Chapter IX OFFENCES AND PENALTIES

1. (1) Whoever--
   • (a) holds, gives, produces or accepts a declaration under the second proviso to clause (a) of sub-section (2) of section 4, or under the first proviso to section 5, which he knows or has reason to believe to be false; or
   • (b) carries on business as a dealer without obtaining a certificate of registration as required under sub-section (1) of section 14 or sub-section (1) of section 17; or
   • (c) not being a registered dealer, represents when purchasing goods that he is a registered dealer or;
   • (d) being a registered dealer, represents when purchasing any goods or class of goods not covered by his certificate of registration, that such goods or class of goods are covered by such certificate; or
   • (e) fails to comply with the provisions of sub-section (5) of section 20; or
   • (f) fails to submit any return as required by sub-section (2) of section 21 by the prescribed date or submits a false return; or
   • (g) not being a registered dealer, collects any amount by way of tax under this Act or make any collection of such tax otherwise than in accordance with this Act or the rules made thereunder; or
   • (h) fails to keep a true account of the value of goods bought or sold by him as required by section 38, or fails when required so to do under that section, to keep any account or record of purchases or sales specified in any notice or notification referred to in that section; or
     • (i) fails or neglects to issue cash memorandum or bills as required under section 39; or
   • (j) knowingly maintains or produces incorrect accounts, registers or documents or knowingly furnishes incorrect information; or
   • (k) neglects to furnish any information required by section 40; or
   • (l) refuses to comply with any requirements made of him under section 41; or
   • (m) closes his place of business with a view to preventing inspection under section 41; or
   • (n) obstructs or prevents any officer making inspection, search or seizure under section 41, or performing any functions under section 64, as the case may be; or
   • (o) being the owner or person in charge of a goods vehicle fails, neglects or refuses to comply with any of the requirements contained in section 64; or
   • (p) aids or abets any person in the commission of any offence specified in clauses (a) to (o), shall be punishable with rigorous imprisonment for a term which may extend to six months or with fine, or with both, and where the offence is a continuing one, with a daily fine not exceeding two hundred rupees during the period of the continuance of the offence: Provided that no prosecution for an offence under this Act shall be instituted in respect of the same facts in respect of which a penalty has been imposed under sub-section (6) of section 20, sub-section (6) of section 23, section 55, section 56 or section 57: Provided further that a person shall not be deemed to have committed an offence under clause (b) if he had applied for registration under this Act in accordance with the provisions of sub-section (2) of section 14, or sub-section (2) of section 17, as the case may be.
2. (2) Notwithstanding anything contained in sub-section (1), if any person commits an offence under clause (a) or clause (f) or clause (j) or clause (l) or clause (m) or clause (o) of that sub-section and the court is satisfied that the offence has been committed wilfully, he shall be punishable with rigorous imprisonment for a term which may extend to six months and with fine, and where the offence is a continuing one, with a daily fine not exceeding three hundred rupees during the period of the continuance of the offence.

1. (1) Where an offence under this Act has been committed by a company, every person who at the time the offence was committed, was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly: Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
2. (2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or that the commission of the offence is attributable to any neglect on the part of any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.-- For the purposes of this section,--
   • (a) "company" means a body corporate, and includes a firm or other association of individuals; and
   • (b) "director", in relation to a firm, means a partner in the firm.

1. (1) No court shall take cognizance of any offence under this Act or rules made thereunder except with the previous sanction of the Commissioner, and no court inferior to that of a Metropolitan Magistrate shall try any such offence.
2. (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), all offences punishable under this Act or rules made thereunder shall be cognizable and bailable.

1. (1) Subject to such conditions as may be prescribed, the Commissioner may authorise either generally or in respect of a particular case or class of cases any person appointed under sub-section (2) of section 9 to assist him to investigate all or any of the offences punishable under this Act.
2. (2) Every person so authorised shall, in the conduct of such investigation exercise the powers conferred by the Code of Criminal Procedure, 1973 (2 of 1974), upon an officer in charge of a police station for the investigation of a cognizable offence.

1. (1) Subject to such conditions as may be prescribed, the Commissioner may accept, from any person alleged to have committed an offence under section 50 or under any rules made under this Act, either before or after the commencement of any proceedings against such person in respect of such offence, by way of composition for such offence, a sum not exceeding five thousand rupees or where the offence alleged to have been committed is under any of the clauses (a), (b), (c), (d) and (f) of that section, not exceeding three times the amount of the tax which would thereby have been avoided, whichever is higher.
2. (2) On payment in full of such sum as may be determined by the Commissioner under sub-section (1),--
   • (a) no proceedings shall be commenced against such person as aforesaid; and
   • (b) if any proceedings have already been commenced against such person as aforesaid, such proceedings shall not be further proceeded with.

1. (1) If a dealer fails without reasonable cause to furnish any return by the prescribed date as required under sub-section (2) of section 21, or to pay the tax due according to the return as required by sub-section (3) of that section, the Commissioner may after giving the dealer an opportunity of being heard, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax payable, a sum not exceeding twice that amount or where no tax is payable a sum not exceeding two thousand rupees.
2. (2) The penalties specified under sub-section (1) may be imposed by the Commissioner notwithstanding the fact that assessment proceedings have not been initiated against the dealer under section 23.

1. (1) If the Commissioner or any person appointed under sub-section (2) of section 9 to assist him, in the course of any proceedings under this Act, is satisfied that a dealer has concealed the particulars of his sales or has furnished inaccurate particulars of his sales, he may, after giving the dealer a reasonable opportunity of being heard, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax payable, a sum not exceeding two and a half times the amount of tax which would thereby have been avoided.
2. (2) If a person commits an offence under clause (a) of section 50, the Commissioner or any person appointed under sub-section (2) of section 9 to assist him may, after giving that person a reasonable opportunity of being heard, by order in writing, impose upon such person by way of penalty, a sum not exceeding two and a half times the amount of tax which would thereby have been avoided.
3. (3) If a person purchasing goods commits an offence under clause (c) or clause (d) of section 50, the authority which granted him, or, as the case may be, is competent to grant him a certificate of registration under this Act, may, after giving him a reasonable opportunity of being heard by order in writing impose upon him by way of penalty, a sum not exceeding two and a half times the tax which could have been levied under this Act in respect of the sale to him of the goods, if the offence had not been committed.

If any person acts in contravention of the provisions of section 22, he shall be liable to a penalty not exceeding two and a half times the tax wrongly collected: Provided that the Commissioner shall not impose such penalty unless the person concerned has been given an opportunity of being heard.