THE BIHAR VALUE ADDED TAX ACT, 2005[PART I]

An Act to consolidate and amend the law relating to levy of tax on sales or purchases of goods in the State of Bihar and to provide for matters connected therewith or incidental thereto.

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

CHAPTER IPRELIMINARY

 

1.

Short title, extent and commencement.

1. Short title, extent and commencement.-(1) This Act may be called the Bihar Value Added Tax Act, 2005.(2) It shall extend to the whole of the State of Bihar.

(3) It shall be deemed to have come into force on the 1st day of April, 2005.

2.

Definitions.

2. Definitions.-In this Act, unless the context otherwise requires,-

(a) “Assessing Authority” means any of the authorities referred to in section 10 who is directed under sub-section (2) of that section to exercise or perform all or any of the powers and functions conferred on an Assessing Authority under this Act;

(b) “Assistant Commercial Taxes Officer” means an Assistant Commercial Taxes Officer appointed under sub-section (1) of section 10;

(c) “Assistant Commissioner of Commercial Taxes” means an Assistant
Commissioner of Commercial Taxes and Additional Assistant Commissioner of
Commercial Taxes appointed under sub-section (1) of section 10;

(d) “business” includes,-

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

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

(iii) any transaction in connection with, or incidental or ancillary to, the commencement or closure of such business;

(e) “capital goods” means plant, machinery and equipment used in trade or manufacturing of goods;

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

(g) “Commercial Taxes Officer” means a Commercial Taxes Officer appointed under sub-section (1) of section 10;

(h) “Commissioner” means the Commissioner of Commercial Taxes appointed under sub-section (1) of section 10 or Additional Commissioner of Commercial Taxes and any other officer upon whom the State Government may, by notification, confer all or any of the powers and duties of the Commissioner under this Act;

(i) “dealer” means any person who, whether regularly or otherwise, in the course of business, buys, sells, supplies, distributes or does anything incidental to such buying, selling, supplying or distributing of goods, directly or indirectly, whether for cash, or for deferred payment or for commission, remuneration or other valuable consideration and includes-

(A) a local authority;

(B) a Hindu undivided family;

(C) a company, or any society (including a co-operative society), club, firm, association of persons or body of individuals, whether incorporated or not, which carries on such business;

(D) a society (including a co-operative society), club, firm or association which buys goods from, or sells, supplies or distributes goods to its members;

(E) an industrial, commercial, banking or trading undertaking, whether or not, of the Central Government or of any of the State Governments or of a local authority;

(F) a casual trader;

(G) a commission agent, broker, factor, a del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of buying, selling, supplying or distributing goods on behalf of the principal.

Explanation.- Every person who acts as an agent on behalf of a dealer residing outside the State of Bihar and buys, sells, supplies or distributes goods in the State or acts on behalf of such dealer as –

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

(b) an agent for handling goods or documents of title to goods; or

(c) an agent for the collection or the payment of the sale price of goods or as a guarantor for such collection or payment; or

(d) a local branch of a firm or company situated outside the State, shall be deemed to be a dealer for the purposes of this Act;

(j) “declared goods” means goods declared under section 14 of the Central Sales Tax Act, 1956 (74 of 1956) to be of special importance in inter-State trade or commerce;

(k) “Deputy Commissioner of Commercial Taxes” means the Deputy Commissioner of Commercial Taxes or Additional Deputy Commissioner of Commercial Taxes appointed under sub-section (1) of section 10;

(l) “goods” means all kinds of movable property including livestock, computer software, any electronic chip used for the purpose of storing or transmitting data or voice and all materials, commodities and articles (as such or in some other form) but excluding newspapers, electricity, actionable claims, stocks, shares or security.

Explanation.- For the purposes of this clause, materials, commodities and articles,-

(i) attached to or forming part of an immovable property which are agreed to be severed under the contract of sale; or

(ii) sold or supplied as such or in some other form in the execution of works contract, lease or hire purchase,

shall be deemed to be goods within the meaning of this clause;

(m) “goods carrier” means a motor vehicle, vessel, boat, animal and any form of conveyance used for carrying goods;

(n) “Government” means the Government of the State of Bihar;

(o) “gross turnover” means, –

(i) for the purposes of levy of tax on sales, in respect of sale of goods, aggregate of sale prices received or receivable by a dealer on sales and includes sale of goods made outside the State of Bihar or in the course of inter-State trade or commerce or export but does not include sale price of goods which have borne the incidence of tax on purchases under sections 4 and 5;

(ii) for the purposes of levy of tax on purchase, aggregate of purchase prices paid or payable by a dealer during any given period in respect of purchase of goods or class or description of goods which are liable to tax under sections 4 and 5; and

(iii) for the purposes of section 3, the aggregate of the amounts under sub-clauses (i) and (ii) above.

Explanation.- For the purposes of this clause, the amount received by a dealer on account of price variation or price escalation in respect of sale or supply of goods shall be deemed to form part of gross turnover of the financial year during which it is actually received;

(p) “importer” means a dealer who brings any goods into the State of Bihar or to whom any goods are despatched from any place outside the State of Bihar;

(q) “input” means goods (excluding goods specified in Schedule IV) purchased in the course of business –

(a) for re-sale;

(b) for use in manufacture of goods including packing materials;

(c) for use as capital goods as defined in clause (e)

(r) “input tax” means the amount paid or payable by a registered dealer, by way of tax under this Act, in respect of purchase of any taxable goods;

(s) “Inspector” means an Inspector of Commercial Taxes appointed under sub-section (3) of section 10;

(t) “month” means a calendar month;

(u) “notification” means a notification published in the Official Gazette;

(v) “output tax” means the tax charged or chargeable in respect of sale or supply of goods made by a registered dealer;

(w) “place of business” means any place where a dealer, either usually or for the time being, manufactures, sells or purchases goods or keeps accounts of stocks, manufactures, sales or purchases, execution of works contracts, hire purchase contracts and lease contracts or any other place where business activity takes place and includes –

(i) the place of business of an agent, in case of a dealer carrying on business through an agent; or

(ii) any place or building in which a person carrying on a business, keeps any of his books of account, documents, stocks or other things, relating to his business;

(x) “prescribed authority” means the authority prescribed by the rules made under this Act to exercise powers conferred under different provisions and perform such functions as may be conferred by or under this Act;

(y) “prescribed” means prescribed under the rules made under this Act;

(z) “purchase price” means the amount paid or payable by a dealer as a valuable consideration in respect of purchase of goods and includes –

(i) any amount charged for anything done by the vendor in respect of the goods at the time of, or before, the delivery thereof;

(ii) transport costs or freight, if any;

(iii) trade commission, if any, by whatever name called;

(iv) clearing, forwarding and handling charges, if any;

(v) insurance charges, if any;

(vi) taxes or duties under any law for the time being in force (other than tax paid or payable under this Act) by whatever name called, if any;

(vii) cost of packing, if any; and

(viii) the amount paid or payable by the purchaser by way of non-refundable deposit, whether by way of a separate agreement or not, in connection with or incidental or ancillary to, the said purchase of goods;

(za) “quarter” means the quarter ending on the 30th June, 30th September,
31st December and 31st March and the expression “quarterly” shall be construed accordingly;

(zb) “registered dealer” means a dealer in possession of a valid certificate of registration granted to him under section 19 or under the provisions of the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94;

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

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

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

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

(iv) 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;

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

(vi) 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,

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 purchase of those goods by the person to whom such transfer, delivery or supply is made;

(zd) “sale price” means the amount payable to a dealer as valuable consideration for the sale or supply of any goods and includes-

(i) any amount charged for anything done by the vendor in respect of the goods at the time of, or before, the delivery thereof;

(ii) transport costs or freight, if any;

(iii) trade commission, if any, by whatever name called;

(iv) clearing, forwarding and handling charges, if any;

(v) insurance charges, if any;

(vi) taxes or duties levied under any law for the time being in force (other than tax paid or payable under this Act) by whatever name called, if any;

(vii) cost of packing, if any; and

(viii) the amount received or receivable by the seller by way of non-refundable deposit, whether by way of a separate agreement or not, in connection with or incidental to or ancillary to, the said sale of goods;

Explanation I.- Where goods are sold on hire purchase or any system of payment by instalments, the sale price of such goods shall be inclusive of insurance charges, interest and hire charges and such other charges related to hire purchase or any system of payment by instalments.

Explanation II.-Where goods are sold by way of transfer of right to use such goods, the sale price thereof shall be the amount of valuable consideration received or receivable by the transferor for such transfer;

(ze) “tax” means the tax leviable and payable under this Act;

(zf) “taxable goods” means all goods in respect of which tax is payable under section 14;

(zg) “Tribunal” means the Tribunal constituted under sub-section (1) of section 9;

(zh) “works contract” means any agreement for carrying out for cash or deferred payment or other valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable or movable property;

(zi) “year” means the financial year.

CHAPTER IIINCIDENCE OF TAX

 

3. Charge of tax.-(1) Every dealer who is registered under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, shall be liable, on or after the commencement of this Act, to pay tax under this Act on sale or purchase, made by him.

(2) Every dealer, to whom sub-section (1) does not apply, shall be liable to pay tax on sale or purchase, as the case may be, from the date on which his gross turnover, during a period not exceeding twelve months, first exceeded five lakh rupees.

(3) Notwithstanding anything contained in sub-section (1) or sub-section (2) but subject to the other provisions of this Act, every dealer,-

(a) being an importer or a manufacturer; or

(b) who is required to file a return under the Income-tax Act, 1961 (43 of 1961); or

(c) who holds any licence under the Explosives Act, 1884 (4 of 1884), or the Bihar Excise Act, 1915 (Bihar and Orissa Act 2 of 1915), or the Drugs and Cosmetics Act, 1940 (23 of 1940), or the Essential Commodities Act, 1955 (10 of 1955) or the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957); or

(d) being a corporation, constituted under any law for the time being in force or a company incorporated under the Companies Act, 1956 (1 of 1956), or, is registered under the Central Sales Tax Act, 1956 (74 of 1956); or

(e) whose place of business is located inside the market yard established under the Bihar Agriculture Produce Market Act, 1960 (Bihar Act 16 of 1960); or

(f) who fulfils the following two conditions, namely:-

(i) uses a telephone in his place of business or has a mobile telephone; and

(ii) the receipts or payments of whose business, either wholly or in part, are transacted through any bank,

shall be liable to pay tax on sale or purchase, as the case may be, with effect from the date of the first sale of any taxable goods made by him.

(4) Every dealer who has become liable to pay tax under sub-sections (1), (2) and (3) shall, subject to the provisions of sub-section (5), cease to be so liable after the expiry of twelve consecutive months from the date he either closes or discontinues his business or entirely transfers his business to another person.

(5) A registered dealer shall, within a period of twelve consecutive months, pay tax on the stock of goods remaining with him on the date with effect from which he closes or discontinues his business:

Provided that the Commissioner may, after recording the reasons, extend the period of twelve consecutive months if the goods are held in stock beyond the said period of twelve months because of reasons beyond the control of the dealer.

(6) Notwithstanding anything contained in sub-section (1) or sub-section (2) or sub-section (3), where any person who, is, or was, less than six months earlier, a member of the partnership firm, concern or Hindu undivided family, which is, or was, less than six months earlier, liable to pay tax, starts a new business, either singly or jointly with other persons, or joins other business, partnership firm or concern, tax as aforesaid, shall likewise be payable on sales and purchases made from such business, partnership firm or concern, on and from the date the person starts or joins it, unless the liability in respect of such business, partnership firm or concern has arisen from an earlier date under the said sub-sections.

(7) The tax for each year or any part thereof, may, with the previous approval of the Commissioner, be estimated and collected in advance, in the manner prescribed, during a year, in such instalments as may be fixed by the prescribed authority.

(8) For the purposes of sub-section (7), the prescribed authority may require the dealer to furnish an advance estimate of his taxable turnover for that year or any part thereof and may provisionally determine the amount of tax payable by the dealer in respect of the year or any part thereof and thereupon the dealer shall pay the amount so determined by such date as may be fixed by such authority.

4.

Levy of purchase tax.

4. Levy of purchase tax.-Subject to the provisions of sections 6 and 7, every dealer liable to pay tax under section 3, who purchases goods in circumstances in which no tax on sales is payable or has been paid on the sale price of such goods and either consumes such goods in the manufacture of other goods for sale or otherwise disposes of such goods in any manner other than by way of sale in the State or sale in the course of inter-State trade or commerce, shall be liable to pay tax on the purchase price of such goods at the same rate at which it would have been leviable on the sale price of such goods under section 14.

5.

Liability to pay purchase tax on certain purchases.

5. Liability to pay purchase tax on certain purchases.-Where a dealer purchases any taxable goods from any person within the State of Bihar, and such person is not a registered dealer and the said goods are used as capital assets anytime after such purchase, there shall be levied, a tax on the purchase price of such purchases at the rate at which tax on sales is leviable on the said goods.

6.

Non-levy of tax in certain cases.

6. Non-levy of tax in certain cases.-(1) No tax shall be payable under this Act on sales or purchases of goods which have taken place-

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

(b) outside the State of Bihar;

(c) in the course of import of goods into, or, export of goods out of, the territory of India.

(2) The provisions of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining when a sale or purchase of goods shall be deemed to have taken place in any of the ways mentioned in clause (a) or clause (b) or clause (c) of sub-section (1).

7.

Exemptions.

7. Exemptions.-No tax shall be payable on sale or purchase of goods specified in Schedule I.

8.

Burden of proof.

8. Burden of proof.-The burden of proving that any sale or purchase effected by a dealer is not liable to tax under section 6 or section 7 or sub-section (2) of section 13, as the case may be, or that he is eligible for an input tax credit under sections 16 and 17 shall be on the dealer.

CHAPTER IIITRIBUNAL AND TAXING AUTHORITIES

 

9. Tribunal.-(1) Subject to such rules, as may be prescribed, the State Government shall, by a notification published in the Official Gazette, constitute a Tribunal to be called the Commercial Tax Tribunal consisting of a Chairperson and two other Members to exercise all the powers and perform all the functions conferred by or under this Act or any other law for the time being in force upon such a Tribunal:

Provided that till the Tribunal is constituted under this Act, the Tribunal constituted under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, shall be deemed to be the Commercial Tax Tribunal constituted under this Act and shall exercise all the powers and perform all the functions conferred by or under this Act or any other law for the time being in force.

(2) The Chairperson of the Tribunal shall be a retired High Court Judge, not exceeding sixty-five years of age, or a judicial officer of the rank of a District Judge.

(3) One of the other two Members shall be an officer of the Commercial Taxes
Department of the State Government not below the rank of Joint Commissioner and the third Member shall be a person-

(a) who has, for at least ten years, been in the practice of accountancy as a chartered accountant under the Chartered Accountants Act, 1949 (38 of 1949) or as a registered accountant under any law formerly in force or partly as a registered accountant and partly as a chartered accountant; or

(b) who is or has been an officer of the Indian Audit and Accounts Service not below the rank of Deputy Accountant-General; or

(c) who is a Government servant, whether serving or retired having experience of at least four years in the administration of accounts or financial management in the State Government or public sector undertaking.

(4) (a) The State Government may, if it considers expedient to do so, set up by a notification, one or more additional benches of the Tribunal at such places and having jurisdiction over such area as may be specified in the notification.

(b) It shall consist of such Member or Members, as may be specified in the notification, possessing such qualifications as are specified in sub-sections (2) and (3):

Provided that if a judicial officer is appointed to such an additional bench, he shall be an officer not below the rank of an Additional District Judge.

(5) Any vacancy in the membership of the Tribunal shall be filled up by the State Government as soon as possible.

(6) During the vacancy in the post of the Chairperson pending the appointment of a permanent Chairperson, the Government may appoint one of the remaining members to act as the Chairperson.

(7) Any person appointed as a member of the Tribunal shall ordinarily hold office for a period of three years:

Provided that in case a retired High Court Judge is appointed as the Chairperson or any other Government servant is appointed as a Member, after his superannuation to the Tribunal, the terms and conditions of service (including his pay and allowances) shall be such as may be prescribed.

(8) (a) The functions of the Tribunal shall be exercised by a bench to be constituted by the Chairperson consisting of one or two or three members.

(b) The nature of cases to be disposed of by either of these benches shall be under the discretion of the Chairperson:

Provided that a bench consisting of only one Member or two Members may in its discretion refer a case to a larger bench of two or three Members, as the case may be.

(9) (a) Where an application is heard by all the 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:

Provided that if the post of any one of the Members is vacant such points shall be decided in accordance with the opinion of the Chairperson.

(b) Where an application is heard by a bench consisting of two Members, whether it consists of the Chairperson or not, and the Members are divided in opinion on any point or points, such point or points shall be referred to a bench consisting of all the three Members.

(10) (a) The Members of the Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code (45 of 1860).

(b) No Member shall accept any other paid employment outside the duties of his office during the term of his membership of the Tribunal.

(11) The Tribunal shall, with the previous sanction of the State Government, make regulations consistent with the provisions of this Act and the rules made thereunder, for regulating its procedure and other matters incidental to the disposal of its business and publish such regulations in the Official Gazette.

(12) The Members of the Tribunal shall, ordinarily be appointed for a period of three years from the date of their appointment:

Provided that the period of appointment may be reduced or extended by the State Government.

(13) The Chairperson or any other Member may, by notice in writing under his hand addressed to the State Government, resign his office:

Provided that the Chairperson or any other Member shall, unless he is permitted by the State Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

(14) The Chairperson or any other Member of the Tribunal shall not be removed from his office except by an order by the State Government on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the High Court, in which the Chairperson or any other member concerned has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges.

(15) The State Government may, by rules, regulate the procedure for the investigation of misbehaviour or incapacity of the Chairperson or any other Member.

10.

Taxing Authorities and Inspectors.

10. Taxing Authorities and Inspectors.-(1) There shall be the following classes of authorities to be appointed by the State Government, for carrying out the purposes of this Act, namely:-

(a) Commissioner of Commercial Taxes;

(b) Senior Joint Commissioner of Commercial Taxes;

(c) Joint Commissioner of Commercial Taxes;

(d) Deputy Commissioner of Commercial Taxes;

(e) Assistant Commissioner of Commercial Taxes;

(f) Commercial Taxes Officer;

(g) Assistant Commercial Taxes Officer.

(2) The authorities appointed under sub-section (1) shall, within such areas or in respect of such transactions falling within an area as the State Government may, by notification specify, exercise such powers as may be conferred and perform such duties as may be imposed, by or under this Act.

(3) The Commissioner may appoint such number of Inspectors of Commercial Taxes as may be necessary to assist any of the authorities appointed under sub-section (1) and the Inspectors so appointed shall, within such areas exercise powers under sub-sections (1) and (2) of section 56 and perform such other functions in the execution of this Act in those areas as may be prescribed or as the Commissioner may, by general or special order, assign to them and such assignment may be subject to such conditions and restrictions as may be specified in the order.

(4) All persons appointed under sub-section (1) or sub-section (3) shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860).

(5) The Commissioner may, at any stage, direct transfer of a proceeding under section 27 or section 28 or section 31 or section 32 or section 33 or section 72 in respect of any dealer from the prescribed authority to another of the same or higher rank appointed under sub-section (1) and where such direction is given by the Commissioner the authority to whom the proceeding is transferred shall proceed to dispose it of as if it had been initiated by the said authority, irrespective of the local limits of its jurisdiction; such transfer shall not render necessary the re-issue of any notice already issued before the transfer and the authority to whom the proceeding is transferred may, in its discretion, continue it from the stage at which it was left by the authority from whom it was transferred.

(6) For smooth functioning of the office, it shall be lawful for the Deputy
Commissioner or the Assistant Commissioner in-charge of a circle to allot work and proceedings amongst the officers posted in the circle, as the case may be, and it may include transfer of a proceeding from one officer to another posted in the same office and exercising concurrent jurisdiction.

(7) The Commissioner may, from time to time, issue such orders, instructions and directions as he may deem fit, to the authorities subordinate to him, for carrying out the purposes of this Act, and such authorities shall observe and follow such orders, instructions and directions of the Commissioner:

Provided that no such orders, instructions and directions shall be issued-

(i) so as to require any authority to pass a particular order or to dispose of a particular case in a particular manner; or

(ii) so as to interfere with the discretion of the Appellate authorities in a particular case:

Provided further that if the Commissioner is of the opinion that it is necessary in the public interest so to do, he may cause such orders, instructions and directions to be published and circulated for general information.

11.

Protection of action taken in good faith.

11. Protection of action taken in good faith.-No suit, prosecution or other legal proceeding shall lie against any servant of the Government or any officer or authority appointed under section 10 or section 86 of this Act for anything which is in good faith done or intended to be done in pursuance or rules made thereunder.

12.

Power to issue summons and examine on oath.

12. Power to issue summons and examine on oath.-(1) The Tribunal constituted under section 9, or the Commissioner or any officer or authority appointed under section 10 or section 86 shall, for carrying out the purposes of this Act, have all the powers of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908) and in particular in respect of the following matters, namely:-

(a) to summon and enforce attendance of any person, including any officer of a banking company, and examine him on oath or affirmation;

(b) to compel the production of documents or accounts and to impound and retain them;

(c) to issue commissions for the examination of witness.

(2) Every proceeding under this Act before the Tribunal, shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 of the Indian Penal Code, 1860 (45 of 1860).

CHAPTER IVRATE OF TAX AND POINT OF LEVY

 

13. Point or points in series of sales at which sales tax shall be levied.-(1) (a) Subject to the provisions of sections 16 and 17, tax on sale of goods (other than goods specified in Schedule IV) shall be levied at each point in a series of sales in the State of Bihar by a dealer liable to pay tax under this Act.

(b) Where the tax is levied at each point of sale, the tax payable by a dealer at any point shall be the amount arrived at after deducting, the input tax credit specified under section 16 or section 17, from the tax computed at that point of sale.

(2) (a) The tax on sales, in respect of goods specified in Schedule IV, shall be levied at the first point of their sale in the State of Bihar by a dealer and subsequent sales of the same goods in the State of Bihar shall not be levied to tax, if the dealer making the subsequent sale produces before the prescribed authority the original copy of the cash memo, or invoice or bill issued to him and files a true and complete declaration in the form and in the manner prescribed.

(b) The declaration referred to in clause (a) shall be issued by the selling dealer to the purchasing dealer not later than the 30th day of September of the year following the year to which such sales relate.

(3) If upon information, the prescribed authority has reasons to believe that the selling dealer has, without reasonable cause, failed to issue to the purchasing dealer the declaration referred to in sub-section (2), he shall, after giving the selling dealer a reasonable opportunity of being heard, direct that the selling dealer shall pay, by way of penalty, a sum of rupees five thousand per month for every month of default or the amount of tax involved, whichever is less.

14.

Rate of tax.

14. Rate of tax.-(1) Tax shall be payable on the sale price of –

(a) the goods specified in the Schedule II, at the rate of one per cent.;

(b) the goods specified in the Schedule III, at the rate of four per cent.;

(c) the goods specified in the Schedule IV, at the rate not exceeding fifty per cent. but not less than twenty per cent., as the State Government may, subject to such conditions and restrictions, by notification, specify;

(d) any other goods, not specified in the Schedules I, II, III and IV, at the rate of twelve and a-half per cent.

(2) The State Government may, by notification, alter any Schedule to this Act.

15.

Compounding of tax liability in certain cases.

15. Compounding of tax liability in certain cases.-(1) Notwithstanding anything to the contrary contained in the Act, the State Government may, by notification and subject to such conditions and restrictions as may be prescribed, permit any class of registered dealers, whose gross turnover does not exceed the limit specified in the notification to pay, in lieu of the tax payable by him, an amount calculated at such rate, not exceeding four per cent. of his taxable turnover, as may be specified in the notification:

Provided that no such permission shall be granted to a manufacturer or a person who imports any goods from any place outside the State of Bihar for the purpose of his business:

Provided further that the amount so specified shall be in addition to any tax that may be payable by the dealer under section 4.(2) The dealers to whom the provisions of sub-section (1) apply shall-

(a) not charge any tax on the sale of goods specified in Schedule I;

(b) not charge tax in excess of the rate specified in the notification issued under sub-section (1); and

(c) not be entitled to issue tax invoices in respect of sales made by them.

(3) If the Assessing Authority has reasons to believe that the dealer was not eligible to pay tax at a rate specified under sub-section (1), the Assessing Authority shall, without prejudice to any action which is or may be taken under section 81, impose a penalty equivalent to three times of the amount of tax arrived at after applying the rate, specified under section 14, to the gross turnover of the dealer after deducting the value of sales under section 6:

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

16.

Input tax credit.

16. Input tax credit.-(1) Subject to the provisions of this Act, an input tax credit as provided in this section shall be claimed by a registered dealer, subject to such conditions and restrictions as may be prescribed, on sales of goods in the following circumstances, namely: –

(a) when a registered dealer purchases any input within the State of Bihar from another registered dealer after paying him the tax as specified under section 14, he shall claim credit of the input tax in the manner prescribed, if the goods are sold within the State or in the course of inter-State trade and commerce;

(b) when a registered dealer –

(i) purchases any input within the State from another registered dealer after paying him the tax under section 14, or

(ii) purchases any input and pays tax on such purchase under section 4 of the Act,

and consumes such goods in the manufacture of any goods mentioned in clause (a), (b) and (d) of section 14, he shall claim credit of the said input tax in the manner prescribed, if the goods so manufactured are sold within the State of Bihar or in the course of inter-State trade and commerce;

(c) when a registered dealer purchases any capital goods within the State from another registered dealer after paying him the tax as specified under section 14, and uses such goods in the manufacture of any goods mentioned in clauses (a), (b) and (d) of section 14 and sells the manufactured goods within the State of Bihar or in the course of inter-State trade or commerce, or otherwise, he shall claim and be allowed, in such manner as may be prescribed, credit of the amount of input tax;

(d) when a registered dealer holds in stock, on the 1st day of April, 2005, such goods as have been purchased by him on or after the 1st day of April, 2004 and which have suffered the incidence of tax under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94 and –

(i) he sells such goods within the State of Bihar or in the course of inter-State trade and commerce, or

(ii) he consumes such goods in the manufacture of any goods mentioned in clauses (a), (b) and (d) of section 14 and the goods so manufactured are sold within the State of Bihar or in the course of inter-State trade and commerce,

he shall claim credit of the input tax in the manner prescribed;

(e) when a registered dealer purchases any input within the State of Bihar from another such dealer after paying him the tax as specified under section 14 at a rate higher than four per cent. and transfers such goods or goods manufactured from such goods to another dealer outside the State of Bihar, he shall be allowed credit of such tax in excess of four per cent. in the manner as may be prescribed:

Provided that if the claim for input tax credit under clause (a) or clause (b) or clause (c) or clause (d) or clause (e) for any month exceeds the output tax for the same month, such excess shall be carried forward for adjustment against the output tax of subsequent months, not being a month later than two years after the close of the year during which such excess had arisen and the amount of input tax remaining unadjusted after two years after the close of the year during which such excess had arisen shall be refunded to the dealer subject to the provisions of sections 68, 69 and 71 of this Act:

Provided further that input tax credit in respect of capital goods shall be allowed in the manner and over such period, not exceeding thirty-six months from the date of their acquisition, as may be prescribed:

Provided also that no credit of input tax shall be allowed in respect of capital assets purchased or acquired before the commencement of this Act.

(2) Notwithstanding anything contained in sub-section (1), where a registered dealer purchases any input in the circumstances mentioned in clause (a) or clause (b) or clause (c) or clause (d) of the said sub-section and,-

(a) he despatches such goods or the goods manufactured by consuming such goods, to a commission agent registered under this Act or transfers such goods to its branch or head office within the State of Bihar for sale, as the case may be; or

(b) he supplies such goods in the course of execution of a works contract to another registered dealer to whom he has let out a sub-contract, for use in the execution thereof,

the input tax credit on the sale or supply, as the case may be, of such goods shall be claimed by the registered dealer selling the goods on commission or using the goods supplied in the execution of sub-contract, as the case may be, in accordance with the provisions of sub-section (1), in such manner as may be prescribed.

(3) No input tax credit under sub-section (1) shall be claimed or be allowed to a registered dealer-

(a) in respect of goods specified in Schedule IV or such other goods as may be prescribed; or

(b) in respect of inputs purchased by him from another registered dealer or manufactured by him and the right wherein to use is transferred to another dealer; or

(c) in respect of inputs purchased from a registered dealer permitted to pay tax under the provisions of section 15; or

(d) in respect of inputs consumed for the manufacture of goods specified in Schedule I; or

(e) in respect of goods used for self consumption or as gift.

(4) In case the inputs or goods are used partially for the purpose specified in sub- section (3), the claim for input tax credit shall stand reduced to the extent they are so used.

(5) (a) No dealer shall claim an input tax credit in respect of inputs purchased unless he is in possession of an original copy of the tax invoice, signed and issued by the selling registered dealer, containing the prescribed particulars of sale.

(b) If the original tax invoice is lost, input tax credit shall be allowed only on the basis of a duplicate copy of the original tax invoice in the form and manner prescribed.

17.

Exports to be zero-rated.

17. Exports to be zero-rated.-(1) In the case of a sale in the course of export under section 5 of the Central Sales Tax Act, 1956 (74 of 1956); or sale of any input made to any dealer in a special economic zone outside the customs territory of India; or sale (including sale out side India and Domestic Tariff Area) by an export oriented unit, there shall be no tax payable on the turnover of such sale and the person exporting the goods or selling them shall be entitled, in the manner prescribed, to a credit of input tax paid-

(a) on the purchase of the goods sold in the course of export (excluding sale to Domestic Tariff Area) or purchase of goods sold to any dealer in the special economic zone or sale (including sale outside India and Domestic Tariff Area) by an export oriented unit, or

(b) on the purchase of inputs and capital assets which have been used for the manufacture of goods sold in the course of export (excluding sale to Domestic Tariff Area) or to any dealer in the special economic zone:

Provided that the input tax credit on account of capital assets shall be allowed only to the extent and in the manner prescribed.

(2) The organisations specified in the Schedule V to this Act shall be entitled to claim a refund of tax paid on goods purchased in the State of Bihar, subject to such restrictions and conditions as may be prescribed and such organisation shall be entitled to a refund of the same only on an application made to the prescribed authority within such time and in such manner as may be prescribed.

18.

Rate of tax on packing materials and containers.

18. Rate of tax on packing materials and containers.-Notwithstanding anything contained in section 14, where any goods packed in any container or packing material are sold or purchased, the container or packing material in which such goods are so packed shall be deemed to have been sold or purchased along with such goods and the tax under sections 3, 4 and 5 shall be levied on the sale or purchase of such container or packing material (whether such packing materials or containers are separately charged for or not) at the rate of tax applicable to the sale or the purchase, as the case may be, of such goods:

Provided that where the price of the goods is less than the container or packing material in which they are packed, the rate of tax specified in respect of such containers under sub-section (1) of section 14 shall apply.

CHAPTER VREGISTRATION

 

19. Registration.-(1) No person liable to pay tax under section 3 or section 4, as the case may be, of this Act shall sell or purchase goods unless he has obtained and is in possession of a valid certificate of registration:
Provided that any dealer not liable to pay tax under this Act may also apply for grant of a certificate of registration.

(2) Every person, referred to in sub-section (1), shall apply for the grant of certificate of registration to the prescribed authority in the prescribed manner and the prescribed authority, shall, after verifying that the application has been duly filled in, grant certificate of registration in the manner as may be prescribed:

Provided that dealers registered under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, shall be deemed to be dealers registered under this Act and such dealers shall be granted, a certificate of registration within such time and in the manner as may be prescribed and such dealers may sell or purchase goods till such time as the certificate of registration is granted to them:

Provided further that a dealer, who exclusively sells or purchases, goods mentioned in Schedule I, shall not be liable for registration.

(3) Every dealer registered under sub-section (1) of section 7 of the Central Sales Tax Act, 1956 (74 of 1956), shall apply for and obtain a certificate of registration, notwithstanding whether such dealer is not liable to pay tax under this Act.

(4) Where the prescribed authority, at any time after the grant of the certificate of registration, is satisfied upon an inquiry, that the particulars mentioned in the application are incorrect or the applicant has suppressed or misrepresented certain material facts, he shall, after giving the applicant an opportunity of being heard, and after recording reasons therefor, cancel the certificate of registration granted to him.

20.

Amendment and cancellation of certificate of registration.

20. Amendment and cancellation of certificate of registration.-(1) The prescribed authority may, after considering such information as may be furnished by the dealer under section 23 or as may be otherwise received by the said authority, amend the certificate of registration of the dealer in respect of whom the information has been furnished or received.

(2) When-

(a) any registered dealer discontinues or entirely transfers his business to other persons; or

(b) the liability of a registered dealer to pay tax under this Act has ceased, the dealer shall, forthwith, surrender his certificate of registration in the manner prescribed to the prescribed authority and the said authority shall cancel the certificate of registration in the manner prescribed:

Provided that, in a case covered by clause (a), the certificate of registration shall be deemed to be inoperative with effect from the date of discontinuance or transfer of the business and, in a case covered by clause (b), with effect from the date on which the dealers liability to pay tax has ceased.

21.

Security.

21. Security.-Where it appears necessary to the prescribed authority to do so for the proper realisation of the tax payable under this Act, he may, by an order in writing and for reasons to be recorded therein, direct a dealer to furnish such security and in such manner as may be prescribed.

22.

Declared manager.

22. Declared manager.-(1) Every dealer, who is liable to pay tax under this Act, and who is a Hindu undivided family, a firm, company or corporation or a society or club or association or who is engaged in business as a guardian or a trustee or otherwise on behalf of another person, shall furnish to the prescribed authority in the prescribed manner a declaration stating the name and prescribed particulars of the person or persons who shall be deemed to be the manager or managers of such dealers business for the purposes of this Act.

(2) Every dealer shall specifically authorise his manager or officer or any other person to receive any form of declaration, make any statement, furnish any return, statement, accounts, produce documents or other evidence and any statement made, return or statement furnished, accounts, registers or documents produced or evidence given by the manager or any person authorised by him or by the dealer in this behalf, in the course of any proceeding under this Act, shall be binding on the dealer.

23.

Furnishing of information by dealers.

23. Furnishing of information by dealers.-If any person or dealer liable to pay tax under this Act-

(a) transfers or otherwise disposes of his business or any part thereof, whether by way of sale or otherwise, or

(b) acquires any business or part of any business, whether by way of purchase or otherwise, or

(c) effects any other change in the ownership or constitution of the business, or

(d) discontinues his business, or shifts his place of business, or

(e) changes the name, style or nature of his business or effects any change in the class or description of goods dealt in by him, or

(f) starts a new business or joins another business either singly or jointly with other person or persons, or

(g) effects any change in the particulars furnished in an application under section 19 or declaration furnished under section 22, or

(h) applies for or has an application made against him for insolvency or liquidation under any law for the time being in force, or

(i) makes a reference or has a reference made under the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986),

he shall, within seven days of the occurring of any of the events aforesaid, inform the prescribed authority accordingly, and, if any such dealer dies without doing so, his executor, administrator, successor-in-interest or legal representative, as the case may be, shall, within fifteen days of the dealers death, inform the said authority accordingly.

CHAPTER VIRETURNS, ASSESSMENT, RE-ASSESSMENT AND PAYMENT OF TAX

 

24. Returns, payment of tax, interest and penalty.-(1) Every person, being-

(a) a dealer, who is not registered under this Act, by a notice served in the manner prescribed by the prescribed authority;

(b) a registered dealer (other than a dealer permitted under section 15 to pay tax at a fixed rate in lieu of the tax payable by him),

shall furnish a true and complete return in respect of all his transactions relating to sales, purchases, receipts and despatches of goods and any other transactions prescribed specifically for each month, on or before the end of the next following month to the prescribed authority in such form and in such manner as may be prescribed.

(2) Without prejudice to the provisions contained in sub-section (1), every person, being –

(a) a dealer, who is not registered under this Act, by a notice served in the manner prescribed by the prescribed authority;

(b) a registered dealer (other than a dealer permitted under section 15 to pay tax at a fixed rate in lieu of the tax payable by him),

shall furnish a true and complete statement in respect of all his transactions relating to sales and purchases of goods and any such details as may be prescribed for each completed quarter on or before the end of the month following the end of the quarter to the prescribed authority in such form and in such manner as may be prescribed.

(3) Every registered dealer shall furnish to the prescribed authority, on or before the due date, a true and complete return in respect of every financial year in the form and manner prescribed.

Explanation.- In this sub-section, “due date” means –

(a) where the dealer is a company within the meaning of the Companies Act, 1956 (1 of 1956), the 30th day of November of the year following the year to which such return relates;

(b) where the dealer is a person, other than a company,-

(i) in a case where the accounts of the dealer are required under this Act or any other law to be audited or where the report of an accountant is required to be furnished under section 54, the 31st day of October of the year following the year to which such return relates;

(ii) in any other case, the 31st day of July of the year following the year to which such return relates.

(4) Every dealer who has been permitted to pay tax under section 15 shall file a quarterly abstract statement for each completed quarter on or before the end of the month following the end of the quarter to the prescribed authority in such form and in such manner as may be prescribed.

(5) If the due date prescribed for the filing of quarterly statement or monthly return or quarterly abstract statement or annual return happens to be a holiday, the next date on which the office opens shall be deemed to be the due date.

(6) Notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may, for specific reasons to be recorded in writing, extend the date of filing such return or quarterly statement, as the case may be, subject to the condition that such an extension may be allowed only once and for a period not exceeding thirty days from the due date; but the Commissioner may allow extension beyond thirty days for reasons to be recorded in writing subject to the condition that such an extension may be allowed only once and that also for a period not exceeding three months.

(7) If a dealer, having furnished a monthly return under sub-section (1) or the quarterly statement under sub-section (2), discovers any omission or wrong statement therein, he may furnish a revised return or statement, as the case may be, in the form and manner prescribed to the prescribed authority at any time before the due date within the meaning of sub-section (3):

Provided that no such return or statement shall be taken into consideration if, upon information or otherwise and for reasons to be recorded in writing, the prescribed authority is satisfied that the return or statement originally furnished was deliberately false or that it was furnished with intent to defraud the State Government of its revenue.

(8) If a dealer fails to furnish the return within the time specified under sub-section (1) or the quarterly statement under sub-section (2) or the quarterly abstract statement under sub-section (4), the prescribed authority shall, after giving such a dealer an opportunity of being heard in the manner prescribed, impose a penalty at the rate of twenty-five rupees for every day of such failure.

(9) (a) Every dealer liable to furnish the return under sub-section (1) shall also deposit the tax payable, according to the return on or before the fifteenth day of the following month in such manner as may be prescribed and shall enclose the proof of payment in the form and manner prescribed along with the return.

(b) Every dealer permitted to pay tax under section 15 shall also deposit the tax, arrived at after applying the rate specified in the notification issued under section 15 to his quarterly turnover, on or before the fifteenth day of the month following the quarter to which it relates and shall enclose the proof of payment in the form and manner prescribed along with the statement required to be furnished under sub-section (4).

(c) Subject to the provisions of sub-section (10), if any registered dealer submits a revised return under sub-section (7) and if the amount of tax due from such dealer according to the revised return is higher than the amount which was due according to the original return, such revised return shall be accompanied by a receipt showing the payment of extra amount of tax in the manner provided in clause (a).

(10) If a dealer, required to furnish the return under sub-section (1) or statement under sub-section (4), fails to pay the amount of tax payable according to the provisions of sub-section (9), such dealer shall be liable to pay interest-

(a) in respect of tax payable under sub-section (9), by him in accordance with the return or the quarterly abstract statement or revised return, as the case may be; or

(b) in respect of the tax payable for the period for which he has failed to furnish returns under sub-section (1) or quarterly abstract statement under sub-section (4),

at the rate of one and a-half per cent. per month of the amount due from the date the tax so payable had become due to the date of its payment.

Explanation.- For the purposes of this sub-section-

(i) where the period of default in payment of tax covers a period less than a month, the interest payable on such tax in respect of such period shall be computed proportionately;

(ii) “month” shall mean thirty days.

(11) Any interest levied or penalty imposed under this section shall be without prejudice to any action, which is or may be taken under section 81.(12) A rebate at the rate of half per cent. of the amount of tax admitted to be due in the return furnished under sub-section (1), subject to a maximum of fifty thousand rupees in a year, shall be allowed to a registered dealer who has furnished the return within the due dates specified under this section and has paid such amount in full on or before the date specified for payment of tax under this section.

25.

Scrutiny of returns.

25. Scrutiny of returns.-(1) The prescribed authority shall, within the time and in the manner prescribed, scrutinize every return filed under sub-sections (1) and (3) of section 24 for the purpose of ascertaining that-

(a) all calculations contained therein are arithmetically accurate;

(b) the output tax, the input tax, the tax payable and interest payable, if any, have been computed correctly and properly;

(c) the rates of tax have been applied correctly; and

(d) evidence, as prescribed, has been furnished with regard to payment of tax and interest payable, if any.

(2) If, upon scrutiny under sub-section (1), the prescribed authority discovers any error, he shall serve a notice in the prescribed form on the concerned dealer directing him to-

(a) pay, within thirty days, the extra amount of tax along with the interest, if any, payable and furnish the challan evidencing such payment; or

(b) explain, within thirty days, that the return or returns filed by him do not suffer from any error and all requirements specified in clauses (a) to (d) of sub-section (1) have been complied with.

(3) (a) The prescribed authority shall, in a case falling under clause (b) of sub-section (2) and after giving the dealer a reasonable opportunity to adduce necessary evidence, pass such order in the matter as it may deem fit.

(b) If, pursuant to an order under clause (a), any tax or interest is found to be payable by a dealer, a notice in the form and manner prescribed, shall be served upon the dealer requiring him to pay the tax and interest within the time as may be prescribed.

(c) Any tax or interest payable under clause (b) shall be deemed to be an arrear of tax within the meaning of section 39.

26.

Self-Assessment of tax.

26. Self-Assessment of tax.-(1) Subject to the provisions of section 25, the tax due in respect of a financial year from every registered dealer, who has furnished the return and statement mentioned in section 24, shall be deemed to have been assessed.

(2) Notwithstanding anything contained in sub-section (1), the Commissioner may, in the interest of revenue, select any registered dealer for detailed audit of his business, on the basis of a selection model as may be prepared for such purpose, incorporating therein such criteria as may be deemed fit by the Commissioner.

(3) The audit of the business of a dealer selected under sub-section (2) shall be conducted, within a period of twenty-four months from the due date within the meaning of sub-section (3) of section 24, in such manner as may be prescribed.

27.

Assessment of dealer not filing returns.

27. Assessment of dealer not filing returns.-(1) If a registered dealer fails to furnish before the due date specified under sub-section (3) of section 24-

(a) the returns specified under sub-section (1) or sub-section (3) of section 24; or

(b) the quarterly abstract statement under sub-section (4) of section 24; or

(c) the statement under sub-section (2) of section 24,

the prescribed authority shall, after giving the dealer a reasonable opportunity of being heard, assess to the best of its judgment, the amount of tax due from the dealer and interest, if any.

(2) Any assessment made or interest levied under this section shall be without prejudice to any action, which is, or may be, taken under section 81.

28.

Assessment of tax of dealers evading registration.

28. Assessment of tax of dealers evading registration.-(1) If upon information which has come into his possession, the prescribed authority is satisfied that reasonable grounds exist to believe that any dealer has been liable to pay tax under this Act in respect of any period, and has nevertheless wilfully failed to apply for grant of certificate of registration, or, having so applied, failed to furnish any particulars or information required for the purposes of section 19, the prescribed authority shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of its judgment, the amount of tax due, if any, from the dealer in respect of such period and all subsequent periods; and the prescribed authority may, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum of one hundred rupees for every day of the period during which the dealer failed to apply for registration or failed to furnish any particulars or information required for the purposes of section 19 or an amount equal to the amount of tax assessed, whichever is higher:

Provided that no proceeding for such assessment shall be initiated except before the expiry of two years from the expiry of the period to which it relates:

Provided further that a proceeding initiated under this sub-section shall be completed within a period of four years from the date of initiation.

(2) Any assessment made, interest levied or penalty imposed under this section shall be without prejudice to any action which is, or may be, taken under section 81.

29.

Assessment of tax on disputed question.

29. Assessment of tax on disputed question.-Notwithstanding anything contained in any other provision of this Act, where the assessment involves a decision on a point which is concluded against any of the authorities specified in sub-section (1) of section 10 by a judgment of the Tribunal and an appeal has been filed under section 79, then unless otherwise directed by the High Court, the prescribed authority may complete the assessment as if the point was not so decided against such authority, but shall stay the recovery of such of the dues including tax, penalty, interest or amount forfeited, if any, in so far as they relate to such point, until the decision by the High Court and after such decision, may modify the assessment order, if found necessary, after giving the dealer a reasonable opportunity of being heard.

30.

Assessment of tax of non-resident dealer doing business temporarily by way of fair, mela, etc.

30. Assessment of tax of non-resident dealer doing business temporarily by way of fair, mela, etc.-(1) Notwithstanding anything contained in section 19, or section 26 and subject to such rules as may be prescribed, it shall be open to the prescribed authority or any other officer authorised by the Commissioner in this behalf to make provisional or final assessment of turnover of sale or purchase of goods, as the case may be, effected by any dealer residing outside the State of Bihar and carrying on business temporarily by way of fair, mela or by way of any other similar mode in the State of Bihar.

(2) If a dealer referred to in sub-section (1) claims that the sales affected by him are not of goods imported by him, the onus to prove such claim shall lie on the claimant.

31.

Assessment or re-assessment of tax of escaped turnover.

31. Assessment or re-assessment of tax of escaped turnover.-(1) If the prescribed authority is satisfied, either on the basis of audit conducted under sub-section (3) of section 26 or otherwise, that reasonable grounds exist to believe that, in respect of any assessment under this Act or under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, during any period, any sale or purchases of goods liable to tax under this Act or the said Act, for any reason, has been under-assessed or has escaped assessment, or has been assessed to tax at a lower rate, or any deduction therefrom has been wrongly made, or an input tax credit has incorrectly been claimed, the prescribed authority shall, in such manner as may be prescribed and after serving on the dealer a notice in the form and in the manner prescribed, proceed to assess or re-assess, as the case may be, the tax payable by such dealer within four years from the expiry of the year during which the original order of assessment or re-assessment was passed, in a case where the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice under this sub-section was a notice under section 27:

Provided that the amount of tax shall be assessed or re-assessed after allowing such deductions as were allowable during the said period and at the rates at which it would have been assessed had the turnover not escaped assessment.

(2) (a) The prescribed authority shall, in a case where the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, direct that the dealer shall, besides the amount of interest payable under sub-section (10) of section 24, pay by way of penalty, a sum equal to three times the amount of tax which is or may be assessed on the turnover of sale or purchase which escaped assessment.

(b) The penalty imposed under clause (a) shall be in addition to the amount of tax, which is or may be assessed on the turnover of sale or purchase which escaped assessment.

(3) Any assessment or re-assessment made and any penalty imposed under this section shall be without prejudice to any action, which is or may be taken under section 81.

32.

Escaped turnover detected before or at the time of assessment of tax.

32. Escaped turnover detected before or at the time of assessment of tax.-(1) If the prescribed authority is satisfied that any registered dealer-

(a) has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this Act; or

(b) has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases in the return furnished under sub-section (1) of section 24 or quarterly statement under sub-section (2) of section 24 or quarterly abstract statement under sub-section (3) of section 24; or

(c) has claimed input tax credit in excess of the amount of input tax credit to which he is entitled under this Act,

the prescribed authority shall, after giving such a dealer an opportunity of being heard in the prescribed manner, by an order in writing, direct that he shall, besides the amount of interest payable under sub-section (10) of section 24 and in addition to any tax which may be determined to be payable by him under the Act, pay by way of penalty, a sum equal to three times the amount of tax on the concealed turnover or on concealed or incorrect particulars or excess input tax credit claimed.

(2) The penalty under sub-section (1) may be imposed before completion of assessment, and for determining the amount of penalty, the prescribed authority may quantify the amount of tax provisionally in the prescribed manner.

(3) Any penalty imposed under sub-section (1) shall be without prejudice to any action, which is or may be taken under section 81.

33.

Assessment of tax based on audit objections.

33. Assessment of tax based on audit objections.-Where an objection has been made by the Comptroller and Auditor-General of India in respect of an assessment or re-assessment made or scrutiny of any return filed under this Act, the prescribed authority shall proceed to re-assess the dealer with respect to whose assessment or re-assessment or scrutiny, as the case may be, the objection has been made in the manner prescribed:

Provided that no order under this section shall be passed without giving the dealer an opportunity of being heard.

34.

Assessment of tax proceedings, etc., not to be invalid on certain grounds.

34. Assessment of tax proceedings, etc., not to be invalid on certain grounds.-No assessment and demand on account of any tax, interest or penalty shall be invalid or affected by reason only of any mistake in the name, residence, place of business or status of any person liable to pay the tax, interest of penalty or by reason only of clerical error or other defect of form, if the provisions contained in this Act and the rules made thereunder have, in substance, been complied with.

35.

Taxable turnover.

35. Taxable turnover.-(1) For the purposes of this Act, the taxable turnover of a dealer shall be that part of his gross turnover which remains after deducting therefrom-

(a) the aggregate value of the transactions specified in section 6;

(b) sale price on account of sales exempted under section 7;

(c) in the case of works contract, the amount remaining after deducting from the gross value of the contract the amount on account of the following, namely:-

(i) labour charges for execution of the works contract,

(ii) amount paid to sub-contractor on account of labour and services,

(iii) charges for planning, designing and architects fees,

(iv) charges for obtaining on hire, the machineries and tools used in the execution of the works contract,

(v) cost of consumables such as water, electricity, fuels, etc., used in execution of the works contract, the property in which is not transferred in the course of execution of a works contract,

(vi) cost of establishment of the contractor to the extent, it is relatable to supply of labour and services,

(vii) other similar expenses relatable to supply of labour and services,

(viii) profit earned by the contractor to the extent it is relatable to the supply of labour and services, and

(ix) goods or transaction exempted under section 6 or section 7;

(d) value of goods transferred otherwise than by way of sale;

(e) the value of goods sold but returned to the dealer within a period of six months from the date of the original sales and in respect of which the selling dealer has issued to the purchasing dealer a credit note specified in section 53;

(f) sale price at the subsequent stages of sale of such goods as are specified in Schedule IV as being subject to tax at the first point of their sale in the State of Bihar, if necessary evidence as required by sub-section (2) of section 13 are filed along with the return filed by the dealer under sub-section (3) of section 24.(2) Where a dealer claims that he is not liable to pay tax on any part of his gross turnover in respect of any goods by reason of transfer of such goods by him to any other dealer or to his agent or to his principal, as the case may be, for sale, the burden of proving such claim shall be on the dealer and for this purpose, along with other evidences as may be prescribed, he shall furnish before the prescribed authority a declaration in a form and in the manner prescribed.

36.

Tax payable by a dealer.

36. Tax payable by a dealer.-The tax payable by a dealer shall be calculated according to the following formula, namely:-

T = A-B

Where-

T means the tax payable by the dealer,

A means the output tax under this Act, and

B means the total amount of input tax credit allowable to the dealer under section 16 or section 17.

37.

Time limit for completion of proceeding of assessment of tax.

37. Time limit for completion of proceeding of assessment of tax.-Except for a proceeding under sub-section (2) of section 26, section 28, sub-section (1) of section 31 and section 33, no proceeding for assessment of tax payable by a dealer under this Act in respect of any period shall be initiated and completed except before the expiry of two years from the expiry of such period:

Provided that a proceeding for re-assessment in pursuance of or as a result of an order on appeal, revision or review shall be initiated and completed before the expiry of one year from the expiry of the year during which such order was communicated to the assessing authority:

Provided further that the Commissioner may, on being satisfied that it is necessary so to do and for reasons to be recorded in writing, extend in a case or class of cases, the said period of two years to such further period not exceeding two years.

38.

Exclusion of time in assessment tax proceedings.

38. Exclusion of time in assessment tax proceedings.-In computing the period of limitation prescribed for assessment or re-assessment, as the case may be, under section 27 or section 28 or section 29 or section 30 or section 31 or section 32 or section 33, the time during which any assessment or re-assessment proceedings remained stayed under the order of any competent court shall be excluded.

39.

Payment and recovery of tax.

39. Payment and recovery of tax.-(1) The tax payable under this Act shall be paid in the manner hereinafter provided.

(2) The amount of-

(i) tax estimated in advance under sub-section (7) of section 3, or

(ii) tax due according to the returns filed by the dealer where full payment of such amount has not been made, or

(iii) tax assessed or re-assessed under section 26 or section 27 or section 28 or section 29 or section 30 or section 31 or section 32 or section 33 or in pursuance of or as a result of an order on appeal, revision or review, less the sum, if any, already paid by the dealer, or

(iv) interest chargeable or penalty imposed, if any, under any of the provisions of this Act,

shall be paid by the dealer or the person concerned into a Government Treasury or a bank authorised in this behalf by the State Government, or in such other manner as may be prescribed and by such date as may be specified in a notice issued by the prescribed authority for this purpose and the date to be specified shall, ordinarily, not be less than thirty days from the date of service of such notice:

Provided that the authority may, in respect of any particular dealer or a person, and, for reasons to be recorded in writing, extend the date of such payment, or allow such dealer to pay tax or interest due and the penalty, if any, by instalments in the manner prescribed:

Provided further that where the prescribed authority considers it expedient in the interest of revenue, it may, for reasons to be recorded in writing, require any dealer, or person, to make such payments forthwith.

(3) If a dealer or a person fails to make payment of any amount of tax by the period specified in the notice issued under sub-section (2) or fails to make payment of tax by the date extended or has defaulted in making payment of instalments under the first proviso of the said sub-section, the dealer shall, for such failure or default, pay, in addition to the amount of tax, an amount by way of simple interest calculated at the rate of one and a-half per cent. for each calendar month or part thereof on the amount of such tax.

(4) Where, in course of any proceeding, the prescribed authority finds that any dealer has-

(i) wrongly claimed either the whole or part of his turnover as not taxable and, has consequently, paid lesser amount of tax than payable by him; or

(ii) wrongly declared his turnover or any particulars thereof and thereby has reduced the amount of tax payable under this Act; or

(iii) wrongly claimed input tax credit in excess of what he is entitled to under this Act,

the dealer shall pay, in addition to the amount of tax assessed under any proceeding as aforesaid, simple interest at the rate of one and a-half per cent. for each calendar month or part thereof on the difference of the amount previously admitted and tax finally assessed from the date, the tax would have been payable had the dealer not committed any of the acts mentioned in clause (i) or clause (ii) or clause (iii):

Provided that where the recovery of tax or any part thereof assessed under any proceeding under this Act is stayed as a result of an order on appeal or by any competent court, the amount of such interest shall be recoverable after the final order is passed and such order is confirmed from the date the tax first became due.

(5) If a dealer or a person has failed, without reasonable cause, to make payment of any amount of tax by the date specified in the notice issued under sub-section (2) or forthwith as required by the second proviso thereto, or in like manner has failed to make payment of tax and interest by the date extended under the first proviso of the said sub-section or has defaulted in payment of instalments or has not paid the amount of interest due, the prescribed authority, after giving the dealer a reasonable opportunity of being heard, may direct that the dealer shall pay, in the prescribed manner, by way of penalty for such failure, an amount which shall be five per cent. per month of the amount payable following the expiry of such date for each subsequent month and part thereof.

(6) Subject to the provisions of sub-sections (2), (4) and (5), any amount of tax, interest together with penalty, if any, which remains unpaid after the date specified in the notice issued under sub-section (2), or penalty imposed under sub-section (5) and remaining unpaid shall, without prejudice to any other mode of recovery, be recoverable as if it were an arrear of land revenue:

Provided that where an appeal in respect of such amount has been entertained under section 72, the appellate authority may, subject to such rules as may be made by the State Government under this Act, stay recovery of such amount or portion thereof for so long as the appeal remains pending or for such shorter period as the said authority may consider to be adequate.

40.

Advance recovery of tax on sales and supplies to Governments and other persons.

40. Advance recovery of tax on sales and supplies to Governments and other persons.-(1) Subject to the provisions of section 6, any person responsible for paying sale price or any amount purporting to be the full or part payment of sale price in respect of sales or supplies of taxable goods exceeding rupees two lakh fifty thousands during a year made to the State Government or the Central Government or a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled either wholly or partly by the State Government or the Central Government, shall, at the time of payment, subject to such conditions and restrictions as may be prescribed, deduct an amount at the rate as may be specified by the State Government, by a notification, on account of tax on the amount of such payment:

Provided that the rate or rates to be specified by the State Government shall not be more than the rate of tax applicable to the goods sold or supplied.

(2) Notwithstanding any law or contract to the contrary, the person making such deduction shall be lawfully competent to make such deduction.

(3) The payment of the amount deducted under sub-section (1) into the Government Treasury in the prescribed manner, shall be the liability of the person making such deduction.

(4) The payment of the amount deducted under sub-section (1) into the Government Treasury by the person making the deduction shall be deemed to be a payment by or on behalf of the seller or supplier concerned.

(5) If any person contravenes any or all of the provisions of sub-sections (1), (3) and (4), he shall be liable to pay, by way of penalty, a sum not exceeding twice the amount of tax deductible under sub-section (1):

Provided that such penalty shall not be imposed unless the person contravening the provisions is given an opportunity of being heard by the prescribed authority.

(6) The provisions of sections 39 and 47 for recovery of any amount of tax due from a dealer shall, mutatis mutandis, apply for recovery of any amount of tax deducted or any penalty imposed but not deposited under this section.

Explanation.-For the purposes of this section, the “person” in this section shall include all officers or authorities who are competent or authorised to make payment of the sale-price in respect of sales to the State Government or the Central Government or to a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled wholly or partly by the State Government or the Central Government.

(7) The provisions of sub-section (5) of section 41 shall, mutatis mutandis, apply, so far as it relates, to issuance of certificate to person from whose bills deduction has been made and for filing of quarterly statements by the person making the deductions.

41.

Advance recovery of tax from works contractors.

41. Advance recovery of tax from works contractors.-(1) Subject to the provisions of section 6, every person, responsible for making any payment in discharge of any liability on account of valuable consideration payable in respect of transfer of property in goods (whether as goods or in some other form) vested in the execution of a works contract shall be lawfully competent to deduct an amount at the rate or rates, not exceeding four per cent. to be specified by the State Government, in a notification published in the Official Gazette, purporting to be a part or full amount of tax payable on the sale of such goods from every bill or invoice raised by the works contractor as payable by the person and no such payment or discharge of any such bill or invoice raised by a works contractor shall be made without deduction as aforesaid.

Explanation.-For the purposes of this section, the “person” in this section shall include all officers and authorities of the Central or the State Government or of a company, corporation, Board, authority, co-operative societies, undertaking or any other body constituted or formed under any Act and of any firm or association of persons and organisation:

Provided that, the State Government may prescribe the conditions subject to which no such deductions shall be made.

(2) No such payment or discharge of any bill or invoice raised in respect of transfer of property in goods (whether as goods or in some other form) by a works contractor shall be made without the deduction referred to in sub-section (1):

Provided that no deduction under sub-section (1) shall be made where the payment is made as advance prior to the commencement of the execution of such works contract until it forms part of the sale price payable for transfer of property in goods (whether as goods or in some other form):

Provided further that no deduction under sub-section (1) shall be made from the payment or any part thereof, where-

(a) the payment or any part thereof does not relate to any transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract;

(b) the dealer produces a certificate issued by the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, in-charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no further liability to pay tax in terms of the provisions of section 15 of the Central Sales Tax Act, 1956 (74 of 1956)

(c) the dealer produces a certificate issued by the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, in charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no liability to pay tax in terms of the provisions of section 6.

(3) The amount deducted under sub-section (1) shall be adjusted against the amount of tax finally assessed or determined as being payable by the concerned works contractor and any amount deducted in excess of the tax so assessed or determined shall be refunded in accordance with the provisions of this Act.

(4) The deduction referred to in sub-section (1) shall be made in the manner prescribed.

(5) The person making the deduction shall issue a certificate, in the form and manner prescribed, containing such particulars as may be required to be mentioned therein, to the works contractor or person from whose bill or invoice such deduction has been made and such certificate shall be deemed to be a valid discharge of liability in terms of provisions of sub-section (9) of section 24 to the extent of amount of deduction made under sub-section (1).

(6) If any person contravenes any or all of the provisions of sub-sections (1), (2) and (5), the prescribed authority shall, after giving a reasonable opportunity of being heard, by order in writing direct that such person shall pay by way of penalty, a sum not exceeding twice the amount of tax deductible or deducted and not deposited in the Government Treasury.

(7) The provisions of sections 39 and 47 shall, mutatis mutandis, apply for recovery of any amount of tax deducted but not deposited into the Government Treasury or any penalty imposed under this section.

42.

Production of tax clearance certificate.

42. Production of tax clearance certificate.-Notwithstanding anything contained in any law for the time being in force, no person shall be awarded by-

(i) the State Government; or

(ii) the Central Government; or

(iii) a company, corporation, board, authority, undertaking or any other body which is owned, financed or controlled either wholly or partly by the State Government or the Central Government,

any contract involving sale or supply of goods and no person shall be granted any licence to carry on any trade or commerce unless he produces to the State Government or the Central Government or the company, corporation, board, authority, undertaking or any other body which is owned, financed or controlled either wholly or partly by the State Government or the Central Government, a tax clearance certificate, granted by the prescribed authority in the form and manner prescribed, to the effect that the prescribed authority has no objection to the awarding of such contract or the granting of such licence to the person concerned:

Provided that no such certificate shall be granted to any person who is not a registered dealer under this Act or, being a registered dealer, has made a default in the payment of any tax, penalty or interest due under this Act:

Provided further that if a person not liable to tax under this Act applies for the grant of certificate under this section and in whose case the value of the contract or, as the case may be, the anticipated turnover in the immediately succeeding twelve months exceeds the limit specified in sub-section (2) of section 3, he shall be granted such certificate subject to the condition that he shall furnish, to the prescribed authority, an undertaking to the effect that he shall apply for grant of certificate of registration in the manner and within the period prescribed and in the event of failure to do so the concerned Government or person or authority shall terminate the contract awarded to the person.

43.

Restriction on collection of tax by dealers.

43. Restriction on collection of tax by dealers.-(1) Without prejudice to the provisions of sections 40 and 41, no person, who is not a registered dealer, shall collect from any person any amount, by whatever name or description it may be called, towards or purporting to be tax on sale of goods.

(2) No registered dealer shall collect from any person any such amount exceeding the amount arrived at after applying the rate of tax specified under section 14 to the sale price of the goods sold.

(3) If any person or a registered dealer contravenes the provisions of sub-section (1) or sub-section (2), the prescribed authority shall, after giving an opportunity of being heard in the manner prescribed, by an order in writing direct that such person or registered dealer shall pay by way of penalty a sum equal to twice the amount collected in contravention of the provisions of sub-sections (1) and (2).

44.

Forfeiture of tax collected in violation of this Act.

44. Forfeiture of tax collected in violation of this Act.-(1) Any amount collected, by any person in contravention of the provisions of sub-section (1) or sub-section (2) of section 43 or any amount collected by any person by way of tax, by whatever name called, or in any other manner not payable under any provision of this Act, shall be liable to forfeiture to the State Government.

(2) If the prescribed authority, in the course of any proceeding under this Act or otherwise, has reason to believe that any amount is liable for forfeiture under sub-section (1), it shall serve, on the person who has collected such amount, a notice in the prescribed form requiring him to show cause why the said amount should not be forfeited to the State Government and on receipt of the reply, if any, and after making such inquiries as may be deemed fit, he shall make an order of forfeiture if the amount is found so liable.

(3) Where an order of forfeiture under sub-section (2) has been made, the person making the unauthorised collection shall forthwith pay the amount so forfeited to the State Government, if it has not already been paid and on his failure to do so, such amount shall be recoverable from him as if it were a tax due from him.

(4) Where an order for forfeiture is passed, the Commissioner shall publish or cause to be published, in the prescribed manner, a notice for information of the persons from whom the amount so forfeited had been collected giving such details as may be prescribed.

(5) On the publication of the notice under sub-section (4) a refund of such amount or part thereof may be claimed from the State Government within one year from the date of publication of the said notice by the person from whom it was unauthorisedly realised by way of tax and for this purpose the person claiming the refund shall make an application in the prescribed form.

(6) On receipt of an application under sub-section (5), the Commissioner shall hold such enquiry as he deems fit and if he is satisfied that the claim is valid and admissible and that the amount so claimed as refund was actually paid to the State Government and no refund or remission in respect of that amount was granted, the Commissioner shall refund such amount or any part thereof to the person concerned.

(7) Notwithstanding anything contained in this Act or in any other law for the time being in force, where any amount collected by any person is forfeited to the State Government under this section, such forfeiture shall, if the amount forfeited has been paid to the State Government, discharge him of the liability to refund the amount to the person from whom it was so collected.

45.

Rounding off of tax liability.

45. Rounding off of tax liability.-Any tax, interest or penalty payable under this Act shall be rounded off to the nearest ten rupees and shall be paid accordingly.

46.

Recovery of tax as arrests of land revenue.

46. Recovery of tax as arrests of land revenue.-(1) All authorities appointed under section 10 shall, for the purpose of recovery of tax, interest and penalty under this Act, have the same powers as are vested in the certificate officer under the Bihar and Orissa Public Demand Recovery Act, 1914 (Bihar and Orissa Act 4 of 1914).

(2) Any proceeding under sub-section (1) before any authority appointed under section 10 shall be deemed to be a proceeding for recovery of the public demand under the Bihar and Orissa Public Demands Recovery Act, 1914 (Bihar and Orissa Act 4 of 1914) and all provisions of the said Act for recovery, attachment, sale, arrest shall mutatis mutandis apply.

47.

Special mode of recovery of tax and other liabilities under this Act.

47. Special mode of recovery of tax and other liabilities under this Act.-(1) Notwithstanding anything contained in section 39 or any law or contract to the contrary, the prescribed authority may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the said authority) direct-

(a) any person from whom any money is due or may become due to a dealer who has failed to comply with a notice of demand served under section 39; or

(b) any person who holds or may subsequently hold any money for or on account of such dealer,

to pay into Government treasury, in the manner specified in the notice issued under this sub-section, either forthwith or upon the money becoming due or being held, or within the time specified in the notice (not being before the money becomes due or it is held) so much of the money as is sufficient to pay the amount of tax due from the dealer, together with interest and penalty, if any, under this Act or the whole of the money when it is equal to or less than that amount.

(2) The authority issuing a notice under sub-section (1) may, at any time or from time to time, amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

(3) Any person making any payment in compliance with a notice issued under sub-section (1) shall be deemed to have made the payment under the authority of the dealer and the receipt from the Government Treasury shall constitute a good and sufficient discharge of the liability of such person to the dealer to the extent of the amount specified in the receipt.

(4) Any person discharging any liability to the dealer after service on him of the notice issued under sub-section (1) shall be personally liable to the State Government to the extent of the liability discharged or to the extent of the liability of the dealer for tax, interest and penalty, whichever is less.

(5) Where a person on whom a notice is served under sub-section (1) proves to the satisfaction of the authority which issued the notice that the money demanded or any part thereof was not due to the dealer or that he did not hold any money for or on account of the dealer, at the time the notice was served on him, nor is the money demanded or any part thereof, likely to become due to the dealer or be held for or on account of the dealer, nothing contained in this section shall be deemed to require such person to pay into the Government Treasury any such money or part thereof, as the case may be.

(6) If any person contravenes any of the provisions of sub-sections (1) and (4) of this section, the prescribed authority shall after giving an opportunity of being heard by an order in writing direct that such person shall pay by way of penalty a sum not exceeding twice the amount payable under sub-section (1).

(7) Any amount of money which a person is directed to pay under sub-section (1) or for which he is personally liable to the State Government under sub-section (4), shall, if it remains unpaid, be recoverable as an arrear of land revenue.

(8) No action shall be taken under this section in respect of any amount of tax, interest and penalty, if any, the date of payment of which has been extended or the realisation of which has been stayed under this Act during the period of such extension or stay.

(9) The provisions of this section shall be without prejudice to any action that may be taken for recovery of the arrears of tax, interest and penalty, if any, due from the dealer or person.

48.

Liability of surety.

48. Liability of surety.-The liability of a surety under this Act shall be co-extensive, to the extent of the amount of security, with that of the defaulting dealer and all modes of recovery enforceable against the dealer shall be enforceable against the surety by the prescribed authority.

49.

Transfers to defraud revenue void.

49. Transfers to defraud revenue void.-Where, during the pendency of any proceeding relating to assessment, re-assessment or recovery of any tax, interest or penalty payable under this Act or the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, any person or dealer creates a charge on or parts with the possession, by any mode of transfer whatsoever including sale, mortgage, gift or exchange, of any of his assets in favour of any person with the intention of defrauding the revenue, then, notwithstanding anything to the contrary contained in any Act or contract, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer as a result of the completion of such proceeding or otherwise.

50.

Period of limitation for recovery of tax.

50. Period of limitation for recovery of tax.-Notwithstanding anything contained in any other law for the time being in force, no proceeding, for the purposes of sub-section (6) of section 39 or sub-section (7) of section 47, shall be initiated under this Act except before the expiry of twelve years from due date within the meaning of sub-section (3) of section 24:

Provided that the period of limitation for the registered dealer availing of the tax deferment under section 23A of the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, shall be reckoned from the last date of repayment of the deferred amount of tax:

Provided further that when an appeal or application for review has been filed, the period of limitation as aforesaid shall run from the date of order passed on such appeal, application for review or from the date of order passed in pursuance of or as a result of such order, whichever is later.

51.

Tax to be first charge on property.

51. Tax to be first charge on property.-Notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax and interest and penalty, if any, payable by a dealer or any other person under this Act shall be a first charge on the property of the dealer or such person.

CHAPTER VIIBOOKS OF ACCOUNT AND FURNISHING OF INFORMATION

 

52. Maintenance of accounts.-(1) Every registered dealer (other than a dealer permitted to pay tax under section 15), shall-

(a) keep in such manner as may be prescribed a true and complete account in respect of all goods produced, raised, manufactured, processed, bought, sold or delivered or transferred to or by him;

(b) maintain in such manner as may be prescribed correct and complete accounts of despatches and arrivals of goods as also of stock of goods manufactured or transferred.

(2) Such dealers or persons, as may be prescribed, and such other dealers to whom sub-section (1) applies, shall, at the end of each financial year, draw up, in the manner as may be prescribed,-

(a) a manufacturing, trading and profit and loss account and a balance sheet, in the case of a manufacturer; and

(b) such accounts as may be prescribed, in any other case:

Provided that no accounts referred to in sub-section (1) shall be considered, true and complete unless such accounts enable the prescribed authority to compute the tax payable and the entitlement of input tax credit under the provisions of this Act:

Provided further that the accounts referred to in sub-section (1) shall not be considered true and complete unless they give a true and fair view-

(i) of the state of affairs of the dealer or the person as at the end of the financial year, in the case of the balance sheet; and

(ii) of the working results of the dealer or the person for the financial year, in the case of the manufacturing, trading and profit and loss account.

(3) Every dealer or a person required to keep accounts by sub-section (1) shall-

(a) issue a challan in respect of all transfers of goods from his place of business otherwise than as a result of sale, in such form as may be prescribed; and

(b) preserve all invoices for a period of not less than six years from the end of the year to which they relate, or for a period of two years after the completion of assessment, appeal or revision for the year, whichever is later.

(4) Every dealer permitted to pay tax under section 15 shall-

(a) maintain accounts showing his purchases and sales during the year and such other accounts, as may be prescribed; and

(b) draw up, at the end of each financial year, in the manner as may be prescribed, a trading and profit and loss account.

53.

Issue of tax invoice and debit and credit notes.

53. Issue of tax invoice and debit and credit notes.-(1) A registered dealer, making a sale liable to tax under this Act, to another registered dealer shall, provide the purchaser at the time of sale, a tax invoice containing the particulars specified in sub-section (2) and retain a copy thereof:
Provided that a tax invoice shall not be issued-

(a) by a dealer permitted to pay tax under section 15; or

(b) for the sale in the course of inter-State trade or commerce or export by a dealer,

and in such cases a retail invoice shall be issued:

Provided further that not more than one tax invoice shall be issued for each such sale:

Provided also that if an invoice has been issued under the provisions of the Central Excise Act, 1944 (1 of 1944), it shall be deemed to be a tax invoice if it contains the particulars specified in sub-section (2).

(2) The tax invoice issued under sub-section (1) shall contain the following particulars on the original as well as copies thereof, namely :-

(a) the words Tax Invoice in a prominent place;

(b) the name, address and tax payer identification number of the selling registered dealer;

(c) the name, address and tax payer identification number of the purchaser;

(d) an individual pre-printed serialised number and the date on which the tax invoice is issued;

(e) description, quantity, volume and value of goods sold and the amount of tax charged thereon indicated separately;

(f) the signature of the selling dealer or his manager, agent or servant duly authorised by him; and

(g) the name and address of the printer and first and last serial number of tax invoices printed and supplied by him to the dealer.

(3) A tax invoice in respect of a sale shall be issued in duplicate and the original of which shall be issued to the purchaser (or the person taking the delivery, as the case may be) and the duplicate shall be retained by the selling dealer.

(4) Except when a tax invoice is issued under sub-section (1), if a dealer sells any goods exceeding such amount in value as may be prescribed, in any one transaction to any person, he shall issue to the purchaser a retail invoice containing the particulars specified in sub-section (5) and retain a copy thereof.

(5) The retail invoice issued under sub-section (4) shall contain the following particulars on the original as well as copies thereof, namely:-

(a) the words Retail Invoice or Cash Memorandum or Bill in a prominent place;

(b) the name, address and tax payer identification number of the selling dealer, if registered;

(c) in case the sale is in the course of inter-State trade or commerce, the name, registration number and address of the purchasing dealer and type of any form, under the Central Sales Tax Act, 1956 (74 of 1956), if any, against which the sale has been made;

(d) an individual pre-printed serialised number and the date on which the retail invoice is issued;

(e) description, quantity, volume and value of goods sold and amount of tax charged thereon indicated separately; and

(f) the signature of the selling dealer or his servant, manager or agent, duly authorised by him.

(6) The retail invoice shall be issued in duplicate, and the original of which shall be issued to the purchaser and the duplicate copy of which shall be retained by the selling dealer.

(7) The Commissioner may, by notification, specify the manner and form in which the particulars on a tax invoice or retail invoice are to be recorded.

(8) If a purchaser claims to have lost the original tax invoice, the selling dealer may, subject to such conditions and restrictions as may be prescribed, provide a copy of such tax invoice clearly marked as a copy of the original tax invoice.

(9) Where a tax invoice has been issued in respect of a sale and-

(a) the amount shown as tax in that tax invoice exceeds the tax payable in respect of the sale, the dealer shall provide the purchaser with a credit note, containing such particulars as may be prescribed; or

(b) the tax payable in respect of the sale exceeds the amount shown as tax on the tax invoice, the dealer shall provide the purchaser with a debit note, containing such particulars as may be prescribed.

(10) Every dealer referred to in sub-section (1) shall preserve books of account including tax invoices and retail invoices until the expiry of six years after the end of the year to which they relate or for such other period as may be prescribed.

(11) If a registered dealer contravenes the provisions of this section, the prescribed authority shall, after giving the dealer an opportunity of being heard, direct him to pay by way of penalty a sum equivalent to twice the amount of tax payable for each sale in respect of which such contravention has taken place.

54.

Accounts to be audited in certain cases.

54. Accounts to be audited in certain cases.-(1) Every dealer whose gross turnover exceeds forty lakh rupees shall, for the purposes of this Act, get his annual accounts audited by an accountant by-

(i) the 30th day of November of the following year, in the case of a company formed and registered under the Companies Act, 1956 (1 of 1956); and

(ii) the 31st day of October of the following year, in any other case.

(2) Every dealer referred to in sub-section (1) shall obtain, by the date specified in that sub-section, a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and true copy of such report shall be furnished, on or before the due date, by such dealer to the prescribed authority.

Explanation 1.-In this sub-section, “due date” means-

(a) where the dealer is a company within the meaning of the Companies
Act, 1956 (1 of 1956), the 30th day of November of the year following the year to which such return relates;

(b) where the dealer is a person, other than a company,-

(i) in a case where the accounts of the dealer are required under this Act or any other law to be audited or where the report of an accountant is required to be furnished under this section, the 31st day of October of the year following the year to which such return relates;

(ii) in any other case, the 31st day of July of the year following the year to which such return relates.

Explanation 2.-For the purposes of this section, “accountant” means a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949) and includes a person who, by virtue of the provisions of sub-section (2) of section 226 of the Companies Act, 1956 (1 of 1956), is entitled to be appointed to act as an auditor of companies registered in any State.

(3) If the accounts of a registered dealer are not required to be audited in terms of the provisions of sub-section (1), such dealer shall furnish, to the prescribed authority, the accounts and statements mentioned in sub-section (2) of section 52 on or before the 31st day of July of the year following the year to which such accounts or statements relate.

(4) If a dealer contravenes the provisions of sub-section (2) or sub-section (3), the prescribed authority shall, after giving the dealer a reasonable opportunity of being heard, impose on him, in addition to any tax payable, a sum by way of penalty equivalent to two per cent. of the tax payable by him under section 36 for every month, or part thereof, of such default.

55.

Furnishing of information by Government departments, banks, financial institutions clearing and forwarding agents and owners of warehouses, godowns and others.

55. Furnishing of information by Government departments, banks, financial institutions clearing and forwarding agents and owners of warehouses, godowns and others.-(a) Every bank, including any branch of a bank, or any clearing house in the State or any financial institution, department of the Government, corporation, institution, organisations or companies, boards, authorities, undertakings or any bodies owned, financed or controlled wholly or partly by the State Government or the Central Government; and

(b) every clearing, forwarding or booking agent or dalal as defined in clause (a) of the Explanation to section 59 or a person engaged in the business of transporting goods,

shall, if so required by any authority appointed under section 10, furnish any such particulars as may be required by such authority in respect of the transactions relating to sales or purchases of goods by such dealers or any dealer with or through such banks or clearing house or any financial institution, department of the Government, corporations, institutions, organisations or companies, boards, authorities, undertakings or any other body owned, financed or controlled wholly or partly by the State Government or the Central Government