The Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001

Short title, extent and commencement.-

1. (1) This Act may be called the Gujarat Tax on Entry of Specified Goods into Local Areas Act, 2001.
2. (2) It extends to the whole of the State of Gujarat.
3. (3) It shall be deemed to have come into force on the 1st day of September, 2001.

Definitions.- In this Act, unless the context otherwise requires,-

1. (a) "entry of specified goods into a local area", with all its grammatical variations and cognate expressions, means entry of specified goods into a local area from any place outside such local area for consumption, use or sale therein;
2. (b) "importer" means a person who brings or causes to be brought any specified goods into a local area, or to whom any specified goods are despatched from any place outside a local area;
3. (c) "local area" means the area comprised within the limits of a municipal corporation, a municipality, a gram panchayat, a nagar panchayat, an industrial township, a cantonment board or any other local authority constituted or continued under any law for the time being in force;
4. (d) "purchase value" means the value of specified goods as ascertained from the purchase invoice and includes insurance charges, excise duty, countervailing duty, sales tax, transport fee, freight charges and any other charges incurred by the importer till the date of entry of specified goods into a local area: Provided that where purchase invoice is not available or the purchase invoice produced by the importer is proved to be unreasonable or does not represent the true purchase value, the purchase value shall be such value as may be determined by the assessing authority in the manner prescribed;
5. (e) "State" means the State of Gujarat;
6. (f) "tax" means the tax levied and collected under this Act.

Incidence of tax.

1. (1) Subject to the provisions of this Act, there shall be levied and collected a tax on the entry of the specified goods into a local area for consumption, use or sale therein.
2. (2) The tax shall be levied on the purchase value of the specified goods at such rate, not exceeding twenty per centum of the purchase value, as the State Government may, by notification in the Official Gazette, specify and different rates may be specified for different specified goods or different local areas.
3. (3) The tax shall be payable by an importer: Provided that where the specified goods are purchased by an importer through a clearing and forwarding agent, the tax shall be payable by the clearing and forwarding agent in the same manner as if he were the importer of such goods.

Tax not to be levied on entry of specified goods in certain cases. No tax shall be levied under this Act on the entry of specified goods into a local area, if the specified goods are entered into a local area—

1. (a) by a person other than an importer; or
2. (b) by an importer for the purpose of carrying out any manufacturing process; or
3. (c) by an importer for the purpose of sale and such sale is made in such manner as may be prescribed.

Registration.

1. (1) Every dealer liable to pay tax under this Act shall obtain a certificate of registration from such authority, in such manner and within such period as may be prescribed.
2. (2) Every dealer required to obtain a certificate of registration under sub-section
3. (1) shall make an application in the prescribed form to the prescribed authority.
4. (3) If the prescribed authority is satisfied that the application is in order, he shall, in accordance with such rules as may be prescribed, grant a certificate of registration to the applicant.
5. (4) A certificate of registration granted under this section may be amended or cancelled in accordance with the prescribed rules.

Returns.

1. (1) Every dealer registered under this Act shall furnish a return in such form, for such period and to such authority, as may be prescribed.
2. (2) Every such return shall be furnished on or before the prescribed date.
3. (3) If any dealer having furnished a return under sub-section
4. (1) discovers any omission or wrong statement therein, he may furnish a revised return in the prescribed form at any time before the expiry of the period prescribed for furnishing the next return.

Payment of tax

1. (1) The tax shall be paid in the manner as may be prescribed.
2. (2) Every importer liable to pay tax under this Act shall furnish a return in such form, for such period, and by such date as may be prescribed.
3. (3) Every importer shall, before furnishing the return required by sub-section (2), pay the full amount of tax due from him according to such return.
4. (4) If any importer fails to pay the tax in accordance with the provisions of this Act, he shall be liable to pay, in addition to the tax, a simple interest at the rate of two per cent of the tax amount for each month or part thereof from the date specified for its payment till the date of its payment.

Assessment of tax

1. (1) If the prescribed authority is satisfied that the return furnished by an importer in respect of any period is correct and complete, he shall assess the amount of tax due from the importer on the basis of such return.
2. (2) If the prescribed authority has reason to believe that the return furnished by an importer is incorrect or incomplete, he shall serve on such importer a notice requiring him, on the date and at the hour and place specified therein, to attend or to produce or cause to be produced any evidence on which such importer may rely in support of his return.
3. (3) On the day specified in the notice or as soon as may be thereafter, the prescribed authority shall, after hearing such evidence as the importer may produce and such other evidence as the prescribed authority may require on specified points, assess or re-assess the amount of tax due from the importer.
4. (4) If an importer fails to comply with the requirements of the notice issued under sub-section (2), the prescribed authority shall assess or re-assess to the best of his judgment the amount of tax due from him.
5. (5) If the tax calculated on the basis of the assessment or re-assessment made under sub-section
6. (3) or
7. (4) is in excess of the amount of tax already paid by the importer, the prescribed authority shall serve on such importer a notice of demand in the prescribed form for the payment of the difference.

Tax to be paid notwithstanding assessment. — Tax shall be paid in the manner herein provided, and notwithstanding the pendency of any assessment proceedings in any local area, any tax due under this Act shall be paid before the entry of specified goods into a local area.

Imposition of penalty. —

1. (1) If any person—
   • (a) being required under this Act to furnish a return, fails to furnish such return; or
   • (b) being an importer, fails to pay within the time allowed, any tax due under this Act; or
   • (c) fails to comply with any of the provisions of this Act or the rules; the assessing authority may, after giving such person a reasonable opportunity of being heard, direct that such person shall pay, by way of penalty, in addition to the tax and interest, if any, a sum not exceeding one and a half times the amount of tax: Provided that no penalty shall be imposed under this sub-section for the failure referred to in clause
   • (b) in a case where the importer proves to the satisfaction of the assessing authority that the failure was due to circumstances beyond his control.
2. (2) The amount of penalty imposed under sub-section
3. (1) shall be paid by the person concerned in the prescribed manner within thirty days from the date of service of the notice of demand.

Interest on delayed payment of tax.

1. (1) If an importer does not pay the tax within the time prescribed for its payment under this Act, he shall pay, in addition to the amount of tax, interest at the rate of eighteen per cent. per annum on the amount of tax not so paid or any less amount thereof, for the period of delay: Provided that the State Government may, by notification in the official Gazette, reduce the rate of interest for such class of importers or such specified goods as may be specified in the notification.
2. (2) Where the amount of tax is increased in consequence of any order passed under or in pursuance of this Act, interest shall be payable on the amount by which the tax is so increased.

Assessment of escaped tax.

1. (1) If the assessing authority has reason to believe that the whole or any part of the tax in respect of any specified goods has escaped assessment or has been under-assessed, or has been assessed at a rate lower than the rate at which it is assessable, or any deduction has been wrongly made therefrom, then the assessing authority may, at any time within five years from the end of the year in which the tax due was to be paid, serve on the importer a notice containing all or any of the requirements which may be included in a notice under section 9 and may proceed to assess or re-assess the amount of tax, and the provisions of this Act shall, so far as may be, apply to such assessment or re-assessment as if it were an assessment made under section 9.
2. (2) The tax shall be assessed or re-assessed after giving the importer a reasonable opportunity of being heard.

Collection of tax by local body.—

1. (1) Notwithstanding anything contained in this Act, the State Government may, by notification in the Official Gazette, direct that the tax levied under this Act shall be collected by a local body within its local area.
2. (2) Where a direction is issued under sub-section (1), the local body shall collect the tax and shall, after deducting such collection charges as may be prescribed, remit the balance to the State Government.

Tax to be first charge on property.— Notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax, penalty, interest or any other sum payable by a dealer or any other person under this Act shall be the first charge on the property of the dealer or such person.

Recovery of tax.

1. (1) The amount of tax due under the provisions of this Act shall be paid in such manner and within such time as may be prescribed.
2. (2) In default of the payment of any tax due under this Act, the amount of tax due shall be recoverable as an arrear of land revenue.

Special mode of recovery.

1. (1) Notwithstanding anything contained in any law or contract to the contrary, the assessing authority may, at any time or from time to time, by notice in writing, a copy of which shall be forwarded to the importer at his last address known to the assessing authority, require
   • (a) any person from whom any amount of money is due, or may become due, to the importer, or
   • (b) any person who holds or may subsequently hold money for or on account of the importer, to pay to the assessing authority, either forthwith upon the money becoming due or at or within the time specified in the notice (not being before the money becomes due or is held as aforesaid), so much of the money as is sufficient to pay the amount due by the importer in respect of the arrears of tax under this Act, or the whole of the money when equal to or less than that amount.
2. (2) The assessing authority 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. (3) Any person making any payment in compliance with a notice under this section shall be deemed to have made the payment under the authority of the importer and the receipt of the assessing authority shall constitute a good and sufficient discharge of the liability of such person to the importer to the extent of the amount referred to in the receipt.
4. (4) Any person discharging any liability to the importer after receipt of the notice referred to in this section shall be personally liable to the assessing authority to the extent of the liability discharged or to the extent of the liability of the importer for tax and penalty, whichever is less.
5. (5) Where a person to whom a notice under this section is sent, objects to it by a statement on oath that the sum demanded or any part thereof is not due to the importer or that he does not hold any money for or on account of the importer, then, nothing contained in this section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the assessing authority to the extent of his own liability to the importer on the date of the notice, or to the extent of the importer's liability for tax and penalty, whichever is less.
6. (6) Any amount of money which a person is required to pay to the assessing authority, or for which he is personally liable to the assessing authority under this section shall, if it remains unpaid, be recoverable as an arrear of land revenue.
7. (7) For the purposes of this section, the amount of money due to an importer for or on account of the importer by any person includes money due to the importer, or held for or on account of the importer, by the Government of India or the Government of any State or any local authority.

Refund of tax-

1. (1) The assessing officer shall, in the manner prescribed, refund to an importer the amount of tax, penalty or interest paid by him in excess of the amount due from him under this Act, either by a refund order or by adjustment of the amount so paid against the amount due from him in respect of any other period: Provided that the assessing officer shall first apply such excess towards the recovery of any amount due in respect of which a notice of demand has been issued.
2. (2) Where any refund is due to an importer according to a return furnished by him or is required to be granted under an order on appeal or revision, the assessing officer may, in lieu of payment of the refund, adjust the amount to be refunded against the amount, if any, due from the importer in respect of any period.

Accounts and documents-

1. (1) Every importer, who is liable to pay tax under this Act, shall maintain a true and correct account of the purchase value of the specified goods, the tax paid thereon and such other particulars in respect of his business as may be prescribed.
2. (2) Every such importer shall keep at his place of business all accounts, registers and documents relating to the purchase of specified goods.
3. (3) If the assessing officer considers that the accounts maintained by an importer are not sufficiently clear and intelligible to enable him to make a proper assessment of the tax due under this Act, he may require such importer to maintain such accounts, including the records of sale and purchase of other goods, in such form and in such manner as he may direct by notice in writing.

Power to order production of accounts and powers of entry and inspection.

1. (1) Any officer authorized by the State Government in this behalf may, for the purposes of this Act, require any importer or any other person in charge of his business to produce before him the accounts, registers, vouchers and other documents related to the entry of specified goods into a local area and the consumption, use or sale thereof and to furnish such other information as may be necessary.
2. (2) All accounts, registers, vouchers and other documents relating to the entry of specified goods into a local area and the consumption, use or sale thereof, and the specified goods in the possession, custody or control of any importer or any other person in charge of his business, shall at all reasonable times be open to inspection by such officer as may be authorized by the State Government in this behalf.
3. (3) If such officer has reason to suspect that any importer is attempting to evade payment of any tax under this Act, he may, for reasons to be recorded in writing, seize such accounts, registers, vouchers and other documents as may be necessary and shall grant a receipt for the same and shall retain the same for so long as may be necessary.
4. (4) Any such officer may, for the purposes of this Act, enter and search any place of business or any other place where such officer has reason to believe that the specified goods or the accounts, registers, vouchers or other documents relating thereto are kept.

Power to call for information. The State Government or any officer authorized in this behalf may require any person or any bank, post office, or any other institution to furnish any information in relation to the entry of specified goods into a local area and the consumption, use or sale thereof as it or he may deem necessary.

Appeal.

1. (1) Any person aggrieved by an order passed under this Act may, within sixty days from the date of the receipt of the order, appeal to the prescribed authority: Provided that the appellate authority may admit an appeal after the expiration of the said period if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the said period.
2. (2) No appeal shall be entertained by the prescribed authority unless it is accompanied by satisfactory proof of the payment of the tax in respect of which the appeal has been preferred: Provided that the appellate authority may, if it thinks fit, for reasons to be recorded in writing, entertain an appeal against such order without payment of the whole of the amount of tax or upon furnishing of such security for such amount as it may direct.
3. (3) The appellate authority may, after giving the appellant a reasonable opportunity of being heard, -
   • (a) confirm, reduce, enhance or annul the assessment or the penalty imposed;
   • (b) set aside the assessment or penalty and direct the assessing authority to pass a fresh order after such further inquiry as may be directed; or
   • (c) pass such other order as it may think fit.
4. (4) Every order passed in appeal under this section shall, subject to the provisions of sections 22 and 23, be final.

Revision.

1. (1) The State Government or such officer not below the rank of Deputy Commissioner, as may be authorised by it in this behalf, may, either of its or his own motion or upon an application made in this behalf, call for and examine the record of any order passed or proceedings recorded by any officer subordinate to it or him under this Act, for the purpose of satisfying itself or himself as to the legality or propriety of such order or as to the regularity of such proceedings and may pass such order in reference thereto as it or he thinks fit: Provided that no application for revision of an order shall be entertained if it is not made within ninety days from the date of the communication of the order: Provided further that the State Government or the authorised officer may admit an application for revision after the expiration of the said period of ninety days if it or he is satisfied that the applicant had sufficient cause for not making the application within the said period.
2. (2) No order shall be passed under this section which adversely affects any person unless such person has been given a reasonable opportunity of being heard.
3. (3) No proceedings for revision shall be initiated under this section after the expiry of three years from the date of the order sought to be revised.

Court fee

1. (1) Any memorandum of appeal to the Appellate Tribunal shall be accompanied by a fee of two hundred rupees.
2. (2) Any application for revision to the Tribunal or any other application to the Tribunal, any application for revision to the Commissioner or any other application to the Commissioner shall be accompanied by a fee of fifty rupees.

Offences and penalties

1. (1) Whoever—
   • (a) willfully submits an untrue return or fails to submit a return as required by the provisions of this Act or the rules made thereunder; or
   • (b) being a person engaged in business as an importer or a person liable to pay tax under this Act, fails to keep true and complete accounts; or
   • (c) willfully acts in contravention of any of the provisions of this Act or the rules made thereunder for the contravention of which no express provision for punishment is made, shall, on conviction, be punished with simple imprisonment for a term which may extend to six months or with fine which may extend to two thousand rupees or with both.
2. (2) Whoever willfully evades or attempts to evade the payment of any tax leviable under this Act or willfully conceals his liability to such tax, shall, on conviction, be punished with imprisonment for a term which may extend to three years or with fine which may extend to five thousand rupees or with both.
3. (3) Whoever aids or abets any person in the commission of any act specified in sub-section
4. (1) or
5. (2) shall, on conviction, be punished with imprisonment for a term which may extend to six months or with fine which may extend to two thousand rupees or with both.
6. (4) No court shall take cognizance of any offence punishable under this Act except with the previous sanction of the Commissioner and no court inferior to that of a Metropolitan Magistrate or a Magistrate of the First Class shall try any such offence.

Cognizance of offences.—

1. (1) No court shall take cognizance of any offence punishable under this Act or any rules made thereunder except with the previous sanction of the Commissioner or any officer authorised by him in this behalf.
2. (2) No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class shall try any offence punishable under this Act.

Compounding of offences.—(1) The State Government or any person authorised by it in this behalf may, either before or after the institution of proceedings for any offence punishable under section 25, permit any person charged with the offence to compound the offence on payment of such sum not exceeding double the amount of tax which would have been payable if the offence had not been committed as the State Government or the authorised person may determine.

1. (2) On payment of such sum as may be determined by the State Government or the authorised person under sub-section (1), no further proceedings shall be taken against the person in respect of the same offence.

Power to make rules.

1. (1) The State Government may, by notification in the Official Gazette, make rules for carrying out the purposes of this Act.
2. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
   • (a) the form of the application for registration and the fee for registration under sub-section
3. (2) of section 7;
   • (b) the manner in which and the time within which the tax shall be paid under sub-section
4. (2) of section 9;
   • (c) the form of the return to be furnished and the manner of its verification under sub-section
5. (1) of section 10;
   • (d) the form and the manner of payment of interest;
   • (e) the form of notice of demand under section 13;
   • (f) any other matter which is to be, or may be, prescribed.
6. (3) All rules made under this section shall be laid for not less than thirty days before the State Legislature as soon as possible after they are made and shall be subject to rescission by the State Legislature or to such modification as the State Legislature may make during the session in which they are so laid or the session immediately following.
7. (4) Any rescission or modification so made by the State Legislature shall be published in the Official Gazette and shall thereupon take effect.

Power to remove difficulties.

1. (1) If any difficulty arises in giving effect to the provisions of this Act, the State Government may, by general or special order published in the Official Gazette, do anything not inconsistent with the provisions of this Act, which appears to it to be necessary or expedient for the purpose of removing the difficulty: Provided that no such order shall be made after the expiry of a period of two years from the date of commencement of this Act.
2. (2) Every order made under this section shall be laid, as soon as may be, after it is made, before the State Legislature.

Power to exempt.

1. (1) The State Government may, by notification in the Official Gazette, exempt the entry of specified goods into a local area from the payment of tax for such period and subject to such terms and conditions as may be specified in the notification.
2. (2) The State Government may, by like notification, cancel any such exemption or vary the rate of tax or the terms and conditions and such notification may be issued so as to have retrospective effect.

Repeal and saving.

1. (1) The Gujarat Tax on Entry of Specified Goods into Local Areas Ordinance, 2001 (Guj. Ord. 4 of 2001) is hereby repealed.
2. (2) Notwithstanding such repeal, anything done or any action taken (including any notification issued, registration granted, tax levied or collected) under the said Ordinance shall be deemed to have been done or taken under this Act.

Schedule ("List of Specified Goods") 1. High speed diesel. 2. Motor spirit (petrol). 3. Aviation turbine fuel. 4. Crude oil. 5. Natural gas. 6. Coal. 7. Sugar. 8. Textiles. 9. Tobacco and tobacco products.