114. Creation of loan liability of a dealer for the amount of tax deferred
(1) Where a dealer desires to admit under sub-section (10) of section 40 a loan liability of an amount equal to the amount of such tax deferred upon creation of loan liability in accordance with the provisions of that sub-section in respect of a year or part of a year, he shall, ordinarily within sixty days from the end of such year, make an application in Form 20 to the authority specified by the State Government under that sub-section (hereinafter referred to as the specified authority) for creation of such loan liability till the expiry of the eligible period upto which payment of such amount of tax has been deferred.
(2) In the application referred to in sub-rule (1), the dealer shall furnish, inter alia, the following particulars :-
(a) due date or dates for furnishing of the returns under sub-section (2) of section 30 in respect of which payments of tax have been deferred ;
(b) due date or dates as specified in the notice or notices issued under section 47 by which payments of the amount of tax had to be made ;
(c) amount of tax payable for each return period or part of a return period falling within a year ;
(d) amount of tax which due in terms of each year notice issued under section 47 and is eligible for deferment ;
(e) total amount (c) + (d) of tax against which loan liability is sought to be created ;
(f) due dates for payment of deferred tax after the expiry of the period upto which it has been deferred (specify separately for each period).
(3) On receipt of the application referred to in sub-rule (1), if the specified authority is satisfied that a loan liability should be created against the amount of tax deferred in respect of a dealer, he shall, by an order in writing, pass an order directing such dealer to enter into an agreement in this behalf with the State Government.
(4) On presentation of an agreement in Form 21 by the dealer, such agreement in terms of the order referred to in sub-rule (3) shall be duly executed, signed and sealed by the specified authority for and on behalf of the State Government on one part and by the dealer on the other part, and such agreement shall remain valid till the amount of tax deferred becomes payable under sub-section (7) of section 40.
(5) Upon execution of an agreement in the manner referred to in sub-rule (4), a loan liability for a dealer for an amount equal to the amount of tax which has been deferred under sub-section (1) of section 40 and the rules made thereunder shall be created and thereupon, the specified authority shall send a certificate in Form 22 to the dealer certifying that the amount payable by, or due from, the dealer under the Act for a year or part of a year comprising the period or periods in respect of which the loan liability has been created, shall be deemed to have been paid by such dealer on the prescribed date as applicable to him for furnishing his return under sub-section (2) of section 30 or on the date on which payment of tax according to the notice issued to him under section 47 becomes due from him.
(6) The deed of agreement duly executed, signed and sealed by both the parties referred to in sub-rule (4) shall be retained by the specified authority until the full payment of the amount is made by the dealer against his loan liability before the expiry of the eligible period up to which such amount of tax has been deferred or until the date on which such amount of tax becomes payable by the dealer under sub-section (7) of section 40.
(7) If a dealer makes payment of the amount of tax deferred in respect of which a loan liability of such dealer has been created before the expiry of the period up to which such loan liability has been created according to the agreement, he shall apply in writing to the specified authority for discharging him from his loan liability.
(8) If the specified authority is satisfied that the loan liability equal to the amount of tax deferred has been discharged by the dealer under sub-rule (7), he shall return immediately the deed of agreement to the dealer and intimate him that he has been discharged from his loan liability.
(9) In the event of -
(a) discontinuation or closure of the business of a dealer,
(b) cessation of his liability to pay tax, or
(c) cancellation of his certificate of registration at any time before the expiry of the eligible period up to which loan liability has been created,
such dealer shall, within fifteen days from the date of such discontinuation, cessation of liability or cancellation, make payment of the entire amount of the loan liability equal to the amount of tax deferred.