PUNJAB VALUE ADDED TAX ACT, 2005

PUNJAB VALUE ADDED TAX ACT, 2005

Preamble 1 - PUNJAB VALUE ADDED TAX ACT, 2005

THE PUNJAB VALUE ADDED TAX ACT, 2005

[Act, No. 8 of 2005]

PREAMBLE

An Act to provide for the levy and collection of value added tax and turnover tax on the sales or purchases of goods and for the matters connected therewith and incidental thereto, and for the repeal of the Punjab General Sales Tax Act, 1948.

BE it enacted by the Legislature of the State of Punjab in the Fifty-sixth Year of the Republic of India as follows:--

Section 1 - Short title and commencement

(1)     This Act may be called the Punjab Value Added Tax Act, 2005.

(2)     It shall come into force from the 1st day of April, 2005.

Section 2 - Definitions

In this Act, unless the context otherwise requires,

(i)       account books means record of business transactions and includes accounts, registers and documents maintained in any manner including electronic medium;

(ii)      appointed day means the date on which this Act comes into force;

(iii)     business includes ?

(i)       any trade, commerce, manufacture, adventure or concern whether or not such trade, commerce, manufacture, adventure or concern is carried on with a motive to make profit and whether or not any profit accrues there from; and

(ii)      any transaction in connection with or ancillary or incidental to such trade, commerce, manufacture, adventure or concern;

(iv)    capital goods means any plant, machinery or equipment including equipment for pollution control, quality control, laboratory and cold storage, used in manufacturing, processing and packing of taxable goods for sale;

(v)      carrier of goods includes a person or a transport company or a booking agency, who transports, receives or delivers goods;

(vi)    casual trader means a person other than a taxable person or registered person, who whether as principal, agent or in any other capacity, undertakes occasional transactions in the nature of business involving purchase, sale, supply or distribution of goods or conducting any exhibition-cum-sale in the State, whether for cash, deferred payment, commission, remuneration or other valuable consideration;

(vii)   Commissioner means the Excise and Taxation Commissioner, appointed by the State Government under sub-section (1) of section 3;

(viii)  declared goods means goods declared under section 14 of the Central Sales Tax Act, 1956,to be of special importance in inter- State trade or commerce;

[1][(i) "designated officer" means an officer, not below the rank of an Excise and Taxation Inspector, authorised by the State Government by notification to carry out any of the purposes of this Act, for a period to be specified in the notification;]

(j) ? document means title deeds, writing or inscription and includes electronic data, computer programs, computer tapes, computer discs, photographs, video tapes and the like that provides evidence;

[2][(jj) "electronic governance" means for use of electronic medium for.-

(i)       filing of any form, return, application, declaration or any other document;

(ii)      creation retention or preservation of records;

(iii)     issue or grant of any form including statutory forms, orders and certificates; and

(iv)    receipt of tax, interest, penalty or any other payment or refund of the same through Government treasury or authorized banks.]

(k) ? goods means all kinds of movable property, whether tangible or intangible, other than newspapers, actionable claims, money, stocks, shares and securities and includes livestock, growing crops, grass, trees, plants attached to or forming part of the land, which are agreed to be severed before the sale or under the contractor sale;

(l) ? goods vehicle includes

                                           (i)            any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer constructed or adapted for use for the carriage of goods and any vehicle not so constructed or adapted when used for the carriage of goods solely or in addition to passengers, but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or any other enclosed premises; and

                                          (ii)            any animal - driven or man - driven vehicle used for the carriage of goods solely or with passengers;

(m)  gross turnover includes the aggregate of the amounts of sales and/or purchases made by any person during the given period, including any sum, charged on account of freight, storage, demurrage, insurance and for anything done by the person in respect of the goods at the time of or before the delivery thereof;

Explanations

(1)     The proceeds of any sale made outside the State by a person, who carries on business both inside and outside the State, shall not be included in the gross turnover.

(2)     The sum receivable or received from any person in respect of transaction of forward contract, in which goods are actually not delivered, shall not be included in the gross turnover.

(3)     In respect of transactions of delivery of goods on hire-purchase or any system of payment by instalments , the amount to be included in the gross turnover shall be the total sum payable by the hirer under a hire-purchase agreement in order to complete the purchase of or the acquisition of property in the goods to which the agreement relates and includes any sum as payable by the hirer under the hire-purchase agreement by way of deposit or other initial payment or credited or to be credited to him under such agreement on account of any such deposit or payment whether that sum is to be or has been paid to the owner or to any person or is to be or has been discharged by payment of money or by transfer or delivery of goods or by any other means, but does not include any sum payable as a penalty or interest or compensation or damages for breach of the agreement.

(4)     The amount to be included in the gross turnover in respect of movable goods, agreed to be sold under a works contract, shall be its sale price;

(n) ? import means bringing of goods into the State from any place outside the territorial jurisdiction of the State;

(o)?  input tax in relation to a taxable person means value added tax (VAT), paid or payable under this Act by a person on the purchase of taxable goods for resale or for use by him in the manufacture or processing or packing of taxable goods in the State;

(p)??  input tax credit means credit of input tax (in short referred to as ITC) available to a taxable person under this Act;

(q) ?? manufacture includes any activity that brings out a change in an article or articles as a result of some process, treatment, labour and results in transformation into a new and different article so understood in commercial parlance having a distinct name, character, use, but does not include such activity of manufacture as maybe notified otherwise;

(r) ?? offence means any act or omission made punishable under this Act;

(s)??  output tax in relation to a taxable person means the tax charged or chargeable or payable in respect of sale and/or purchase of goods, as the case may be, under this Act;

(t)??  person includes a sole proprietor, a partnership, a Hindu undivided family, a company, a society, a trust, a club, an institution, an association, a local authority, a department of any State Government, Union territory Government or Central Government, a Government enterprise, a statutory body or other body corporate, who whether or not in the normal course of business, purchases, sells, supplies or distributes any goods in the State, irrespective of the fact that the main place of business of such person is outside the State and where the main place of business of any such person is not in the State, person includes the local manager or agent of such person in the State in respect of such business and also includes a person engaged in the business of -

(i)       transfer, otherwise than in pursuance of a contract of property in any goods for cash, deferred payment or other valuable consideration;

(ii)      transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract;

(iii)     delivery of goods on hire-purchase or any system of payment by instalments;

(iv)    transfer of right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration; and

(v)      supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service is for cash, deferred payment or other valuable consideration:

Provided that an agriculturist or a member of his family, who sells within the State exclusively the agricultural produce, grown on any land inside the State in which he has an interest, whether as owner, mortgage, tenant or otherwise, shall not be deemed to be a person;

Explanations

(1)     A co-operative society or a club or an association which sells or supplies goods to its members is a person within the meaning of this clause.

(2)     A factor, a broker, a commission agent, a persons agent, an auctioneer or any other mercantile agent by whatever name called and whether of the same description as here-in-before mentioned or not, who carries on the business of selling, supplying or purchasing goods and who has in the customary course of business, authority to sell goods belonging to the principals or to purchase goods on their behalf, is a person within the meaning of this clause.

(3)     For the purpose of this clause, Government will include the Government of India or the Government of any State or the Union of India or the Union Territories.

(4)     Each of the following persons or bodies, who dispose of any goods including unclaimed or confiscated or as unserviceable or scrap surplus, old or obsolete goods or discarded material or waste products whether by auction or otherwise directly or through an agent for cash or for deferred payment or for any other valuable consideration, notwithstanding anything contained in this Act, irrespective of the fact whether such disposal was in the course of business or not, shall be deemed to be a person for the purposes of this Act to the extent of such disposals, namely:--

(i)       Municipal Corporations, Municipal Councils and other local authorities constituted under any law for the time being in force;

(ii)      Railways Administration as defined under the Railways Act, 1989;

(iii)     Transport and construction companies;

(iv)    Any person holding permit for the transport vehicles granted under the Motor Vehicles Act, 1988, which are used or adapted to be used for hire;

(v)      the State Road Transport Corporations;

(vi)    Customs Department of the Government of India administering the Customs Act, 1962;

(vii)   Insurance and Financial Corporations or companies and banks included in the Second Schedule to the Reserve Bank of India Act, 1934;

(viii)  advertising agencies; and

(ix)    any other corporation, company, body or authority, owned or set up by, or subject to the administrative control of the Central Government or any State Government ;

(u) ? place of business means any place where a person purchases or sells goods and includes the place where such person stores, processes, produces or manufactures goods or keeps books of accounts or documents or any other place where business activity is conducted;

(v) ? prescribed means prescribed by rules made under this Act;

(w) ? purchase with all its grammatical or cognate expressions means the acquisition of goods for cash or deferred payment or other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge and includes,

(i)       transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;

(ii)      transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(iii)     delivery of goods on hire-purchase or any system of payment by instalments;

(iv)    transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;

(v)      supply by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration, and such transfer, delivery or supply of any goods shall be deemed to be a purchase of these goods from the person making the transfer, delivery or supply to a person to whom such transfer, delivery or supply is made;

(x) ? purchase price means the amount of valuable consideration paid or payable by a person for any purchase made, including any sum charged on account of freight, storage, demurrage, insurance and any other sum charged for anything done by a person in respect of the goods at the time of or before delivery thereof;

Explanation

(1)     Purchase price shall not include the tax paid or payable under this Act by a person in respect of such purchase.

(2)     In respect of the goods listed in Schedule H, any tax, duty, cess or fee paid or payable under the Punjab Agricultural Produce Markets Act, 1961 (Punjab Act No. 23 of 1961) or the Punjab Rural Development Act, 1987(Punjab Act No. 6 of 1987) or the Punjab Infrastructure (Development and Regulation) Act, 2002 (Punjab Act No. 8 of 2002) by or on behalf of the seller or the purchaser, shall also form part of purchase price.

[3][(3) The amount of bonus, granted as an incentive by the Government of India from time to time in respect of wheat and paddy purchased for the central pool by the procurement agencies, shall not form part of the purchase price of these commodities.]

(y) ? quarter means a period consisting of three months, commencing from the first day of April, July, October and January of a calendar year;

(z) ? registered person means a person, who is registered for the purpose of paying turn-over tax under this Act;

(za)  repealed Act means the Punjab General Sales Tax Act, 1948;

(zb)  retail invoice means an invoice issued to the purchaser by a taxable or registered person or a casual trader, listing therein the goods, sold, with price, quantity and value;

(zc)  return means a true and correct account of business pertaining to the return period in the prescribed form;

(zd)  return period means the period for which returns are to be furnished by a person;

(ze)  reverse input tax credit means an amount of input tax credit, which is required to be reversed by a taxable person on account of-

(i)       credit note for output tax received from seller of goods on purchases in respect of which input tax credit is claimed;

(ii)      goods, returned subsequent to availing the input tax credit;

(iii)     goods, subsequently not used in accordance with the conditions prescribed for availing input tax credit; and

(iv)    having availed the credit required to reverse the same in accordance with the provisions of sub-sections (8) and (9) of section 13;

(zf)  sale with all its grammatical or cognate expressions means any transfer of property in goods for cash, deferred payment or other valuable consideration and includes-

(i)       transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;

(ii)      transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(iii)     delivery of goods on hire-purchase or any system of payment by instalments;

(iv)    transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration;

(v)      supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;

(vi)    supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration; and

(vii)   every disposal of goods referred to in Explanation (4) to clause (t) of this section;

and such transfer, delivery or supply of any goods shall be deemed to be a sale of these goods by the person making the transfer, delivery or supply to a person to whom such transfer, delivery or supply is made, but does not include a mortgage, hypothecation, charge or pledge.

(zg)  sale price means the amount of valuable consideration received or ?receivable by a person for any sale made including any sum charged on account of freight, storage, demurrage, insurance and any sum charged for anything done by the person in respect of the goods at the time of or before the delivery thereof;

Explanation

(1)     In relation to the transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract, sale price means such amount as is arrived at by deducting from the amount of valuable consideration paid or payable to a person for the execution of such works contract, the amount representing labour and other charges incurred and profit accrued other than in connection with transfer of property in goods for such execution. Where such labour and other charges are not quantifiable, the sale price shall be the cost of acquisition of the goods and the margin of profit on them plus the cost of transferring the property in the goods and all other expenses in relation thereto till the property in such goods, whether as such or in any other form, passes to the contracted and where the property passes in a different form, it shall include the cost of conversion.

(2)     In relation to the delivery of goods on hire purchase or any system of payment by instalments, the amount of valuable consideration payable to a person for such delivery.

(3)     In relation to the transfer of right to use any goods for any purpose (whether or not for a specified period), the valuable consideration received or receivable for such transfer.

(4)     The amount of duties levied or leviable on goods under the Central Excise and Salt Act, 1944 (1 of 1944), or the Customs Act, 1962 (52of 1962), or the Punjab Excise Act, 1914 (1 of 1914), shall be deemed to be part of the sale price of such goods, whether such duties are paid or payable by or on behalf of the seller or the purchaser or any other person.

(5)     Sale price shall not include tax paid or payable to a person in respect of such sale.

[4][***]

[5][(7) The amount of bonus, granted as an incentive by the Government of India from time to time in respect of wheat and paddy purchased for the central pool by the procurement agencies, shall not form part of the purchase price of these commodities.]

[6][(8) The amount received or receivable by oil companies for the sale of diesel and petrol, shall be deemed to be equivalent to the price, on which the retail outlets will sell these commodities to the consumer.]

[7][(9) The amount of bonus., granted as an incentive by the Government of India from time to time in respect of paddy, purchased by the procurement agencies and rice mills, out of which, rice is shelled out, which is supplied to the Central pool, shall not form part of the sale price of rice.]

(zh) Schedule means the Schedule appended to this Act;

(zi)  section means a section of this Act ;

(zj)  State means the State of Punjab;

(zk)  State Government means the Government of the State of Punjab;

(zl) ? taxable goods means the goods, other than the goods declared tax free under section 16of this Act;

(zm)  tax period means a period for which a person is required to pay tax under this Actor the rules made there under;

(zn)  taxable person means a person, who is registered for the purpose of paying value added tax under this Act;

(zo)  taxable turnover means that part of gross turnover of sales or purchases, as may be determined after making such deductions from the gross turnover of sales or purchases, as are admissible under this Act or as may be prescribed, on which a person shall be liable to pay tax;

(zp)  Tribunal means the Tribunal constituted under section 4 of this Act;

(zq)  Turnover tax (in short referred to as TOT) means a tax, leviable on the taxable turnover of a registered person as per the provisions of this Act;

(zr)  Value added tax (in short referred to as VAT) means a tax leviable on the taxable turnover of a person, other than a registered person, under this Act;

[8][(zs) "VAT invoice" means an invoice issued by a taxable person to another taxable person listing therein the goods supplied, with the price, quantity, value and VAT charged;]

(zt) ? vessel includes any ship, barge, boat, raft, timber, bamboos or floating materials propelled in any manner;

(zu)  works contract includes any agreement for carrying out, for cash, deferred payment or other valuable consideration, building ,construction, manufacturing, processing, fabrication, erection, installation, fitting out, improvement, modification, repairs or commissioning of any movable or immovable property; and

(zv)  year means the financial year beginning from the first day of April, and ending with the 31st day of March. 

Section 3 - Commissioner and other officers

(1)     For carrying out the purposes of this Act, the State Government may appoint an officer to be the Commissioner and such other officers to assist him as it may deem fit.

(2)     The Commissioner shall have jurisdiction over the whole of the State and shall have all the powers and perform all the duties conferred or imposed upon him by or under this Act. All other officers appointed, under sub-section (1), shall exercise such powers as may be conferred upon them by the State Government.

(3)     Every officer appointed under sub-section (1), to assist the Commissioner, shall exercise his powers, subject to the general superintendence and control of the Commissioner.

(4)     The officers appointed under sub-section (1), shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (Central Act 45 of1860).

Section 3A - Implementation of electronic governance

[9][3A. Implementation of electronic governance.--

Notwithstanding anything contained in this Act or the rules made thereunder the commissioner may by an order with the approval of the State Government implement electronic governance for carrying out the various provisions of the Act and the rules made there under.]

Section 4 - Constitution of Tribunal

(1)     The State Government shall, by notification in the Official Gazette, constitute a Tribunal to exercise the powers and discharge the functions conferred on it under this Act.

[10][(2) The Tribunal may consist of a Chairman and three other members to be appointed by the State Government from time to time.]

(3) ??The Chairman shall either be a retired Judge of the High Court or a retired or serving officer of the rank of Chief Secretary to the State Government or Secretary to Government of India.

(4) ??The members appointed under sub-section (2), shall have the following qualifications and experience, namely:-

(a)      should be a law graduate and should have at least fifteen years experience of practising in the High Court or the Supreme Court of India in tax matters; or

(b)      should be a retired or a serving Officer of the Excise and Taxation Department of the State with at least two years experience of the post of Additional Excise and Taxation Commissioner; or

[11][(c) should have at least fifteen years' experience of practising as a Chartered Accountant under the Chartered Accountant Act, 1949 (Central Act 38 of 1949) or is a member or should have been a member or should be eligible for appointment as member of the Customs, Excise and Service Tax Appellate Tribunal constituted by the Government of India:]

Provided that one member of the Tribunal shall be appointed from each of the aforesaid categories.

(5) ??The State Government may appoint one of the members, to be a Vice-Chairman of the Tribunal.

(6) ???The Vice-Chairman shall exercise such powers and perform such functions of the Chairman, as may be delegated to him by the Chairman by a general or special order in writing. In the absence of the Chairman, the Vice-Chairman shall act as Chairman.

(7) ??The Chairman or a member of the Tribunal shall hold office for a term of three years from the date he assumes charge of his office and he shall not be eligible for re-appointment.

(8) ??No person shall be appointed or continue as Chairman or Member of the Tribunal, if he has attained the age of sixty-seven years.

(9)?? ?The Chairman, Vice-Chairman and other members of the Tribunal shall be entitled to such salaries and allowances and shall be governed by such conditions of service, as may be specified by the State Government.

(10) ?The Chairman, the Vice-Chairman or a member of the Tribunal may be removed from the office by the State Government, if

(a)      he is adjudged an insolvent; or

(b)      he takes up employment outside the duties of his office; or

(c)      he has become incapable of performing his duties on account of unsoundness of mind or any other reason; or

(d)      he is guilty of such misconduct as would render him unfit to continue as Chairman or Vice-Chairman or member of the Tribunal; or

(e)      he is convicted of an offence involving moral turpitude.

(11) ?The Chairman, the Vice-Chairman or a member, as the case may be, may at any time by writing under his hand addressed to the State Government, resign his office, but his resignation shall take effect from the date on which it is accepted.

(12) ?The Chairman, the Vice-Chairman and members of the tribunal shall be deemed to be public servants within the meaning of section 21of the Indian Penal Code (Act 45 of 1860).

(13) ?No order made or act done, or proceedings taken under this Act by or before the Tribunal, shall be called in question in any manner on the ground of merely of any defect in the constitution of the Tribunal.

(14) ?The Tribunal shall have power to award costs. The arrears of such costs shall be recoverable as arrears of land revenue.

(15) ?Subject to the previous sanction of the State Government, the Tribunal shall for the purpose of regulating its procedure, make regulations in conformity with the provisions of this Act and the rules made there under.

(16) ?Subject to the directions given by the State Government, the Tribunal shall sit at such place or places, as it may deem fit.

(17) ?The State Government may, appoint such officers or officials, as may be considered necessary to enable the Tribunal to carry out its functions under this Act.

(18) ?The administrative expenditure of the Tribunal including salaries, allowances and pensions, if any, payable to the Chairman, Vice-Chairman, members, officers and officials of the Tribunal, shall be charged upon the Consolidated Fund of the State.

Section 5 - Procedure of the Tribunal

(1)     For carrying out the purposes of this Act, the State Government may appoint an officer to be the Commissioner and such other officers to assist him as it may deem fit.

(2)     The Commissioner shall have jurisdiction over the whole of the State and shall have all the powers and perform all the duties conferred or imposed upon him by or under this Act. All other officers appointed, under sub-section (1), shall exercise such powers as may be conferred upon them by the State Government.

(3)     Every officer appointed under sub-section (1), to assist the Commissioner, shall exercise his powers, subject to the general superintendence and control of the Commissioner.

(4)     The officers appointed under sub-section (1), shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (Central Act 45 of1860).

Section 6 - Incidence of tax

(1)     Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (a) of sub-section (3), shall be liable to pay tax under this Act by way of VAT on the taxable turnover.

(2)     Every person, except a casual trader and one dealing exclusively in goods declared tax free under section 16, whose gross turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, exceeded the taxable quantum, as provided in clause (b) of sub-section (3), shall be liable to pay tax under this Act by way of TOT on the taxable turnover.

(3)     For the purpose of this section, the expression taxable quantum means-

(a)      for registration as a taxable person for VAT ?

(i)       in relation to any person, who imports taxable goods for sale or use in manufacturing or processing any goods in the State, rupee one;

(ii)      in relation to a person, who receives goods on consignment/branch transfer basis from within or outside the State on which no tax has been paid under this Act, rupee one;

(iii)     in relation to a person, liable to pay purchase tax under section 19, rupee one;

(iv)    in relation to a person, who is a manufacturer, rupees one lac;

[12][(v) in relation to a person, who is running a hotel/restaurant, rupees five lac;

(vi)? ?in relation to a person, who is running a bakery, rupees [13][fifty lac];

(vii) in relation to voluntary registration, rupees five lac; and

(viii) in relation to any other person, rupees fifty lac.]

[14][(b) for registration as a registered person for TOT-in relation to a person, other than those specified in clause (a), whose turnover during the year immediately preceding the commencement of this Act or during any year subsequent thereto, is more than rupees five lac, but below rupees fifty lac].

(4)     Every person, who has become liable to pay tax under this Act, either by way of VAT or TOT, shall continue to be so liable, until the expiry of three consecutive years during each of which his gross turnover does not exceed the taxable quantum and such further period after the date of such expiry, as may be specified by notification by the State Government and on the expiry of such specified period, his liability to pay tax, shall cease.

(5)     Every person whose liability to pay tax has ceased under sub- section (4), shall again be liable to pay tax under this Act from the date on which his gross turnover again exceeds the taxable quantum.

(6)     Every casual trader shall be liable to pay tax under this Act by way of VAT on the taxable turnover including sales through agent within the State.

[15][(7) (a) Notwithstanding anything contained in this act or the Rules made thereunder the State Government may by notification specify The goods on which a taxable person shall pay tax in advance at the rates notified by the Government but not exceeding the rates including surcharge applicable on such goods under this Act. when he imports such goods into the State subject to such conditions. as the State Government may specify in the notification. the aforesaid payment of tax in advance shall be counted towards the final tax liability of the taxable person:

Provided that the State Government may by notification exempt any taxable person or class of taxable persons from payment of tax in advance or reduce the rate of payment of tax in advance subject to such conditions, as may be notified:

Provided further that if on an application made by a taxable person, the Commissioner or an officer authorized by him, after verifying all aspects of the case, arrives at a decision that such taxable person should be exempted from payment of tax in advance or that the rate of payment of tax in advance should be reduced for such taxable person, he may do so and impose such terms and conditions on such taxable person as he may deem fit.

Explanation--The taxable person, who imports goods into the State, shall pay tax in advance, on the presumption that such goods are meant for the purposes of sale or for use in manufacture or processing of goods meant for sale, unless, it is proved otherwise by such taxable person. It is further presumed, unless, it is proved otherwise by such taxable person, that such goods or any product manufactured therefrom, shall not be sold below the price at which such goods have been purchased and imported in the State.

(b) ??The tax already paid in advance under the provisions of subsection (7) of section 6 as it existed prior to commencement of the Punjab Value Added Tax (Second Amendment) Act, 2013, shall be deemed to have been paid tax in advance under the provisions of clause (a).]

(8) ??The tax collected under the Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No. 9 of 2000), shall be deemed to have been collected under the provisions of sub-section (7).]

Section 7 - Liability of person registered under the Central Sales Tax Act, 1956

The person registered under the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), shall be liable to pay VAT under this Act on any sale made by him within the State, irrespective of the fact that he is not liable to pay tax under section 6 of this Act. However, the provisions of this section shall not apply in case of a person, who deals exclusively in goods declared tax free under section 16.

Section 8 - Rate of Value Added Tax

(1)     Subject to the provisions of this Act, there shall be levied on the taxable turnover of a person other than a registered person, VAT at such rate, as specified in Schedules, but not exceeding [16][fifty five paise] in a rupee:

Provided that the rate of tax applicable on purchase or sale of declared goods, shall not exceed [17][***] such rate, as specified in clause (a) of section 15 of the Central Sales Tax Act, 1956.

(2)     Notwithstanding anything contained in this section, where any goods are sold in container or are packed in any packing material, the rate of tax applicable to such container or packing material, shall, whether the price of the container or packing material is charged separately or not, be the same as is applicable to the goods, contained or packed therein and the turnover in respect of the container and packing material, shall be included in the turnover of such goods. Where the goods, sold in container or packed in packing material are tax free, the sale of such container or packing material shall also be tax free.

[18][(2A) Every person executing works contracts shall pay tax on the value of goods at the time of incorporation of such goods in the works executed at the rates applicable to the goods under this Act :

Provided that where accounts are not maintained to determine the correct value of goods at the time of incorporation , such person shall pay tax at the rate of twelve and half per cent on the total consideration received or receivable, subject to such deductions , as may be prescribed.]

(3)     The State Government after giving fifteen days notice by notification, of its intention so to do, may by like notification, alter the rate of tax specified in any of the Schedules, add to or omit from or otherwise amend the Schedules and thereupon, the Schedule shall be deemed to have been amended accordingly:

Provided that if, the State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may, for reasons to be recorded in writing, dispense with the condition of previous notice.  

Section 8A - Payment in lump-sum of tax

[19][8-A. Payment in lump-sum of tax-

(1)     Notwithstanding anything contained in any provision of this Act, the Administrator, if satisfied that it is necessary or expedient so to do in public interest, may, by notification in the Official Gazette, direct that in respect of any goods or class of goods a person may, at his option, pay such lump-sum tax, subject to such conditions, as the Administrator may specify in the notification.

(2)     In case, a person opts for payment of lump-sum tax under sub-section (1), he shall not,-

(a)      issue VAT invoice for sale of goods made by him, and no taxable person to whom goods are sold by such person, shall be entitled to claim any input tax credit in respect of such sale; and

(b)      be entitled to claim any input tax credit on purchase made by him.

(3)     The person, who has opted under sub-section (1), shall be at liberty to cancel his option by making an application to the designated officer in such form, as may be prescribed.]

Section 8B - Levy of additional tax

[20][(1) Notwithstanding anything contained in this Act, there shall be levied and collected on the taxable turnover of a person, other than the registered person, an additional tax, which shall be calculated at the rate of ten percentum of the tax, payable by him under this Act :

Provided that the aggregate of tax and the surcharge payable under this Act, shall not exceed in respect of the goods, declared to be of special importance inter-state trade or commerce under section 14 of the Central Sales Tax Act, 1956, the rate fixed under section 15 of that Act.

(2)?? ?Except as otherwise provided in sub-section (1), the provisions of this Act shall, so far as may be, apply in relation to the additional tax, leviable under sub-section (1) as they apply in relation to the tax, leviable under any other provision of this Act.] 

Section 8C - Tax on Maximum Retail Price

[21][8C. Tax on Maximum Retail Price.--

(1)     Notwithstanding anything contained in this Act, the State Government, if satisfied that it is necessary or expedient so to do in public interest, may, by notification in the official Gazette, direct that, in respect of any goods or class of goods covered under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, a taxable person who is a manufacturer or a first importer of goods, may, at his option, pay tax on The basis of Maximum Retail Price (MRP) as printed upon such goods subject to such conditions as the State Government may specify in The notification.

(2)     A taxable person, who opts to pay tax as provided under sub-section (1), shall pay tax at the rate as notified by the State Government on the value of Maximum Retail Price (MRP) by issuing an invoice showing value of goods and Tax separately, as Maximum Retail Price (MRP) printed would be inclusive of the tax payable. For The purpose of computing tax liability, such a taxable person shall not be entitled to claim any deduction on account of any trade discount or incentive in terms of quantity or cash discount that he may have given to the purchaser.

(3)     The taxable person, who has opted under sub-section (1), shall be at liberty to cancel his option by making an application to the designated officer, in such form and subject to such conditions as the State Government may specify in the notification,

(4)     All subsequent taxable persons, purchasing goods on which tax on the basis of Maximum Retail Price (MRP) as provided under sub-sect ion (1) has already been paid, shall be exempted from payment of tax on the sale of such goods, subject to such conditions as the Slate Government may specify in the notification.]

Section 8D - Power to grant tax incentives to certain class of industries

[22][8D. Power to grant tax incentives to certain class of industries.--

Notwithstanding anything contained in this Act, the State Government may, if satisfied that it is necessary or expedient so to do in the interest of industrial development of the State, grant tax incentives to such class of industries for such period and subject to such conditions, as may be prescribed, in the case of industries, which came into production for the first time, as and when notified in the Industrial Policy framed by the Department of Industries.]

Section 8E - Retention of tax collected

[23][8E. Retention of tax collected.--

Notwithstanding Anything contained in the Act, the State Government, may, if satisfied that it is necessary or expedient to do in the interest of industrial development of the State, allow retention of tax collected in such class of industries subject to such conditions, as may be prescribed.]

Section 9 - Rate of Turnover Tax

Subject to the provisions of this Act, there shall be levied on the taxable turnover of sales of a registered person, TOT at a rate, not exceeding two paise in a rupee, as the State Government may specify, by notification, in the Official Gazette.

Section 10 - Rounding off of tax

The amount of VAT or TOT shall be calculated to the nearest rupee by ignoring fifty paise or less and counting more than fifty paise as one rupee.

Section 11 - Bar against collection of tax when not payable

(1)     No person, who, is not registered under this Act or if registered, is not liable to pay tax in respect of any sale or purchase, shall collect any amount by way of tax from any person.

(2)     No person, who is registered under this Act, shall collect any amount by way of tax in excess of the amount of tax leviable under this Act.

(3)     No person, who is registered under this Act, shall collect any amount by way of tax in respect of sale of goods, which are tax free under section 16.

(4)     If a person collects tax in contravention of the forgoing provisions of this Act, he shall be liable to deposit the tax so collected immediately after such collection, in the Government treasury. In the event of failure of such person to deposit the tax, the Commissioner or the designated officer, as the case may be, shall, by order in writing, recover such tax, as per provisions of this Act.

Section 12 - Liability of registered persons

(1)     Liability of a registered person shall be calculated at the rate, specified under section 9.

(2)     Sale of taxable goods held in stock by a registered person on the appointed day, which were purchased without payment of tax under the repealed Act, shall be liable to tax at the rate, specified for those goods under this Act.

(3)     A registered person, whose registration has been continued under section 21, shall furnish in such form and to such authority, as may be notified, a statement of taxable goods under this Act, held in stock on the appointed day, within a period of thirty days from the appointed day.

(4)     A registered person shall not be entitled to input tax credit for any purchase.

(5)     A registered person shall issue only a retail invoice for sale made by him and shall not be eligible to issue a VAT invoice.

(6)     A registered person shall not be eligible to hold registration under the Central Sales Tax Act, 1956.

Section 13 - Input tax credit

(1)     A taxable person shall be entitled to the input tax credit, in such manner and subject to such conditions, as may be prescribed, in respect of input tax on taxable goods, including capital goods, purchased by him from a taxable person within the State during the tax period:

[24][Provided that the input tax shall not be available as input tax Credit unless such goods are sold within the State or in the course of inter-State trade or commerce or in the course of export or are used in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-State trade or commerce or in the course of export.]

Provided further that a taxable person shall be entitled to partial input tax credit in any other event, as may be provided in this section in such manner and subject to such conditions as may be prescribed:

Provided further that if, purchases are used partially for the purposes specified in this sub-section and the taxable person is unable to identify the goods used for such purposes, then the input tax credit shall be allowed proportionate to the extent, these are used for such purposes, in the prescribed manner:

Provided further that input tax credit in respect of purchase tax paid or payable by a taxable person under section 19, shall be allowed subject to the conditions laid therein.

[25][***]

(2) ??Input tax credit shall be allowed only to the extent by which the amount of tax paid in the State exceeds four percent on purchase of goods

(a)      sent outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of territory of India; and

(b)      used in manufacturing or in packing of taxable goods sent outside the State other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India.

(3) ??Where a taxable person sends any goods as such or after being partially processed for further processing on job work basis, he shall debit the ITC by four percent of the value of such goods. If such goods after processing are received back by such person, the ITC debited at the time of despatch, shall be restored. Such person shall, however, be required to produce proper evidence in the shape of records, challans or memos or any other document evidencing receipt of such goods, whenever asked for.

(4)? ?Input tax credit on furnace oil, transformer oil, mineral turpentine oil, water methanol mixture, naphtha and lubricants, shall be allowed only to the extent by which the amount of tax paid in the State exceeds [26][five per cent]:

Provided that these goods are used in production of taxable goods or captive generation of power.

(5)? ?A taxable person under this section, shall not qualify for input tax credit in respect of the tax paid on purchase of, -

(a)      automobiles including commercial vehicles, two wheelers, three wheelers and spare parts for the repair and maintenance thereof, unless the taxable person is in the business of dealing in such automobiles or spare parts;

(b)      petrol, diesel, aviation turbine fuel, liquefied petroleum gas and condensed natural gas, unless the taxable person is in the business of selling such products;

(c)      civil structure and immovable goods or properties;

(d)      office equipment and building material, unless the taxable person is in the business of dealing in such goods;

(e)      furniture fixtures including electrical fixtures and fittings, unless the taxable person is in the business of such goods;

(f)       air-conditioning units, air circulators and refrigeration units, unless the taxable person is in the business of dealing in such goods or where air-conditioning, air circulating or refrigeration is essential for sale or storage of taxable goods or in the manufacturing process of taxable goods;

(g)      weigh bridge, except when installed inside the manufacturing premises for use in the manufacturing process of taxable goods;

(h)     goods used in manufacture, processing or packing of goods specified in Schedule A;

(i)       goods used in generation, distribution and transmission of electrical energy unless such generation, distribution and transmission of electrical energy is for captive consumption, in which case, it would be allowed subject to the provisions of sub-section (4) of this section;

(j)       the provisions of food, beverage and tobacco products, unless the taxable person is in the business of selling food, beverage and tobacco products; and

(k)      goods used for personal consumption or gifts.

(6) ??A person, who was earlier registered for VAT and has subsequently got himself registered for TOT, shall reverse the input tax credit availed by him before such change of option, on the stock of goods held by him on the day, when he is registered as a registered person.

(7) ???A person, who was earlier registered for TOT and has subsequently got himself registered for VAT, shall not be entitled for input tax credit on the stock of goods held by him on the day, when he got registered as a taxable person and shall be liable to pay TOT on such stock, if sold within thirty days from such date.

(8) ???A person, who exports goods out of India and has claimed refund of input tax under subsection (2) of section 18, shall reverse the input tax credit, if any, availed by him on such goods.

[27][(9) A person shall reverse input tax credit availed by him on goods which remained in stock at the time of closure of the business.]

(10) Where the selling taxable person has made any modification in respect of a sale by issuance of debit or credit note on the invoice book, the purchasing taxable person shall make necessary adjustment of input tax credit availed.

(11) ?Input tax credit shall be non-transferable, except where the ownership of the business of a person is entirely transferred.

[28][(12) Save as otherwise provided hereinafter, input tax credit shall be claimed only against the original VAT invoice and will be claimed during the period in which such invoice is received. The input tax shall he utilized In accordance with the conditions mentioned in this section, but in no case the amount of input tax credit on any purchase of goods shall exceed the amount of tax, in respect of the same goods or goods used in manufacture of same goods. actually paid, if any. under this Act, into the Government treasury.]

(13) ?In case the original VAT invoice is lost or mutilated, the input tax credit will be available only after the designated officer has determined the credit in the prescribed manner.

(14) ?If upon audit or cross verification or otherwise, it is found that a taxable person has made a false input tax credit claim, the Commissioner or the designated officer, as the case may be, shall order for recovery of the whole or any part of such input tax credit, as the case may be, without prejudice to any action or penalty provided for in this Act.

(15) ?The onus to prove that the VAT invoice on the basis of which, input tax credit is claimed, is bonafide and is issued by a taxable person, shall lie on the claimant.

Section 13A - Input tax credit for tax, paid under the Punjab Tax on Entry of Goods into Local Areas Act, 2000

[29][Subject to the provisions of this Act, a taxable person shall be entitled to input tax credit in respect of the tax, paid by him under the Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No. 9 of 2000), if such goods are for sale in the State or in the course of inter- State trade or commerce  or in the course of export or for use in the manufacture, processing or packing or taxable goods for sale within the State or in the course of inter-State trade or commerce or in the course of export.]

Section 14 - Input tax credit in respect of stock held on the appointed day

(1)     A taxable person, who was registered under the repealed Act and whose registration has been continued under section 21, shall be entitled to input tax credit in respect of the tax paid or payable under the repealed Act on the goods, other than capital goods, lying in stock with him on the appointed day, to such extent and in such manner and subject to such conditions, as may be prescribed. He shall, however, be eligible for input tax credit on capital goods, if he is in the business of resale of such goods:

Provided that such stock is out of the purchases made within twelve months prior to the appointed day.

(2)     The taxable person, who intends to claim input tax credit under sub-section (1), shall within [30][Forty five] days from the appointed day, furnish in the specified form to the designated officer, a statement of tax-paid goods held in stock.

(3)     Input tax credit shall not be available on goods held in stock on the appointed day in respect of which, deduction from gross turnover was claimed by such person under the repealed Act or rules.

(4)     Input tax credit on the stock, held on the appointed day, shall be allowed on the basis of the rate of tax, prevailing on the day preceding the appointed day or on the day of purchase of such goods under the repealed Act or the rate of tax, leviable under this Act, whichever is the lowest.

(5)     Input tax credit available under this section, shall be proportionately adjusted in equal installments over a period of one year beginning after three months from the appointed day in such manner, as may be prescribed.

(6)     No input tax credit under this section shall be allowed in respect of goods held in stock ?

(a)      which are not included in the statement of taxable goods specified under sub-section (2); and

(b)      for which the person does not have in his possession sales vouchers, issued by a person, registered under the repealed Act, against the purchases of the said goods, or which are not recorded in his books of accounts.

(7)     Onus to prove that the taxable goods held in the stock on the appointed day, has suffered tax under the repealed Act, shall be on the claimant of input tax credit.

(8)     Save as otherwise provided in this section, the provisions of section 13, shall apply mutatis mutandis to the input tax credit claimed under this section.

Section 15 - Net tax payable by a taxable person

(1)     Subject to the provisions of this Act, the net tax payable by a taxable person for a tax period, shall be determined by deducting the amount of input tax credit available to him (including input tax credit carried forward from the preceding tax periods, if any) from the output tax, payable by him during the tax period.

(2)     If the amount of input tax credit, is more than the amount of output tax, the same may be adjusted, at the option of the taxable person, against the tax liability for the said tax period, if any, under the Central Sales Tax Act, 1956 and only the remaining amount of the Central Sales Tax shall be payable.

(3)     Excess amount of input tax credit, if any, after adjustment under sub-section (2) shall be adjusted against any outstanding tax, penalty or interest under this Act or under the Central Sales Tax Act, 1956, as the case may be.

(4)     Excess amount of input tax credit, if any, after adjustment under sub-section (2) and (3), may be carried over to subsequent tax period or at the option of taxable person, on application being made in the prescribed manner, be refunded in accordance with the provisions of this Act.

(5)     The net tax payable for a tax period by a person, liable to pay tax, but not registered under this Act, shall be equal to the output tax, payable for the said tax period as per the provisions of this Act and no input tax credit shall be admissible to him.

Section 16 - Tax free goods

No tax shall be payable on the sale of goods specified in Schedule-A and no person including a taxable person or a registered person shall charge tax on the sale of goods which are declared tax free goods under this section.

Section 17 - Zero-rated sales

[31][(1)] Where any taxable goods are exported outside the territory of India or are supplied in the course of such export falling within the scope of section 5 of the Central Sales Tax Act, 1956, such sales shall be zero-rated.On such sale, no output tax is payable by any person:

Provided that a taxable person making zero-rated sale shall be eligible for input tax credit in relation to such sales.

[32][(2) Where any taxable goods are sold to a unit within the Special Economic Zone or to a developer or where any inter-unit transaction of goods within the Special Economic Zone is made, such sales shall be zero-rated. On such sale, no output tax is payable by any person :

Provided that a taxable person making zero-rated sale shall be eligible for input tax credit in relation to such sale :

Provided further that the sale made to aforesaid unit or to a developer or an inter-unit transaction shall be zero-rated subject to production of certificate in such form as may be prescribed.

(3)? ?Where any unit referred to in sub-section (2) makes sales directly to a customer, the provisions of zero-rated sales specified in sub-section (2) shall not be applicable.

Explanation.-

(i)       The expressions "unit" and "Special Economic Zone" shall have the same meaning as has been assigned to these expressions in the Punjab Special Economic Zone Act, 2009 (Punjab Act No. 17 of 2009) ;

(ii)      "developer" means a person or a body of persons, including a company, a firm or a Government undertaking, which establishes, constructs, installs, operates, maintains or manages a part or whole of the infrastructure and other amenities in the Special Economic Zone.]

Section 18 - Refund of tax to certain categories

(1)     The persons or organizations listed in Schedule-G, shall be entitled to claim refund of tax, paid for goods, purchased in the State, on every single purchase, exceeding rupees five thousand, excluding tax amount, on proper application, subject to such conditions, as may be prescribed.

(2)     A taxable person shall be entitled to claim refund in respect of input tax paid on goods exported out of the territory of India, subject to such conditions and the manner, as may be prescribed.

Section 19 - Levy of purchase tax on certain goods

(1)     Notwithstanding anything contained in this Act, there shall be levied VAT on the taxable turnover of purchase of the goods specified in Schedule-H at the rate applicable to such goods as per the Schedules.

(2)     The tax shall be leviable on the first purchase of these goods from within the State. In case of Milk, however, first purchase shall be, when purchase is made by a manufacturer of taxable goods:

Provided that on subsequent sales of such goods, VAT on sale price shall be leviable as per the provisions of this Act.

(3)     Subject to the provisions of this Act, the purchaser of the goods, specified in Schedule-H, shall have to be registered for VAT.

(4)     The purchase tax paid by a taxable person, shall not be admissible as input tax credit, unless the goods are sold within the State or are used for manufacture of taxable goods in the State for sale or are sold in the course of inter-State trade or commerce or in the course of export:

[33][Provided that if, purchases are used partially for the purpose of manufacture of taxable goods and partially for the purpose of manufacture of tax free goods, then the purchase tax paid by a person shall be allowed to be treated as input tax credit proportionately, to the extent, the purchases are used for such purposes in the prescribed manner.]

[34][(5) Input tax credit, on the goods specified in schedule 'H' or the products manufactured there from, when sold in the course of inter-State trade or commerce, shall be available only to the extent of Central Sales Tax, chargeable under the Central Sales Tax Act, 1956.]

Section 20 - Levy of tax on turnover of purchase of goods in certain circumstances

(1)     Where a taxable person purchases taxable goods from a person other than a taxable person or a registered person, and ?

(a)      uses such goods in the manufacture of goods, declared tax-free under section 16; or

(b)      uses such goods in the manufacture of any goods other than those specified in Schedule-A, and sends the goods so manufactured outside the State otherwise than by way of sale in the course of inter-State trade or commerce or exports out of India; or

(c)      disposes of such goods in any manner other than by way of sale in the State; or

(d)      despatches them to a place outside the State otherwise than as a result of sale in the course of inter-state sale, trade or commerce or export out of India, there shall be levied a tax on the taxable turnover of purchases of such goods at the rate applicable to such goods as per the Schedules :

Provided that no tax shall be levied under this section, if a tax has already been paid on such goods under section 19.

(2)     Where a registered person purchases taxable goods from a person, other than a taxable person or a registered person, and disposes of such goods in any manner, there shall be levied a tax on the turnover of such purchases at the rate(s) specified in the Schedule(s).

Section 21 - Persons liable to register

(1)     No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act.

(2)     Every person required to be registered under sub-section (1), shall make an application for registration, within a period of thirty days from the date when such person becomes liable to pay tax under this Act, in the prescribed manner to the designated officer.

(3)     If the designated officer is satisfied that the application for registration is in order, he shall, in accordance with such manner and on payment of such fee, as may be prescribed, register the applicant and grant him a registration certificate in the prescribed form:

Provided that if the designated officer is satisfied that the particulars contained in the application are not correct, or are incomplete or that any evidence or information required for registering the applicant, is not furnished, he may, after necessary inquiry and after giving the applicant an opportunity of being heard, reject the application for reasons to be recorded in writing. However, the applicant may submit a fresh application for registration in accordance with the provisions of this Act:

Provided further that during the pendency of an application for registration, he shall file return and pay the due amount of tax, in the prescribed manner.

(4)     Where a person has contravened the provisions of sub-section (1), the designated officer shall, subject to action under section 52 or section 60, as the case may be, register such person and grant him a registration and such registration shall take effect as if, it had been granted under sub-section (3) on the application made by the person.

(5)     When any person, who was registered before the appointed day under the repealed Act, and continues to be so registered on the day, immediately before such appointed day, and is liable to pay tax under this Act on such appointed day, the designated officer shall, within thirty days of receipt of application in the prescribed form, issue to such person, in the prescribed manner, a fresh registration under this Act for VAT or TOT, as the case may be.

(6)     For the purpose of identification of taxpayers, the Commissioner or the designated officer, shall issue a VAT Registration Number ( hereinafter in short referred to as VRN) to every taxable person and TOT Registration Number (hereinafter in short referred to as TRN) to every registered person.

(7)     Every taxable person or a registered person, who is allocated a registration number, shall mention his VRN or TRN, as the case may be, in all returns, forms or any other documents, used for the purposes of this Act.

(8)     Every person, who is liable to pay tax, and who is a Hindu undivided family or an association of persons, club or society or firm or company or, who is engaged in business as the guardian or trustee or otherwise on behalf of another person, shall make a declaration to the designated officer, stating the name of the person or persons, who shall be deemed to be the manager or managers of such persons business for the purposes of this Act.

(9)     Save as otherwise provided in section 77, a registration, granted under this Act, shall be personal to the person to whom it is granted and shall not be transferable.

Section 22 - Voluntary registration for VAT

(1)     Subject to the provisions of sub-section (3) of section 6, any person except one dealing exclusively in goods declared tax-free under section 16, may apply in the prescribed manner to the designated officer for registration under this Act.

(2)     The provisions of sub-sections (2), (3) and (5) of section 21, shall apply in respect of applications for registration under this section.

(3)     Every person, who has been registered upon application made under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act whether his gross turnover exceeds the taxable quantum or not.

Section 23 - Amendment of registration

The designated officer may from time to time, by order in writing, amend registration on information furnished under section 76.

Section 24 - Cancellation of registration

(1)     The designated officer may, on an application made to him, or otherwise, by an order in writing, cancel registration, on ?

(a)      an information received that a business, in respect of which a registration was granted under sub-section (3) of section 21, has been discontinued; or

(b)      an information received that the person has violated any of the provisions of this Act or the rules made there-under; or

(c)      non-filing of return or non-payment of due tax under this Act; or

(d)      any other sufficient cause including misuse of the registration or cessation of liability to payment of tax under this Act; or

(e)      the registration granted under the Central Sales Tax Act, 1956, to a person liable to pay tax by virtue of the provisions of section 7, but who is not otherwise liable to pay tax under section 6, has been cancelled.

(2)     Where registration is cancelled under this section without making an application by the person concerned, no order for such cancellation shall be passed by the designated officer, without affording an opportunity of being heard.

Section 25 - Security from certain classes of persons

(1)     Every person applying for registration under this Act, shall furnish a security of rupees fifty thousand in the manner, prescribed for securing proper and timely payments of tax or any other sum, payable by him under this Act:

Provided that the security already furnished by a person registered under the repealed Act, shall be deemed to have been furnished under this Act.

(2)     The designated officer granting registration, may, on application made by a person for release, discharge or refund of the security, order the release, discharge or refund of the whole security or any part thereof, furnished by him, if the same is not required.

Explanation.- The designated officer shall not be required to retain security or surety furnished by a person on behalf of a taxable person or registered person, if the registration of such a person has been cancelled under this Act and nothing remains due against such a person.

(3)     Where it appears expedient to the designated officer, granting registration, so to do, for the proper realisation of, tax payable under this Act, he may, at any time while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the person, to whom the registration has been granted, to furnish within such time, as may be specified in the order and in the prescribed manner, such additional security, not exceeding rupees two lac in addition to the security, furnished under sub-section (1), as may be specified in the order, for the aforesaid purpose:

Provided that no person shall be required to furnish any additional security under this sub-section, unless he has been given an opportunity of being heard.

(4)     The designated officer, granting the registration, may, by an order in writing, for good and sufficient cause, forfeit or realise the whole or any part of the security or additional security furnished by a person for recovery of any amount of tax or penalty due or payable by a person:

Provided that no order shall be passed under this sub-section without giving the person concerned, an opportunity of being heard.

(5)     In case the security is rendered insufficient because of the order made under subsection (4), the person concerned shall furnish further security to make up for the amount, which has fallen short, in such manner and within such time, as may be prescribed. 

Section 26 - Returns

(1)     Every taxable person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.

(2)     Every registered person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.

(3)     Every person shall, in such manner, as may be prescribed, pay into a Government Treasury or any bank authorized to transact Government business or at the District Excise and Taxation Office, the full amount of tax due from him as per provisions of this Act and shall furnish along with the returns, receipt from such Treasury or Bank or District Excise and Taxation Office, as the case may be, showing the payment of such amount:

Provided that no payment of such amount shall be accepted at the District Excise and Taxation Office, except through a bank draft or crossed cheque drawn on a local Scheduled Bank in favour of the designated officer.

(4)     If any person referred to in sub-sections (1) and (2), discovers any bonafide error or omission in any return furnished by him, he may rectify such error or omission in the return, due to be filed immediately following the detection of such error or omission. If such rectification results in a higher amount of tax to be due than the original return, it shall be accompanied by a receipt for payment of the additional amount of tax, payable along-with the interest at the rate specified under this Act for the period of delay, in the manner prescribed in sub-section (3). No such rectification shall, however, be allowed after the end of the financial year immediately following the year to which the rectification relates or issue of a notice for audit or assessment whichever, is earlier. Where such rectification results in excess amount of tax having been paid than due, such excess tax shall be refundable on application as per provisions of this Act and the rules framed thereunder. No adjustment shall, however, be allowed for such excess payment.

(5)     In addition to any return under sub-sections (1) and (2), the Commissioner or the designated officer may, require a taxable person or a registered person to furnish such further information along-with the returns or at any other time, as may be deemed necessary.

(6)     Notwithstanding anything contained in this section, the Commissioner or the designated officer, as the case may be, may by notice, direct a person other than a taxable person or a registered person, to file returns at such intervals and in such form and containing such information, as may be required.

(7)     Every taxable person or registered person, as the case may be, shall file an annual statement in such form and in such manner, as may be prescribed.

(8)     A taxable person or a registered person, whose registration is cancelled under section 24, shall file such final return, as may be prescribed, within thirty days from the date of cancellation by the Commissioner or the designated officer, as the case may be.

Section 27 - Tax deduction from the amount payable to works contractor

(1)     Notwithstanding anything contained in any of the provisions of this Act, every contractee responsible for making payment to any person (hereinafter in this section referred to as the contractor) for discharge of any liability on account of valuable consideration, exceeding rupees five lac in a single contract payable for the transfer of property in goods (whether as goods or in some other form) in pursuance of a works contract, shall, at the time of making such payment to the contractor either in cash or in any other manner, deduct an amount equal to [35][six per cent] of such sum towards the tax payable under this Act on account of such contract:

Provided that any individual or Hindu undivided family not registered under this Act, shall not be liable for deduction of such tax.

(2)     Any contractor responsible for making any payment or discharge of any liability to any sub-contractor or in pursuance of a contract with the sub-contractor, for the transfer of property in goods (whether as goods or in some other form) involved in the execution whether wholly or in part, of the work undertaken by the contractor, shall, at the time of such payment or discharge, in cash or by cheque or draft or by any other mode, deduct an amount, equal to [36][six per cent] of such payment or discharge, purporting to be a part of the tax, payable under this Act on such transfer, from the bills or invoices raised by the sub-contractor, as payable by the contractor.

(3)     Every person liable to deduct tax at source under sub-section (1) or sub-section (2), as the case may be, shall make an application in the prescribed manner to the designated officer for allotment of Tax Deduction Number. The designated officer, after satisfying that the application is in order, shall allot Tax Deduction Number.

(4)     The amount deducted under sub-section (1) or sub-section (2), as the case may be, shall be deposited into the Government Treasury by the person making such deduction in the prescribed manner and shall also file a return of tax deduction and payment thereof in such form and in such manner, as may be prescribed.

(5)     Any deduction made in accordance with the provisions of this section and credited into the Government Treasury, shall be treated as payment towards the tax payable on behalf of the person from whose bills and invoices, the deduction has been made and credit shall be given to him for the amount so deducted on the production of the certificate, in the prescribed form in this regard.

(6)     If any contractee or the contractor, as is referred to in sub-section (1) or sub-section (2), as the case may be, fails to make the deduction or after deducting such amount fails to deposit the amount so deducted, the designated officer may, after giving an opportunity of being heard, by order in writing, direct that the contractee or the contractor shall pay, by way of penalty, a sum, equal to the amount deductible under this section, but not so deducted, and if deducted, not so deposited into the Government Treasury.

(7)     Without prejudice to the provision of sub-section (6), if any contractee or the contractor, as the case may be, fails to make the deduction or after deducting, fails to deposit the amount so deducted, he shall be liable to pay simple interest at the rate of one and half per cent per month on the amount deductible under this section, but not so deducted and, if deducted, but not so deposited, from the date on which such amount was deductible to the date, on which such amount is actually deposited.

(8)     Where the amount has not been deposited after deduction, such amount together with interest referred to in sub-section (7), shall be a charge upon all the assets of the person concerned.

(9)     Payment by way of deduction in accordance with sub-section (1) or sub-section (2), shall be without prejudice to any other mode of recovery of tax, due under this Act from the contractor or the sub-contractor, as the case may be.

(10)   Where on an application being made by any contractor or sub-contractor, the Commissioner or designated officer is satisfied that no deduction of tax or deduction of tax at a lower rate is justified, he shall grant him such certificate permitting no deduction of tax or deduction of tax at a lower rate, as the case may be. On furnishing of such certificate, the person responsible for deduction of tax, shall comply with such certificate. 

Section 28 - Audit of returns

(1)     The Commissioner or the designated officer with a view to ascertain the correctness of the returns in general and admissibility of various claims, including input tax credit and refund, may audit or cause to be audited, any of the returns filed, documents or information or statutory forms submitted by a person, subject to such conditions and in such manner, as may be prescribed.

(2)     For the purpose of audit under subsection (1), the Commissioner or any designated officer, may, after due notice to the person to be audited, proceed to examine the records, stock in trade and the related documents of the person. Such examination of records can be undertaken in any office of the Excise and Taxation Department of the State or at the business premises of the person.

(3)     The audit under sub-section (1), may be carried out within a period of six years from the date of furnishing of returns.

Section 29 - Assessment of tax

(1)     Where a return has been filed under sub section (1) or sub-section (2) of section 26 or in response to a notice under sub section (6) of section 26, if any tax or interest is found due on the basis of such return, after adjustment of any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent to the person specifying the sum so payable, and such intimation shall be deemed to be a notice of demand issued under sub-section (11) and all the provisions of this Act shall apply accordingly :

Provided that except as otherwise provided in this sub-section, the acknowledgment of the return shall be deemed to be an intimation under this sub-section in case, either no sum is payable by the person or no refund is due to him:

Provided further that no intimation under this sub-section shall be sent after the expiry of [37][two years] from the end of financial year in which the return is filed.

(2)     Notwithstanding anything contained in sub-section (1), the Commissioner or the designated officer, as the case may be, may, on his own motion or on the basis of information received by him, order or make an assessment of the tax, payable by a person to the best of his judgement and determine the tax payable by him, where, -

(a)      a person fails to file a return under section 26 ; or

(b)      there are definite reasons to believe that a return filed by a person is not correct and complete; or

(c)      there are reasonable grounds to believe that a person is liable to pay tax, but has failed to pay the amount due; or

(d)      a person has availed input tax credit for which he is not eligible; or

(e)      provisional assessment is framed.

(3)     The Commissioner on his own motion or on the basis of information received by him may, by an order in writing, direct the designated officer to make an assessment of the amount of tax payable by any person or any class of persons for such period, as he may specify in his order.

[38][(4) An assessment under sub-section (2) or sub-section (3), may be made within a period of six years after the date when the annual statement was filed or due to be filed, whichever is later:

Provided that the assessment under sub-section (2) or sub-section (3), in respect of which annual statement for the assessment year 2006-07 has already been filed, can be made till the 20th day of November, 2014.

Explanations: (1) The limitation period of six years for an assessment under sub-section (2) or sub-section (3), shall also apply to those cases in which the aforesaid period of six years has yet not expired.

(2)? ?It is clarified that prior to commencement of the Punjab Value Added Tax (Second Amendment) Act, 2013, the Commissioner was not required to issue any notice to the concerned person before extending the limitation period of assessment.]

[39][(4A) Notwithstanding anything contained in sub-section (4), the assessment under sub-section (2) or sub-section (3), in respect of which annual statement for the assessment year 2005-06 has already been filed, can be made within a period of five years, commencing from the 20th day of November, 2006.]

(5)?  Where an assessment is to be made under this section, the designated officer shall, serve a notice to the person to be assessed and such notice shall state-

(a)      the grounds for the proposed assessment; and

(b)      the time, place and manner for filing objections, if any.

(6) ? The designated officer, after taking into account all relevant material, which the officer has gathered, shall on the day specified in the notice issued under sub-section (5) or as soon afterwards as may be, after hearing such evidence, as the assessee may produce, by an order in writing, make an assessment determining the sum payable or refund of any sum due to him on the basis of such assessment.

(7) ? The designated officer may, with the prior permission of the Commissioner, within a period of three years from the date of the assessment order, amend an assessment, made under sub-section (2) or sub-section (3), if he discovers underassessment of tax, payable by a person for the reason that,-

(a)      such a person has committed fraud or wilful neglect; or

(b)      such a person has misrepresented facts; or

(c)      a part of the turnover has escaped assessment:

Provided that no order amending such assessment, shall be made without affording an opportunity of being heard to the affected person.

(8) ?? The designated officer may, within a period of one year from the date of the assessment order, rectify an assessment, made under sub-section (2) or sub-section (3), if he discovers that there is a mistake apparent from record:

Provided that no order rectifying such assessment shall be made without affording an opportunity of being heard to the affected person.

(9)??  An assessment under sub-sections (7) and (8) shall be an assessment made under this Act for all intents and purposes.

(10) No assessment or other proceedings purported to be made, or executed under this Act or the rules made thereunder, shall be, -

(a)      quashed or deemed to be void only for the reason that the same were not in the prescribed form; or

(b)      affected by reason of a mistake, defect or omission therein:

Provided that such an assessment is substantially in conformity with this Act or according to the intent and meaning of this Act and the rules made thereunder.

[40][(10-A) Notwithstanding any thing to the contrary contained in any judgement, decree or order of any court, tribunal or other authority, an order passed by the Commissioner under sub-section (4) prior to commencement of the Punjab Value Added Tax (Second Amendment) Act, 2013, shall not be invalid on the ground of prior service of notice or communication of such order to the concerned person.]

(11) When any tax, interest, penalty or any other sum is payable in consequence of any order passed under this Act, the designated officer shall serve upon the person a notice of demand in the prescribed form specifying the sum so payable. 

Section 29A - Power to arrive at settlement of unpaid tax in case of any discrepancy in the discharge of tax liabilities

[41][29-A.  Power to arrive at settlement of unpaid tax in case of any discrepancy in the discharge of tax liabilities

Notwithstanding anything contained in any provision of this Act, the State Government, if satisfied that it is necessary or expedient so to do in public interest, may, for greater transparency, in order to ensure compliance, notify any scheme for settlement of unpaid tax in case of any discrepancy in the discharge of tax liabilities, subject to such terms and conditions, as may be notified in the Official Gazette.]

Section 30 - Provisional assessment

(1)     Notwithstanding anything contained in section 29, where fraud or willful neglect has been committed with a view to evade or avoid the payment of tax or due tax has not been paid or a return has not been filed by or on behalf of a person, the designated officer may, for the reasons to be recorded in writing, make provisional assessment for any period to determine the tax liability so evaded, avoided or unpaid:

Provided that tax liability of such a person shall be assessed finally after he files his return in the prescribed manner.

(2)     The provisional assessment under sub-section (1) shall be made within a period of six months from the date of detection. The Commissioner may, however, for reasons to be recorded in writing, extend the said period by another six months in a particular case referred to him by the designated officer.

Section 31 - Tax liability of a casual trader

(1)     If a casual trader organizes a business event for sale or purchase of taxable goods in the State, he shall apply for permission to do so to the designated officer in the prescribed form, along- with such fee, as may be prescribed.

(2)     The designated officer on receipt of the application, may grant permission in the prescribed form, subject to such conditions, as may be prescribed.

(3)     Where a business event for sale or purchase of taxable goods is organized by a taxable person or a registered person, he shall before organizing such event inform the designated officer in the prescribed manner.

(4)     A casual trader organizing the business event, shall furnish, such amount of security, in the prescribed manner, as may be determined by the designated officer, keeping in view the nature and quantum of business, likely to be undertaken by the casual trader, but not exceeding rupees one lac.

(5)     A casual trader, who brings taxable goods from outside the State, shall report to the nearest Information Collection Centre or check post on entry in the State, in the prescribed form by giving full detail of such goods, in the prescribed manner.

(6)     A casual trader, shall make the payment of tax in such manner, as may be prescribed, and shall immediately on completion of such business event or the period for which the permission was granted by the designated officer, whichever is earlier, report to the designated officer, about the total amount of sales or purchases, the tax payable thereon and the tax paid and shall deposit the amount of balance tax, if any, in the Government treasury within such time and in such manner, as may be prescribed.

(7)     Where a casual trader fails to apply for permission as required under sub-section (1) or fails to make a report as required under sub-sections (5) and (6), the designated officer shall assess to the best of his judgement, the amount of tax due and direct such person to pay the amount of tax within such time and in such manner, as may be prescribed:

Provided that no amount of tax under this sub-section shall be assessed without affording an opportunity of being heard to the casual trader.

(8)     The provisions relating to penalty, interest and recovery of this Act shall mutatis mutandis apply to the tax payable by a casual trader under this section.

Explanation. - For the purpose of this section, business event shall include an event like exhibition-cum-sale, seasonal clearance-cum-sale or any such like activity where occasional transaction in the nature of business, is carried out.

Section 32 - Interest for non-payment or delayed payment of tax

(1)     If any person fails to pay the amount of tax due from him as per provisions of this Act, he shall, in addition to the amount of tax, be liable to pay simple interest on the amount of tax due from him at the rate of [42][half per cent] per month from the due date for payment till the date, he actually pays the amount of tax.

(2)     If a person having furnished a return under this Act, rectifies any error or omission as per sub-section (4) of section 26, which results in higher amount of tax to be due than the original return, such a person shall be liable to pay interest at the rate of one and half per cent per month, in respect of the additional amount of tax payable from the due date for payment till the date, he actually pays the additional amount of tax.

(3)     If a person fails to declare the amount of tax in a return, which should have been declared, such a person shall be liable to pay simple interest at the rate of one and half per cent per month on such amount of tax from the due date for payment till the date, he actually pays such amount of tax.

(4)     If the amount of tax or penalty due from a person is not paid by him within the period specified in the notice of demand, or if no period is specified, within thirty days from the service of such notice, the person shall in addition to the amount of tax or penalty, be liable to pay simple interest on such amount at the rate of one and half per cent per month from the date immediately following the date, on which the period specified in the notice or the period of thirty days, as the case may be, expires till the date, he actually pays such amount of tax or penalty, as the case may be:

Provided that where the recovery of any tax or penalty is stayed by an order of any competent authority or any Court, the amount of tax or penalty shall, after the order of stay is vacated, be recoverable alongwith interest at the aforesaid rate on the amount ultimately found to be due and such interest shall be payable from the date, the tax or penalty had first become due.

(5)     The amount of interest payable under this section shall, -

(a)      be calculated by considering part of a month as one month;

(b)      for the purposes of collection and recovery, be deemed to be tax under this Act; and

(c)      be in addition to the penalty, if any, imposed under this Act.

Explanation. If payment of the amount of tax is made by any person through cheque and the same is dishonoured by the bank, it will amount to failure on the part of the person to pay the amount of tax

Section 33 - Due date of payment

Value Added Tax or Turnover Tax due or payable under this Act, shall be paid,-

(a)      in the case of a taxable person whose gross turnover exceeds rupees one crore in the previous year, on monthly basis by such date, as may be prescribed;

(b)      in the case of a taxable person whose turnover is less than one crore in the previous year, by the date, the return for such a period is required to be filed or as may be prescribed;

(c)      in case of tax due as per assessment made under this Act, by the date, specified in the notice of demand or within a period of thirty days of the order, which ever is earlier;

(d)      in the case of turnover tax payable by a registered person under this Act, by the date, the return for the period is required to be filed;

(e)      in the case of a casual trader, by such date as may be prescribed; and

(f)       in any other case, the tax shall be payable by such date, as may be specified by the designated officer.

Section 34 - Tax as a debt due to the State Government

Tax or any other amount due or payable by a person under this Act, shall be a debt, due to the State Government and shall be payable or recovered as per the provisions of this Act, and the rules framed thereunder.

Section 35 - Liability under this Act to be the first charge

Notwithstanding anything to the contrary contained in any contract or law for the time being in force, any amount of tax, penalty, interest and any other sum, payable by a taxable, registered or any other person under this Act, shall be the first charge on the property of such person from the date on which the amount becomes due and payable.

Section 36 - Arrear recoverable as arrears of land revenue

The amount of any tax, penalty, interest or any other sum due and payable under this Act, which remains unpaid after the due date, shall be recoverable as arrears of land revenue.

Section 37 - Adjustment of any payment

Payment made by a person towards the amount, due as a result of any order passed under this Act, shall first be adjusted, except in so far as the recovery of the said amount or part thereof is stayed under the provisions of this Act, against the interest payable by him on the date of payment and thereafter towards the amounts due as a penalty. Any amount remaining unadjusted, shall be adjusted towards the tax payable.

Section 38 - Restrictions on transfer of property

No person against whom any recovery proceedings under the provisions of this Act are pending, shall create a charge on or part with the possession by way of sale, mortgage, gift, exchange or any other mode of transfer whatsoever, of any of his assets, with the intention to avoid or evade payment of any tax, penalty, interest or any other sum due or likely to become due. In case, any charge or transfer is made in violation of the provisions of this section, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the taxable person, registered person or any other person, till the completion of the said proceedings:

Provided that such charge or transfer shall not be void, if it is made with the previous permission of the designated officer or the tax or any other amount due from such a person, has been fully secured for payment by furnishing a bank guarantee. In case of outstanding arrears, the designated officer shall inform the appropriate Registering Authority about the liabilities under this Act.

Explanation.- In this section assets means land, building, machinery, plant, shares, securities and fixed assets, charged to the banks to the extent, to which any of the assets, do not form part of the stock in trade of the business of the person.

Section 39 - Refund of tax

(1)     Subject to the provisions of this Act and the rules made thereunder, the Commissioner or the designated officer shall, in such manner and within such period, as may be prescribed, refund to a person, the amount of tax, penalty or interest, if any, paid by such person in excess of the amount due from him and also the excess of input tax credit over output tax payable under this Act. The refund may either be by refund voucher or at the option of the person, by refund adjustment order as may be specified:

Provided that, the Commissioner or the designated officer shall first apply such excess amount towards the recovery of any amount due in respect of which a notice under section 29 has been issued or any amount, which is due, but not paid, as the case may be, and shall refund the balance, if any.

[43][(1-A) Notwithstanding anything contained in sub-section (1), where an application for claim of refund is submitted by a person on the basis of his monthly or quarterly return, as the case may be, the designated officer may, after adjusting any recovery, if due against such person, provisionally allow seventy-five per cent of the amount of refund claimed, but not exceeding one crore rupees, on furnishing of an indemnity bond in the prescribed form, subject to such terms and conditions, as may be prescribed:

Provided that if such terms and conditions are not complied with by the taxable person, he shall be liable to pay due tax along with penalty at the rate of two per cent per month and interest in accordance with the provisions of section 32 on the tax so due from the date of filing of the return.; and]

(2)     Where any refund is due to any taxable person or registered person according to the return furnished by him for any period, such refund may provisionally be adjusted by him against the tax due and payable as per the returns furnished under section 26 for any subsequent period:

Provided that the amount of tax or penalty or interest or all of these, due from, and payable by, the taxable person or the registered person, as the case may be, on the date of such adjustment, shall first be deducted from such refund while [44][making adjustment.]

[45][***]

Section 39A - Punjab VAT Refund Fund

[46][39A. Punjab VAT Refund Fund.--

(1)     There shall be constituted a fund to be called the Punjab VAT Refund Fund, which shall be maintained and operated by the Department of Excise and Taxation in such manner, as may be prescribed.

(2)     The amount collected on account of advance tax under sub-section (7) of section 6, shall directly be credited in to the Punjab VAT Refund fund.

(3)     After allowing refund claims from the fund, the balance amount in the fund, shall be deposited in the Consolidated fund of the State, as may be prescribed.]

Section 40 - Interest on delayed refund

Where an amount required to be refunded by the Commissioner or the designated officer, to any person, is not so refunded to him within a period of ninety days from the date of the application, a simple interest at the rate of [47][half per cent] per month on the said amount shall be paid to such person from the date, immediately following the expiry of the period of [48][sixty days] to the date of the refund.

Explanation.- (1) If the delay in granting the refund within the aforesaid period of ninety days is attributable to the taxable person or the registered person, as the case may be, whether wholly or in part, the period of the delay attributable to him, shall be excluded from the period for which interest is payable.

(2) ???Where any question arises as to the period to be excluded in terms of Explanation (1), for the purposes of calculation of interest, such question shall be determined by the Commissioner, whose decision shall be final.

(3)?? ?Interest under this section, shall be calculated by considering part of the month as one month.

Section 41 - Power to withhold refund in certain cases

(1)     Where an order giving rise to a refund is the subject matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the officer competent to grant such refund is of the opinion that the grant of the refund is likely to adversely affect the revenue, such officer may, with the previous approval of the Commissioner, withhold the refund till such time, as may be determined.

(2)     Where a refund is withheld under sub-section (1), the Commissioner shall pay interest in accordance with the provisions of section 40 on the amount of refund ultimately determined to be due to the person as a result of appeal or further proceeding or any other proceeding for the period, from the date, immediately following the expiry of the period of ninety days from the date of the order referred to in sub-section (1), to the date of refund.

Section 42 - Accounts

(1)     Every taxable person, registered person, casual trader or any other person, who is required so to do by the Commissioner or the designated officer by notice served on him, shall keep a true account of the goods sold and purchased by him.

(2)     If the officer referred to in sub-section (1), considers that the accounts kept are not sufficiently clear or intelligible to determine, whether or not a person is liable to pay tax during any period or the accounts are so kept as not to enable a proper scrutiny of the returns or the statements furnished, he may require such person by notice in writing to keep such accounts, including records of sales or purchases in such form or manner, as in his opinion are necessary for the purpose of proper assessment of tax.

(3)     Every taxable person and registered person shall keep all his account books including those relating to his stock of goods or to purchases, sales and delivery of goods made by him or payments made or received, at the place or places of business, specified in his registration certificate or with the previous approval of the Commissioner or the designated officer at such other place or places, as may be allowed.

(4)     Every person, shall produce all account books relating to his business, if so required by the designated officer, for the purpose of authentication in the manner as may be prescribed.

Section 43 - Audit of accounts by Chartered Accountant

Every person whose gross turnover in a year exceeds the prescribed limit, shall have his accounts audited by an accountant and shall submit to the designated officer a VAT audit report in the prescribed form duly signed by such accountant and setting forth such particulars and certificates, as may be prescribed.

Explanation. In this section accountant means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (Central Act No. 38 of 1949), and includes any person, who by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (Central Act No. 1 of 1956), is entitled to be appointed to act as an auditor of companies.

Section 44 - Period of retention of accounts

Every person required under this Act to keep and maintain account books or other records, shall retain them until the expiry of six years after the end of the year to which these relate or for such other period, as may be required or until the assessment becomes final, whichever is later.

Section 45 - Taxable person and registered person to issue invoice

(1)     Every taxable or registered person or an agent of such person shall, in respect of the goods sold by him or on his behalf for the value, exceeding rupees one hundred, issue to the purchaser, in such manner, a VAT invoice or a retail invoice, as the case may be, containing such information, as may be prescribed.

(2)     Each sale below rupees one hundred, where a VAT invoice or a retail invoice has not been issued, shall also be recorded in the account books on daily basis.

(3)     Notwithstanding anything contained in sub-sections (1) and (2) where a purchaser asks for an invoice, it shall be issued by the person irrespective of the fact that value of the goods sold is less than rupees one hundred.

(4)     Where the goods are transferred otherwise than by way of sale, the taxable or registered person shall, in respect of the goods transferred or consigned by him or on his behalf, issue to the consignee a delivery challan in such manner and containing such particulars, as may be prescribed.

(5)     Where a taxable person returns any goods purchased by him from another taxable person, against a VAT invoice, he shall issue to the selling taxable person at the time of return of the goods, a delivery cum debit note on the invoice book and shall reverse the input tax credit availed by him in respect of those goods.

Section 46 - Production and inspection of accounts, impounding of documents, search of premises and seizure of goods

(1)     The Commissioner or the designated officer, as the case may be, may, subject to such conditions, as may be prescribed, require any taxable person, registered person or any other person to produce before him any account and document or to furnish any information, relating to stocks of goods or sale, purchase and delivery of goods or payments made or received by the person or any other information relating to his business, as may be necessary.

(2)     All accounts, registers and documents relating to stocks of goods or purchase, sale and delivery of goods, payments made or received by any taxable person, registered person or any other person and all goods kept in any place of business of any person, shall at all reasonable times be provided for inspection by an officer referred to in sub-section (1), and that officer may take or cause to be taken such copies or extracts of the said accounts, registers or documents and such inventory of the goods, as appear to him to be necessary.

(3)     If the officer referred to in sub-section (1), has reason to believe that any taxable person, registered person or any other person has evaded or is attempting to evade the payment of any tax due from him, he may, for reasons to be recorded in writing, seize such accounts, registers or documents, as may be necessary and shall issue a receipt for the same. The said officer shall retain such accounts, registers or documents for a period not exceeding thirty days in case of current account books and sixty days for old account books. The officer may, however, in case he finds any information necessary for further investigation, retain a photocopy of the documents, which shall be authenticated by the person himself and shall be treated as original.

(4)     For the purpose of sub-section (2) or sub-section (3), the said officer may enter and search any place of business or any other place where he has reason to believe that the taxable person or registered person keeps or is for the time being keeping any accounts, registers or documents of his business or stocks of goods relating to his business:

Provided that no officer shall enter and search any premises, without prior permission of the Commissioner or of such other officer not below the rank of Assistant Excise and Taxation Commissioner, as the Commissioner may, authorize in writing.

(5)     Where any books of accounts, documents, cash or goods are found in the possession or control of any person in the course of any search, it shall be presumed, unless the contrary is proved, that such books of accounts, documents, cash or goods belong to such person whose place of business is inspected.

(6)     Any officer empowered to act under sub-section (2) or sub-section (3), shall have power to seize any goods, which are found in any office, shop, godown, vessel, vehicle or any other place of business, but not accounted for by the person in his books, accounts, registers, records and other documents:

Provided that a list of all the goods seized under this sub-section, shall be prepared by such officer and be signed by the officer and two independent witnesses, and a receipt of the goods shall be given to the person from whose possession or control these are seized.

(7)     The officer shall have the power to record the statement of a person or any person connected with his business, including a bailee or a transporter, and such statement may, after giving the affected person a reasonable opportunity of being heard, be used for the purpose of determining his liability to tax.

(8)     The Officer after seizing the goods, may hand over the goods on sapurdari to the owner of the goods or a person duly authorized by such owner with the direction that he shall not part with the goods till verification is done or inquiry is made by such officer. The Officer shall make necessary verification or inquiry within a period of fifteen days from the date of handing over the seized goods.

(9)     The officer may release the goods, seized under sub-section (6), to the owner of the goods or to the person duly authorised by such owner, during the course of the proceedings, on furnishing security for an amount equal to the value of the goods to the satisfaction of such an officer.

(10)   If the officer, on inquiry or verification is satisfied that the seized goods are not accounted for or that the person has attempted to evade payment of tax in respect of such goods, he shall, after giving the person an opportunity of being heard, impose penalty as per provisions of this Act.

(11)   The penalty referred to under sub-section (10), shall be deposited by the person in the prescribed manner within a period of thirty days from the service of the notice. If the person does not deposit the penalty, the officer shall cause the goods to be sold in such manner, as may be prescribed and apply the sale proceeds thereof towards the penalty and tax and refund the balance, if any, to the owner or the person duly authorised by the owner of such goods, subject to provisions of section 37. In the event of the goods having been released against security under subsection (9), the amount of penalty imposed, shall be recovered out of such security.

(12)   Where the officer, seizing the goods or any other officer, as the case may be, is of the opinion that the goods are subject to speedy and natural decay or where the tax or penalty, as the case may be, is not deposited in accordance with the provisions of this Act, he may, without prejudice to any other action that may be taken in accordance with other provisions of this Act, cause the goods to be sold by public auction in the prescribed manner. The sale proceeds of such goods shall be adjusted towards the expenses of auction and amount of tax, penalty and interest, if, any. The balance, if any, shall be refunded to the person concerned in accordance with the provisions of this Act.