Chapter V RETURNS, PAYMENT OF TAX, ASSESSMENT, RECOVERY OF TAX AND REFUND

Periodical payment of tax and interest on non-payment of tax Periodical payment of tax and interest on non-payment of tax.—(1) Tax in respect of any tax period shall be paid in such manner and within such time as may be prescribed.

1. (2) If any dealer fails to pay the tax within the time prescribed under sub-section (1), he shall be liable to pay, in addition to the tax, interest at such rate not exceeding one and a half per cent of the amount of tax for each month or part thereof, for the period by which the payment of the tax or any part thereof is delayed, as may be prescribed.

Provisional refund Provisional refund. —

1. (1) Where a registered dealer has made a sale in the course of export of goods out of the territory of India and the tax credit is claimed under sub-section
2. (1) of section 11 in respect of the goods exported, then the Commissioner may, after being satisfied with the prima facie evidence of export, grant a provisional refund of the tax credit claimed.
3. (2) The provisional refund granted under sub-section
4. (1) shall be adjusted against the refund, if any, due to the dealer at the time of final assessment.

Interest on refund.—

1. (1) A registered dealer shall be entitled to receive simple interest at the rate of six per cent. per annum on the amount of refund, for the period commencing from the date immediately following the date of expiry of ninety days from the date of receipt of the application for refund in the prescribed form complete in all respects or from the date of the order and ending with the date on which the refund is granted: Provided that, the interest shall be paid on the amount of refund, less the amount of penalty, if any, payable by the dealer.
2. (2) Where by reason of any order passed in appeal or other proceedings under this Act, the refund to which the dealer is entitled is increased or decreased, as the case may be, the interest payable shall be proportionately increased or decreased.

Power to withhold refund in certain cases.—

1. (1) Where an order giving rise to a refund is the subject matter of an appeal or other proceedings under this Act or where any other proceeding under this Act is pending, and the Commissioner is of the opinion that the grant of the refund is likely to adversely affect the revenue, the Commissioner may, after giving the dealer an opportunity of being heard, withhold the refund till such time as he may determine.
2. (2) Where a refund is withheld under sub-section (1), the dealer shall be entitled to interest as provided in section 38, if as a result of the appeal or proceeding, he becomes entitled to the refund.

Refund of tax for certain categories.—

1. (1) Subject to the provisions of this Act, the State Government may, by notification in the Official Gazette, provide for the refund of tax paid by such categories of dealers or persons as may be specified in the notification.
2. (2) The refund under sub-section
3. (1) shall be subject to such conditions, restrictions and in such manner as may be prescribed.

Remission of tax, penalty or interest.— The State Government may, in such circumstances and subject to such conditions as may be prescribed, remit the whole or any part of the tax, penalty or interest payable by any dealer or class of dealers.

Payment and recovery of tax and interest on delayed payment.—

1. (1) The amount of tax due under this Act shall be paid in the manner as may be prescribed.
2. (2) If a dealer fails to pay the amount of tax within the time prescribed for its payment, he shall be liable to pay, in addition to the tax, interest at the rate of one per cent. per month on the amount of tax so remaining unpaid, for the period of default.
3. (3) The interest payable under sub-section
4. (2) shall be calculated from the due date of payment of tax.
5. (4) Any tax, interest or penalty due under this Act which remains unpaid shall be recoverable as arrears of land revenue.

Continuation of certain recovery proceedings.—

1. (1) Where a notice of demand in respect of any tax, penalty or interest is served upon a dealer and any appeal or other proceeding is filed or initiated in respect thereof, then,—
   • (a) where such appeal or proceeding results in the enhancement of the amount of tax, penalty or interest, the Commissioner shall serve upon the dealer another notice of demand in respect of the amount by which such tax, penalty or interest is enhanced, and any recovery proceedings in relation to the amount covered by the notice or notices of demand served upon him before the disposal of such appeal or proceeding may be continued from the stage at which such proceedings stood immediately before such disposal;
   • (b) where such appeal or proceeding results in the reduction of such amount, it shall not be necessary for the Commissioner to serve upon the dealer a fresh notice of demand and the amount of tax, penalty or interest reduced shall be deemed to be the amount due from the dealer.
2. (2) No proceedings in relation to such amount as is referred to in sub-section
3. (1) shall be invalid by reason only that no fresh notice of demand was served after the disposal of the appeal or proceeding, as the case may be.

Special mode of recovery.—(1) The Commissioner may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the Commissioner), require—

1. (a) any person from whom any amount of money is due, or may become due, to the dealer, or
2. (b) any person who holds or may subsequently hold money for or on account of the dealer, to pay to the Commissioner, 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 dealer in respect of arrears of tax, interest and penalty or the whole of the money when it is equal to or less than that amount.

1. (2) The Commissioner 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.
2. (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 dealer and the receipt of the Commissioner shall constitute a good and sufficient discharge of the liability of such person to the dealer to the extent of the amount referred to in the receipt.
3. (4) Any payment made by any person under this section to the Commissioner shall be deemed to have been made on behalf of the dealer and the amount so paid shall be credited to the amount of tax, interest, or penalty due by the dealer.
4. (5) Any person discharging any liability to the dealer after receipt of the notice referred to in this section shall be personally liable to the Commissioner to the extent of the liability discharged or to the extent of the liability of the dealer for tax, interest and penalty, whichever is less.
5. (6) 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 dealer or that he does not hold any money for or on account of the dealer, 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 Commissioner to the extent of his own liability to the dealer on the date of the notice, or to the extent of the dealer’s liability for tax, interest and penalty, whichever is less.
6. (7) The Commissioner may apply to the court in whose custody there is money belonging to the dealer for payment to him of the entire amount of such money, or if it is more than the tax, interest and penalty due, an amount sufficient to discharge such tax, interest and penalty.