The Orissa Value Added Tax Act, 2004

PREAMBLE

An act to provide for the imposition and collection of tax on the sale or purchase of goods in the state.

Be it enacted by the Legislature of the State of Orissa in the Fifty- fifth Year of the Republic of India as follows :-

Section 1 - Short title, extent and commencement

(1)     This Act may be called the Orissa Value Added Tax Act, 2004.

(2)     It extends to the whole of the State of Orissa.

(3)     It shall come into force on such date[1] as the Government may, by notification, appoint, and different dates may be appointed for different provisions of this Act.

Section 2 - Definitions

(1)     In this Act, unless the context otherwise requires,-

[2][(1-a) "Advance Ruling Authority" means the Orissa Sales Tax Tribunal constituted under sub-section (1) of section 4;

(1-b) "Advance Ruling" means a determination made by the Advance Ruling Authority of a disputed question raised under sub-section (1) of section 78-A;

(1-c) "Applicant for Advance Ruling" means a registered dealer who has filed an application under sub-section (1) of section 78-A;

(1-d) "appellate authority" means any authority prescribed for the purpose of section 77;]

(2)     "appointed day" in relation to any provision of this Act, means the date on which such provision comes into force;

(3)     "assessee" means any dealer by whom tax or any other sum of money is payable under this Act, and includes every dealer in respect of whom any proceedings under this Act has been initiated for the assessment of tax payable by him;

(4)     "assessing authority" means any officer appointed under sub-section (2) of section 3 who is authorised by the Commissioner to make assessment under this Act;

(5)     "assessment" means determination of tax liability under this Act and includes self assessment, provisional assessment, audit assessment, assessment of escaped turnover, assessment of unregistered dealers liable to be registered, assessment of casual dealers and reassessment;

(6)     "audit assessment" means an audit assessment made under section 42;

(7)     "business" includes -

(a)      any trade, commerce or manufacture;

(b)      any adventure or concern in the nature of trade, commerce or manufacture;

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

(d)      any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern;

(e)      any occasional transaction, whether or not there is volume, frequency, continuity or regularity of such transaction, in the nature of such trade, commerce, manufacture, adventure or concern, whether or not such trade, commerce, manufacture, adventure, concern or transaction is effected with a motive to gain or profit or whether or not any gain or profit accrues from such trade, commerce, manufacture, adventure, concern or transaction.

Explanation.- For the purposes of this clause,-

(i)       the activity of raising of man-made forest or rearing of seedlings or plants shall be deemed to be a business,

(ii)      transaction of sale or purchase of capital goods pertaining to any trade, commerce, manufacture, adventure, concern or transaction shall be deemed to be a transaction comprised in business,

(iii)     purchase of any goods, the price of which is debited to the business and sale of any goods, the proceeds of which are credited to the business shall be deemed to be transactions comprised in business;

(8)     "capital goods" means plants, machinery and equipments used directly in the process of manufacturing [3][and shall include the components and spare parts thereof, but shall not include] such plant, machinery and equipments which are used for the purposes and in the circumstances specified in Schedule 'D';

(9)     "casual dealer" means any person, whether as principal, agent or in any other capacity, who has occasional transactions of buying, selling or supplying or distributing goods in the State [4][***] for cash or deferred payment or for commission, remuneration or other valuable consideration and includes, whether he has a fixed place of business in this State or not,-

(a)      a transporter who, while carrying any goods in his goods vehicle, fails to disclose the name and address of the consignor or consignee in the State or fails to furnish copy of invoice, challan, transport receipt or consignment note or document of like nature in respect of such goods, or

(b)      an owner or a lessee of a warehouse who fails to disclose the name and address of the owner of any goods stored at his warehouse or fails to satisfy the Commissioner that such goods are for his personal use or consumption;

(10)   "Commissioner" means the Commissioner of Sales Tax appointed under sub-section (1) of section 3 or deemed to have been appointed under clause (a) of sub-section (2) of section 106;

(11)   "co-operative society" means a co-operative society registered under the Orissa Co-operative Societies Act,1962(Orissa Act 2 of 1963) and includes a Co-opera registered under the Orissa Self-Help Co-operatives Act, 2001(Orissa Act 4 of 2002);

(12)   "dealer" means any person who carries on the business of buy selling, supplying or distributing goods, executing works contract, delivering any goods on hire-purchase or any system of payment by installments, transferring the right to use any goods or supplying by way of or as part of any service, any goods directly or otherwise, whether for cash or for deferred payment, or for commission, remuneration or other valuable consideration and includes :-

(a)      a casual dealer ;

(b)      a commission agent, a broker or a del credere agent or an auctioneer or any other mercantile agent, by whatever name called;

(c)      a non-resident dealer or an agent of anon-resident dealer, or a local branch of a firm or company or association or body of persons whether incorporated or not, situated outside the State;

(d)      a person who, whether in the course of business or not, -

(i)       sells goods produced by him by manufacture, agriculture, horticulture or otherwise; or

(ii)      transfers any goods, including controlled goods whether in pursuance of a contract or not, for cash or for deferred payment or for other valuable consideration;

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

(13)   "declared goods" means goods declared to be of special importance as specified under section 14 of the Central Sales Tax Act, 1956(74 of 1956);

(14)   "documents" means title deeds, writing or inscription and includes electronic records and the like which is produced as documentary evidence;

(15)   "Electronic Hardware Technology Park (EHTP) Unit" is a unit set up under the EHTP, which undertakes to export their entire production of goods outside the territory of India and is approved by the Development Commissioner of the Export Processing Zone or any other competent authority duly authorised by the Ministry of Industry, Government of India for the purpose;

(16)   "electronic record" means electronic record as defined in Information Technology Act, 2000(21 of 2000);

(17)   "exempted goods" means any goods exempted from tax under section 17;

(18)   "Export Oriented Unit (EOU)" means any industrial unit, which undertakes to export their entire production of goods and is approved as such by the Development Commissioner of the concerned Export Processing Zone or any other competent authority duly authorised for the purpose by the Ministry of Industry, Government of India;

(19)   "fixed place of business" means the place of business from which the dealer carries out his business activities, and includes-

(a)      a place where the management of the business is undertaken, any of its branch, office, factory or workshop, go down or warehouse;

(b)      a mine, oil or gas well, quarry, timberland or any other place from which natural resources are extracted; or

(c)      a fixed place of business of another person (other than a broker, general commission agent or other independent agent acting in the normal course of business) who is carrying on business on behalf of the dealer in the State in ordinary course of business;

(20)   "Fund" means the Orissa Consumer Welfare Fund referred to in section 53;

(21)   "goods" means every kind of movable property not being newspapers, actionable claims, money, stock, shares or securities, and includes all materials, commodities and articles (including goods as goods or in some other form) involved in the execution of any works contract or goods used in the fitting out, improvement or repair of movable property and growing crops, grass and trees, plants including the produce thereof and all other things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;

(22)   "goods vehicle" means any motor vehicle constructed or adapted for use solely for carriage of goods, or any motor vehicle not so constructed or adapted but when used for carriage of goods solely or in addition to passengers, and includes any vessel, boat, animal or any other means of conveyance other than railway wagon or coach;

(23)   "Government" means the Government of Orissa;

(24)   "gross turnover" in relation to any period, means the aggregate of the turnover of sales and the turnover of purchases made by a dealer during that period;

(25)   "input" means any goods purchased by a dealer in the course of his business for resale or for use in the execution of works contract, in processing or manufacturing, where, such goods directly goes into composition of finished products or packing of goods for sale, and includes consumables directly used in such processing or manufacturing;

(26)   "input tax" in relation to any registered dealer means the tax collected and payable under this Act in respect of sale to him of any taxable goods for use in the course of his business [5][***];

(27)   "input tax credit" in relation to any tax period means the setting off of the amount of input tax or part thereof under section 20 against the output tax, by a registered dealer other than a registered dealer paying turnover tax under section 16;

(28)   "Manufacture" means any activity that brings out a change in an article or articles as 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 and use, but does not include such activity of manufacture as may be notified;

(29)   "output tax" in relation to any registered dealer means the tax leviable and payable under this Act in respect of sale of any taxable goods made by that dealer in the course of his business [6][***];

(30)   "passenger vehicle" means a motor vehicle constructed or adapted for the carriage of passengers;

(31)   "person" means any individual or association or body of individuals and includes a Hindu Undivided Family, a firm, a company whether incorporated or not, a society including a co-operative society, a trust, a club, an institution, an agency, a corporation, other artificial or legal person, local authority, a department of Government, a Government enterprise and a Financial institution or Bank;

(32)   "place of business" means any place where a dealer carries on business and include s-

(a)      any warehouse, go down or other place where the dealer stores or processes his goods,

(b)      any place where a dealer produces or manufactures goods,

(c)      any place where a dealer keeps his books of account,

(d)      in case where a dealer carries on business through an agent by whatever name called, the place of business of such agent, or

(e)      any vehicle or vessel or any other carrier wherein the goods are stored or used for transporting the goods;

Explanation. - The place of business specified in sub-clause (e) shall not be construed as such for the purpose of registration under sections 25 and 26.

(33)   "prescribed" means prescribed by rules;

(34)   "prevailing market price" in relation to any goods sold means the published price in force in the market at the time when the sale of such goods occasioned or, in the absence of any such published price, the price at which such goods were capable of being sold in the open market at that time;

(35)   "property" means any property, whether real or personal, movable or immovable, tangible or intangible, corporal or in corporal, and includes a right or interest of any kind, but does not include money;

(36)   "published" means published in any newspaper, journal or periodical or notified by a market committee established under the Orissa Agricultural Produce Markets Act, 1956(Orissa Act 3 of 1956) or any such authority as the Government may notification, specify from time to time;

(37)   "purchase" with all its grammatical variations and cognate expressions shall be construed from the word sale;

(38)   "registered dealer" means a dealer registered under this Act;

(39)   "registering authority" means any officer appointed under sub-section (2) of section 3 who is authorised by the Commissioner to function as registering authority;

(40)   "resale" means a sale of goods in the same form in which they were purchased;

(41)   "retailer" means a dealer, not being a manufacturer or a person selling or dispatching goods outside the State, or purchases or receives goods other than by way of purchase from outside the State, who ordinarily effects sales to consumers ;

(42)   "return" means any return prescribed or otherwise required to be furnished by or under this Act;

[7][(43) "reverse tax" means that portion of input tax on the value of goods purchased for which credit has been availed by a dealer to which he is not entitled under sub-section (9) of section 20;]

(44) "rules" means rules made under this Act;

(45) "sale" with all its grammatical variations and cognate expressions, means every transfer of the property in goods, other than by way of mortgage, hypothecation, charge or pledge, by one person to another in the course of trade or business for cash, deferred pay mentor other valuable consideration, and includes -

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

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

(c)      delivery of goods on hire purchase or any other system of payment by installments,

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

(e)      a 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,

(f)       a 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,

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

Explanations.-

(a)      A sale or purchase of goods shall be deemed to have taken place inside the State if the goods are within the State-

(i)       in the case of specific or ascertained goods, at the time the contract of sale is made, and

(ii)      in the case of unascertained or future goods, at the time of their appropriation to the contract of sale by the seller, or by the buyer, whether assent is prior or subsequent to such appropriation.

(b)      Where there is a single contract of sale or purchase of goods situated in more than one place, the provisions of this Explanation shall apply as if there were separate contracts in respect of the goods at each of such places.

Note. -A sale or purchase of goods shall not be deemed to have taken place inside the State, if the goods are sold -

(i)       in the course of inter-State trade or commerce, or

(ii)      outside the State, or

(iii)     in the course of import into or export out of the territory of India;

[8][(46) "Sale price" means the amount of valuable consideration received or receivable by a dealer as consideration for the sale of any goods less any sum allowed as cash discount or trade discount at the time of delivery or before delivery of such goods but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof and the expression "purchase price" shall be construed accordingly;

Explanations-

(a)      Where any sum charged for freight, delivery, distribution, installation or insurance at the time of delivery or before delivery of such goods it shall be included in the sale price.

(b)      In case of sale by hire purchase agreement, the prevailing market price of the goods on the date on which such goods are delivered to the purchaser under such agreement shall be deemed to be the sale price.

(c)      In relation to transfer of right to use any goods for any purpose (whether or not for a specified period) the consideration or the hire charges received or receivable for such transfer shall be the sale price.

(d)      Any amount of duties, charges, taxes levied or leviable under any Act (other than tax levied or leviable under this Act) in respect of such goods shall be included in the safe price.

(e)      Amount received or receivable by the seller byway of deposit, warranty (whether refundable or not) which has been received or is receivable whether by way of separate agreement or not, in connection with, or incidental or ancillary to, the sale of goods shall be deemed to be included in the sale price.]

(47) "self assessment" means a true and correct determination of net tax liability by a dealer in relation to any tax period;

(48) "Software Technology Park (STP)" unit means a unit set up under the STP, which undertakes to export their entire production of goods outside the territory of India and is approved by the Development Commissioner of the concerned Export Processing Zone or any other competent authority duly authorised by Ministry of Industry, Government of India for the purpose;

(49) "Special Economic Zone (SEZ)" means any Special Economic Zone specified by the Government of India by notification under section 76A of the Customs Act, 1962(52 of 1962);

(50) "State" means the State of Orissa;

(51) "tax" means tax chargeable under this Act;

(52) "tax invoice" means a document showing the goods sold with price, quantity and [9][such other particulars as may be prescribed];

(53) "tax period" means such period for which return is required to be furnished by or under this Act;

(54) "taxable goods" means goods liable to tax under this Act;

(55) "taxable limit", in relation to the business of a dealer is that part of the gross turnover [10][***], specified in sub-section (4) of section 10;

(56) "taxable turnover" means the turnover on which a dealer is liable to pay tax as determined after making such deduction from his gross turnover and in such manner as may be prescribed ;

(57) "transporter", "carrier" or " transporting agent" means the owner or any person having possession or control of a goods vehicle, who transports on account of any other person for hire or on his own account, any goods from one place to another, and includes any person whose name is entered in the permit issued under the Motor Vehicles Act, 1988(59 of 1988) as the holder thereof, the driver or any other person in-charge of such vehicle ;

(58) "Tribunal" means the Orissa Sales Tax Tribunal constituted or deemed to have been constituted under section 4;

(59) "turn over of purchases" means the aggregate of the amounts of purchase price paid and payable by a dealer in respect of the purchase or receipt of goods liable to tax under section 12during a given period :

(60) [11]["turnover of sales"] means the aggregate of the amounts of sale price received or receivable by a dealer in respect of sale or supply of goods effected or made during a given period :

(61) "vehicle" includes every wheeled conveyance used for the carriage of goods or goods in addition to passengers;

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

(63) "works contract" means a contract for the construction, building, manufacture, processing, fabrication, erection, installation, fitting out, improvement, modification, repair or commissioning of any property;

(64) "year" means the financial year.

Section 3 - Taxing authorities

(1)     The Government shall, for carrying out the purposes of this Act, appoint a person to be the Commissioner of Sales Tax.

(2)     The Government may appoint such other persons under any prescribed designation including a Special Commissioner, an Additional Commissioner, [12][a Special Additional Commissioner,] a Joint Commissioner, a Deputy Commissioner, an Assistant Commissioner, a Sales Tax Officer, or an Assistant Sales Tax Officer to assist the Commissioner and they shall exercise such powers as may be conferred, and discharge such functions as may be required, by or under this Act within such local area as may be assigned by the Commissioner.

(3)     The Commissioner shall have jurisdiction over the whole of the State and the other persons appointed under sub-section (2)shall, within such areas as the Commissioner may, by general or special order specify, exercise such powers as are, or may be conferred and discharge such functions as may be required, by or under this Act.

(4)     Without prejudice to any other functions that the Commissioner may perform under the provisions of this Act, he shall exercise the following powers and discharge the following functions:-

(a)      to superintend and control all persons employed in the executive administration of tax;

(b)      subject to the provisions of this Act and the rules, to make rules of procedure and conduct of administration for the guidance of persons subordinate to him;

(c)      to call for any record from any subordinate officer and also to call for any paper or document in connection with any assessment under this Act;

(d)      to inspect the records and to superintend the work of officers subordinate to him and their offices.

Section 4 - Orissa Sales Tax Tribunal

(1)     (a) The Government shall, by notification, constitute a Tribunal to be called the Orissa Sales Tax Tribunal, which shall exercise such powers and discharge such functions as may be conferred or imposed by or under the provisions of this Act.

(b) The Tribunal shall consist of six members, of whom, three shall be appointed from among the members of the Orissa Superior Judicial Service (Senior Branch) (hereinafter called the Judicial members of the Tribunal) and the other three members shall be appointed from among the members of the Orissa Finance Service, [13][not below the rank of] Class-I (Upgraded Super time) (hereinafter called the Accounts members of the Tribunal).

(c) The Senior-most Judicial member of the Tribunal shall be the Chairman of the Tribunal, who shall constitute benches, allot cases to the benches and exercise supervision in respect of their disposal.

(d) The Chairman of the Tribunal shall look to the overall administration of the Tribunal subject to regulations to be made by the Tribunal with the previous sanction of the Government consistent with the provisions of this Act and rules.

(e) Any vacancy in the membership of the Tribunal shall be filled up by the Government.

(2)     Notwithstanding anything contained in sub-section (1), the Orissa Sales Tax Tribunal constituted under the Orissa Sales Tax Act, 1947(Orissa Act 14 of 1947) shall be deemed to have been constituted under this Act with effect from the appointed day and shall be called as (SIC) from that date.

(3)     The functions of the Tribunal may be exercised by a bench consisting of-

(a)      the Chairman or any other single member, as maybe constituted by the Chairman, when the total disputed amount of tax and interest and penalty, if any, involved in a case does not exceed rupees two lakhs;

(b)      the Chairman or any other Judicial member and an Accounts member, as may be constituted by the Chairman, when the total disputed amount of tax and interest and penalty, if any, involved in a case exceeds rupees two lakhs, but does not exceed rupees ten lakhs; [14][***]

(c)      three members of the Tribunal, which shall include the Chairman or any other Judicial member and one Accounts member, when the total disputed amount of tax and interest and penalty, if any, involved in a case exceeds rupees ten lakhs and shall be presided over by the Chairman or, as the case may be, the senior Judicial member [15][; and]

[16][(d) three members of the Tribunal, which shall include the chairman or the senior Judicial member and one Accounts member and another judicial member when the case is to hear an application seeking an advance ruling and shall be presided over by the chairman or, as the case may be, the senior Judicial Member.]

(4)     (a) Where an appeal or application is heard by a bench consisting of two members and the members are divided in opinion on any point or points, such point or points shall be referred to the Tribunal consisting of three members.

(b) Where an appeal or application is heard by three members of the Tribunal and the members are divided in opinion on any point or points, such point or points shall be decided in accordance with the opinion of the majority.

(5)     Any member who has previously dealt with any case coming up before the Tribunal in any other capacity or is personally interested in any case coming up before the Tribunal shall be disqualified to hear that case.

Section 5 - Delegation of the Commissioner’s powers and functions

Subject to such restrictions and conditions as may be prescribed, the Commissioner may, by order in writing, delegate any of his powers and functions under this Act or the rules to any person appointed under sub-section (2) of section 3, and any order passed by any such person in exercise of the powers so delegated shall be deemed to be an order passed by that person.

Section 6 - Power to transfer proceedings

(1)     Notwithstanding anything contained elsewhere in this Act or in the rules, the Commissioner may, by order in writing, transfer any proceeding or class of proceedings under any provision of this Act from any person appointed under sub-section (2) of section 3 to any other person so appointed, whether or not such other person has jurisdiction in respect of the local areas to which such proceedings or class of proceedings relate.

(2)     The person to whom any proceeding is transferred under sub-section (1) shall proceed to dispose of such proceeding as if it has been initiated by himself.

(3)     The transfer of a proceeding shall not require reissue of any notice, if such a notice has already been issued before transfer and the person to whom the proceeding is transferred may, at his discretion, continue the proceeding from the stage at which it was left by the person from whom it was transferred.

Section 7 - Person appointed under section 3 and members of the Tribunal to be public servants

The Commissioner and all persons appointed under section 3, and the members of the Tribunal appointed under section 4 shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code, 1860(45 of 1860).

Section 8 - Indemnity

No suit, prosecution or other legal proceedings shall lie against any officer or servant of Government employed for execution of the provisions of this Act or the rules for anything which is in good faith done or intended to be done.

Section 9 - Charge to tax and incidence

There shall be levied in accordance with the provisions of this Act, -

(a)      a Value Added Tax hereinafter called VAT on the sale or purchase of goods by a dealer; and

(b)      a turnover tax in lieu of VAT on the taxable turnover of sales of every retailer registered under this Act, whose annual gross turnover does not exceed [17][rupees fifty lakhs] and dealers of any specific class or category as may be notified under section 16.

Section 10 - Liability

(1)     Subject to other provisions of this Act, every dealer -

(i)       whose gross turnover [18][***] during a period of twelve consecutive months immediately preceding the appointed day exceeded the taxable limit; or

(ii)      who is registered or liable to be registered under the Orissa sales Act, 1947(Orissa Act 14 of 1947) or the Central Sales Tax Act, 1956(74 of 1956); or

(iii)     to whom clauses (i) and (ii) do not apply, but -

(a)      whose gross turnover exceeds the taxable limit during any period of twelve consecutive months, or

(b)      who has become liable to pay tax under the Central Sales Tax A 1956(74 of 1956), or

(c)      who is registered as a dealer under the Central Sales Tax Act, 1956(74 of 1956) or under this Act at any time on and from the appointed day,

shall be liable to pay tax in accordance with the provisions of this Act, -

(a)      in cases of clauses (i) and (ii), with effect from the appointed day,

(b)      in case of sub-clause (a) of clause (iii), with effect from the date immediately following the day on which his gross turnover exceeded the taxable limit during a period of any twelve consecutive months, and

(c)      in cases of sub-clauses (b) and (c) of clause (iii), with effect from the date on which he becomes so liable, or the date of registration, whichever is earlier.

(2)     Every dealer who has become liable to pay tax under this Act shall continue to be so liable until the expiry of three consecutive years during each of which his gross turnover has failed to exceed the taxable limit and his liability to pay tax under this Act shall cease on the expiry of the period specified above.

Explanation.- In computing the period of three years, the part of a year shall be ignored.

(3)     Every dealer who has ceased to be liable under sub-section (2) shall be again liable to pay tax under this Act with effect from the date immediately following a period not exceeding twelve consecutive months during which his gross turnover again exceeds the taxable limit.

[19][(4) For the purposes of this Act, taxable limit shall be in relation to any dealer who--

[20][(4-a) (a) Where a dealer, who transfers property in goods (whether as goods or in some other form) involved in the execution of works contract (hereinafter referred to as the contractor) enters into further contract for assigning such works contract, either wholly or in part thereof to other dealer (hereinafter referred to as sub-contractor), directly or otherwise, and the sub-contractor executes such works contract then each or either of them shall be jointly and severally liable to pay tax, and notwithstanding anything contained in this Act, the contractor and the sub-contractor shall pay tax proportionately in the prescribed manner in respect of transfer of property in goods (whether as goods or in some other form) involved in the execution of such works contract.

(b) If the contractor proves, in the prescribed manner, to the satisfaction of the Commissioner that the tax has been paid by the sub-contractor on the turnover of the goods involved in the course of execution of the works contract, the contractor shall not be liable to pay tax on such turnover.

(c) If the sub-contractor proves, in the prescribed manner, to the satisfaction of the Commissioner that the contractor has opted for composition under sub-section (3) of section 11 in respect of the works contract being executed by the sub-contractor, then the sub-contractor shall not be liable to pay tax on such turnover.]

(5)   For the purpose of calculating the gross turnover to determine the liability of a dealer to pay tax under this Act the turnover of all sales whether taxable or not and all purchases subject to tax shall be taken.

Explanation.- The expressions sales and purchases shall mean sales and purchases made by a dealer on his own account and those made on behalf of principal whether disclosed or not.

Section 11 - Levy of tax on sale

(1)     The tax shall be levied under this Act on every dealer who is liable to pay tax under section10 on his taxable turnover of sales.

(2)     For the purposes of sub-section(1), the expression " taxable turnover of sales" shall mean, in relation to a dealer liable to pay tax on sale of goods under Sub-section (1) of section 10, that part of the gross turnover of sales during any period which remains after deducting there from -

(a)      the turnover of sales of goods exempted from tax under section 17;

(b)      the turnover of sales of goods which are shown to the satisfaction of the Commissioner to have taken place -

(i)       in course of inter-State trade or commerce, or

(ii)      outside the State, or

(iii)     in the course of import into or export out of the territory of India.

Explanation.- Sections 3, 4 and 5 of the Central Sales Tax Act, 1956(74 of 1956) shall apply for determining whether or not a particular sales has taken place in the manner indicated in sub-clauses (i), (ii) and (iii) of clause (b);

[21][(b-1) the turnover of sales of goods as specified in Schedule C which has suffered tax under this Act in the State;]

(c)      in case of turnover of sales in relation to works contract, the charges towards labour, services and other like charges subject to such conditions and restrictions as may be prescribed :

Provided that where the amount charged towards labour, services and other like charges in such contract are not ascertainable from the terms and conditions of the contract or the books of account maintained for the purpose, the amount of such charges shall be calculated at the prescribed rate; and

(d)      such other sales on such conditions and restrictions as may be prescribed.

[22][(3) Notwithstanding anything contained in this Act, the Government may, by notification, provide for a scheme of composition, for dealers executing works contract including dealers undertaking the construction of flats, dwellings or buildings or premises and transferring them in pursuance of an agreement along with the land or interest underlying the land, subject to such conditions and restrictions as may be specified in the said notification, including the provision for option of dealer for such scheme.]

(4)   (a) Notwithstanding anything contained in the Sale of Goods Act, 1930(3 of 1930), but subject to clauses (b) and (c), the sale of goods shall, for the purposes of this Act, be deemed to have taken place when title or possession of the goods is transferred or, in the case of works contract, when the goods are incorporated in the course of execution of the works contract, whether or not there is receipt of payment for such sale.

(b) Where, before the time applicable under clause (a), the dealer selling the goods issues a tax invoice in respect of such sale, the sale shall, to the extent it is covered by the invoice or payment, be deemed to have taken place at the time the invoice is issued or the payment is received, whichever is earlier.

(c) Where a dealer issues a tax invoice in respect of any sale not falling under clause (b) within fourteen days from the time specified under clause (a), the sale shall be deemed to have taken place at the time the invoice is issued.

Section 12 - Levy of tax on purchase

Every dealer who, in the course of his business, purchases or receives [23][any taxable goods within the State] -

(i)       from a registered dealer, in the circumstances in which no tax under section 11 is payable by that registered dealer on such goods, or

(ii)      from any person other than a registered dealer,

shall be liable to pay tax on the purchase price or prevailing market price of such goods, if after such purchase or, as the case may be, receipt, the goods are not sold within the State or in the course of inter-State trade or commerce or in the course of export out of the territory of India, but are -

(a)      [24][***] disposed of otherwise; or

(b)      consumed or used in the manufacture of goods declared to be exempt from tax under this Act; or

(c)      after their use or consumption in the manufacture of goods, such manufactured goods are disposed of otherwise than by way of sale in the State or in the course of inter-State trade or commerce or export out of the territory of India; or

(d)      used or consumed otherwise,

and such tax shall be levied at the same rate, at which tax under section 11 would have been levied, on the sale of such goods within the State on the date of such purchase or receipt.

Section 13 - Levy of tax on containers and packing material

Where any goods is packed in any container or packing materials are sold, such container or packing material shall be deemed to have been sold or purchased along with such goods and the tax under section 11 or section 12 shall be levied on the sale or purchase of such container or packing material at the same rate as applicable to the sale or purchase of the goods contained therein:

Provided that no tax under section 11 or section 12 shall be levied where the container or packing material is sold or purchased along with the goods exempted from tax under section 17.

Section 14 - Rates of VAT

(1)     The Value Added Tax payable by a dealer under this Act shall be levied on his taxable turnover in respect of different goods specified in Schedule B and Schedule C at the rate mentioned under the said Schedules in respect of those goods.

[25][Provided that a registered dealer of any particular class or category, as the Government may, by notification, specify, who may, at his option, pay in lieu of tax payable by him under this sub-section, tax at the rate specified in that schedule on the maximum retail price (MRP) of such goods in the manner as may be prescribed.

Explanation :-The expression "maximum retail price (MRP)" means the price printed on level or packet of the goods or regulated price of the goods, if any:

Provided further that a registered dealer of any particular class or category as the Government may, by notification, specify, shall pay, in lieu of tax payable under this sub-section, a lumpsum tax fixed in such manner as may be prescribed.]

[26][Explanation- Where a dealer is engaged in execution of works contract, the tax payable by him under this Act shall be levied on his taxable turnover in respect of goods utilized in such execution of works contract, at the rate applicable to such goods as specified in Schedule B and Schedule C.]

(2)     The levy of tax under sub-section (1) in respect of goods specified in Schedule C shall be in the manner provided in section 15.

Section 15 - Points of levy in respect of certain goods

The levy of Value Added Tax in respect of different goods as specified in Schedule C shall be at such point of sale in a series of sales by successive dealers as the Government may, by notification, specify in relation to those goods.

Section 16 - Levy of turnover tax

Every retailer registered under this Act whose gross turnover does not exceed [27][rupees fifty lakhs] and every registered dealer of any specific class or category as the Government may by notification, direct, shall pay, in such manner and subject to such conditions and restrictions as may be prescribed, in lieu of the tax payable under section 11, a turnover tax at such percentage of the taxable turnover as the Government may, by notification, specify, in addition to the tax payable on the taxable turnover of purchases under section 12:

Provided that any such retailer or dealer may, by exercising option in the prescribed manner, elect to pay tax as specified under section 11 in lieu of the turnover tax.

[28][Provided further that no turnover tax shall be payable on turnover of sales of declared goods purchased from a registered dealer on which tax has been paid:

Provided also that no turnover tax shall be payable on turnover of sales of goods purchased within the State on which tax on MRP has been paid.]

Section 17 - Sales of goods exempt tax

The sale of all goods specified in Schedule A shall be exempt from tax subject to conditions and exceptions set out therein.

Section 17A – [Power of Government to exempt tax in public interest

(1)     Notwithstanding anything contained in this Act, the Government may, if it is necessary so to do in the public interest, subject to such conditions and exceptions as it may impose, by notification, exempt any specified class of sales or specified sales or purchases from payment of whole or any part of the tax payable under the provisions of this Act.

(2)     Every notification issued under sub-section (1) shall, as soon as it is published, be laid before the Legislative Assembly for a period of fourteen days which may be comprised in one or more sessions.][29]

Section 18 - Zero rated sales

The rate of tax on the sale of goods subject to levy of tax shall be zero when such goods are sold -

(a)      in course of inter-State trade or commerce ; or

(b)      in course of export out of the territory of India; or

(c)      to a dealer having business under -

(i)       a SEZ; or

(ii)      a STP; or

(iii)     a EHTP; or

(d)      to an EOU

[30][Explanation- For the purpose of this section, the sale of goods to a dealer referred to in clause (c) or an EOU referred to in clause (d) shall mean and always be deemed to have meant the sale of such goods intended to be used as capital goods referred to in clause (8) of section 2 or used for manufacturing of goods by such dealer or EOU.]

Section 19 - Net tax payable

(1)     The net tax payable by a registered dealer for a tax period shall be the difference between the output tax (plus purchase tax, if any), and the input tax, which can be determined from the following formula.

Net tax payable = (O + P) -I

Where 'O' denotes the output tax payable for any tax period, 'P' denotes the tax payable on purchases by a registered dealer for that tax period under section 12 and ‘ denotes the input tax paid or payable for the said tax period.

(2)     The net tax payable by a dealer liable to pay tax but not registered under this Act for a tax period shall be equal to the output tax payable for the said tax period.

(3)     If the amount calculated under sub-section (1) is negative, the same shall be carried forward to the next tax period or periods for adjustment against the output tax payable.

Section 20 - Input tax credit

(1)     Subject to the provisions of this Act, for the purpose of calculating the net tax payable by a registered dealer for any tax period, an input tax credit as determined under this section shall be allowed to such registered dealer against the tax paid or payable in respect of all sales or purchases taxable under this Act, other than sales or purchases of goods specified in Schedule C and Schedule D.

[31][(1-a) (a) Notwithstanding anything to the contrary contained in this Act, a dealer shall not be entitled for input tax credit in respect of purchase of the following taxable goods subject to the circumstances mentioned against each such goods.

(i)       Coal when used for generation of electricity for sale and captive use.

(ii)      Furnace oil except when purchased for resale.

(iii)     Kerosene except when purchased for resale.

(iv)    All automobiles including commercial vehicle, two wheelers and three wheelers required to be registered under the Motor Vehicles Act, 1988(59 of 1988) except when purchased for resale and including tyres and tubes, spare parts and accessories for the repair and maintenance thereof.

(v)      Air conditioning units except when purchased for resale and except when used in plant and laboratory.

(vi)    Earth moving equipment such as dozers, loaders and excavators; and poclain, dumpers and tippers except when purchased for resale.

(vii)   Machinery and equipments including accessories and component parts thereof purchased for use in mining.

(viii)  Machinery and equipments including accessories and component parts thereof purchased for use in construction activities such as mixer, road roller, paver, vibrator.

(ix)    Fuels used for automobiles or used for captive power generation or used in power plants.

(x)      Natural gas except when purchased for resale.

(b) The State Government may, by notification, declare any other taxable goods and circumstances, if any, under which such goods shall not be entitled to input tax credit.]

(2)     The input tax credit to which a registered dealer is entitled under Sub-section (1) shall be the amount of tax paid by the registered dealer to the seller on his turnover of purchase of goods during the tax period, calculated, subject to the provisions contained in sub-sections (3), (4) and (5), in such manner as may be prescribed.

(3)     Input tax credit shall be allowed for purchases made within the State from a registered dealer holding a valid certificate of registration in respect of goods intended for the purpose of-

(a)      sale or resale by him in the State;

(b)      use as inputs or as capital goods in the manufacturing [32][of goods within the State], other than those specified in Schedule A and Schedule C and Schedule D for sale;

(c)      sale of goods subject to levy of tax at zero rate under section 18;

(d)      for use [33][as containers or materials] for packing of goods, other than those exempt from tax under this Act, for sale or resale ; or

(e)      transfer of stock of taxable goods other than by way of sale, to any place outside the State :

Provided that -

(a)      the input tax credit on purchases intended for the purpose of clause (e) shall only be allowed in respect of the amount of tax paid or payable in excess of tax at the rate of four per centum;

(b)      if goods purchased are used partially for the purposes specified in [34][clause (e)], input tax credit shall be allowed proportionately to the extent they are used for such purposes; and

(c)      where a registered dealer sells or dispatches goods, both taxable and exempt under this Act, the input tax credit shall be allowed proportionately only in relation to the goods which are not so exempt.

[35][(d) the input tax credit on purchase when sold in course of interstate trade or commerce shall be allowed only to the extent of the Central Sales Tax payable under the Central Sales Tax Act, 1956(74 of 1956).]

[36][(3-a) Notwithstanding anything contained in this Act, no amount of input tax credit shall be allowed to a registered dealer on any purchase of goods in excess of the amount of such tax actually paid under this Act.]

(4)     Notwithstanding anything contained in this section or elsewhere in this Act, and subject to such conditions and restrictions and in such manner, as may be prescribed, input tax credit may be allowed partially or in phased manner, in respect of such goods or such class of dealers or in such cases, as may be prescribed.

(5)     (a) Input tax credit on capital goods shall be allowed from the date of first sale of taxable goods produced or manufactured after the commencement of such production and shall be adjusted against the output tax over a period not exceeding three years:

Provided that no input tax credit shall be allowed on such capital goods used for the purposes and in the circumstances as specified in Schedule 'D'.

(b) Input tax credit under clause (a) of this sub-section shall be allowed in lumpsum provided the value of such capital goods is rupees one lakh or less.

(c) Input tax credit on capital goods shall be allowed only on purchase of such goods made on or after the appointed day.

(d) In case of closure of business before the commencement of commercial production, no input tax credit on capital goods shall be allowed and input tax credit carried forward, if any, shall be forfeited.

(e) In case where there is production of both taxable goods and goods exempt from tax, the input tax credit admissible on capital goods shall be determined in the manner prescribed.

(f) where the used capital goods are sold, the same shall be subject to tax under this Act.

(6)     Input tax credit shall not be claimed by the dealer for any tax period until the dealer receives the tax invoice in original evidencing the amount of input tax :

Provided that for good and sufficient reasons to be recorded in writing, the Commissioner may, in the prescribed manner, allow such credit subject to such conditions and restrictions as may be specified in the order allowing the credit.

(7)     A registered dealer who intends to claim input tax credit shall, for the purpose of determining the amount of input tax credit, maintain accounts and such other records as may be prescribed in respect of the purchases and sales made by him and stock in trade held.

(8)     No input tax credit shall be claimed by or be allowed to a registered dealer --

(a)      in respect of any taxable goods purchased by him from another registered dealer for resale but given away by way of free sample or gift;

(b)      who makes payment of turnover tax as provided in section 16;

(c)      in respect of capital goods used for the purposes and in the circumstances as specified in Schedule 'D';

(d)      in respect of goods brought from outside the State against the tax paid in any other State;

(e)      in respect of stock of goods remaining unsold at the time of closure of business;

(f)       in respect of goods purchased on payment of tax, if such goods are not sold because of any theft, damage and destruction;

(g)      where the tax invoice is not available with the dealer or there is evidence that the same has not been issued by the selling registered dealer from whom the goods are purported to have been purchased:

[37][Provided that input tax credit on the stock of goods,-

(i)       held on the date of registration as admissible under sub-section (11); and

(ii)      held by a registered dealer on the date, he is liable to pay tax under section 11 in lieu of tax payable under section 16;

shall be allowed without tax invoice subject to production of evidence that such goods have been purchased from a registered dealer inside the State on payment of tax under this Act, supported by a retail invoice, to the satisfaction of the assessing authority;"]

(h)     in respect of goods purchased from a dealer whose certificate of registration has been suspended;

(i)       in respect of sale of goods specified in Schedule A;

(j)       in respect of sale of goods specified in Schedule C;

[38][(k) in respect of input or capital goods other than those covered under Schedules A, C and D used in manufacture of goods where the finished products are exempted from tax either in whole or in part under this Act or under the Central Sales Tax Act, 1956(74 of 1956);]

(l)    executing works contract, in relation to works contracts executed by him, where he has exercised option under sub-section (3) of section 11 to pay tax by way of composition; and

(m) in any other case as the Government may, by notification, specify.

[39][(8-a) Where sale price of any taxable goods, for any reason, is less than the purchase price of the said goods, the input tax credit on purchase of such goods shall be allowed only to the extent of the output tax payable on the sale of such goods and in such case if the input tax credit has been availed in excess of the output tax paid or payable, it shall be reversed in the manner prescribed.]

(9)     If goods purchased -

(a)      are intended for any of the purposes specified under sub-section (3) but are subsequently used otherwise, or

(b)      are lost due to theft, damage or for any other reason, or

(c)      remain unsold at the time of closure of business, 

the input tax credit availed in respect of purchase of such goods shall be deducted from the input tax credit admissible for the tax period during which any one or more of such events occurs [40][or]

[41][(d) are subsequently transferred to any place outside the State otherwise than by way of sale on which input tax credit has already been availed at the full rate, or

(e)   remain unutilized or unsold on the date on which the exercise of option for composition of tax under this Act, is allowed, or

(f)    remain unutilized or unsold on the date on which the liability of the dealer to pay tax under section 11 is changed to section 16, or

(g)   are utilized in manufacture of goods exempted from tax, on which input tax credit has been availed in a tax period prior to its utilization, by a dealer manufacturing both taxable goods and goods exempted from tax, or

(h)   are exempted from levy of tax subsequently, or

(i)    are returned to the selling dealer and necessary adjustment is made by revising the tax invoice or retail invoice, or by issue of credit or debit notes in respect of such goods,]

Provided that if part of the goods so purchased are used otherwise or lost or remain unsold, the amount of reverse tax credit shall be proportionately calculated :

Provided further that if no input tax credit is available for such deduction, the input tax credit availed of shall be repayable in the manner prescribed.

[42][Provided also that in case of clause (d), the input tax credit so reversed shall be limited to four per centum of the value of the goods in respect of which input tax credit has been allowed.]

(10)   Where the Commissioner is of the opinion that the method used by a registered dealer to determine the extent to which goods are used, consumed or supplied or intended to be used, consumed or supplied, in the course of manufacturing taxable goods or making sales liable to tax, is not fair and appropriate in the circumstances, he may, after giving the dealer an opportunity of being heard, for reasons to be recorded in writing, reject the method adopted by the dealer and determine the amount of input tax credit admissible.

(11)   Subject to the restrictions specified in sub-section (8), input tax credit shall be allowed to a registered dealer in respect of the amount of tax paid or payable on purchase of taxable goods from a registered dealer, which the dealer holds on the date of registration, if such purchases were made within three months prior to the date of his registration.

Section 21 - Input tax credit exceeding tax liability

[43][(1) If the input tax credit of a registered dealer other than an exporter selling goods outside the territory of India determined under section 20 for any tax period exceeds the tax liability for that period, the excess input tax credit shall be set off against the tax payable under the provisions of the Central Sales Tax Act, 1956(74 of 1956) for that period at the first instance and if any balance input tax credit is still available, the same shall be carried forward for being set off against the tax payable for subsequent tax period or periods by that dealer.]

(2)   The excess input tax credit after adjustment under sub-section (1), shall be carried forward as an input tax credit, to the subsequent tax period or periods, till it is fully adjusted:

Provided that no excess input tax credit for a tax period shall be carried forward exceeding a period of twenty-four months from the close of the year to which that tax period relates.

(3)   Where input tax credit is so carried forward, a quarterly credit statement shall be forwarded to the concerned dealer and the claims reconciled accordingly.

Section 22 - Adjustment of input tax credit

Where any purchaser, being a registered dealer, has been issued with a credit note or debit note in terms of section 23, or where he returns or rejects goods purchased, as a consequence of which the input tax credit, availed by him for any period to which the purchase of goods relates, becomes less or excess, he shall make due adjustment of the amount of such less credit or excess credit allowed to him in respect of the tax period in which the credit note or debit note has been issued or goods are returned, subject to conditions as may be prescribed.

[44][Provided that no such adjustment shall be allowed in respect of such tax where any credit note has been issued as a consequence of cash discount or sale incentive by any registered dealer to another registered dealer after tax invoice is issued.]

Section 23 - Credit notes and debit notes

(1)     Where a tax invoice has been issued in respect of any sale and the amount shown as tax charged in the tax invoice is found to be in excess of the tax payable under this Act in respect of that sale, the registered dealer making the sale shall provide the purchaser with a credit note containing the requisite particulars as may be prescribed.

(2)     Where the tax invoice has been issued in respect of any sale and the tax charged in the tax invoice in respect of that sale is found to be less than the amount of tax payable under this Act, the registered dealer making the sale shall provide the purchaser with a debit note containing the requisite particulars as may be prescribed.

(3)     In case of goods returned or rejected by the purchaser, a credit note shall be issued by the selling dealer to the purchaser and a debit note shall be issued by the purchaser to the selling dealer containing the requisite particulars as may be prescribed.

Section 24 - Persons liable to be registered

No dealer shall, while being liable to pay tax under section 10, carry on business as a dealer unless he has been registered under this Act and possesses a certificate of registration, and no dealer shall be issued more than one certificate of registration for his business in the State.

Section 25 - Compulsory registration of dealers

(1)     Every dealer required by section 24 to be registered shall make an application in the prescribed manner to the registering authority within thirty days from the date of his liability to pay tax, and such application shall be accompanied by a declaration in the prescribed form duly filled in and signed by the dealer specifying therein such particulars as may be prescribed :

Provided that where a dealer has more than one place of business inside the State, he shall declare one of such places as the principal place of business and make the application for the principal place of business, in the manner prescribed.

[45][(2) If the registering authority, on verification of application for registration, is satisfied that the requirements of the provisions of this Act and the rules have been complied with, he shall register the applicant and grant him a certificate of registration in the prescribed form, which shall specify the class or classes of goods dealt in or manufactured by him and such registration certificate shall be assigned a number in the manner as may be prescribed:

Provided that the registration certificate issued in respect of dealers liable to pay turnover tax under section 16 shall be in such different form and bear such number in such manner, as may be prescribed.]

(3)   Nothing in sub-section (2) shall debar the registering authority from refusing to grant a certificate of registration to the applicant after giving him a reasonable opportunity of being heard, if -

(a)      the applicant has not paid any dues payable by him under this Act or under the Orissa Sales Tax Act, 1947 (Orissa Act 14 of 1947) or under the Central Sales Tax Act 1956(74 of 1956) in respect of any business ;

(b)      any person associated with the business for which the application for grant of registration is made is in arrears of any dues under the provisions of this Act or the Orissa Sales Tax Act, 1947(Orissa Act 14 of 1947) in respect of any business; or

(c)      any earlier certificate of registration granted to the applicant or any person associated with the business for which the application for grant of registration is made, has been cancelled under the provisions of this Act or the Orissa Sales Tax Act, 1947(Orissa Act 14 of 1947) and the circumstances and reasons for which the certificate was cancelled continue to exist; or

(d)      for any other good and sufficient reasons to be recorded in writing.

(4)   Where the application for registration is made under this section, the registering authority shall grant him the certificate of registration effective from the date of filing of such application :

Provided that the registering authority shall grant to such dealer the certificate of registration from the date of commencement of liability to pay tax where the application for registration has been made within thirty days of such date.

(5)   Where a dealer registered under the Orissa Sales Tax Act, 1947(Orissa Act 14 of 1947) continues to be so registered on the day immediately before the appointed day and is liable to pay be tax under this Act on such appointed day, shall be deemed to be registered under this Act and the registering authority shall issue to such dealer, in the prescribed manner, a certificate of registration under this Act in the prescribed form and the certificate of registration so issued shall be effective from the appointed day :

[46][Provided that where any dealer has more than one place of business inside the State and such place or places of business come under the jurisdiction of different registering authorities, the dealer shall intimate to the registering authority within fifteen days from the date of commencement of the Orissa Value Added Tax {Amendment) Act, 2008 failing which the Commissioner may, on his own information or on receipt of information from any registering authority, decide the principal place of business of such dealer and, by order direct the registering authority of that principal place of business to issue certificate of registration to the dealer in the prescribed manner.]

(6)   When any dealer has been convicted or has paid composition money under section 86, in respect of any contravention of the provision of section 24, the registering authority shall register such dealer and grant him a certificate of registration and such registration shall take effect from the date of the order granting such registration.

Section 26 - Voluntary registration

[47][(1) Any dealer or person,--

(a)      who intends to establish a business for the purpose of manufacturing of goods of value exceeding rupees one lakh during a period of twelve consecutive months for sale, or

(b)      who intends to carry on business in respect of goods of value exceeding rupees three lakhs during a period of twelve consecutive months.

may, notwithstanding that he is not liable to pay tax under section 10, apply in the prescribed form and manner to the registering authority for registration:

Provided that for the purposes of this sub-section, the dealer or person, as the case may be, shall have to furnish such evidence as may be required by the registering authority in support of his intention to establish a business for manufacturing of goods for sale or, as the case may be, in support of his business.]

(2)   In respect of an application for registration under sub-section (1), the provisions of [48][sub-sections (2) and (3)] of section 25 shall apply.

(3)   Every dealer who has been registered on application made under this section shall, so long as his registration remains in force, be liable to pay tax under this Act.

[49][(4) (a) The certificate of registration granted to a dealer or person referred to in clause (a) of sub-section (1) shall be in force for such period as may be specified therein:

Provided that for good and sufficient reasons to the satisfaction of the registering authority, the period for which the registration is in force can be extended, but in no case such extension shall be allowed beyond a period of one year at a time.

(b) The certificate of registration granted to a dealer or person referred to in clause (b) of sub-section (1) shall be in force for a period of not less than three complete years, unless cancelled earlier.

(5)   The certificate of registration granted under this section shall be effective from the date of issue of such certificate.]

Section 27 - Security

[50][(1) The registering authority may, for proper realization of tax payable under this Act and for enforcement of lawful conduct of any dealer from time to time, demand from a registered dealer, a reasonable security, or additional security, as the case may be, to be paid in the prescribed manner and if the security so demanded is not paid within such time as may be specified in the order demanding such security, he may, notwithstanding anything contained in this Act, cancel the certificate of registration granted to him:

Provided that no such cancellation shall be made unless the dealer has been given a reasonable opportunity of being heard.]

(2)   In case there is reasonable apprehension or likelihood of evasion of tax as a result of misutilisation of way bills, the registering authority may, for reasons to be recorded in writing, demand adequate security or additional security, as the case may be, in the prescribed manner from the dealer before issue of way bills to him on application made in that behalf.

(3)   The registering authority may, by order, adjust or forfeit, as the case may be, the whole or any portion of the security furnished by a dealer -

(a)      for realising any amount of tax, penalty or interest payable by the dealer; or

(b)      if the dealer has misused any forms or has failed to keep them in proper custody:

Provided that no order shall be passed under this sub-section without giving the dealer a reasonable opportunity of being heard.

(4)   Where, by reason of any order under sub-section (3), the security furnished by a dealer is forfeited in whole or is rendered insufficient, such dealer shall, on demand made by order of the registering authority, furnish fresh or further security of the requisite amount or shall make up the deficiency, as the case may be, in such manner and within such period as may be specified in such order.

(5)   The registering authority may, on application by a dealer who has furnished security as required under sub-section (1) refund in the prescribed manner any amount of security or part thereof if such security is not required for the purposes for which it was furnished.

Section 28 - Penalty for failure to be registered

(1)     Without prejudice to any other provision in this Act, when a dealer has, without reasonable cause, failed to get himself registered within the time provided under sub-section (1) of section 25, the registering authority may, after giving such dealer a reasonable opportunity of being heard, direct him to pay, by way of penalty, a sum of rupees five thousand :

Provided that no such penalty shall be imposed under this sub-section in respect of the same offence for which a prosecution under section 82 has been instituted and no such prosecution shall be initiated in respect of an offence for which a penalty has been imposed under this section.

(2)     If a penalty is imposed under sub-section (1), the registering authority shall issue a notice in the prescribed form directing the dealer to pay such penalty by such date as may be specified in the notice and the penalty imposed shall be paid to Government treasury.

Section 29 - Liability in case of grant of registration by mistake

Where a dealer after being registered under this Act is found that he was not entitled under the provisions of section 25 or section 26 to be so registered, he shall be liable to pay tax during the period from the date on which his certificate of registration took effect till it is cancelled, notwithstanding that he was not liable to pay tax under this Act.

Section 30 - [Omitted]

[51][***]

Section 31 - Cancellation of certificate of registration

(1)     Where-

(a)      any business in respect of which a certificate of registration has been granted to a dealer under this Act is discontinued ; or

(b)      in the case of transfer of business by a dealer, the transferee already holds a certificate of registration under this Act; or

(c)      an incorporated body is closed down or otherwise ceases to exist; or

[52][(d) the owner of a proprietorship business dies; or]

(e) in case of a firm or association of persons, if it is dissolved ; or

(f) a dealer has ceased to be liable to pay tax under this Act,

[53][(g) any change alters the basic status of a dealer as referred to in subsection (6) of section 32,]

[54][(h) there is good and sufficient reasons,]

the registering authority may, by order, cancel the certificate of registration of such dealer or the transferor dealer, as the case may be, from such date as may be specified in that order.

(2)     The certificate of registration shall be deemed to be inoperative -

(a)      in case of clause (a) and clause (b) of sub-section (1), with effect from the date of discontinuance or transfer of the business, as the case may be;

(b)      in case of clauses (c), (d), (e) and (f) of sub-section (1), from the date on which the liability of the dealer to pay tax has ceased,

[55][(c) in case of clause (g) of sub-section (1), from the date on which the basic status of a dealer is changed,

(d)   in case of clause (h) of sub-section (1), from the date of order of cancellation,]

notwithstanding the fact that the certificate of registration is cancelled from a later date.

[56][(3) A registered dealer, whose certificate of registration becomes liable for cancellation under clauses (a), (b), (c), (e), (f) and (g) of sub-section (1), shall apply for cancellation of the registration to the registering authority in such manner and within such time as may be prescribed.

(3-a) A registered dealer, whose certificate of registration becomes liable for cancellation under clause (h) of sub-section (1), the registering authority shall, after causing such inquiry as he may consider necessary and after giving an opportunity of being heard to the dealer, cancel the certificate of registration held by him.]

(4)   On receipt of such application, if the registering authority is satisfied that the certificate of registration of the dealer is liable to be cancelled under sub-section (1), he may cancel such certificate.

(5)   [57][***]

(6)   Every dealer whose certificate of registration is cancelled under this section shall pay in respect of every taxable goods held as stock in trade or as capital goods on the date of cancellation, an amount equal to the tax that would have been payable in respect of those goods if the goods were sold at prevailing market price on that date or the total input tax credit previously claimed in respect of those goods, whichever is higher.

(7)   Every dealer who applies for cancellation of his registration shall surrender with his application the certificate of registration granted to him along with the unused way bills held on the date of such application and the account of utilisation of such way bills, if any, for which no account has been rendered.

(8)   Every dealer whose certificate of registration is cancelled otherwise than on application shall surrender the certificate of registration along with the unused way bills, if any, held on the date of such cancellation, the account of utilisation of such way bills and the statutory declaration forms, if any, for which no account has been rendered, within seven days from the date of receipt, by him, of the order of cancellation.

(9) If a dealer-

(a)      fails, without sufficient cause, to comply with the provisions of sub-section (3) or sub-section (6); or

(b)      fails to surrender his certificate of registration as required under sub-section (7); or

(c)      fails to surrender his registration certificate along with unused way bills and the statutory declaration forms and the account of utilisation of such way bills and declaration forms, for which no account has been rendered under sub-section (8), the registering authority may, by an order in writing and after giving the dealer an opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum equal to rupees one hundred for each day of default subject to a maximum of rupees ten thousand.

(10) The registering authority shall, at intervals of one month, publish in the Commercial Tax Gazette such particulars, as may be prescribed, in respect of every dealer whose certificate of registration has been cancelled under the provisions of this Act during the intervening period.

(11) The cancellation of a certificate of registration shall not affect the liability of any dealer to pay tax for any period till the date of such cancellation which remains unpaid or is assessed after the said date, notwithstanding that he is not liable to pay tax under this Act.

Section 32 - Amendment of certificate of registration

[58][(1) If any dealer registered under this Act-

(a)      sells or disposes of his business or any part thereof or discontinues his business, or changes the name, style, or nature of business, or makes any addition or deletion in the class of goods dealt in or manufactured, or changes his place of business (other than principal place of business) or warehouse, or opens a new place of business; or

(b)      effects any other change in the constitution or principal place of business,

(c)      changes the ownership of the business, or its basic status, he or any person, duly authorised by him shall, within the prescribed time, inform the registering authority accordingly.]

[59][(2) If under circumstances mentioned in sub-section (1) a registered dealer makes an application for amendment of the certificate of registration,--

(a)      in cases of clause (a), such amendment shall be done electronically on the basis of the application,

(b)      in cases of change in constitution or principal place of business, the registering authority may, amend the certificate of registration of the dealer or reject the application for such amendment as the case may be; and