(1) Notwithstanding any thing contained in this Act, where the State Government is of the opinion that it is necessary so to do for increasing production of any goods or for promoting the development of any industry in the State generally or in any district or part of a district in particular, it may on application or otherwise in any particular case or generally, by notification declare that to the dealers running new units whose date of starting production falls on a date prior to the date of commencement of this Act and dealers owning manufacturing units which have undertaken expansion, diversification or modernization or backward integration prior to the date of commencement of this Act and if such dealers hold an eligibility certificate issued under the provisions of section 4-A of the Uttaranchal(the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002, rules made or notifications issued thereunder, moratorium for payment of admitted tax in lieu of exemption from tax on sale of goods whether wholly or partly or at reduced rate, will be allowed subject to the conditions given in this section and such other conditions as may be prescribed or as the State Government may, by notification in the Gazette, specify:

(2) Dealers who have been granted facility of moratorium for payment of admitted tax before the commencement of this Act, such facility shall continue and shall be deemed to have been granted under this Act, and to that extent the provisions of Uttaranchal (the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 shall be deemed to be part of this Act. The facility granted under this section shall be subject to such conditions as given in this section and such other conditions as may be prescribed or as the State Government may, by notification in the Gazette, specify.

(3) Any application pending at the time of commencement of this Act, before the Commissioner of Trade Tax, for issue of orders for moratorium for payment of admitted tax under the Uttaranchal (The Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 shall be deemed to be pending under the provisions of this Act before the Commissioner and the same shall be disposed of according to the provisions of that Act as it was in force on the date on which the application was presented before the Commissioner.

(4) Notwithstanding any thing contained contrary to the provisions of this Act and in particular to the provisions of section 4-A or sub-section (2-A) of section 8 of the Uttaranchal (the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002, rules made or notifications issued thereunder

(a) application for grant of eligibility certificate presented on a date prior to the date of commencement of this Act before the competent authority under that Act shall be deemed pending before the prescribed authority under this Act,

(b) dealers owning new units whose date of starting production falls before the date of commencement of this Act and dealers owning such units as have under taken expansion or diversification or modernization or backward integration before the date of commencement of this Act, may apply for grant of eligibility certificate under the provisions of section 4-A of the Uttaranchal(the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 within the time prescribed under that Act before the prescribed authority under this Act.

(5) Applications for grant of eligibility certificate under sub-section (4) shall be disposed of by the prescribed authority according to the provisions of the Uttaranchal(the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002, the rules made and notifications issued thereunder, as applicable on the date of commencement of this Act, and the dealer, if found eligible, shall be granted eligibility certificate, and such dealer shall be entitled to moratorium for payment of admitted tax to the extent and for the period provided in sub-section(6).

(6) Subject to other provisions of this section, the dealers holding eligibility certificate either granted under the provisions of the Uttaranchal (the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002 before the date of the commencement of this Act or who may be granted eligibility certificate under sub-section (5), shall be eligible to tax concessions or, as the case may be, for the facility of moratorium for payment of tax in lieu of exemption from tax, as per provisions of section 4-A of the repealed Act and the Rules made or relevant Notifications issued thereunder, subject to the following conditions and restrictions, namely:-

(a) the dealers who had opted for moratorium for payment of tax in lieu of exemption from tax, shall be eligible for the facility of moratorium to the extent of aggregate amount of hundred percent of the amount of exemption from tax mentioned in the eligibility certificate and fifty percent of the amount of fixed capital investment mentioned in the eligibility certificate less aggregate of such amount in respect of which facility of moratorium for payment of tax has been availed during the period before the commencement of this Act, for the period remaining on that date out of the maximum period mentioned in the order of moratorium.

(b) the dealers who were enjoying exemption from tax for any period before the commencement of the Act, may, either

(i) continue to do so for the period remaining on that date out of the maximum period mentioned in eligibility certificate, and to the extent of remaining balance amount (amount of exemption from tax mentioned in the eligibility certificate less the aggregate of amount of exemption from tax as has been availed before the date of commencement of this Act); or

(ii) opt, in the prescribed manner, for benefit of moratorium for payment of tax in lieu of exemption from tax and such units shall be eligible for facility of moratorium to the extent of aggregate amount of hundred percent of the amount of exemption from tax mentioned in the eligibility certificate and fifty percent of the amount of fixed capital investment mentioned in the eligibility certificate less the aggregate of amount of exemption from of tax as has been availed before the date of commencement of the Act, for the period remaining on that date out of the maximum period mentioned in the eligibility certificate:

Provided that if the dealer does not choose either of the two options, within 30 days of the commencement of this Act, it shall be presumed that the dealer desires to continue as per provision (i) above.

(c) any taxable dealer purchasing goods from such dealer holding eligibility certificate and who is exempted from tax, whether wholly or partially, shall be entitled to input Tax Credit of the amount of tax charged in the sale invoice of the selling dealer, and for this purpose the sellling dealer shall append the following certificate in the sale invoice regarding-

Certificate

"Certified that the dealer is entitled to exemption from tax @ ............... as per Eligibility Certificate No............ Dated ..........................according to which the exemption amount in this invoice comes to Rs. ......................

(7) Under moratorium for payment of admitted tax under this section, the amount of tax for each assessment year, which a dealer would have been liable to pay as admitted tax payable on sale of goods if exemption had not been granted, less any amount of admitted tax payable according to the conditions of eligibility certificate for the assessment year, shall be deferred for a period of seven years. Such period of seven years shall be computed from 1^st May of the assessment year subsequent to assessment year to which such amount of tax relates. The amount of tax for each assessment year for which moratorium is granted shall be paid by the dealer in lump sum within one month of the expiry of the period of moratorium:

Provided that the total amount payable shall be paid in lump sum within three months of its becoming payable when the moratorium ceases as per the provisions under sub-section (14) of this section.

(8) Moratorium shall be allowed only to those manufacturers who hold eligibility certificate and who obtain certificate of moratorium from the prescribed authority.

(9) Moratorium shall be admissible in respect of tax on sale of goods mentioned in the eligibility certificate and shall not be available in respect of tax payable on purchases of goods, if any, and in respect of sales of goods for which eligibility certificate is not applicable.

(10) Moratorium shall not be admissible in respect of amount of tax assessed in excess of tax admittedly payable and shall be limited to the amount of tax and for the period mentioned in sub-section (6).

(11) Moratorium shall be available to only such manufacturers who create first charge on their property in favour of the State Government sufficient to cover the amount of tax for which moratorium has been granted.

(12) Moratorium shall be subject to such conditions as the State Government may, by notification in the gazette prescribe.

(13) The Commissioner may, by order in writing, before or after the expiration of the period of exemption or reduction, amend or cancel the certificate of eligibility in the following circumstances-

(a) where there is any legal or factual error in issuing such eligibility certificate; or

(b) where the unit is not entitled to such facility or is entitled to such facility for a lesser period or from a different date; or

(c) where the dealer has misused the certificate of eligibility in any manner; or

(d) where the dealer has acted in contravention of any conditions of eligibility certificate; or

(e) where the dealer has not paid any amount of tax or penalty due from him either under this Act or under the Central Sale Tax Act, 1956; or

(f) where the dealer is involved in the evasion of tax under this Act or under the Central Sales Tax Act,1956; or

(g) where the dealer has discontinued business,

and in any such case the facility of moratorium shall be withdrawn with effect from the date specified in the order and such date may be prior to the date of such order, so however, that in cases of misuse of breach, the cancellation of eligibility certificate shall have effect not before the date of such misuse or breach;

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

(14) The moratorium shall cease and the total amount shall become payable-

(a) on the date on which the dealer discontinues business; or

(b) on the date on which the dealer violates any of the conditions subject to which eligibility certificate has been granted; or

(c) on the date on which the order of cancellation of certificate of eligibility under sub-section (13) is served on the dealer,

and the amount shall be paid in lump sum within three months of its becoming payable.

(15) When any dealer fails to pay the amount due under the provisions of sub-section (7) or sub-section (14) of this section within the time specified therein, he shall, notwithstanding his liability under section 58 be liable to pay interest at the rate of fifteen percent per annum for the period of default:

Provided that no penalty under this sub-section shall be levied without giving the dealer an opportunity of being heard.

(16) If there is discontinuation of business, within the meaning of clause (e) of sub-section (7) of section 3, of the manufacturer who was eligible for exemption from or reduction in rate of tax under this section, and if he is succeeded by another manufacture by means of sale, license, contract, lease, managing agency or in any other manner, such successor manufacturer may, subject to the provisions of sub-section (13), apply to the officer competent to grant eligibility certificate, within sixty days of such succession, for the grant of facility under this section for the un expired portion of the period for which the facility was or could be granted to the former manufacture:

Provided that the aforesaid officer may, in its discretion and for adequate and sufficient reasons to be recorded in writing, entertain an application moved within six months of the date of the expiration of the period specified in this sub-section;

Provided further that such manufacture and successor manufacturer for the purpose of liability of tax shall be treated as the transferor and transferee under sub-section (4) of section 9;

Provided also that in computing the un-expired portion of the period, the period during which the production of successor manufacturer remains closed on account of an order passed by any Court or Board for Industrial and Financial Reconstruction or Appellate Authority for Industrial and Financial Reconstruction shall be excluded.

(17) The State Government may, by notification in the gazette, withdraw this facility of moratorium for payment of tax under this section, where it is of the opinion that it is no longer in public interest:

Provided that this facility shall not be withdrawn retrospectively.

Explanation: The expression "new unit" and "unit which has undertaken expansion, diversification, modernization or backward integration" and "eligibility certificate" shall have the same meanings as are assigned to them under section 4-A of the Uttaranchal (the Uttar Pradesh Trade Tax Act, 1948) Adaptation and Modification Order, 2002.