental goods in the manufacture or in the processing of any goods or in the mining of any goods specified in Schedule- II which have not been exempted in whole under Section 17 and any such goods after their manufacture, processing or mining are sold by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India, he shall be entitled to set off at a rate equal to the difference between the tax at full rate under * [sub-section (1) of Section 9 or Section 9-B] and the tax at the concessional rate of four per cent or such other aforesaid concessional rate, as the case may be, in respect of such goods in such manner and on such quantum of the price at which such goods were purchased from a registered dealer, as may be prescribed.
- (b) (i) When a registered dealer sells any goods specified in Schedule II other than the goods specified in Schedule III which are tax paid goods in his hands to any person other than a registered dealer, or any agency and the sale of such goods is exempt from tax, in whole or in part, under a notification issued under Section 17 or under any provision of this Act, he shall, subject to the compliance of the restrictions and conditions if any specified in such notification or prescribed under such provision, be entitled to set off in respect of such goods at a rate equal to the difference between the tax at full rate on such goods under * [sub-section (1) of Section 9 or Section 9-B] and the tax at the rate specified under the said notification or prescribed under such provision in such manner and on such quantum of the price at which such goods were purchased from a registered dealer, as may be prescribed;
  - (ii) When a registered dealer purchases any goods specified in Schedule II other than the goods specified in Schedule III which are tax paid goods in his hands and the sale thereof by the selling registered dealer to him is otherwise exempt from tax, in ________________________________________________________________ ⇒ (Amendment) Act, 1997 w.e.f. 1.5.97. 1 In clause (a) of Sec. 13(1) for the words ‘four per cent’ wherever they occur, the words ‘two per cent’ have been substituted by MPCT (Amendment) Act, 1998. But, so far the same has not been made effective.
    - • Subs. for the words ‘sub-section (1) of Section 9’ wherever occurred in Section 13(1) by MPCT (Amendment) Act, 1997 w.e.f. 1.5.97. 2 See Noti. No. 22, dt. 1.4.95. 3 Clause (b) substituted by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95. whole or in part, under a notification issued under Section 17 or under any provision of this Act, the purchaser shall, subject to the compliance of the restrictions and conditions, if any, specified in such notification or prescribed under such provision, be entitled to set off in respect of such goods at a rate equal to the difference between the tax at full rate on such goods under * [sub-section (1) of Section 9 or Section 9-B] and the tax at the rate specified under the said notification or prescribed under such provision in such manner and on such quantum of the price at which such goods were purchased from the seller, as may be prescribed. Explanation - When the amount of set off to which a registered dealer is entitled is not fully adjusted towards the tax payable by him, the balance of the amount of set off after adjustment shall be granted to him by way of refund of tax.
- (c) A registered dealer entitled to set off in respect of tax paid goods under clause (a) or clause (b) shall also be entitled to a set off in the amount of surcharge paid on such goods equal to fifteen per cent of the amount of set off admissible under the said clauses.
(2) Nothing in sub-section (1) shall apply to a registered dealer who holds a recognition certificate under Section 25. Relevant Rules : Rule 29 Sec. 14 : Burden of proof The burden of proving that any sale or purchase effected by a dealer is not liable to tax under 2[Section 9 or Section 9-A] or Section 10 or Section 21 as the case may be, shall be on the dealer. Sec. 15 : Tax free goods
(1) No tax shall be payable on the sales or purchase of goods specified in the second column of Schedule-I, subject to the restriction and exceptions, if any, set out in the corresponding entry in the third column thereof.
(2) The State Government may in respect of any goods, by notification amend Schedule-I, so as to include therein any goods not already specified or may relax or omit any of the conditions and exceptions set out in the corresponding entry in the third column thereof. Sec. 16 : Power of State Government to amend Schedule II
(1) The State Government may, by notification, amend the Schedule II and thereupon the said Schedule shall stand amended accordingly :

Provided that the rate of tax in respect of any goods specified therein other than the declared goods shall not exceed twice the original rate of tax specified in the Schedule : Provided further that if any goods are transposed by deleting them from one of the parts of the Schedule and inserting or adding them to another, the rate of tax in respect of such goods shall not exceed twice the rate specified in the schedule for the

1 Clause (c) inserted by MPCT (Second Amendment) Act, 1997 w.e.f. 22.8.97. Earlier clause (c)

inserted by MPCT (Amendment) Ordinance, 1997 w.e.f. 1.7.97 and repealed by MPCT (Second Amendment) Act, 1997 provided for set-off of surcharge @ 5%. 2 Subs. for the words ‘Section 9’ by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95. 3 Sec. 16 substituted by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95.

part where from such goods have been transposed.

(2) No notification enhancing the rate of tax, shall be issued under this Section without giving in the Gazette such previous notice as the State Government may consider reasonable of its intention to issue such notification;
(3) Every notification issued under sub-section (1) shall, as soon as may be, be laid on the table of the Legislative Assembly. Sec. 17 : Saving
(1) The State Government may, by notification and subject to such restrictions and conditions as may be specified therein, exempt whether prospectively or retrospectively,
- (i) (a) any class of dealers; or
- (b) any goods or class of goods, in whole or in part, from the payment of tax under this Act for such period as may be specified in the notification;
  - (ii) any dealer or class of dealers from any provision of this Act or any provision of a rule made under Section 80 for such period as may be specified in the notification.
(2) Any notification issued under this Section may be rescinded before the expiry of the period for which it was to have remained in force and on such rescission such notification shall cease to be in force. A notification rescinding an earlier notification shall have prospective effect.
(3) Notwithstanding the repeal of the Madhya Pradesh General Sales Tax Act, 1958 (No.2 of 1959) (hereinafter referred to as the repealed Act) the State Government may, by notification exempt -
- (i) (a) any class of dealers; or
- (b) any goods or class of goods in whole or in part, from the payment of tax under the repealed Act; or
  - (ii) any dealer or class of dealers from any provision of the repealed Act or the provision of any rule made thereunder, for any period before the commencement of this Act and for that purpose it shall and shall always be deemed that the provision of Section 12 of the repealed Act have revived for the purpose of such exemption. Sec. 18 : Licensing of certain dealers
(1) The Commissioner may subject to such conditions as may be prescribed, license under this Section any registered dealer who carries on business in any of the goods specified in Schedule-IV and whose yearly turnover in respect of all goods specified in Schedule-I and Schedule-II does not ordinarily exceed such amount as may be prescribed, on advance payment of such annual licence fee as may be determined in relation to such registered dealer in accordance with the rules made in this behalf and the provisions of Sections 26, 27, 42 and 43, shall not apply to such registered dealer in respect of his business relating to goods specified in Schedule-I and IV during the period in which the licence issued to him under this Section remain in force.
(2) The licence fee recovered from a registered dealer under sub-section (1) shall be deemed to be in lieu of the tax payable in respect of the sales of goods specified in the licence during the currency of the licence.
(3) The State Government may, from time to time, by notification, amend Schedule- IV so as to include any goods not already specified therein. Sec. 19 : Composition of tax by certain registered dealers (1)(a) The Commissioner may, subject to such restrictions and conditions as may be prescribed, permit any registered dealer, who carries on wholly or partly the business of supplying goods in the course of execution of works contract entered into by him, to pay in lieu of tax payable by him under this Act a lumpsum at such rate, not exceeding 15 per cent, as may be prescribed, determined in the prescribed manner, by way of composition.
- (b) The provisions of Sections 26, 27, 42 and 43 shall not apply to a registered dealer to whom permission to pay a lumpsum by way of composition is granted under clause
- (a) in relation to the period for and the goods in respect of which such composition of tax has been made and who complies with the restrictions and conditions prescribed under the said clause.
(2) For the purpose of determination of the lumpsum by way of composition under clause (a) of sub-section (1), the State Government may prescribe different rates for different kinds of contracts. Relevant Rules & Forms : Rule 31; Form 37 & 38 Sec. 20 : Liability to tax of persons not observing conditions of exemption or licence If any restrictions or conditions notified under Section 17 or imposed under Section 18, are not complied with by a dealer, the sales or purchases, as the case may be, of the dealer may with effect from the commencement of the year in which such non- compliance took place, be assessed under Section 27 to tax payable under Section 9, or Section 10 and the licence fee, if any, recovered from such dealer, shall be adjusted towards the tax so assessed. Sec. 21 : Liability of a dealer purchasing exempted goods Notwithstanding anything contained in Section 20, where any condition of exemption imposed under Section 17 requires that the registered dealer purchasing the goods exempted in whole or in part from the payment of tax under this Act, shall furnish a declaration or certificate to the effect that -
- (a) the goods purchased shall be used by him for a specified purpose and within a specified time; or
- (b) the goods purchased shall be disposed of by him in a specified manner and within a specified time; and contrary to such declaration or certificate, if such dealer -
  - (i) does not use the goods for the specified purpose or within the specified time, or
  - (ii) does not dispose of the goods in the specified manner or within the specified time, he shall be liable to pay the tax on the purchase price of such goods at the full rate mentioned in column (3) of Schedule-II and penalty equal to 25 per cent of the amount of tax payable under this Act : Provided that where the goods were exempted from payment of tax in part, the registered dealer instead of paying the tax at the full rate, shall be liable to pay the difference between the tax already paid and the tax payable at the rate mentioned in column (3) of Schedule-II on the purchase price of such goods, in addition to any penalty, that may be imposed on him under this Section. Sec. 22 : Registration of dealers
(1) Every dealer whose turnover during the twelve months immediately preceding the commencement of this Act exceeds the limits specified in sub-section (5) of Section 5 shall get himself registered in the prescribed manner before such date as may be notified in this behalf.
(2) Every dealer other than a dealer to whom sub-section (1) applies shall be liable to get himself registered within the prescribed period from the date on which his turnover in a year first exceeds the limits specified in sub-section (5) of Section 5.
(3) Every dealer required by sub-section (1) or sub-section (2) or sub-section (1) of Section 49 to be registered shall make an application in the prescribed form and manner giving correct and complete particulars therein. Such application shall be accompanied by an affidavit in support of the particulars given in the application as also a satisfactory proof of payment of a registration fee of five hundred rupees in that behalf in the prescribed manner to the Commissioner : Provided that no such fee shall be payable where such application is made by a person holding a provisional registration certificate under Section 24.
(4) (a) On the day the application is received, the said authority shall grant the applicant a provisional registration certificate in the prescribed form.
- (b) After issue of the provisional registration certificate the Commissioner shall require the applicant to produce before him evidence and documents in respect of the particulars given in the application as also the accounts relating to the business for verification. On production of the evidence, documents and accounts the Commissioner shall verify the particulars given in the application. On being satisfied about the correctness of the particulars, the Commissioner shall issue to the applicant a permanent registration certificate in the prescribed form not later than thirty days of the date of receipt of the application for grant of a registration certificate.
- (c) If the Commissioner is satisfied that the particulars given by the applicant in his application are incorrect or that the applicant has misrepresented certain facts, he shall, after giving the applicant an opportunity of being heard and recording the reasons in writing reject the application and cancel the provisional registration certificate issued to the applicant from the date of its issue, not later than thirty days of the date of receipt of the application.
(5) The registration certificate granted under sub-section (4) shall take effect from -
- (a) in a case where a dealer required to get himself registered under sub-section
(2) has applied for registration within the prescribed period, the date on which his turnover in a year first exceeds the limits specified in sub-section (5) of Section 5;
- (b) in a case where a dealer required to get himself registered under sub-section
(2) has applied for registration after the expiry of the prescribed period, the date on which he applies for registration;
- (c) in a case where a dealer required to apply for registration under sub-section
(1) of Section 49 has applied for registration within thirty days of the transfer of business, the date from which the ownership of the business is entirely transferred to him; and
- (d) in a case where a dealer required to get himself registered under sub-section
(1) of Section 49, has applied for registration after the expiry of thirty days of the transfer of business, the date on which he applies for registration.
(6) Without prejudice to the provisions of sub-section (6) of Section 27 when a dealer has without reasonable cause, failed to get himself registered within the prescribed time as required by sub-section (1) or sub-section (2), the Commissioner may, after giving such dealer a reasonable opportunity of being heard, direct him to pay by way of penalty in addition to the fee payable, a sum of rupees five hundred.
(7) Every dealer who at the commencement of this Act holds a registration certificate under the provisions of the Act repealed by this Act shall, on such commencement, be deemed for all purposes of this Act to be a dealer registered and holding a registration certificate under this Section.
(8) (a) The Commissioner shall -
- (i) on an application made by a dealer for amendment of his registration certificate in pursuance of the provisions of Section 48 or otherwise, amend the registration certificate of the dealer or reject the application within 30 days of the date of receipt of such application, after making such enquiry as he deems fit; and
- (ii) on being satisfied that the registration certificate issued to a dealer requires amendment with regard to certain particulars specified therein, amend the registration certificate after giving the dealer an opportunity of being heard.
- (b) (i) When the registration certificate is amended under sub-clause (i) of clause (a) in pursuance of any of the events specified in clause (a) or clause (b) or clause (c) of Section 48, such amendment shall take effect from the date such event has taken place and in all other cases falling under the said sub-clause the amendment shall take effect from the date of application. An amendment made under sub-clause (ii) of clause (a) shall take effect from the date of order for making such amendment.
  - (ii) where any application for amendment, other than the amendment requested for in pursuance of any event specified in Section 48 is not rejected or the registration certificate is not amended within the time specified in sub-clause (i) of clause (a), the dealer shall be entitled to have the registration certificate amended in accordance with his application from the date of application for amendment and the Commissioner shall amend the certificate accordingly.
(9) When -
- (a) a registered dealer discontinues or transfers his business; or
- (b) the liability of a registered dealer to pay tax ceases in accordance with the provisions of sub-section (3) of Section 5; or
- (c) a registered dealer has been granted a registration certificate by mistake; or
- (d) a registered dealer is in arrears of tax or penalty or any other sum due under this Act; or
- (e) the Commissioner for reasons to be recorded in writing, is of the opinion that the registration certificate should be cancelled for any other reason; the Commissioner may either on his own motion or on the application of the dealer in this behalf cancel the registration certificate but notwithstanding such cancellation the dealer shall be liable to pay tax for the period during which his registration certificate remained in force. (10)(a) When a registration certificate is cancelled under sub-section (9) in any case other than that of a dissolution of firm or entire transfer of the business of dealer, the dealer shall be liable to pay tax on his stock of goods remaining unsold at the time of cancellation of the registration certificate.
- (b) (i) any dealer whose application for registration is rejected under clause (c) of sub-section (4); or
  - (ii) any dealer whose registration certificate is cancelled under clause (d) or clause (e) of sub-section (9); he shall, for the purpose of sub-section (6) of Section 27 be deemed to be a dealer, who has failed to apply for registration, but he shall not be liable to pay any penalty under the said sub-section. Relevant Rules & Forms : Rule 7 to 16; Form 4 to 7 Sec. 23 : Voluntary registration of dealers
(1) (a) A dealer or person who desires to obtain a voluntary registration certificate, though he is not liable to pay tax under Section 5, may make an application in the prescribed form to the Commissioner giving correct and complete particulars therein. Such application shall be accompanied by an affidavit in support of the particulars given in the application as also a satisfactory proof of payment of registration fee of five hundred rupees, in that behalf. Where the application is made by a dealer or person undertaking works contract the application shall also be accompanied by a copy of award of the contracts : Provided that no such fee shall be payable where the application is made by a person holding a provisional registration certificate under Section 24.
- (b) On the day the application is received the said authority shall grant the applicant a provisional registration certificate in the prescribed form.
- (c) After issue of the provisional registration certificate the Commissioner shall require the applicant to produce before him evidence and documents in respect of the particulars given in the application as also the accounts relating to the business for verification. On production of the evidence, documents and accounts the Commissioner shall verify the particulars given in the application. On being satisfied about the correctness of the particulars the Commissioner shall issue to the applicant a permanent registration certificate in the prescribed form not later than thirty days of the date of receipt of the application for grant of a registration certificate.
- (d) If on verification of the records produced by the applicant the Commissioner is satisfied that the particulars given by the applicant in his application are incorrect or that the applicant has misrepresented certain facts, he shall, after giving the applicant an opportunity of being heard and recording the reasons in writing, reject the application and cancel the provisional registration certificate issued to the applicant from the date of its issue, not later than thirty days of the date of receipt of the application.
(2) The certificate granted under sub-section (1) shall take effect from the date on which the dealer has applied for registration and every dealer who has been registered under this Section shall, notwithstanding the provisions of Section 5 be liable to pay tax under this Act, during the period from the said date till his registration certificate remains in force. Relevant Rules & Forms : Rule 7 to 16; Form 4 to 7 Sec. 24 : Provisional registration of intending manufacturers
(1) Any person intending to establish a business in the State for the purpose of manufacturing goods for sale of value exceeding rupees fifty thousand a year and who is registered with the Industries Department of the State Government for establishing a small scale industrial unit in the State or who is issued a licence wherever necessary or has sent a memorandum of information to the Central Government to establish a new industrial undertaking in the State under the provisions of the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951) may, notwithstanding that he is not liable for registration under Section 22 make an application to the Commissioner accompanied by a satisfactory proof of payment of registration fee of five hundred rupees in that behalf in the prescribed manner for grant of a provisional registration certificate under this Act.
(2) On the day the application is received the said authority shall grant the applicant a provisional registration certificate in the prescribed form.
(3) The provisional registration certificate granted under sub-section (2) shall take effect from the date on which the person had applied for registration and notwithstanding the provisions of Section 5 every person who has been granted a provisional registration certificate under this Section shall, during the period from such date till such certificate remains in force, be liable to pay tax under this Act.
(4) A provisional registration certificate granted under this Section shall be in force for such period as may be specified therein and the provisions of sub-section (8) and
(10) of Section 22, shall, so far as may be, apply in respect thereto Provided that the Commissioner on an application made by the holder of such certificate before the expiry of the period of validity mentioned in the certificate, may for reasons to be recorded in writing, extend the period specified in the provisional registration certificate by a further period not exceeding six months on each occasion.
(5) Every person who has been granted a provisional registration certificate under this Section shall for the purpose of this Act, be deemed to be a registered dealer.
(6) Where a person who has been granted a provisional registration certificate under this Section starts manufacturing and selling of goods during the period the provisional registration certificate is in force, he shall get himself registered under Section 22 or Section 23 as the case may be, before the date on which the provisional registration certificate is due to expire and on the grant of the registration certificate under Section 22 or Section 23 as the case may be, which shall take effect from the date on which application has been made for registration, the provisional registration certificate shall cease to be in force as from such date.
(7) If a person who has been granted a provisional registration certificate under this Section fails to start selling goods manufactured by him within the period specified in such certificate or within the period extended by the Commissioner, as the case may be, he shall, if he had purchased any goods for use as 1[raw material or incidental goods] on payment of tax in accordance with the provisions of clause (b) of sub- section (2) of Section 9 be liable to pay as penalty an amount not less than the difference between the amount of tax on the sales of such goods at the full rate applicable thereto under sub-section (1) of Section 9 and the amount of tax paid under clause (b) of sub-section (2) thereof but not exceeding one and one quarter times the amount of tax at such full rate as the Commissioner may determine having regard to the circumstances of the case.
(8) The provisions of this Section shall also apply to the Central Government or the State Government or public sector undertaking intending to establish any new industrial undertaking in the State. Explanation - In this Section the expression ‘Industrial Undertaking’ shall have the meaning assigned thereto in clause (d) of Section 3 of the Industries (Development and Regulation) Act, 1951 (No. 65 of 1951). Relevant Rules & Forms : Rule 9 to 17; Form 5 to 9 Sec. 25 : Issue of recognition certificate to certain dealers
(1) Where the Commissioner is satisfied that the business of a registered dealer who manufactures taxable goods is likely to suffer in view of the provisions of Section 13 relating to grant of refund or set off in respect of the use of tax paid goods as raw material or incidental goods in such manufacture either due to the fact that the goods manufactured are liable to be taxed at substantially lower rates than the rate of tax on goods used as raw material or incidental goods or that the goods manufactured are wholly or substantially sold in the course of export out of the territory of India, or for any other reason, he may issue a recognition certificate to such registered dealer in such form and in such manner and subject to such restrictions and conditions as may be prescribed so as to enable him to purchase the goods for use as raw material or incidental goods in accordance with the provisions of clause (b) of sub-section (2) of Section 9.
(2) If the Commissioner is satisfied that -
- (a) any registered dealer has obtained a recognition certificate by misrepresenting the facts, or 1 Subs. for the words ‘raw material’ by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95.
- (b) the reasons due to which any registered dealer was found eligible for holding a recognition certificate no longer exist, 1[or
- (c) a registered dealer who makes default in furnishing return/or is in arrears of tax or penalty or any other sum due under this Act.] he may after giving such dealer a reasonable opportunity of being heard, cancel the recognition certificate issued to him. The order of cancellation of such certificate shall take effect from the date of communication of such order to the dealer. Relevant Rules & Forms : Rule 18; Form 10 & 11 Sec. 26 : Returns
(1) (i) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner; and
- (ii) Every registered dealer; and
- (iii) Every dealer whose registration certificate has been cancelled under clause (d) or
- (e) of sub-section (9) of Section 22, shall furnish return in such form, in such manner, for such period, by such dates and to such authority as may be prescribed : Provided that the Commissioner may, subject to such terms and conditions as may be prescribed, exempt any such dealer from furnishing such returns or permit any such dealer to furnish them for such different period, in such other form and to such other authority, as he may direct.
(2) Every dealer required to file return under sub-section (1) shall pay the full amount of tax payable according to the return as required by sub-section (2) of Section 32 or the difference of the amount of tax payable according to the revised return as required by sub-section (3) of the said Section and the full amount of interest, if any, payable under clause (a) or clause (b) of sub-section (4) and shall furnish the proof of such payment along with the return under sub-section (1) or the revised return under sub-section (3).
(3) If any dealer discovers any omission, error or wrong statement in any return furnished by him under sub-section (1) he may furnish a revised return in the prescribed manner and within the prescribed time. (4)
- (a) If a dealer required to file return under sub-section (1) - ⇒

1 The word ‘or’ and clause (c) inserted by MPCT (Second Amendment) Act, 1997 w.e.f. 1.9.97.

2 Sub-Section (1) & (2) substituted by MPCT (Second Amendment) Act, 1997 w.e.f. 1.9.97. Earlier to substitution sub-section (1) & (2) read as under :

(1) Every such dealer as may be required so to do by the Commissioner by notice served in the prescribed manner and every registered dealer shall furnish returns in such form, in such manner, for such period, by such dates and to such authority as may be prescribed : Provided that the Commissioner may, subject to such terms and conditions as may be prescribed, exempt any such dealer from furnishing such returns or permit any such dealer to furnish them for such different period, in such other form and to such other authority, as he may direct.
(2) Every registered dealer shall pay the full amount of tax payable according to the return as required by sub-section (2) of Section 32 and the amount of interest, if any, payable under clause (a) of sub-section (4) and shall furnish the proof of such payment along with the return under sub-section (1). 3 Clause (a) substituted by MPCT (Second Amendment) Act, 1997 w.e.f. 1.9.97. Earlier to substitution clause (a) read as under : “If a registered dealer fails without sufficient cause -
- (i) to pay the amount of tax payable according to a return for any period in the manner prescribed under sub-section (2) of Section 32; or
- (ii) to furnish his return under sub-section (1) or a revised return under sub-section (3) for any period in the manner or by the date prescribed thereunder; or
- (iii) fails to furnish return, such dealer shall, be liable to pay, in respect of tax that may be payable according to such return or the tax payable for the period relating to such return, interest at the rate of two per cent per month from the date the tax so payable had become due to the date of its payment or ________________________________________________________________ ⇒
- (i) fails without sufficient cause to pay the amount of tax payable according to a return for any period in the manner prescribed under sub-section (2) of Section 32; or
- (ii) files a revised return under sub-section (3) showing a higher amount of tax to be due than was shown by him in the original return; or
- (iii) fails to furnish return, such dealer shall be liable to pay interest in respect of, -
- (a) the tax payable by him according to the return referred to in sub-clause (i); or
- (b) the difference of the amount of tax payable according to the revised return; or
- (c) the tax payable for the period for which he has failed to furnish return, at the rate of 2 per cent per month from the date the tax so payable had become due to the date of its payment or to the date of order of assessment, whichever is earlier. Explanation - For the purpose of this clause, -
(1) Where the period of default covers a period less than a month the interest payable in respect of such period shall be computed proportionately.
(2) ‘month’ shall mean thirty days.
- (b) If a registered dealer having filed a return under sub-section (1) or a revised return under sub-section (3) for any period and paid the tax payable according to such return or revised return after the time prescribed therefor, fails to pay interest along with such return or revised return in accordance with the provisions of clause (a) the Commissioner may, after giving the dealer a reasonable opportunity of being heard, direct him to pay in addition to the tax payable or paid and the interest payable by him, by way of penalty a sum equal to two per cent per month from the date such interest had become due to the date of its payment or to the date of order of assessment, whichever is earlier.
- (c) (i) A dealer fails without sufficient cause to comply with the requirement of notice issued under sub-section (1); or
  - (ii) a registered dealer having paid the tax payable according to a return in time fails to furnish the return in time; or
  - (iii) a registered dealer having paid the tax payable according to a return and furnished the return in time, fails to furnish along with the return proof of payments made in accordance with the provisions of sub-section (2); the Commissioner may after giving the dealer a reasonable opportunity of being heard, direct him to pay, in addition to any tax payable or paid by him by way of penalty a sum not exceeding fifty rupees for each occasion of default subject to a maximum of five hundred rupees in each case.
- (d) Where no tax is payable by a registered dealer committing a default under sub-clause (ii) or sub-clause (iii) of clause (a), the Commissioner may after giving to the date of order of assessment, whichever is earlier. Explanation - For the purpose of this clause :
(1) Where the period of default covers a period less than a month the interest payable in respect of such period shall be computed proportionately.
(2) ‘month’ shall mean thirty days.” such dealer a reasonable opportunity of being heard direct him to pay by way of penalty a sum not exceeding five hundred rupees. Relevant Rule & Form : Rule 19 to 25, 32 to 34, 37; Form 12 to 25 Sec. 27 : Assessment of tax
(1) The amount of tax due from a registered dealer shall be assessed separately for each year : Provided that where such dealer fails to furnish any return by the prescribed date or knowingly furnishes incomplete or incorrect return for any period of any year, the Commissioner may, at any time, assess such dealer to tax for such period : Provided further that the Commissioner may, subject to such conditions as may be prescribed and for reasons to be recorded in writing, assess the tax due from any such dealer at any time for any part of a year.
(2) (a) where a registered dealer, -
- (i) who is an importer or a manufacturer and whose gross turnover in a year does not exceed rupees ten lacs; or
- (ii) who is neither an importer nor a manufacturer and whose gross turnover in a year does not exceed rupees forty lacs, has furnished the return or returns for any year and paid the tax payable according to such return or returns within the prescribed time or has furnished the return or returns for any year after the prescribed time but not later than four months of the expiry of the period to which the return relates and has paid the tax according to such return or returns along with the interest payable under clause (a) of sub-section (4) of Section 26 shall be eligible for summary assessment under this Section.
- (b) On receipt of the return or returns for any such year from a registered dealer in the manner specified in clause (a) the Commissioner shall, subject to the restrictions and conditions in the rules that may be made for the purpose and without requiring the presence of such dealer and calling for his accounts, accept such return or returns and send an intimation of acceptance to the dealer within such time as may be prescribed. Such intimation of acceptance shall be deemed to be an order of assessment for the purpose of this Act.
- (c) Notwithstanding the provisions of clause (b) the Commissioner shall direct every year that five per cent of the dealers in each circle eligible for summary assessment under clause (a) to be selected on sample basis in the manner decided by the Commissioner, be assessed under sub-section (4) or sub-section (5), as the case may be.
(3) In every other case, the Commissioner shall serve the dealer with a notice appointing a place and day and directing him :
- (i) to appear in person or by an agent entitled to appear in accordance with the provisions of Section 31; or
- (ii) to produce evidence or have it produced in support of the returns; or
- (iii) to produce or cause to be produced any accounts, registers, cash memoranda or other documents as may be considered necessary by the Commissioner for the purpose.
(4) After hearing the dealer or his agent and examining the evidence produced in compliance with the requirements of clause (ii) or clause (iii) of sub-section (3) and such further evidence as the Commissioner may require, the Commissioner shall assess him to tax.
(5) If a registered dealer -
- (a) has not furnished returns in respect of any period by the prescribed date; or
- (b) has knowingly furnished incomplete or incorrect returns for any period; or
- (c) having furnished such returns fails to comply with any of the terms of a notice issued under sub-section (3); or
- (d) has not maintained any accounts or the accounts maintained by him are not in accordance with the provisions of sub-section (1) of Section 42 or has not regularly employed any method of accounting or if the method employed is such that in the opinion of the Commissioner assessment cannot properly be made on the basis thereof, the Commissioner shall in the prescribed manner assess the dealer to the best of his judgement.
(6) (a) If upon any information which has come into his possession, the Commissioner is satisfied that any dealer, who has been liable to pay tax in respect of any period has failed to apply for registration, the Commissioner shall within 1[one calendar year] from the date of completion of the proceedings under sub-section (1) of Section 6, after giving the dealer a reasonable opportunity of being heard, proceed in such manner as may be prescribed, to assess to the best of his judgement the amount of tax due from the dealer in respect of the whole of such period and the Commissioner may if he is satisfied that the dealer has willfully failed to apply for registration direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum 2[not less than two times but not exceeding five times] of that amount.
- (b) In respect of periods subsequent to the period referred to in clause (a), the amount of tax due from a dealer referred to in the said clause shall be assessed separately for each year.
(7) If the Commissioner is satisfied that a dealer has, with a view to evade payment of tax, shown in his accounts sales or purchases of any goods at prices which are abnormally low compared to the prevailing market prices of such goods, the Commissioner may, after making such enquiry as may be necessary and after giving the dealer a reasonable opportunity of being heard, assess or re-assess the dealer to the best of his judgement.
(8) The assessment shall be made under this Section -
- (i) in respect of a registered dealer and a dealer referred to in clause (b) of sub- section (6) within a period of two calendar years from the end of the period for which assessment is to be made; and
- (ii) in respect of a dealer who has failed to apply for registration, within a period of two calendar years from the commencement of proceedings under sub- section (6) :

Provided that -

(a) Where a fresh assessment has to be made to give effect to any finding or direction contained in any order under Sections 61, 62 or 70 or to any order of the Civil Court, High Court or Supreme Court, such assessment shall be made within

3 Sub-section (7) substituted by MPCT (Amendment) Act, 1999 w.e.f. 1.5.99. Earlier to substitution sub-section (7) read as under :

(7) If the Commissioner is satisfied that a dealer has with a view to evade payment of tax, effected sales mostly to favoured buyers at prices which are abnormally low in comparison to the prices charged by other dealers similarly circumstanced, the Commissioner, may after giving the dealer a reasonable opportunity of being heard assess or reassess the dealer to the best of his judgement. a period of two calendar years from the date of the order containing such finding or direction or the order of the Civil Court, High Court or Supreme Court, as the case may be. If for any reason such fresh assessment is not made within the specified period, the Commissioner shall take steps to ensure that assessment is made as expeditiously as possible;
- (b) Where an order of ex-parte assessment is set-aside and case reopened under Section 72 for making a fresh assessment, such fresh assessment shall be made within a period of six calendar months from the date of setting aside the ex-parte order of assessment or within the period laid down in clause (i) whichever is later; and
- (c) Nothing contained in this sub-section shall apply to proceedings initiated under Section 28 or Section 29 or any proceeding other than assessment of tax that may be instituted under any other provisions of this Act.
(9) Notwithstanding anything contained in sub-section (8), where assessment proceedings in respect of any dealer relating to any year cannot be completed before the expiry of the period specified therefor in the said sub-section, the State Government, may by notification, for reasons to be recorded in writing, extend the period for the completion of the assessment proceedings in respect of such dealers by such further period as may be specified in such notification. Relevant Rules/ Forms : Rule 46, 47, 48, 51 to 53 & 57; Form 46, 47, 49 & 50 Sec. 28 : Assessment of turnover escaping assessment
(1) Where an assessment has been made under this Act or the Act repealed by this Act and if for any reason any sale or purchase of goods chargeable to tax under this Act or the Act repealed by this Act during any period has been under assessed or has escaped assessment or assessed at a lower rate or any deduction has been wrongly made therefrom or a set off has been wrongly allowed, the Commissioner may, at any time within five calendar years from the date of order of assessment after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, proceed in such manner as may be prescribed to reassess within a period of two calendar years from the commencement of such proceedings the tax payable by such dealer and the Commissioner may, where the omission leading to such reassessment is attributable to the dealer, direct that the dealer shall pay by way of penalty in addition to the amount of tax so assessed, a sum not exceeding that amount.
(2) The reassessment made under sub-section (1) shall be at the rate at which it would have been made had there been no under assessment or escapement or wrong deduction.
(3) If for any reason the licence fee, registration fee or exemption fee has escaped levy or has been charged at a lower rate in any year, the Commissioner may at any time within a period of three calendar years next succeeding that to which such fee relates, levy the correct amount of the fee payable in respect of that year after issuing a notice to the dealer and after making such enquiry as he considers necessary and the Commissioner may direct that the dealer shall pay by way of penalty in addition to the amount of fee so levied, a sum equal to that amount. Relevant Rules : Rule 48 & 50; Form 47 Sec. 29 : Power of reassessment in certain cases
(1) Where any order passed in respect of a dealer for any period is rendered erroneous and prejudicial to the interest of revenue consequent to or in the light of any judgement or order of any Court or tribunal, which has become final, then notwithstanding anything contained in this Act the Commissioner may at any time within a period of three years from the date of such judgement or order initiate proceedings to reassess the tax payable by such dealer.
(2) The reassessment proceedings initiated under sub-section (1) shall be completed as far as may be within a period of two calendar years from the date of initiation of such proceedings.
(3) No order of reassessment under this Section shall be passed without giving to the dealer a reasonable opportunity of being heard. Relevant Rules & Forms : Rule 48; Form 47 Sec. 30 : Exclusion of time in assessment proceedings
(1) Nothing contained in Section 28 limiting the time within which any 1[re- assessment] may be made, shall apply to a 1[re-assessment] made in consequence of or to give effect to any finding or direction contained in an order under Sections 61, 62 or 70.
(2) In computing the period of limitation prescribed for assessment or reassessment as the case may be, under Section 27 or Section 28, the time during which any assessment or reassessment proceedings remained stayed under the order of any civil or other competent court, or under special or general order of the Commissioner issued under Section 67 shall be excluded.
(3) Where any turnover or a part thereof of any dealer has been assessed to tax under this Act or under any of the Acts repealed by Section 52 of Act No. 2 of 1959 and the Act repealed by this Act (hereinafter referred to as the repealed Acts) and not under the Central Sales Tax Act, 1956 (No.74 of 1956) or vice versa, but subsequently as a result of any order passed under Section 61 or Section 62 or Section 70 or under the corresponding provisions of any of the repealed Acts or of an order passed by any civil or any other competent Court, it is held to be assessable under the Central Sales Tax Act, 1956 (No.74 of 1956) or under this Act or under any of the repealed Acts, as the case may be, then in consequence of such order or to give effect to any finding or direction contained in such order, such turnover or part thereof, shall, irrespective of the fact that the order previously passed in the other case under the Central Sales Tax Act, 1956 (No. 74 of 1956) or under this Act or under any of the repealed Acts, as the case may be, has become final, be assessed or re-assessed to tax, as the case may be, at any time within five years from the date of such order, under the relevant Act, notwithstanding anything contained in Section 27 or Section 28 or of the corresponding provisions in the relevant repealed Acts limiting the time within which any assessment or reassessment may be made. Sec. 31 : Appearance before taxing authorities
(1) Any dealer who is entitled or required to attend or appear before any officer appointed under Section 3 in connection with any proceedings under this Act, otherwise than when required under Section 55 to attend personally for examination on oath or affirmation, may attend or appear by a person authorised by him in writing in this behalf being a relative of or a person regularly employed by, the dealer or a legal practitioner or a chartered accountant or a tax practitioner.
(2) For the purposes of sub-section (1) any person who -
- (a) before coming into force of this Act, had been enrolled as a Sales Tax Practitioner under the Act repealed by this Act; or
- (b) holds a degree in law or commerce or the degree of Bachelor of Arts with economics as one of his subjects conferred by any Indian university 1 As per the original Hindi version of the Act and also as per the corresponding Sec. 20 of the MPGST Act, here the words should be ‘assessment or re-assessment’. incorporated by any law for the time being in force or by any other university as the State Government may, from time to time by notification, specify; or
- (c) does not possess any of the qualifications referred to in sub-clause (b) but has held a post in the Commercial Tax Department not below the rank of an Assistant Sales Tax Officer / Assistant Commercial Tax Officer for at least ten years and is granted a certificate by the Commissioner having regard to his record of service in the department as being a fit and proper person to appear in any proceeding under this Act, shall be entitled to appear as a Tax Practitioner.
(3) Every tax practitioner and every person who is entitled to appear as a tax practitioner in any proceedings under this Act shall within such time as may be prescribed get himself enrolled as such on payment of such fee as may be prescribed.
(4) If the Commissioner is satisfied that the application for enrollment is in order, he shall enroll the applicant and grant him a certificate of enrollment in the prescribed form. If the Commissioner, after making such enquiry as he deems fit, and after giving the applicant a reasonable opportunity of being heard is not so satisfied, he shall, for reasons to be recorded in writing, reject the application.
(5) Notwithstanding anything contained in sub-section (1) and (2) no person who has held any post in the Sales Tax / Commercial Tax Department not below the rank of a Sales Tax / Commercial Tax Inspector shall be entitled to represent any dealer in any proceeding under this Act :
- (i) if he has at any time, passed any order in such proceeding, while he was holding any post in the department;
- (ii) if the place of business of the dealer whom he desires to represent is in the district or circle within the territorial jurisdiction of which the head quarter of the office of the Sales Tax / Commercial Tax department in which he had held such post was located, unless a period of two years has elapsed since he ceased to hold that post : Provided that nothing in clause (ii) shall apply if the representation is to be made before an officer holding a rank higher than the rank last held by such person.
(6) No person who has been dismissed from Government service shall be qualified to represent any dealer under sub-section (1).
(7) If any legal practitioner or a chartered accountant is found guilty of misconduct in connection with any proceedings under this Act or the Central Sales Tax Act, 1956 (No.74 of 1956) or the Act repealed by this Act by the authority empowered to take disciplinary action against members of the profession to which he belongs or if any other person is found guilty of such misconduct by the Commissioner, the Commissioner may direct that he shall be thenceforward disqualified to represent a dealer under sub-section (1) :

Provided that no such person shall be disqualified unless he is given a reasonable opportunity of being heard.

(8) Any person whose application for enrollment is rejected under sub-section (4) or who is disqualified under sub-section (7) may within sixty days of the direction relating thereto, appeal to the Tribunal to have the direction cancelled. Relevant Rules & Forms : Rule 94; Form 71, 72 & 73 Sec. 32 : Payment and recovery of tax and other dues under this Act
(1) The tax payable for each year shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
(2) Before any registered dealer furnishes any return as required by sub-section (1) of Section 26, he shall pay into a Government treasury, in the prescribed manner and time, the full amount of tax payable according to such return and the amount of 1 Sub-section (2) & (3) substituted by MPCT (Second Amendment) Act, 1996 w.e.f. 1.4.95. interest, if any, payable by him under the provisions of this Act.
(3) If a revised return furnished by a registered dealer in accordance with sub-section
(3) of Section 26 shows a higher amount of tax to be due than was shown in the original return, he shall pay the difference and the interest payable, if any, under the provisions of this Act into a Government treasury.
(4) Notwithstanding anything contained in sub-section (2) or sub-section (3), where the registered dealer is the Central Government or a State Government or any of their departments, the Commissioner may, subject to such terms and conditions as may be prescribed, permit such dealer to pay the amount of tax by book adjustment.
(5) Notwithstanding anything contained in any other provisions of this Act, but subject to such conditions as may be prescribed, a registered dealer who belongs to any of the categories specified in Section 37 and has been granted the facility of the deferment of payment of tax, is liable to pay tax under the provisions of sub-section
(2) or sub-section (3) or sub-section (6) and where a loan liability equal to the amount of tax payable by the dealer as aforesaid for the period of eligibility to avail of the said facility has been created by any agency or agencies as the State Government may, by general or special order, specify then such tax shall be deemed to have been paid in accordance with the provisions of sub-section (2) or sub-section (3) or sub- section (6), as the case may be.
(6) (i) The amount of tax -
- (a) due where the returns were furnished without full payment of tax, or
- (b) assessed under sub-section (1), (2), (4) and (5) of Section 27 less the sum, if any, already paid by the dealer or person in respect of the said year together with interest, if any, required to be paid and the penalty if any, directed to be paid under sub-section (4) of Section 26, or
- (c) assessed under sub-section (6) or sub-section (7) of Section 27 or Section 28 together with the interest and/ or penalty, if any, directed to be paid thereunder, and
  - (ii) the amount of penalty if any imposed or directed to be paid under any provisions of this Act not covered under sub-clause (b) and (c) of clause (i), shall be paid by the dealer or person into a Government treasury by such date as may be specified in a notice to be issued by the Commissioner for this purpose and the date to be so specified which shall be not less than thirty days from the date of service of such notice.
(7) Where on an admission of first appeal or a second appeal, the appellate authority stays the recovery of any amount of tax assessed or penalty imposed and on decision of such appeal by it the amount of tax or penalty so stayed has been maintained in whole or in part by it, the dealer shall be liable to pay interest on such amount at the rate of two per cent per month for the period from the date on which the recovery of such amount was stayed by the appellate authority to the date of its payment after the decision in appeal.
(8) If, for any reason, a dealer or person, is unable to pay the tax assessed or the penalty imposed on him under this Act or the tax payable by him in advance of assessment within the time specified therefor in the notice of demand, he may apply to the Commissioner in writing to grant him further time for payment of such amount or to permit him to pay such amount in instalments. Subject to such conditions and restriction as may be prescribed, the Commissioner may grant further time to such dealer or person or allow him to pay such amount in instalments on such condition as he may deem fit to impose. Where any extension of time or permission to pay by instalments is granted, the dealer or person shall be liable to pay interest on such amounts from the last date on which the tax and / or penalty was due to be paid in accordance with such notice of demand. The interest shall be paid at eighteen per cent per annum for the period commencing from such last date.
(9) Where a dealer or person does not pay the tax assessed on him or the penalty imposed on him or any other amount due from him under this Act within the time specified therefor in the notice of demand and the dealer or person, has not obtained any order under sub-section (8) or has failed to pay the tax or penalty in accordance with the order passed by the Commissioner under sub-section (8), the Commissioner shall, after giving the dealer or person a reasonable opportunity of being heard, direct that such dealer or person shall, in addition to the amount due, pay by way of penalty a sum equal to 2 per cent of the amount of tax, penalty or any other amount due, for every month, for the period for which payment has been delayed by him after the last date on which such tax, penalty or other amount was due to be paid.
(10) (a) Where the State Government after such enquiry as it may deem fit, is of the opinion that genuine hardship is being caused to a dealer or person due to any proceedings initiated for recovery of any amount of tax, interest or penalty or other dues outstanding against him, the State Government may, subject to such restrictions and conditions as may be prescribed, grant to the dealer or person additional time to pay such amount of tax or penalty or any other dues or may grant facility to pay such amount in instalments and pending the completion of such enquiry, the State Government may stay the recovery of the dues. In respect of every such facility the dealer or person shall be liable to pay interest at the rate specified in sub-section (8) : Provided that no such facility shall be granted to the dealer or person unless he has in the first instance applied in this behalf to the Commissioner under sub-section (8).
- (b) If the dealer or person does not comply with any order passed by the State Government, the Commissioner may impose on him penalty under sub-section (9).
(11) Where a dealer or person to whom any facility has been given under sub-section
(8) or sub-section (10) and such dealer or person has properly complied with the order granting him such facility, the Commissioner may, if he is of the opinion that the interest payable by him has caused him hardship, remit such portion of the interest payable on the tax due or on the penalty imposed as is in excess of the tax to be paid or the penalty to be recovered :

Provided that the State Government may suo motu or on a reference made by the

Commissioner, grant such further remission of interest payable under this sub-section as it may deem fit.

(12) Where any amount of tax assessed or any penalty imposed on a dealer or other amount due from him under this Act is not paid by him within the time allowed in the notice of demand or any order for payment of such amount in instalments, issued for the purpose but is paid by him within a period not exceeding one year, then the State Government may remit the penalty under sub-section (9) payable by such dealer in respect of the said amount.
(13) (a) If any amount of tax or any other amount due under this Act or the Act repealed by this Act (hereinafter referred to as the repealed Act) remains unpaid on the expiry of the period prescribed for the payment thereof by or under this Act or the repealed Act or on the expiry of the period specified in any notice of demand or order issued or made under this Act or the repealed Act or the rules made thereunder, for the payment thereof, the dealer or person liable to pay such sum shall be deemed to be in default as to the whole of the amount then outstanding;
- (b) When a dealer or person is in default or is deemed to be in default under clause (a), 1[the sum outstanding shall be recoverable as an arrear of land revenue according to the provisions of Madhya Pradesh Land Revenue Code, 1959 (No. 20 of 1959) and the rules made thereunder] and for the purpose of effecting the recovery of such sum -
  - (i) the Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Commissioner under the Madhya Pradesh Land Revenue Code, 1959 (No.20 of 1959);
  - (ii) an Additional Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Additional Commissioner under the said code;
  - (iii) a Deputy Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Collector under the said code;
  - (iv) an Assistant Commissioner of Commercial Tax shall have and exercise all the powers and perform all the duties of the Assistant or a Deputy Collector under the said code;
  - (v) a Commercial Tax Officer and Assistant Commercial Tax Officer shall have and exercise all the powers and perform all the duties of the Tahsildar under the said code.
- (c) Every notice issued or order passed in exercise of the powers conferred by clause (b), shall for the purpose of Sections 60, 61, 62, 70 and 71 of this Act be deemed to be a notice issued or an order passed under this Act. 2[(d) Notwithstanding anything contained in the Madhya Pradesh Land Revenue

Code, 1959 (No. 20 of 1959) where twenty five percent of the sale value is deposited by the purchaser for the purchase of property sold in auction, the purchaser may apply to the Commissioner in writing to permit him to pay the balance amount in installments. The Commissioner may allow him to pay such amount in installments with interest thereon, on such conditions as he may deem fit to impose.]

(14) Where in pursuance of sub-section (13) any proceedings for the recovery as an arrears of land revenue of any tax, penalty, interest or fee or part thereof or any other amount remaining unpaid, have been commenced and the amount of tax, penalty, interest, fee or any other amount is subsequently modified, enhanced or reduced in consequence of any assessment made or order passed in appeal or revision under Section 61 or Section 62 or rectification of mistake under Section 71, the Commissioner may, in such manner and within such period as may be prescribed, inform accordingly the dealer or person and the authority by whom or under whose order the recovery is to be made and thereupon such proceedings may be continued as if the amount of tax, penalty, interest or fee or any other amount as modified, enhanced or reduced, had been substituted for the tax, penalty, interest or fee or any other amount which was to be recovered under sub-section (13). Relevant Rules & Forms : Rule 40, 45 & 55; Form 39 & 51 Sec. 33 : Payment of tax in advance of assessment on failure to furnish returns
(1) Where any registered dealer fails to furnish any return as required by sub-section Subs. vide MPCT (Amendment) Act. 2002 w.e.f. 23-4-2002 Inserted vide MPCT (Amendment) Act. 2002 w.e.f. 23-4-2002
(1) of Section 26 and fails to pay the tax payable in accordance with the return under the provision of sub-section (2) of Section 32-
- (a) the Commissioner may, if the tax payable by such dealer in a year does not ordinarily exceed one thousand rupees; and
- (b) the Commissioner shall, if the tax payable by such dealer in a year exceeds rupees one thousand, require such dealer to pay such tax, in the manner laid down in the following sub- sections in advance of an assessment which may be under Section 27.
(2) The amount of tax payable in advance under sub-section (1) shall be computed by the Commissioner as under :
- (a) (i) Where the registered dealer has been assessed to tax for any previous year or part thereof, the tax payable in advance shall be an amount which bears to the amount of tax assessed in respect of the latest previous year or part thereof the same proportion as the period for which the tax payable in advance bears to the period for which the latest assessment was made, or
  - (ii) where the registered dealer has furnished the return as required under sub- section (1) of Section 26 for any period subsequent to the latest previous year or part thereof for which he has been assessed to tax, the tax payable in advance shall be an amount which bears to the maximum amount of tax payable according to any such return the same proportion as the period for which the tax payable in advance bears to the period for which such maximum amount of tax was payable according to such return, whichever is greater.
- (b) Where a registered dealer has not been assessed to tax for any previous year or part thereof but has furnished the return as required by sub-section (1) of Section 26 for any period, the tax payable in advance shall be an amount which bears to the maximum amount of tax payable according to any such return the same proportion as the period for which the tax payable in advance bears to the period for which such maximum amount of tax was payable according to such return.
- (c) Where a registered dealer has not been assessed to tax for any previous year and no returns have been furnished by him for such year or where a registered dealer has no previous year, the tax payable in advance shall be such amount as the Commissioner may determine to the best of his judgement.
(3) After the expiry of the date by which the return has become due, the Commissioner may issue a notice in the prescribed form to a registered dealer requiring him to pay in the prescribed manner and within the prescribed time the tax payable in advance computed in accordance with sub-section (2).
(4) If any registered dealer who is required to pay the tax in advance furnishes the return under sub-section (1) of Section 26 and pays the amount of tax in accordance with the provisions of sub-section (2) of Section 32 on or before the date specified in the notice issued under sub-section (3) or satisfies the Commissioner that the return was already furnished by him by the date by which it was due, the said notice shall stand cancelled.
(5) The tax payable in advance or any part thereof left unpaid within the time specified in the notice issued under sub-section (3) shall be recoverable as an arrear of land revenue for which purpose the provisions of sub-section (13) and (14) of Section 32 shall mutatis mutandis apply.
(6) The tax paid under this Section shall be adjusted towards the tax assessed under Section 27. Relevant Rules & Forms : Rule 41; Form 40 Sec. 34 : Deduction and payment of tax in certain cases
(1) Any person responsible for making payment of any sum to any dealer as a

1 See Noti. No. 14, dt. 12.4.96 for no deduction of tax or deduction of tax at a lower rate u/s Sec.

34(1) & 35(1).

consideration for the sale or supply of any goods in pursuance of a contract between such dealer and the Central Government or a State Government (hereinafter referred to in this Section as the purchaser), shall before crediting such sum to the account of the dealer or before payment thereof in cash or by issue of a cheque or draft or by any other mode, deduct an amount equal to the amount payable by the purchaser to the dealer by way of tax, whether or not such amount is shown by the dealer separately in his bill, where such amount exceed rupees five thousand and shall pay it to the State Government in such manner as may be prescribed.

(2) Any person making the payment under sub-section (1) shall be deemed to have made the payment on the authority and on behalf of the dealer and the treasury receipt for such payment shall constitute a good and sufficient discharge of the liability of the purchaser to the extent of the amount specified in the receipt.
(3) Where any payment under sub-section (1) is made by a purchaser on behalf of the dealer such payment shall constitute a good and sufficient discharge of the liability of the dealer to pay tax in respect of such transaction and the amount so paid shall be adjusted in such manner as may be prescribed.
(4) Any sum which a person is required to deduct and pay under sub-section (1) shall, if it remains unpaid, be recoverable as an arrear of land revenue. Relevant Rules & Forms : Rule 42; Form 41 Sec. 35 : Deduction at source of tax payable by a contractor
(1) Notwithstanding anything contained in any other provision of this Act, any person letting out a works contract of value exceeding one lac rupees to a contractor involving sale of any goods in the course of execution thereof by the contractor shall before making the payment of any amount towards the value of such contract to him, deduct at the rate of two per cent an amount towards the tax payable by the contractor under this Act. The amount so deducted shall be adjusted towards the tax assessed on such contractor under Section 27 and any amount that remains after such adjustment shall be refundable to the contractor.
(2) On deduction of the amount at source under sub-section (1) the person making such deduction shall issue a certificate therefor to the contractor and shall deposit such amount into the Government treasury in such manner and within such time as may be prescribed.
(3) Any person making a payment of the amount under sub-section (2) shall be deemed to have made the payment thereof on the authority and on behalf of the contractor and the treasury receipt for such payments shall continue a good and sufficient discharge of the liability of the person to the contractor towards the value of the contract to the extent of the amount specified in the receipt.
(4) Where any payment of any amount is made by a person under sub-section (2) on behalf of a contractor such payment shall constitute a good and sufficient discharge of the liability of the contractor to pay tax in respect of the sale of the goods in the course of execution of the works contract from the payment of the value whereof such amount has been deducted under sub-section (1) and such amount shall be adjusted towards the tax payable by the contractor on the sale of such goods.
(5) Where a person contravenes the provisions of sub-section (1) or sub-section (2) the Commissioner shall impose upon such person by way of penalty an amount which shall be twenty five per cent of the amount required to be deducted under sub-section (1).
(6) Any amount, a person is required to deduct under sub-section (1) and to pay it into a Government treasury under sub-section (2) or the penalty payable under sub- section (5) remains unpaid shall be recoverable as an arrear of land revenue. Explanation - for the propose of this Section “person” means
- (i) Department of the Central or the State Government.
- (ii) Public Sector Undertaking.
- (iii) Municipalities and Municipal Corporation. (iv) 1[.........] Authorities constituted under any law for the time being in force.
- (v) Public limited companies.
- (vi) Non-governmental organisations. Relevant Rules & Forms : Rule 42; Form 42 Sec. 35-A : Saving for person responsible for deduction at source Notwithstanding anything contained in Section 34 and 35 no deduction or deduction at a lower rate or deduction of a lump sum amount at source towards the tax payable shall be made under any of the said sections in the case of dealer or person, if such dealer or person furnishes to the person responsible for paying any amount in respect of the sale, supply or contract referred to in Section 34 and 35, as the case may be, a certificate in writing in the prescribed form issued in the prescribed manner by such authority as may be prescribed. Sec. 36 : Production of tax clearance certificate Any department or office of the Central Government situated in Madhya Pradesh or the State Government or any local authority shall, before entering into a contract with any dealer for the sale or supply of any goods by him exceeding rupees ten thousand in value require such dealer to produce a tax clearance certificate in such form as may be prescribed. Such certificate shall be issued by such authority, in such manner, for such period and within such time as may be prescribed. Relevant Rules & Forms : Rule 43; Form 43 & 44 Sec. 37 : Special provisions relating to deferred payment of tax by industrial units
(1) Notwithstanding anything contained in any other provisions of this Act a registered dealer who is -
- (a) registered as a small scale industrial unit with the Industries Department of the Government of Madhya Pradesh, or
- (b) registered with the Industries Department of the Government of Madhya Pradesh as medium scale industrial unit or has sent a memorandum of information thereof to the Central Government, or
- (c) registered as a large scale industrial unit with any authority duly empowered to do so by the Government of Madhya Pradesh or the Central Government, or
- (d) holding a licence under the Industries (Development and Regulation) Act, 1951 (No.65 of 1951) wherever necessary, and who in each case has or may set up a new industrial unit in any district of Madhya Pradesh eligible for grant of the facility of deferred payment of tax under the scheme providing for grant of incentive to entrepreneur for setting up new industrial units in the State as the State Government may make in this behalf, may make deferred payment subject to such restrictions and conditions as may be specified in such scheme.
(2) Notwithstanding the repeal of the Madhya Pradesh General Sales Tax Act, 1958

4 Existing Section 37 renumbered as sub-section (1) and sub-section (2) inserted by MPCT (Second Amendment) Act, 1997 w.e.f. 1.9.97.

(No. 2 of 1959) (hereinafter referred to as the repealed Act) the State Government may by notification amend retrospectively or prospectively any notification relating to the facility of deferred payment of tax by the industrial units, issued under Section 22-D read with Section 51 of the repealed Act and for that purpose it shall and shall always be deemed that the provisions of Section 22-D and Section 51 of the repealed Act have revived for the purpose of such amendment. Sec. 38 : Special mode of recovery

(1) Notwithstanding anything contained in Section 32 or any law or contract to the contrary, the Commissioner or any officer other than an Inspector appointed under Section 3, may at any time or from time to time, by notice in writing, a copy of which shall be sent to the dealer or person, at his last address known to the officer issuing the notice, require -
- (a) any person from whom any amount is due or may become due to a dealer or person who has failed to comply with a notice of demand for any amount due under this Act;
- (b) any person who holds or may subsequently hold any money for or on account of such dealer or person, to pay to the Government under this sub-section, either forthwith or upon the money becoming due or being held, or at or within the time specified in the notice (not being before the money becomes due or it is held), so much of the money, as is sufficient to pay the amount due from the dealer or person in respect of the arrears of the tax, interest and penalty under this Act or the whole of the money when it is equal to or less than that amount. Explanation - For the purposes of this sub-section the amount due to a dealer or person or money held for or on account of a dealer or person, by any person shall be computed after taking into account such claims, if any, as may have fallen due for payment by such dealer or person to such person and as may be lawfully subsisting.
(2) The Officer issuing a notice under sub-section (1) may at any time or from time to time amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.
(3) Any person making any payment in compliance with a notice issued under sub- section (1) shall be deemed to have made the payment under the authority of the dealer or person and the treasury receipt for such payment shall constitute a good and sufficient discharge of the liability of such a person to the extent of the amount specified in the receipt.
(4) Any person discharging any liability to the dealer or person after service on him of the notice issued under sub-section (1) shall be personally liable to the State Government to the extent of the liability discharged or to the extent of the liability of the dealer or person for tax or penalty or both, whichever is less.
(5) Where a person on whom a notice is served under sub-section (1) proves to the satisfaction of the officer who issued the notice that the sum demanded or any part thereof was not due to the dealer or person or that he did not hold any money for or on account of the dealer or person, at the time the notice was served on him, then nothing contained in this Section shall be deemed to require such person to pay into the Government treasury any such money or part thereof, as the case may be.
(6) Any amount of money which a person is required to pay under sub-section (1) or for which he is personally liable to the State Government under sub-section (4) shall, if it remains unpaid, be recoverable as an arrear of land revenue.
(7) The provisions of this Section shall be without prejudice to any action that may be taken for recovery of the arrears of tax, interest and penalty, if any, due from the dealer or person. Relevant Rules & Forms : Rule 44; Form 45 Sec. 39 : Refunds
(1) If the Commissioner is satisfied that the tax or penalty or both or interest paid by or on behalf of a dealer for any year exceeds the amount of the tax to which he has been assessed or the penalty imposed or the interest payable under this Act for that year, he shall cause a refund to be made of any amount in the manner prescribed found to have been paid in excess either in cash or at the option of the dealer, by adjustment of such excess towards the amount of tax due in respect of any other year from him.
(2) If the Commissioner is satisfied that due to an error committed by the dealer while crediting any amount payable under this Act or the Act repealed by this Act or the Central Sales Tax Act, 1956 (No.74 of 1956), into Government treasury the amount so paid cannot be accounted for the purpose for which it is credited, he shall subject to the provisions of sub-section (4) cause refund to be made of that amount in the manner prescribed either in cash or at the option of the dealer by adjustment of such refundable amount towards the amount of tax due in respect of any other year from him.
(3) If the appellate or the revisional authority is satisfied to the like effect it shall cause refund to be made of any amount found to have been wrongly paid or paid in excess.
(4) Notwithstanding anything contained in sub-section (1) or sub-section (2) or sub- section (3) the authority empowered to grant refund shall apply the refundable amount in respect of any year towards the recovery of any tax, penalty, interest or licence fee, registration fee or exemption fee or part thereof due under this Act or under the Act repealed by this Act or under the Central Sales Tax Act, 1956 (No.74 of 1956) or under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam, 1976 (No.52 of 1976) and shall then refund the balance remaining, if any.
(5) Where a refund of any amount under sub-section (1) or sub-section (3) is not made or is not applied for the purposes mentioned in sub-section (4) within ninety days from the date of passing of the order for refund, the dealer shall be paid interest at the rate of one per cent per month on the amount of refund for the period commencing from the date of expiry of the said period of ninety days and ending with the day on which the refund is made to him under sub-section (1) or sub-section (3) or is applied for the purposes mentioned in sub-section (4), as the case may be. Explanation - (i) Under this sub-section where the period for which interest is payable covers a period less than a month, the interest payable in respect of such period shall be computed proportionately.
- (ii) For the purpose of this sub-section “month” shall mean thirty days.
(6) Nothing in this Section shall operate to validate any objection or appeal which is otherwise invalid or to authorise the revision of any assessment or other matter which has become final and conclusive or the rectification of any mistake by any officer of his decision which is subject to appeal or revision.
(7) Notwithstanding anything contained in Section 9 or Section 10 where a tax has been levied in respect of the sale or purchase of declared goods under this Act, and such goods are subsequently sold in the course of inter-State trade or commerce, the tax so levied shall be refunded in such manner and subject to such conditions as may be prescribed. Relevant Rules & Forms : Rule 58 to 62, 63, 65; Form 52 to 55 Sec. 40 : Power to withhold refund in certain cases Where an order giving rise to a refund is passed and the Commissioner is satisfied that the grant of the refund is likely to be prejudicial to the interest of revenue and action under sub-section (3) or sub-section (6) of Section 62 is required to be initiated or an application to the Tribunal to enhance the tax levied or penalty imposed is required to be made or the said order is the subject matter of any proceeding under Section 70, the Commissioner may withhold the refund till such time as the aforesaid proceedings are finally decided :

Provided that the dealer shall be paid interest under sub-section (5) of Section 39 on the amount of refund ultimately determined to be due as a result of the aforesaid proceedings for the period commencing after the expiry of ninety days from the date of receipt of the order giving rise to the refund. Sec. 41 : Remission of tax The Commissioner may subject to such conditions as may be prescribed, remit the whole or part of the amount of the tax payable by a registered dealer in respect of any year during which he suffered financially on account of riots, accidental fire or through natural calamities : Provided that if the amount to be remitted exceeds rupees ten thousand the remission shall not be made without the previous sanction of the State Government. Relevant Rules : 64 Sec. 42 : Accounts

(1) Every registered dealer and every dealer liable to pay tax under this Act shall maintain correct account of his purchases, sales and stocks showing value, of different kinds of goods subject to different rates of tax under this Act and shall likewise maintain stock accounts showing value of raw materials and of finished goods.
(2) If the Commissioner considers that the accounts maintained by any dealer or any class of dealers do not sufficiently enable him to verify the returns referred to in sub- section (1) of Section 26 or the assessment cannot be made on the basis thereof, he may by an order, require any dealer or by notification any class of dealers, to keep such accounts including records of manufacture, sales, purchases or transfers in such forms and in such manner as he may, subject to rules made under this Act, direct. Relevant Rules & Forms : Rule 74; Form 59 Sec. 43 : Certain dealers to issue bills or cash memoranda
(1) Every dealer whose turnover exceeds one lac and fifty thousand rupees in any year shall, for each sale made by him of goods exceeding rupees one hundred in value, in the next succeeding year, issue to the purchaser, a bill or a cash memorandum signed and dated by such dealer or his servant, manager or agent showing such particulars as may be prescribed. Every such dealer shall also maintain a counterfoil or duplicate of each bill or cash memorandum issued by him with signature, date and all other aforesaid particulars and shall preserve it for a period of not less than five years from such date or till the completion of assessment whichever is earlier :

Provided that the Commissioner may, subject to such conditions and restrictions as he may deem fit to impose, exempt any dealer or class of dealers in respect of sale of any goods or class of goods from issuing a bill or a cash memorandum to the purchaser or from showing some of the particulars or from maintaining a counterfoil or duplicate of each bill or cash memorandum issued by him.

(2) If any person to whom sub-section (1) applies, contravenes the provisions of the said sub-section the Commissioner may, after giving such person a reasonable opportunity of being heard, direct him to pay a penalty not exceeding double the amount of the bill or the cash memorandum in respect of which such contravention has occurred or rupees fifty whichever is less subject to a maximum of rupees five thousand in a year.
(3) Every registered dealer, who in the course of his business sells any goods specified in Schedule II, which have been manufactured by an industrial unit in respect of which such unit is availing the facility of exemption from payment of tax in whole under any notification issued under the Act repealed by this Act or under this Act, in pursuance of any scheme of the State Government, shall issue to the purchaser a bill, invoice or cash memo specifically stating in such manner as may be prescribed, that the goods being sold are the goods manufactured by an industrial unit availing the facility of exemption from payment of tax in whole and no tax has been paid on such goods.
(4) Where the goods mentioned in sub-section (3) are purchased and sold in the course of their business by chain of registered dealers, the selling registered dealer shall issue a bill, invoice or cash memo, containing the statement referred to in sub- section (3).
(5) Every registered dealer referred to in sub-section (3) and (4) shall maintain a separate account of purchases and consumption, use or sale of goods referred to in sub-section (3).
(6) Where a registered dealer referred to in sub-section (3) or sub-section (4) has failed to make the statement referred to in sub-section (3), it shall be presumed, unless the contrary is proved by him, that he has facilitated the evasion of tax on the sale of such goods and accordingly he shall be liable to pay penalty equal to two times the amount of tax payable on such goods. Relevant Rules : 66, 67 & 68 Sec. 44 : Saving for dealers dealing in tax free and tax paid goods
(1) If before the commencement of any year a registered dealer files with the Commissioner, a declaration in the prescribed form and manner in respect of such year to the effect that -
- (i) he will be dealing exclusively during that year in goods declared tax free under Section 15 or exempted in whole under Section 17, or
- (ii) his turnover in a year does not exceed rupees forty lacs and that he will deal exclusively in tax paid goods or deal, along with such goods, in goods declared tax free under Section 15 or exempted in whole under Section 17 during that year, the provisions of Sections 26, 27 and 43 shall not apply to such dealer so long as he deals exclusively in tax paid goods or in tax paid goods and goods declared tax free under Section 15 or exempted in whole under Section 17 in that year.
(2) Every registered dealer of the category specified in clause (ii) of sub-section (1) shall, before filing a declaration under the said sub-section pay such fee as may be prescribed.
(3) If at any time during the year in respect of which a dealer has filed a declaration under sub-section (1), he desires to deal in any taxable goods, he shall send previous intimation thereof to the Commissioner and thereupon his declaration shall cease to be in force.
(4) Where the Commissioner, in consequences of information which has come into his possession, is satisfied that any dealer has at any time during the year, in respect of which he has filed a declaration under sub-section (1), dealt in any taxable goods 1 Sub-sections (3) to (6) inserted by MPCT (Second Amendment) Act, 1996, w.e.f. 1.4.95. without complying with the requirement of sub-section (3), he may, after giving the dealer a reasonable opportunity of being heard and after making such enquiry as he considers necessary, make an order annulling the declaration and also impose upon him a penalty equal to three times the amount of tax payable on the taxable goods sold by him during that year.
(5) The Commissioner shall direct every year that detailed inspection upto five per cent of the dealers falling in clause (ii) of sub-section (1), in each circle to be selected on sample basis in the manner decided by the Commissioner shall be carried out to ensure that the dealers concerned have not acted in contravention of the declaration filed by them. Relevant Rules & Forms : Rule 95; Form 74 Sec. 45 : Constitution of a committee for detection and checking of evasion of tax by dealers liable to pay tax and power of the Commissioner acting upon the report of such committee
(1) The State Government may constitute a committee for detection and investigation of evasion of tax under this Act or the Act repealed by this Act. The committee shall consist of such number of members as the State Government may determine. The committee shall be assisted by such officers specified in Section 3 as the State Government may appoint for the purposes. The authority and the officers appointed to assist it shall perform such functions as the State Government may direct.
(2) If upon any information which has come into its possession the Committee has reason to believe that any dealer has evaded payment of tax or is indulging in evasion of tax under this Act or under the Act repealed by this Act, it may draw its report in the matter and sent it to the Commissioner to investigate into the tax evasion by such dealer. (2-A) In emergent cases, if the Commissioner has reason to suspect that any dealer is attempting to evade payment of any tax, he may, for reasons to be recorded in writing, proceed to investigate into the tax evasion by such dealer. (3) 2[On the receipt of the report from the committee in respect of the dealer as provided in sub-section (2) or on his own motion as provided in sub-section (2-A)], the Commissioner shall subject to such conditions as may be prescribed -
- (a) require the dealer to produce before him any accounts, registers, or documents relevant to his business or to furnish such other information as he may deem fit for scrutiny, or
- (b) inspect the place of business of such dealer and for this purpose all accounts, registers and documents relating to the business of such dealer and all the goods kept in such place of business shall be open to inspection by the Commissioner. 1 Sub-Sction (2-A) inserted first by MPCT (Amendment) Ordinance, 1999 w.e.f. 1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000. 2 Subs. for the words “On the receipt of the report from the committee in respect of a dealer” first by MPCT (Amendment) Ordinance, 1999 w.e.f. 1.1.2000 and then by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000
(4) If on scrutiny of the records produced by the dealer or on inspection of his place of business under sub-section (3) the Commissioner is satisfied that the dealer has evaded payment of tax payable by him for any year, he may for reasons to be recorded in writing, seize such accounts, registers or documents relating to the business of such dealer as he considers necessary, and grant a receipt therefor to the dealer and shall detain them only for so long as may be necessary, for examination thereof or for assessment of tax or for prosecution.
(5) For the purpose of clause (b) of sub-section (3), the Commissioner may -
- (a) enter and search any place of business of such dealer or any other place whether such place be the place of his business or not, where the Commissioner has reason to believe that the dealer keeps or is for the time being keeping any accounts, registers or documents of his business or stock of goods relating to his business and the Commissioner may, for exercising the powers under this clause, seal or break open the lock of any door, box, locker, safe, almirah or any other receptacle where the keys thereof are not produced on demand or are not available; and
- (b) also search any person who leaves or is about to enter or is already in the place referred to in clause (a), if the Commissioner has reason to suspect that such person has secreted about his person, any such books of accounts or other documents relating to the business of such dealer.
(6) (a) In the course of scrutiny of accounts, registers or documents produced by the dealer or in the course of inspection of the place of business of such dealer, the Commissioner has reason to believe that the dealer has stored or kept goods liable to tax, without accounting for them in books, registers or accounts maintained by him in the course of his business, with a view to their surreptitious sale in order to evade payment of tax, in any building, place or vehicle under the ownership or control of the dealer in either case whether exclusive or in association with some other person or in any building, place or vehicle in each case belonging to some other person with express or implied permission of such other person, the Commissioner may enter any such building, place or vehicle and inspect and verify if the goods have been accounted for and in the event of his reasonable belief that the dealer has not accounted for such goods with the intention of evading tax, the Commissioner may seize all such goods and take all necessary steps for their removal, proper custody and preservation :

Provided that a list of all goods seized under this clause shall be prepared by the

Commissioner in presence of at least two respectable persons and a copy thereof shall on demand be furnished to the dealer or as the case may be, to the person from whose possession or custody they were seized.

(b) The Commissioner shall as soon as possible, after seizure of the goods under clause (a), serve upon the dealer, a notice in writing to show cause within a period of thirty days of service of such notice as to why a penalty equal to double the amount of tax payable and calculable on the price which such goods would have fetched on their assumed sale in Madhya Pradesh, on the date of seizure, be not imposed on him for the dealers default in not making entries in respect of such goods in his books of account or register or other documents, as the case may be, maintained by him in the course of his business.
(c) If the Commissioner, after taking into consideration the explanation of the dealer and after giving him an opportunity of being heard, is satisfied that the entries relating to the said goods were not made in the books of accounts, registers or other documents of the dealer and without any proper justification, the Commissioner shall pass an order imposing a penalty equal to the sum specified in the notice.
(d) The Commissioner may, at any time after the service of the notice under clause (b) and before passing an order imposing penalty under clause (c), release the goods seized if the dealer or the person from whom the goods were seized furnishes security in the form of cash security or bank guarantee or any other security to the satisfaction of the Commissioner, in each case for such reasonable amount as the Commissioner may specify by order in writing with the due regards to the amount of penalty proposed.
(e) The cash security, and in the case of bank guarantee, or any other security, when the amount thereof realised, shall be adjusted towards the penalty imposed and the balance, if any, shall be refunded to the dealer or to the surety, as the case may be.
(f) Where no security is furnished under clause (d), the dealer shall pay the amount of penalty, within thirty days of the service of the order imposing penalty on him and on payment of such amount goods seized shall be released forthwith.
(g) If the dealer fails to pay the penalty imposed under clause (c), the Commissioner shall, subject to other provisions of this Section, dispose of the goods by sale in such manner as may be prescribed and apply the sale proceeds thereof towards the penalty imposed and the expenses incurred on account of and incidental to the custody, protection, preservation and sale of such goods and shall refund the balance, if any, to the dealer or person entitled.
(h) The penalty imposed under clause (c) shall be without prejudice to any other action under any other provisions of this Act.
- (i) Where any objection is made to the seizure of the property seized under clause (c) on the ground that such goods do not belong to the dealer or are not otherwise liable to seizure, the Commissioner shall proceed to decide the objection :

Provided that no such objection shall be entertained -

(i) where, before the objection is made, the property seized has already been sold, or
(ii) where the Commissioner considers that the objection was designedly or unnecessarily delayed.

(j) All questions including question relating to right, title or interest in the property seized arising between the parties to such proceeding or their representatives and relevant to the adjudication of the claim or objection, shall be determined by the Commissioner dealing with the claim or objection.
(k) Upon the determination of the question referred to in clause (j), the Commissioner shall, in accordance with such determination :
- (i) allow the claim or objection and release the property from distrain either wholly or to such extent as he thinks fit, or
- (ii) disallow the claim or objection, or
- (iii) continue the distrain subject to any lien, charge or other interest in favour of such person, or
- (iv) pass such order as in the circumstances of the case, he deems fit.
(l) where any claim or objection has been adjudicated upon under clause (k) or where the Commissioner refuses to entertain a claim or objection under the proviso to clause (h), any such order made shall be deemed to be an order relating to assessment of tax against a dealer under Section 27 and shall be subject to the same condition as to appeal, revision or any other remedy under this Act.

(7) Where the Commissioner, apprehends any resistance to entry, search or seizure of goods, he may for reasons to be recorded in writing requisition the services of any police officer of the State Government, having jurisdiction over the local area in which such entry, search or seizure is to be made, to assist him for all or any of the purposes specified in clause (b) of sub-section (3) or clause (a) of sub-section (5) or clause (a) of sub-section (6) and it shall be the duty of each police officer to comply with such requirement.
(8) The Commissioner while making entry, search and seizure under this Section shall, unless otherwise expressly provided by or under this Act exercise the same power and follow the same procedure as are exercised by and are required to be followed by a Police Officer in relation to entry, search and seizure under the provisions of the Code of Criminal Procedure, 1973 (No.2 of 1974) Relevant Rules & Forms : Rule 70 to 73; Form 56 & 58 Sec. 45-A : Establishment of check posts
(1) The State Government or the Commissioner may, with a view to prevent or check evasion of tax under this Act, set up or erect in such manner as may be prescribed, check posts or barriers at such places in the State, excluding railway premises, as may be notified : Provided that the Commissioner shall not set up a check post or erect a barrier for a period exceeding six months at a time.
(2) An officer, not below the rank of 2[Assistant] Commercial Tax Officer shall be in-charge of the check post (hereinafter referred to as the check post officer) and he shall be assisted by other category of officers.
(3) Subject to other provisions of this Section a check post officer shall exercise all powers conferred on him by this section.
(4) Every person transporting such goods as may be notified by the State Government in this behalf (hereinafter referred to in this Section as the transporter) shall carry with him an invoice, bill or challan or any other document, by whatever name called, issued by the consignor of the goods giving such particulars as may be prescribed.
(5) Every transporter shall, before crossing any check post or barrier set up or erected under sub-section (1), deliver to the check post officer a declaration duly signed by the consignor in such manner, in such form and containing such particulars as may be prescribed. A separate declaration shall be filed in respect of the consignment or consignments relating to each consignee where the goods are being imported into Madhya Pradesh and of each consignor where the goods are being sent outside the State. No declaration in relation to goods to be delivered in Madhya Pradesh shall be accepted if the consignee in Madhya Pradesh is shown or described as ‘ self ‘ unless the full particulars and address of the person who will take delivery of the goods at the destination in Madhya Pradesh are furnished. 3[(5-A) The form of declaration specified in sub-section (5) shall be obtained by registered dealer in prescribed manner and on payment of prescribed fee.]
(6) The transporter shall stop the vehicle at every check-post or barrier mentioned in sub-section (1) and keep it stationary for as long as may reasonably be necessary and allow the check post officer to verify and check the declarations and the documents mentioned in sub-section (4), to search the vehicle and inspect the goods and all documents relating to such goods which are in the possession of the transporter. The transporter shall, if so required, give his name and address and names and addresses of the owner of the vehicle and of the consignor and consignee of the goods.
(7) If the check post officer finds after searching the vehicle and verifying the declaration or other documents relating to the goods, that -
- (a) goods notified under sub-section (4) are being transported in respect of which the transporter has not filed any declaration; or
- (b) the declaration filed in respect of any goods is false or incorrect, either in respect of the kind of goods, or the quantity of goods transported, or the value thereof; or

1 Sec. 45-A, 45-B & 45-C inserted by MPCT (Amendment) Act, 2000 w.e.f. 15.3.2000.

Rules relating to Check-posts or barriers are yet to be framed. Inserted by MPCT (Amendment) Act. 2002 w.e.f 13-8-2002. Inserted by MPCT (Amendment) Act. 2002 w.e.f 13-8-2002.

(c) the consignor or the consignee of the goods is shown to be a dealer registered under this Act, while the records available in his office do not show the existence of such a dealer, such officer may presume, until the contrary is proved, that an attempt was being made to facilitate the evasion of tax in respect of such goods and he may, after recording his reasons therefor in writing, a copy of which shall be forthwith supplied to the transporter, seize such goods or the vehicle along with the goods in such manner as may be prescribed.

(8) The check post officer seizing the goods or the vehicle along with the goods under sub-section (7) shall also record the statement of the transporter on all the facts of the case and also obtain particulars of the consignor and consignee of the goods and the vehicle seized. The reasons, if any, stated by the transporter for the violation of the provision of this Section shall also be recorded.
(9) If, after considering the statement of the transporter, the check post officer is satisfied that the explanation is satisfactory and that there was no attempt to evade tax in respect of the goods seized, he shall record his findings giving his reasons therefor and release the goods or the vehicle along with the goods to the transporter in such manner as may be prescribed.
(10) If the check post officer is not so satisfied, he shall record his findings accordingly giving reasons therefor, and he shall serve on the transporter a notice in writing requiring him to show cause, ordinarily within fifteen days of the service of the notice, why a penalty as specified in the notice, which shall be equal to ten times of the amount of tax which would have been payable if the goods were sold within the State on the date of seizure, should not be imposed upon him for the attempt made to facilitate the evasion of tax on such goods.
(11) If, after taking into consideration the explanation, if any, of the transporter and after giving him an opportunity of being heard, the check post officer is satisfied, for reasons to be recorded in writing, with the explanation and the statement of the transporter, he shall discharge the notice and release the goods or the vehicle along with the goods seized in favour of the transporter, in such manner as may be prescribed.
(12) If the check post officer is not so satisfied, he shall record his findings accordingly giving reasons therefor and he shall pass an order imposing such penalty, not exceeding the sum specified in the notice, as he may deem fit : Provided that the amount of penalty shall not be less than half the amount of penalty specified in the notice.
(13) A copy of the order passed under sub-section (12), shall be served on the transporter.
(14) On the payment of the amount of penalty, the goods or the vehicle along with the goods seized, shall be released in favour of the transporter in such manner as may be prescribed.
(15) If the amount of penalty specified in the order passed under sub-section (12) is not paid within thirty days of the service of the order, the check post officer may, notwithstanding anything to the contrary provided in this Act or in any law for the time being in force, confiscate the goods or the vehicle along with the goods seized and dispose of the goods or the vehicle along with the goods by sale in such manner as may be prescribed, and deposit the sale proceeds in the Government Treasury, in such manner as may be prescribed..
(16) The transporter may authorise, in such manner as may be prescribed, the consignor or consignee of the goods or the vehicle along with the goods seized under sub-section (7), to appear before the check post officer in the proceedings under sub- section (11) and such consignor or consignee shall be deemed to be the transporter for all purposes mentioned in the aforesaid sub-sections.
(17) The provisions of Section 31 shall apply to proceedings under sub-section (11) as if the transporter is a dealer.
(18) No person, claiming to have any interest or right in the goods or the vehicle along with the goods released in accordance with the provisions of sub-section (11) or disposed of in accordance with the provisions of sub-section (15), shall have any claim on the check post officer in respect of such goods or the vehicle along with the goods. Explanation : For the purpose of this section, the expressions ‘person transporting’ or ‘the goods transporter’ shall include the owner of the vehicle carrying the goods across the check post or barrier, whether an individual, a firm, association, society or company, and the manager, if any, of such owner. Sec. 45-B : Particulars to be furnished by persons transporting goods Every person transporting any goods notified under sub-section (4) of Section 45-A shall furnish such particulars in respect of such goods transported by him in such form, in such manner, by such date and to such authority as may be prescribed. Explanation : For purpose of this section, the expression "person transporting " shall have the meaning assigned to it in Section 45-A. Sec. 45-C : Power of officers of the Commercial Tax Department to check goods at the points of loading and unloading
(1) With a view to 1[prevent or check evasion of tax under this Act. or] verifying the correctness of a declaration furnished or preventing the furnishing of a false or incorrect declaration under Section 45-A, any officer of the Commercial Tax Department not below the rank of Assistant Commercial Tax Officer, as authorised by the Commissioner, may inspect such goods at the points of their loading or unloading along with documents of title of such goods, and the person owning or, for the time being, incharge of the vehicle in which such goods are transported, shall render all assistance to such officer for this purpose. 1[(2) If at the time of loading or unloading of goods, the officer finds after searching the vehicle and verifying the documents relating to the goods that,-
- (a) goods notified under sub-section (4) of section 45-A are being transported in respect of which the transporter has not filed prescribed declaration at the check post or is not carrying with him the copy of the prescribed declaration, or
- (b) the declaration in respect of any goods is false or incorrect either in respect of the kind of goods or the quantity of goods or the value thereof, such officer may presume until the contrary is proved that an attempt was being made to facilitate the evasion of tax in respect of such goods and he may, after recording his reasons therefor in writing, a copy of which shall forthwith be supplied to the transporter, seize such goods or the vehicle along with the goods.
- (c) Such officer seizing the goods or the vehicle along with the goods shall initiate action for imposition of penalty in accordance with the provision of section 45-A and for that purpose,-
  - (i) he shall exercise all the powers exercisable by the check post officer under that section, Subs: by MPCT (Amendment) Act. 2002 w.e.f 13-8-2002 Inserted by MPCT (Amendment) Act 2002 w.e.f. 13-8-2002
  - (ii) he shall follow the procedure laid down therein,
  - (iii) the provisions of that section shall apply mutatis mutandis to such proceedings.] 2[Sec. 45- D Power to check goods in transit
(1) Every transporter transporting goods by road from the State of Madhya Pradesh to any place outside the State or from any place outside the State to any place within the State of Madhya Pradesh, shall carry with him the copy of the declaration referred to in sub-section (5) of section 45-A in respect of the goods notified under sub- section (4) of that section whether the check post or the barrier is established on such road or not.
(2) Every transporter transporting by road any goods in the State of Madhya Pradesh shall carry with him an invoice, bill or challan or any other document, by whatever name called, issued by the consignor of the goods giving such particulars as may be prescribed.
(3) Any officer, not below the rank of a Assistant Commercial Tax Officer, as may be authorised by the Commissioner, may for the purposes of this Act, require the transporter to stop the vehicle at any place and thereupon the transporter shall stop the vehicle and keep it stationary for, as long as may be required by him and allow him and other persons assisting him, to search the vehicle and inspect the goods being carried and all the documents relating to such goods which are in the possession of the transporter with a view to verifying whether the transporter is carrying the declarations/document referred to in sub-sections (1) and (2) and whether all such documents are legible, correct and complete. Such officer shall carry out such search and inspection as expeditiously as possible. The transporter, if so required by that officer, shall also give his name and address and the names and addresses of the owner of the vehicle, if the owner is different from the person in charge of the vehicle and the consignor and consignee of the goods and also their registration certificate numbers if they are registered under this Act.
(4) If the officer referred to in sub-section (3) finds on the inspection of the vehicle that the transporter is not carrying the documents or the documents being carried are not in order or the transporter is not carrying a copy of the declaration he may direct the transporter to take the vehicle along with the goods and the documents to the nearest check post or any Commercial Tax Office to be named by him and stop it and keep it stationary there till such time as may be required for action in accordance with the provisions of Section 45-A.
(5) The officer referred to in sub-section (3), who stops the vehicle and directs it to go

to the nearest check post or the Commercial Tax Office, shall reach such check post or the Commercial Tax Office at the earliest and immediately on reaching there initiate action for seizure of the goods or the vehicle along with the goods and imposition of penalty in accordance with the provision of Section 45-A and for that purpose-

(i) he shall exercise all the powers exercisable by the check post officer under that section; Inserted by MPCT (Amendment) Act 2002 w.e.f. 13-8-2002
(ii) he shall follow the procedure laid down therein;
(iii) the provisions of that section shall apply mutaitis mutandis to such proceedings.] 1[45-E Regulation of delivery and carrying goods away from Railway premises.

(1) Any dealer who seeks to import by rail into the State from any place outside the State any goods specified in Schedule-II or to whom such goods are sought to be sent as aforesaid, shall furnish or cause to be furnished to such office as may be notified by the Commissioner, a declaration in the prescribed form in duplicate duly filled in and signed by him for endorsement of such office. On endorsement of the two copies of the declaration one copy thereof shall be retained by the said office and after taking delivery, the dealer shall carry the goods away from the railway premises along with a

copy of the declaration duly endorsed by the office referred to above.

(2) The provision of Section 45-A shall mutaitis mutandis apply in relation to any vehicle carrying goods referred to in sub-section (1) and to any declaration relating thereto.] Sec. 46 : Delegation of Commissioner’s powers and duties Subject to the provisions of this Act and to such restrictions and conditions as may be prescribed, the Commissioner may, by order in writing, delegate any of his powers and duties under this Act except those under sub-section (2) of Section 74 to any person appointed under Section 3 to assist him :

Provided that power under Section 62 shall not be delegated to an officer below the rank of a Deputy Commissioner of Commercial Tax.

Relevant Rule : 91 ∗ Delegation of Powers by the Commissioner - In exercise of the powers conferred by Section 46 of the MPCT Act, the Commissioner has issued an Office Order No. 370, dated 6.4.95 and 110, dated 23.1.96 delegating various powers and duties to the different officers. The said orders are given hereunder :

(1) Order No. 370, dated 6.4.95 In exercise of the powers conferred by Section 46 of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) and in supersession of this Office Order No. 3/90/25/I-5384 dated the 20th June, 1991, the powers and duties specified in column (3) of the table below are hereby delegated to the officers specified in the corresponding entry in column (4) thereof, subject to the conditions mentioned therein. TABLE S. No. Section/ Rule Description of powers Dem signation of the Officer to who delegated and conditions of delegation
(1) (2) (3) (4) 1.

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