Chapter IV Chapter IV

I ~IsIRATIoN AN0 SECURITY I

18. (I) Every dealer shall apply for grant of certificate of registration under this

Compulsory Regulation if- and voluntary regishation.

1. (a) the turnover of the dealer in the year immediately preceding the commencement ofthis Regulation exceeded the taxable quantum; or
2. (b) the Nmover of the dealer in the year during which this Regulation comes into force or any year thereafter, exceeds the taxable quantum; or
3. (c) the dealer is liable to pay tax, or is registered or required to be registered

shall not be required to obtain certificate of regishation under this Regulation.

1. (2) For the purposes of this Regulation, "taxable quantum" of a dealer shall be five lakh rupees, or such other amount as may be specified, by the Government, by notification: Provided that in the case of a dealer who imports for sale any goods into the Daman and Diu, the taxable quantum shall be "Nil" or such other amount as may be specified, by. notification, by the Govemn~ent.
2. (3) For the purposes of this section, in case of dealers involved in execution of works contracts, the taxablequantum shall be calculated with reference to thetotal contract amount received.
3. (4) The taxable quantum of a dealer shall not include turnover from-
   • (a) the sales of capital assets;
   • (b) the sales made in the course of winding up business of the dealer.
4. (5) Any person, who is not required by sub-section (I) to be registered, but who is a dealer; or intends from a particular date to undertake the business which would make him a dealer, may apply for grant of certificate of registration. 19.
5. (1) An application for grant of certificate of registration shall, be made in the Registration prescribed form, within such time, and containing such particulars and information and be accompanied by such fee, security and other documents as may be prescribed.
6. (2) The Administrator may, by order to be published in the Official Gazette, specify certain classes of persons who may not be required to furnish a security.
   • (a) an applicant furnishes, in the prescribed manner, the security for the amount as may be prescribed; and
   • (b) all requirements and provisions of this Regulation for grant of certificate of registration have been complied with, such applicant shall be granted a certificate ofregistration under this Regulation.
7. (4) Where the certificate of registration has not been granted to the applicant within fifteen days from the date on which the application is made, the Commissioner shall, after making such inquiries as he deems fit, either-
   • (a) grant certificate of registration forthwith to the applicant; or
   • (b) issue a notice to the applicant, clearly stating the grounds on which his. application is proposed to he rejected

a~~d allowing him to show cause in writing,

within further fifteen days, why his application should not be rejected:

SERIES - I No. : 05 DATED larn AUGUST, 2005. .- .~. . .- . . , . .. . . Providedthatwhere the certificateofregistration has not been granted to the applicant

or such applicant has not been issued

a notice by the required date, the applicant shall be deemed to be registered for the purposes of this Regulation, and the Commissioner shall grant a certificate of registration to such applicant.

1. (5) Where the applicant submits a reply to the notice, under clause (b) of sub-section (4, the Commissioner may, either accept the application and grant a certificate of regisnation to the applicant, or reject the application for reasons to be recorded in writing.
2. (6) If the applicant fails to submit any reply to the notice issued under clause (b) of sub-section
3. (4) within the stipulated time, the application for grant ofcertificate of registration shall stand rejected.
4. (7) Where a registered dealer has furnished a security as a condition for grant of certificate ofregistration, such security shall benecessary for the continuance in effect ofthe certificate of registration, unless otherwise provided by the commissioner. ~ffoct of 20. (1) If acertificate of registration is granted at any time after the commencement of registration. this Regulation and- (a)thedealer holdstradhg stock forthe purpose ofsale, or for useas rawmaterials . for the production of trading stock;
   • (b) the dealer has paid input tax on the purchase of the trading stock or raw . materials;
   • (c) the dealer furnishes a statement of its trading stock and raw materials in the prescribed form to the Commissioner; and (df the dealer possesses sufficient proof of the amount of input tax in respect of the purchases, such dealer shall be entitled to a tax credit for the trading stoct or raw materials held by the dealer on the date on which the certificate ofregistration come into force:

entitled, in a single claim which accompanies the first return furnished by the dealer under this Regulation.

1. (2) For the purposes ofsub-section (I), the amount of the tax credit shall be the least of the following, namely:-
   • (a) theamount ofinput tax disclosed in the proofreferred to in clause (4 ofsub- section (I); or
   • (b) the &fraction of the cost ofthe goods; or (c)thelax fraction ofthe fair market value ofthe goodsat the time of registration; or (9 the amount spmified under sub-section (3) ofsection 9.
2. (3) Where the registered dealer specifies in his books ofa&ount the turnover on the basis of amo~nts received and hountspaid, he shall exclude from his turnover-
   • (a) any amount received after he has been granted a certificate of registration in respect of sales made and such amount relates to ihe oeriod during which he had not been granted a certificate of registration under this ~~gulation; an2 @)any amount paid after he is registered in respect of purchases made and such amount relates to the period during which he had not been granted a certificate of registration under this Regulation. SERIES - I No. : 05 DATED laTH AUGUST, 2005,

21. (1) A registered dealer shall inform, the Commissioner in the prescribed manner,

within one month, if he-

1. (a) sells or otherwise disposes of his business or any part of his business or any place ofbusiness, or effects, or comes to know of, any other change in the ownership of the business; or
2. (b) discontinues his business or changes his place of business or warehouse, or 'opens a new place of business, or closes the business for a period of mrre than one month; or
3. (c) changes the name, style, constitution or nature of his business; or . (4 enters into partnership or other association in regard to his business or adds, deletes or changes the particulars of the persons having interest in his business.

1. (2) If any such registered dealer dies, his legal representative shall, in like manner specified under sub-section (I), inform the Commissioner.
2. (3) The Commissioner may, after considering any information furnished under this Regulation or otherwise received and after making such inquiry as he may deem fit, amend from time to time any certificate of registration granted under this Regulation.
3. (4) An amendment to certificate of registration made under sub-section (3) shall take

(I).

1. (5) Any amendment to a certificate of registration under this section shall be without prejudice to any liability for tax or interest or penalty imposable or for any prosecution for an offence under this Regulation.
2. (6) For the removal of doubts, it is hereby declared that where a registered dealer-
   • (a) effects a change to the nature ofthe goods ordinarily sold; or
   • (b) is a fm and there is achange in lheconstitutionofthe ti rm withoutdissolution thereof; or
   • (c) is a trustee of a trust and there is a change in tlie trustees thereof; or

family as partners thereof; or

1. (e) is a firm or acompany or a trust or other organisation, and achange occurs in tlie management of the organisation,

informati011 being furnished the certificate of registration shall be amended. 22. (1) Where--

1. (a) a registered dealer, who is required to furnish security under the provisions of this Regulation, has failed to furnish or maintain such security; or
2. (b) a registered dealer has ceased to carry on any activity or business which would entitle him to he registered as a dealer under this Regulation; or
3. (c) an incorporated body has been wound up or otherwise ceases to exist; or (4 the owner of a proprietorship business dies leaving no successor to carry on the business; or
4. (e) in the case of a firm or association ofpersons, it is dissolved; or Amendment of registration. Cancellatian of catiticate of regirtralion SERIES - I No. : 05 DATED lgTH AUGUST, 2005. ~ ~. .~ ~ ~ ~ V) registered dealer has ked to be liable to pay tax under this Regulation; or
5. (g) a registered dealer knowingly furnishes a return which is misleading or deceptive in a material particular; or
6. (h) a registered dealer has committed one or more offences or contravened the provisions of this Regulation; or
   • (i) the Commissioner, after conducting proper inquiries, is ofthe view that it is necessary to do so, the Commissionet may, after service of a notice in the prescribed fonn and after giving the dealer an

opportunity ofheing t1eard;cancel the^ certificate of registration of the dealer with

effect from the date, as may be, specified by him in the notice.

1. (2) Where-
   • (a) a registered dealer has ceased to carry on any activity which would entitle him to be registered as a dealer under this Regulation; or
   • (b) an incorporated body has been wound up or otherwise ceases to exist; or
   • (c) the owner of a proprietorship business dies leaving no successor to carry on business; or
   • (d) in the case of a firm or association of persons, it is dissolved; or
   • (e) a registered dealer has ceased to be liable to pay tax under this Regulation, the.registered dealer or the dealer's'legal representative in case of clause (c) above, shall make an application for cancellation of his certificate of registration to the Commissioner in

the manner and within the time as may be prescribed.

.&planallon,'-For the purpose of this sub-section, "legal representative" has the same meaning as assigned to it in clause (11) of section 2 of the Code of Civil Procedure, 1908. 5 of 1908.

1. (3) On receipt of such application, if the Commissioner is satisfied that the dealer has ceased to be entitled to be registered, he may cancel the certificate of registration.
2. (4) If a registered dealer ceases to be registered, the Commissioner shall cancel the oaiificate of registration of the dealer..
3. (5) lfcertifieateofregis&tion ofadealer, which has been cancelled under this section, has been restored

as a result of an appeal or other proceeding under this Regulation, the

certificate of registration of such dealer shall be restored and he sl~all be liable to pay tax as if his registrationhad never been cancelled.

. .

1. (6) If any registered aealer, whose certificate of registration has been restored under sub-section (J), satisfies the Commissioner that an excess tax has been paid by him during

adjusted or refvnded in such manner, as may be prescribed.

1. (7) Evejregistered dealer, who applies for cancellation of his oertificateofr~gistration,

shall surrender with his application the certificate of registration granted to him and every.

registered dealer whose certificate of registration is cancelled otherwise than dn the basis of his application shall surrender the certificate of registration within seven days of the date of communication to him of the cancellation.

1. (8) The Commissioner shall, at intervals not exceeding three months, publish in the Ofticial Gazette, such particulars as maybe prescribed, of registered dealers whose certificate of registration has been cancelled.
2. (9) The cancellation of certificate of regisbation shall not affect the liability of any person to pay tax due for any period and unpaid as on the date of such cancellation or which

is assessed thereafter notwithstanding that he is not otherwise liable to pay tax under this

Regulation.

SERIES - I No. : 05

1. (1) Every person, whose certificate of registration has been cancelled, shall pay in respect of all goods held on the date of cancellation an aniount equal to the amount of-
   • (a) the &. which would be payable in respect of those goods if the goods were sold at their fair market value on that date;.or
   • (b) the tax credit previously claimed in respect of those goods, whichever is higher.
2. (2) Where the dealer has specified in his books of account the turnover on ihe basis of amounts received

qd amounts paid, he shall include in the furnover of his last return-

1. (a) any amount not yet received in respect of sales made while he was registered as a dealer under this Regulation; and
2. (b) any amount not yet paid in respect ofpurchasesmade while he was registered as a dealer under this Regulation. 24. (1) Every dealer- 4 of 1964.
3. (a) who has been registered under the Daman and Diu Sales Tax Act, 1964, on or before the commencenlent of this Regulation; and
4. (b) whose turnover, in the year preceding the year in which this Regulation comes into force, exceeds the taxable quantum, shall bedeemed to be registered under this Regulation fiomthe date on which thisXegulation comes into force.

1. (2) The security furnishedby a dealer registered under the Daman and Diu Sales Tax 4 of 1964. Act, 1964,and such security being valid on thedate ofthe commencement ofthis Regulation, shall be deemed to have been furnished under this Regulation and shall be valid under this Regulation for a period of six months from the commencement of this Regulation or till a fresh security as required under sub-section (3) is furnished, whichever is later.
2. (3) Every dealer referred to in sub-section (I) shall, within a period of six months of the commencement of this

Regulation,~be required to furnish a fresh security under this

Regulation: Provided that the Commissioner may, having regard to the financial position of the dealer and any ,other matter which the Commissioner considers relevant, by notification, exempt a class or classes ofdealers from the requirement offurnishing a fresh security under this sub-section. 25. (I) The Commissioner may, for the purpose of -

1. (a) gianting a certificate of regish.ation to a person as a dealer; or
2. (b) making a refund under section 38, require such person to furnish security, forthe proper discharge of obligations by him under 74 of 1956. this Regulation or under the Central Sales Tax Act, 1956, for such amount equivalent to the

amount which may be prescribed and in the manner and within such time, as may be

1. (2) Notwithstanding anything contained in sub-section (I), the Commissioner may increase, reduce or waive the prescribed amount of the security, having regard t-
   • (a) the nature and size of the business activities of the person;
   • (b) the amount of any tax, interest or penalty for which the person may be, or is likely to become, liable at any time under this Regulation;
   • (c) the creditworthiness of the person; Effectof cancellation of certificate of registration. Registration during transition. Rcquirement of furnishing security. ' SERIES - I No. : 05 DATED 18"' AUGUST. 2005. (4 the nature of the security; and Furnishing of periodical returns. Furnishing of other returns. Furnishing of revised return for re~tilication of mistake. Signing returns.
   • (e) any other matter which the Commissioner considers relevant.
2. (3) Where the security or additional security furnished by a person is in the form of a surety bond and the surety dies or becomes insolvent, the person shall, within one month of the occurrenceof such event, inform the death or insolvency ofsuch surety tothe Commissioner and execute a fresh surety bond within three months of such occurrence.
3. (4) Where the surety bond has been executed in favour of a person by another registered dealer and the certificate of registration of such dealer has been either cancelled or he has closed down his business, the person shall furnish a fresh surety as may he prescribed and in the manner as stated in sub-section (3).
4. (5) The Commissioner may, for good and sufficient cause, order the forfeiture of the whole or any part of the security furnished by a person.
5. (6) Where the security furnished by any person is forfeited in whole or is rendered insufficient, he shall furnish a fresh security of the requisite amount or, as the case may he,

shall make up the deficiency in such manner and within such period as may be specified.

CHAPTER V

4 of 1964.

1. (a) who has been registered under the Daman and Diu Sales Tax Act, 1964, on or before the commencenlent of this Regulation; and
2. (b) whose turnover, in the year preceding the year in which this Regulation comes into force, exceeds the taxable quantum, shall bedeemed to be registered under this Regulation fiomthe date on which thisXegulation comes into force.

1. (2) The security furnishedby a dealer registered under the Daman and Diu Sales Tax 4 of 1964. Act, 1964,and such security being valid on thedate ofthe commencement ofthis Regulation, shall be deemed to have been furnished under this Regulation and shall be valid under this Regulation for a period of six months from the commencement of this Regulation or till a fresh security as required under sub-section (3) is furnished, whichever is later.
2. (3) Every dealer referred to in sub-section (I) shall, within a period of six months of the commencement of this

Regulation,~be required to furnish a fresh security under this

Regulation: Provided that the Commissioner may, having regard to the financial position of the dealer and any ,other matter which the Commissioner considers relevant, by notification, exempt a class or classes ofdealers from the requirement offurnishing a fresh security under this sub-section.

1. (a) gianting a certificate of regish.ation to a person as a dealer; or
2. (b) making a refund under section 38, require such person to furnish security, forthe proper discharge of obligations by him under 74 of 1956. this Regulation or under the Central Sales Tax Act, 1956, for such amount equivalent to the

amount which may be prescribed and in the manner and within such time, as may be

1. (2) Notwithstanding anything contained in sub-section (I), the Commissioner may increase, reduce or waive the prescribed amount of the security, having regard t-
   • (a) the nature and size of the business activities of the person;
   • (b) the amount of any tax, interest or penalty for which the person may be, or is likely to become, liable at any time under this Regulation;
   • (c) the creditworthiness of the person; Effectof cancellation of certificate of registration. Registration during transition. Rcquirement of furnishing security. ' SERIES - I No. : 05 DATED 18"' AUGUST. 2005. (4 the nature of the security; and Furnishing of periodical returns. Furnishing of other returns. Furnishing of revised return for re~tilication of mistake. Signing returns.
   • (e) any other matter which the Commissioner considers relevant.
2. (3) Where the security or additional security furnished by a person is in the form of a surety bond and the surety dies or becomes insolvent, the person shall, within one month of the occurrenceof such event, inform the death or insolvency ofsuch surety tothe Commissioner and execute a fresh surety bond within three months of such occurrence.
3. (4) Where the surety bond has been executed in favour of a person by another registered dealer and the certificate of registration of such dealer has been either cancelled or he has closed down his business, the person shall furnish a fresh surety as may he prescribed and in the manner as stated in sub-section (3).
4. (5) The Commissioner may, for good and sufficient cause, order the forfeiture of the whole or any part of the security furnished by a person.
5. (6) Where the security furnished by any person is forfeited in whole or is rendered insufficient, he shall furnish a fresh security of the requisite amount or, as the case may he,

shall make up the deficiency in such manner and within such period as may be specified.

CHAPTER V

dates as may be prescribed.

any person (including an agent or trustee of such person), whether a registered dealer or not,

returns shall be furnished within such time and in such form as may he prescribed. 28. (I) If, yithin four years of the making of an assessment, any person discovers any mistake or error in any return furnished by him under this Regulation, and he has, as a result ofthe mistake, or error, paid less tax thanwas due under this Regulation, he shall, within one month after the discovery, furnish arevised return and pay the tax owed and interest thereon.

1. (2) If, within four years of the making of an assessment, any person discovers any mistake or error in any return furnished by him under this Regulation, and he has, as a result

of the mistake or error, paid more

tax than was due under this Regulation, he may file an

appeal against the assessment in the manner and subject to the conditions stipulated in

section 74. 29. (1) Every return under this Chapter shall be signed and verifidd-

1. (a) in thecase ofan individual, by the individual himself, and where the individual is absent 6om India, either by the individual or by some personduly authorised by him in this behalfand where the individual is mentally incapacitated from attending to his affairs, by his guardian or,by any other person competent to act on his behalf;
2. (b) in the case of a Hindu undivided family, by a Karta and where the Karta is

absent from India or is mentally incapacitated from attending to his affairs, by any

other adult member of such family;

1. (c) in the case of a company or local authority, by the principal officer thereof;
2. (d) in the case of a firm, by any partner thereof, not being a minor;
3. (e) in the case of any

other association, by any member of the association or

persons; V) in thecase of a trust, by the trustee or any trustee; and

SERIES - I No. : 05 DATED 1sTH AUGUST, 2005.

1. (g) in the case of any other person, by some person competent to act on his behalf. (2) For the purposes of this section ,-
2. (a) the expression "principal officer" shall have the meaning assigned to it under clause (351of section 2 of the Income-tax Act, 1961;
3. (b) any rehrrn signed by a person, who is not authorised under this section, to sign and verify the return, shall be treated as if no return has been furnished.

mistake or error in any return furnished by him under this Regulation, and he has, as a result ofthe mistake, or error, paid less tax thanwas due under this Regulation, he shall, within one month after the discovery, furnish arevised return and pay the tax owed and interest thereon.

1. (2) If, within four years of the making of an assessment, any person discovers any mistake or error in any return furnished by him under this Regulation, and he has, as a result

of the mistake or error, paid more

tax than was due under this Regulation, he may file an

appeal against the assessment in the manner and subject to the conditions stipulated in

section

1. (a) in thecase ofan individual, by the individual himself, and where the individual is absent 6om India, either by the individual or by some personduly authorised by him in this behalfand where the individual is mentally incapacitated from attending to his affairs, by his guardian or,by any other person competent to act on his behalf;
2. (b) in the case of a Hindu undivided family, by a Karta and where the Karta is

absent from India or is mentally incapacitated from attending to his affairs, by any

other adult member of such family;

1. (c) in the case of a company or local authority, by the principal officer thereof;
2. (d) in the case of a firm, by any partner thereof, not being a minor;
3. (e) in the case of any

other association, by any member of the association or

persons; V) in thecase of a trust, by the trustee or any trustee; and -24- SERIES - I No. : 05 DATED 1sTH AUGUST, 2005.

1. (g) in the case of any other person, by some person competent to act on his behalf. (2) For the purposes of this section ,-
2. (a) the expression "principal officer" shall have the meaning assigned to it under clause (351of section 2 of the Income-tax Act, 1961;
3. (b) any rehrrn signed by a person, who is not authorised under this section, to sign and verify the return, shall be treated as if no return has been furnished.