Power to purchase in case of undervaluation of goods

¹ Inserted by Act 7 of 1997 w.e.f. 1.4.1997.

to evade tax.- (1) Where in respect of goods liable to tax under this Act, carried in a goods vehicle or boat or held in stock by any dealer or on his behalf by any other person, or held in custody of any transporter, the assessing authority or any officer empowered under sections 28 or 28-A, has reason to believe that the value shown in the document accompanying the goods in transit or the purchase invoice, is lower than the prevailing market price or fair market value or MRP by a difference of thirty percent or more, such authority or officers, for reasons to be recorded in writing, may purchase such goods.

1. (2) The power under sub-section (1) shall not be exercisable unless the person or dealer being dispossessed of such goods, is afforded reasonable opportunity of being heard.
2. (3) The price payable for purchase of such goods shall be the total price as mentioned in the Invoice, Challan, Delivery Note, Stock Transfer Memo, or any other related document plus the cost of transportation of the goods incurred upto the time of purchase, if any.
3. (4) In determining whether or not the price shown in the Invoice, Challan, Delivery Note, Stock Transfers Memo, or any other related document involves undervaluation, in the case of owner of the goods other than an owner carrying on business in packaged goods, the authority exercising the power under sub-section (1) shall apply the prevailing market price or fair market value and in the case of an owner carrying on business in packaged goods, shall apply the Maximum Retail Price. 1[(5) Any person objecting to an order affecting him under this section by,-
   • (i) any officer below the rank of Joint Commissioner may appeal to the Joint Commissioner;
   • (ii) a Joint Commissioner of Commercial Taxes, may appeal to the Appellate Tribunal.]
4. (6) Such appeal shall be dealt with as if it were an appeal filed under section 20 or section 22, as the case may be, and all the provisions of that section shall mutatis mutandis apply to such appeal.

¹ Substituted by Act 26 of 2004 w.e.f. 1.4.1999.

Sales Tax [1957: KAR. ACT 25

1. (7) The authority or officer purchasing goods in exercise of the powers of sub-section (1) subject to provisions of sub-section (6), shall dispose of the goods in public auction within thirty days from the date of such purchase and for value not less than the price paid to the owner of the goods. The sale proceeds so realised should forthwith be paid into the Government Treasury. Explanation.—For the purpose of this section,—
   • (i) `Prevailing market price' shall mean the published wholesale price in force in the market at about the time proceedings are taken to purchase such goods.
   • (ii) `Fair market value' shall mean the price at which the goods are generally bought or sold in the market by dealers in such goods at about the time proceedings are taken to purchase such goods.
   • (iii) `MRP' or `Maximum Retail Price' shall mean the price marked on the package in which the goods are contained.
   • (iv) `Published' shall mean published in any newspaper, journal or periodical or notified by a market committee or any such authority.] 1[28-B. Transporter, etc., to furnish information.- (1) Every person or a clearing or forwarding house or agency, transporting agency, shipping agency, shipping out agency or steamer agency or air-cargo agency or courier agency engaged in the business of transporting taxable goods in the State shall furnish to any officer empowered under sub- section (3) of Section 28-A, the particulars of all taxable goods, cleared, forwarded,

transported or shipped by it or him for any period, in the area of jurisdiction of such officer.

1. (2) The empowered officer shall have the power to call for and examine the books of accounts or other documents in the possession of such person or agency with a view to verify the correctness of any information furnished.] Again substituted by Act 5 of 2002 w.e.f. 1.4.2002. 1[28-C. xxxx]

¹ Substituted by Act 18 of 1994 w.e.f. 1.4.1994 and again substituted by Act 5 of 2001 w.e.f. 1.4.2001.

¹ Omitted by Act 5 of 2001 w.e.f. 1.4.2001.