Special relief to certain manufacturers

(7) Special relief to certain manufacturers: (a) Notwithstanding anything contained in Section 3 and or this Section where any goods liable to tax under this Act are sold by a dealer to another dealer and such other dealer furnishes to the selling dealer in prescribed form and manner a certificate to the effect that he holds a Recognition Certificate issued under clause (b) in respect thereof, the selling dealer shall be liable in respect of those goods to tax at the rate of 3% subject to the conditions and restrictions as may be notified by the State Government in the Gazette in that behalf : Provided that where such goods are exempt from tax or subject to tax at a rate which is lower than at the rate of 3% then the tax shall be nil or, as the case may be, shall be calculated at the lower rate. Explanation:- For the purpose of this sub-section the conditions and restrictions that may be specified for the grant of concession in respect of, or exemption from tax, may include the requirement that the notified goods referred to in clause(b) shall be manufactured in a manufacturing unit covered under Section 4-A of the Uttarakhand (the Uttar Pradesh Trade Tax Act,1948) Adaptation and Modification Order, 2002, which goes into production after such date, whether before or after the date of the notification under this sub-section , and within such period as may be specified. (b) Where a dealer requires any goods, referred to in clause (a) for use by him for the manufacture of any taxable goods in the State or in the packing of such goods manufactured or processed by him, and such goods are intended to be sold by him in the State or in the course of inter-state trade or commerce or in the course of export out of India, he may apply to the Assessing Authority in such form and manner and within such period as may be prescribed, for the grant of a Recognition Certificate in respect thereof, and if the applicant satisfies such requirements including requirement of depositing late fee and conditions as may be prescribed, the Assessing Authority shall grant to him in respect of such goods a Recognition Certificate in such form and subject to such conditions, as may be prescribed: Provided that every dealer who held a Recognition certificate under Section 4-B of the Uttarakhand (The Uttar Pradesh Trade Tax Act,1948) Adaptation and Modification Order, 2002 and the same has neither been cancelled by the Assessing Authority nor such dealer has discontinued business till the date of commencement of this Act, he shall, subject to the provisions of this sub- section, be deemed to be a Recognition certificate holder under this Act with effect from the date of commencement of this Act and if such a dealer is not desirous of continuing to be a Recognition certificate holder under this Act, he shall submit an application to the Assessing Authority to this effect within 30 days of the commencement of this Act. Explanation:- For the purposes of this sub-section the "goods" required for use in the manufacture shall mean Capital Goods and raw materials, processing materials, consumable stores, spare parts, accessories, components, sub-assemblies, fuels or lubricants; and in the packing of such manufactured goods. (c) (i) Where the assessing authority is satisfied that the dealer in whose favour a Recognition Certificate in respect of any goods was granted under clause(b)- (aa) has discontinued the business or the manufacturing of goods in respect where of the Recognition Certificate was granted; or (ab) has made a breach of any condition of the Recognition Certificate; or (ac) has failed to, furnish the security, if any, required under Section 20; or (ad) has failed to pay any tax, penalty or other dues payable under this Act within a period of three months from the date when such tax, penalty or other dues became payable; such authority may, either of its own motion or on the application of the dealer, cancel the Recognition Certificate with effect from such date as it may specify. Explanation :- The dissolution or reconstitution of a firm, association of persons or partition a joint Hindu family or transfer by a dealer of his business shall be deemed to be discontinuance of business within the meaning of this clause. (ii) The assessing authority may amend a Recognition Certificate granted under clause (b) either of its own motion or on the application of the dealer where the dealer has changed the name or place of his business or has closed down any branch or opened a branch, or for any other sufficient reason: Provided that no Recognition Certificate shall be cancelled or amended by the Assessing Authority of its own motion except after reasonable opportunity of being heard has been given to the dealer. (d) Where a dealer in whose favour a Recognition Certificate has been granted under clause(b) has purchased the goods after payment of tax at concessional rate or, as the case may be, without payment of tax under this sub-section and has used such goods for a purpose other than that for which the Recognition Certificate was granted or has otherwise disposed of the said goods, such dealer shall be liable to pay as penalty such amount as the Assessing Authority may fix which shall not be less than one and half times the difference between the amount of tax on the sale or purchase of such goods payable under this sub-section and the amount of tax payable under any other provisions of this Act, but not exceeding twice the amount of such difference. (e) Where a dealer, in whose favour a Recognition Certificate has been granted under clause (b) has purchased any goods including raw material, processing material or packing material and consumables after payment of tax at concessional rate or, as the case may be, without payment of tax under this section, and (i) the goods (as specified in schedule III) manufactured or processed by using or utilizing such goods; or (ii) the goods ( as specified in schedule III) so manufactured or processed, after being packed with such packing material; are sold or disposed of otherwise than by way of sale in the State or in the course of inter-state trade or commerce or in the course of export out of the Territory of India, such dealer shall be liable to pay, an amount equal to one and half times of the difference between the amount of tax calculated on the sale or purchase value of such goods at the general rate of tax provided in the schedules under this Act in respect of such goods and the amount of tax, at the concessional rate of tax under this section, on the sale or purchase such goods. Such amount shall be due for the period in which such transaction of such manufactured or processed goods is made and be payable within the time limit, as prescribed for depositing the tax due for such period as is applicable in the case of such dealer. Explanation: For determining whether a sale or purchase in the course of inter-State trade or commerce, within the State, or in the course of export out of India, the provisions of Section 3,4 and 5 of the Central Sales Tax Act, 1956, shall respectively apply (f) For determining whether a sale or purchase in the course of inter-state trade or commerce, within the State, or in the course of export out of India, the provisions of Section 3, Section 4 and Section 5 of the Central Sales Tax Act, 1956, shall respectively apply;