Deduction of tax at source from the payment to dealer

(1) Notwithstanding anything contained in any other law or contract to the contrary any person or any specified class of persons responsible to pay any sum to any dealer for sale or supplies made by it to the State or Central Government including department of other States situated in Sikkim, any local body, any authority or corporation established by or under a statute and any State or Central Government undertaking shall, at the time of credit of such sum to the account of the dealer or at the time of payment thereof in cash or by cheque or draft or any other mode, deduct the amount of tax from the bills or invoices, at the rate or rates as specified in the Schedules under Section 12 (2) The amount of tax so deducted shall be deemed to be the amount of tax collected by the dealer from the state or Central Government Departments or aforesaid organizations or authorities, as the case may be, within the meaning of section 8 (3) While making deduction under sub-section (1), the deducting authority shall grant a certificate to the dealer in the prescribed form and shall send a copy thereof to the concerned assessing authority within whose jurisdiction such sale or supply is made (4) The dealer shall furnish an authenticated copy of such certificate to the concerned assessing authority along with the returns as proof of payment of tax (5) The amount deducted from the bills or invoices shall be deposited to the credit of the State Government within fifteen days from the date of such deductions in such form or challan or through book adjustment as may be prescribed (6) The deducting authority shall supply a copy of the form or challan or document of books adjustment, as the case may be, showing the details of deduction of tax to the concerned assessing authority (7) The remittance or deposit of deducted tax to the credit of the State Government shall be adjusted by the concerned assessing authority towards the tax liability of the dealer and shall constitute a good and sufficient discharge of the liability of the deducting authority to the dealer to the extent of the amount remitted or deposited (8) If any person fails to deduct, or having deducted, fails to remit to the State Government within the stipulated time, the amount deductible under sub-section (1), he shall be liable for penalty of a sum not exceeding twice the amount deductible: Provided that no penalty under this sub-section shall be imposed unless a reasonable opportunity of being heard is given to such person (9) The amount deductible and actually deducted under sub-section (1) and penalty levied under sub-section (8) shall be deemed to be a tax for the purpose of the Sikkim (Collection of Taxes and Prevention of Evasion of Payment of Taxes) Act, 1987.