Madhya Pradesh VAT (Amendment) Act, 2006

(No.12 of 2006)

An Act to amend the Madhya Pradesh VAT Act, 2002.

Be it enacted by the Madhya Pradesh Legislature in the Fifty-seventh Year of the Republic of India as follows :

1. Short title and commencement

(1) This Act may be called the Madhya Pradesh VAT (Amendment) Act, 2006.

(2) It shall come into force on such date as the State Government may, by notification, appoint.

2. Amendment of Section 2

In Section 2 of the Madhya Pradesh VAT Act, 2002 (No. 20 of 2002) (hereinafter referred to as the principal Act),

(i) for clause (b), the following clause shall be substituted, namely,-

(b) Appellate Authority means an Authority appointed under Section 3-A;

(ii) clause (e) shall be omitted;

(iii) for clause (o), the following clause shall be substituted, namely,-

(o) Input tax means an amount paid or payable by way of tax under Section 9 by a registered dealer in respect of the purchase of any goods specified in Schedule II, to a selling registered dealer and who is liable to pay tax under the said Section on the sale of such goods;

(iv) in clause (u), after explanation (b), the following explanation shall be inserted, namely,-

(c) Notwithstanding anything to the contrary contained in this Act or any other law for the time being in force, two independent sales or purchases shall, for the purposes of this Act, be deemed to have taken place,

(i) when the goods are transferred from a principal to his selling agent and from the selling agent to the purchaser, or

(ii) when the goods are transferred from the seller to a buying agent and from the buying agent to his principal;

(v) after clause (ii) of explanation to clause (v), the following clause shall be inserted, namely,-

(iii) Cash discount at the time of sale as evident from the invoice shall be excluded from the sale price but any ex post facto grant of discounts or incentives or rebates or rewards and the like shall not be excluded;

(vi) for clause (x), the following clause shall be substituted, namely,-

(x) Taxable turnover in relation to a dealer for any period means that part of dealer's turnover which remains after deducting therefrom,

(1) the sale price of goods declared tax free under Section 16;

(2) the sale price of goods which are in the nature of tax paid goods in the hands of such dealer;

(3) the amount collected by way of tax under Section 9 or the amount arrived at by applying the following formula :

Rate of tax X Aggregate of sale prices

100 + rate of tax

Provided that no deductions on the basis of the above formula shall be made if the amount by way of tax collected by a registered dealer, in accordance with the provisions of this Act, has been otherwise deducted from the aggregate of sale prices.

Explanation  Where the turnover of a dealer is taxable at different rates, the aforesaid formula shall be applied separately in respect of such part of the turnover liable to a different rate of tax under Section 9;

(vii) for clause (y), the following clause shall be substituted, namely,-

(y) Tax paid goods in relation to goods specified in Part III of Schedule II on which tax is payable under Section 9 means any such goods which have been purchased by a dealer from a registered dealer inside the State of Madhya Pradesh within the meaning of Section 4 of the Central Sales Tax Act, 1956 (No. 74 of 1956);

3. Amendment of Section 3

In sub-section (1) of Section 3 of the Principal Act, clause (b) shall be deleted.

4. Insertion of Section 3-A

After Section 3 of the principal Act, the following Section shall be inserted, namely,-

3-A : Appellate Authority

The State Government may, by order, appoint any officer not below Deputy Commissioner of Commercial Tax as Appellate Authority.

5. Amendment of Section 4

In Section 4 of the principal Act, 

(i) in sub-section (2), for the word 'Tribunal', the words 'Appellate Board constituted under the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995)' shall be substituted;

(ii) in sub-section (3), for the words 'two members', the words 'such number of members as the State Government may decide' shall be substituted;

(iii) for sub-section (5), the following sub-section shall be substituted, namely :

(5) The tenure of the Chairman and members shall be five years, but shall not be beyond the age of 65 years in case of Chairman and 62 years in case of members, and the salary and other conditions of service of the Chairman and members shall be such as may be prescribed :

Provided that the Chairmen and the members shall hold office during the pleasure of the State Government.

6. Amendment of Section 7

Sub-section (2) of Section 7 of the principal Act shall be omitted.

7. Substitution of Section 9

For Section 9 of the principal Act, the following Section shall be substituted, namely,-

9 : Levy of tax

There shall be levied on goods specified in Schedule II, a tax at the rate mentioned in the corresponding entry in column (3) thereof and such tax shall be levied on the taxable turnover of a dealer liable to pay tax under this Act.

8. Amendment of Section 10

For sub-section (1) of Section 10 of the principal Act, the following sub-section shall be substituted, namely,-

(1) Every dealer who in the course of his business purchases any goods specified in Schedule II from any person other than a registered dealer or from a registered dealer who has opted for composition of tax under Section 11, shall be liable to pay tax on the purchase price of such goods if after their purchase,-

(a) the goods other than those specified in Part III of the said Schedule, are not sold within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise; or

(b)    the goods other than those specified in Part III of the said Schedule, are consumed or used in the manufacture or processing of goods declared tax free under Section 16; or

(c)    the goods other than those specified in Part III of the said Schedule, after consumption or use in the manufacture or processing or mining of any goods specified in Schedule II, the manufactured or processed or mined goods are disposed off otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India; or

(d) the goods specified in Part III of the said Schedule, are not sold within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India but are sold or disposed of otherwise; or

(e) the goods specified in Part III of the said Schedule, are consumed or used in the manufacture or processing or mining of goods;

and such tax shall be levied,-

(i) in respect of goods referred to in clauses (a), (b) and (c), at the rate of 4 percent or the rate specified in column (3) of Schedule II, whichever is lower; and

(ii) in respect of goods referred to in clauses (d) and (e), at the rate specified in column (3) of Schedule II.

Explanation - The rate specified in Schedule II shall be the rate at which tax would have been levied on the sales of such goods within the State of Madhya Pradesh on the date of such purchase.

9. Amendment of Section 11

For sub-section (1) of Section 11 of the Principal Act, the following sub-section shall be substituted, namely,&

(1) A registered dealer purchasing goods specified in Schedule II from another such dealer within the State after payment to him of tax under Section 9 and/or purchasing goods specified in Schedule I, and whose turnover in a year does not ordinarily exceed such limit as may be prescribed but does not exceed fifty lacs, may opt, in the prescribed form within one month of the commencement of such year, for payment, in lieu of tax payable by him under Section 9, a lump sum at such rate not exceeding four percent in such manner and subject to such restrictions and conditions as may be prescribed.

10. Substitution of Section 14

14 : Rebate of Input tax

(1) Subject to the provisions of sub-section (5) and such restrictions and conditions as may be prescribed, a rebate of input tax as provided in this Section shall be claimed by or be allowed to a registered dealer in the circumstances specified below,

(a) Where a registered dealer purchases any goods specified in Schedule II other than those specified in Part III of the said Schedule within the State of Madhya Pradesh from another such dealer after payment to him input tax for,- 

(1) sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India; or

(2) consumption or use for/in the manufacture or processing or mining of goods specified in Schedule II for sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India; or

(3) use as packing materials in packing of goods specified in Schedule II; or

(4) use as plant, machinery, equipment and parts thereof in respect of goods specified in Schedule II; or

(5) consumption or use for/in the manufacture or processing or packaging and in connection with sale of goods declared tax free under Section 16; or

(6) disposal of,-

(i) such goods, or

(ii) goods specified in Schedule II, manufactured or processed or mined out of such goods, otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India,

he shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax,

(i) in case of goods referred to in sub-clauses (1), (2), (3) and (4); and

(ii) in case of goods referred to in sub-clauses (5) and (6), which is in excess of 4 percent of the purchase price, net of input tax, of such goods.

(b) Where a dealer makes an application for grant of a registration certificate under clause (a) or clause (b) of sub-section (2) of Section 17 on or after the commencement of the Act, he shall, in respect of goods specified in Schedule II other than those specified in Part III of the said Schedule, purchased on or after such commencement by him within the State of Madhya Pradesh from another such dealer after payment to him input tax and held in stock by him on the date of validity of the registration certificate issued to him under clause (a) or clause (b) of sub-section (2) of Section 17, claim or be allowed input tax rebate of the amount of such tax in accordance with the provisions of clause (a) above.

(2) Notwithstanding any thing contained in this Act, where- 

(a) any official or personnel of 

(i) any foreign diplomatic mission or consulate in India; or

(ii) the United Nations Organisation or any other similar international body,

entitled to privileges under any convention to which India is a party or under any law for the time being in force; or

(b) any consular or diplomatic agent of any mission, the United Nations Organisation or other body referred to in sub-clause (i) or sub-clause (ii) of clause (a),

purchases any goods specified in Schedule II other than those specified in Part III of the said Schedule within the State of Madhya Pradesh from a registered dealer after payment to him input tax for himself or for the purposes of such mission, United Nations Organisation or other body, he shall be entitled to claim or be allowed, in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax and such rebate shall be granted by way of refund.

(3) The input tax rebate by a registered dealer under sub-section (1) shall be adjusted in such manner as may be prescribed towards the tax payable by him under this Act or under the Central Sales Tax Act, 1956 (No. 74 of 1956) and the balance, if any, shall be carried over for adjustment towards tax payable in the subsequent year :

Provided that the input tax rebate, which remains unadjusted even after two years from the close of the relevant financial year, shall be granted by way of refund.

(4) Notwithstanding any thing contained in sub-section (3), if any amount of input tax rebate in respect of the goods purchased by a registered dealer being,

(i) for sale in the course of export out of the territory of India; or

(ii) for consumption or use for/in the manufacture or processing or mining of goods for sale in the course of export out of the territory of India; or

(iii) for use as plant, machinery, equipment and parts thereof,

is not adjustable towards any tax payable by him, such rebate shall be granted by way of refund. 

(5) (a) (i) Where a registered dealer has claimed and adjusted input tax rebate towards the tax payable by him according to his return or returns, such dealer shall in the event of disposal of,

(a) goods; or

(b) goods, specified in Schedule II, manufactured or processed or mined out of the goods,

otherwise than by way of sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India, be liable to pay the amount of input tax or the amount at the rate of 4 percent of the purchase price, net of input tax, of such goods, whichever is lower, towards the input tax rebate in respect of the aforesaid goods adjusted by him.

(ii) Where a registration certificate of a registered dealer who has claimed and adjusted input tax rebate towards the tax payable by him according to his return or returns, is cancelled under sub-section (10) of Section 17, such dealer shall pay the amount claimed by way of input tax rebate in respect of the goods held in stock by him on the date the order of cancellation of the registration certificate takes effect.

(b) Where the amount of tax or the amount of input tax rebate which a registered dealer is liable to pay under clause (a) is not adjustable towards any input tax rebate to his credit, such dealer shall be liable to pay on the amount so payable interest at the rate of 1.5 percent per month for the period commencing from the date such amount has become due to the date of its payment.

(6) No input tax rebate under sub-section (1) shall be claimed or be allowed to a registered dealer,

(i) in respect of any goods specified in Schedule II purchased by him from another such dealer for sale but given away by him by way of free sample or gift or given to or received by him by way of replacement;

(ii) in respect of goods specified in Schedule II for use or consumption for manufacture or processing or mining of goods but the goods manufactured or processed or mined are given away by him by way of free sample or gift or given to or received by him by way of replacement;

(iii) in respect of goods purchased by him from another such dealer who opts for the composition of tax under the provisions of Section 11;

(iv) who opts for composition under Section 11;

(v) in respect of plant, machinery, equipment and parts thereof for use in generation or distribution of electrical energy or captive power;

(vi) in respect of plant, machinery, equipment and parts thereof, as may be notified by the State Government.

(7) (a) The State Government, if it deems fit, may, by notification specify any goods mentioned in Part III of Schedule II for the purpose of claiming or allowing input tax rebate under this Section, when such goods are purchased by a registered dealer from another such dealer within the State of Madhya Pradesh,

(i) after payment to him of tax under Section 9, or

(ii) which are tax paid goods at the hands of the selling registered dealer,

for use or consumption of such goods for / in the manufacture or for / in mining of any goods for sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India and thereupon the input tax rebate in respect of such goods shall be claimed or be allowed in such manner, to such extent, within such period and subject to such restrictions and conditions as may be specified in the notification.

(b) The provisions of clause (b) of sub-section (1) and sub-sections (3) to (5) shall apply to input tax rebate that may be claimed or allowed in respect of goods referred in clause (a).

11. Insertion of Section 16 A

After Section 16 of the principal Act, the following Section shall be inserted in Chapter IV, namely,-

16-A : Saving

Notwithstanding the repeal of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) or the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) repealed by Act No. 5 of 1995 (hereinafter referred to as the repealed Acts), the State Government may, by notification, exempt -

(i) (a) any class of dealers; or

(b) any goods or class of goods in whole or in part,

from the payment of tax under the repealed Act; or

(ii) any dealer or class of dealers from any provision of the repealed Acts or the provision of any rule made thereunder,

for any period before the commencement of this Act and for that purpose it shall and shall always be deemed that the provisions of Section 17 of the Act repealed by this Act or Section 12 of the Act No. 2 of 1959 repealed by Act No. 5 of 1995 have revived for the purpose of such exemption.

12. Amendment of Section 17

For clause (a) of sub-section (12) of Section 17 of the principal Act, the following clause shall be substituted, namely,

(a) The Commissioner may, for the proper realisation of tax, from time to time demand from a registered dealer reasonable security as may be prescribed to be furnished in the prescribed manner.

13. Amendment of Section 18

Clause (c) of sub-section (1) of Section 18 of the principal Act shall be omitted.

14. Amendment of Section 19

In Section 19 of the principal Act, -

(i) for sub Section (1), the following sub-section shall be substituted, namely,-

(1) The Commissioner or an agency authorised by him shall, on previous intimation to the dealer, undertake tax audit, in such manner as may be prescribed, of the records, stocks in trade and the related documents of the dealer, who are selected by him in the manner as he may deem fit;

(ii) in sub-section (3), for the words 'or any other officer' the words 'or an agency' shall be substituted;

(iii) for sub-section (4), the following sub-section shall be substituted, namely,-

(4) For the purpose of tax audit, the Commissioner or an agency authorised by him may enter the place of business, office or warehouse of the dealer and require him to produce books of account and documents relating to his business, and the dealer, shall produce the books of account and the documents relating to his business as required.

(iv) after sub-section (4), the following sub-sections shall be inserted, namely,-

(5) Tax audit shall be completed within a period of six calendar months from the date of institution of the proceedings and after completion of tax audit, a report shall be prepared and in case of tax audit by an agency authorised by the Commissioner, the report shall be submitted to the Commissioner, who shall send a copy of the report to the dealer.

(6) After such audit, if the return or returns filed by the dealer are not found to be correct, the Commissioner shall by issue of a notice in prescribed form require such dealer to make the payment of the additional amount of tax and/or interest payable by him, at such rate as may be prescribed, within the period specified in such notice.

(7) If the dealer does not comply with the requirements made in the notice, the Commissioner shall assess or re-assess him to tax and interest and / or to imposition of penalty, in accordance with the provisions of Section 20.

15. Amendment of Section 20

In Section 20 of the principal Act,-

(i) sub-section (2) and sub-section (3) shall be omitted;

(ii) for clause (a) of sub-section (4), the following clause shall be substituted, namely,-

(a) The Commissioner shall serve on a registered dealer referred to in the proviso to sub-section (1) of this Section or sub-section (3) of Section 20-A or a registered dealer who is not eligible for assessment under sub-section (1) of Section 20-A with a notice in the prescribed form appointing a place which may be the business premises or any other place and day and directing him,-

(i) to appear in person or by an agent entitled to appear in accordance with the provisions of Section 23; or

(ii) to produce evidence or have it produced in support of the returns; or

(iii) to produce or cause to be produced accounts, registers, cash memoranda or other documents relating to his business.

(iii) In sub-section (7),-

(a) for clause (iii) the following clause shall be substituted, namely,&

(iii) in respect of a dealer, under clause (a) of sub-section (6) shall be made within a period of one calendar year from the commencement of proceedings under the said sub-section :

(b) in proviso, clause (b) shall be omitted and clause (c) shall be renumbered as clause (b).

16. Insertion of Section 20-A

After Section 20 of the principal Act, the following Section shall be inserted, namely,-

20-A : Self Assessment

(1) Where a registered dealer other than the registered dealer referred to in the proviso to sub-section (1) of Section 20 has furnished,-

(a) all returns or revised returns for any period of a year in the prescribed manner and within prescribed time or before,

(i) 31st July of the subsequent year, in case of such dealer whose annual turnover does not exceed rupees forty lacs;

(ii) 31st October of the subsequent year, in other cases;

(b) has paid the tax payable according to such returns or revised returns as also interest payable, if any; and

(c) has furnished the statement under clause (b) of sub-section (1) of Section 18 within the prescribed time,

the returns or the revised returns furnished by such dealer for that year, subject to compliance of requirements made in the notice issued under the provisions of sub-section (5) of Section 18 and sub-section (6) of Section 19, shall be accepted and his assessment shall be deemed to have been made for the purpose of sub-section (1) of Section 20 :

Provided that the assessment under this sub-section of every such registered dealer who is required to furnish audit report under sub-section (2) of Section 39 shall be deemed to have been made only after such dealer has furnished the audit report.

(2) Notwithstanding anything contained in sub-section (1), the Commissioner shall select for re-assessment a number of such dealers as he deems fit whose assessment for a year is deemed to have been made under sub-section (1) of Section 20 in accordance with the provisions of sub-section (1) and such selection shall be made during the year immediately following the said year.

(3) The Commissioner shall re-assess a registered dealer referred to in sub-section (2) in accordance with the provisions of Section 20.

17. Amendment of Section 21

In Section 21 of the principal Act,-

(i) in sub-section (1), in the paragraph after clause (e), for the words 'within a period of three calendar years from the date of order of assessment,' the words, brackets and letters 'within a period of five calendar years from the date of order of assessment or reassessment in cases falling under clauses (a) to (d) and within a period of three calendar years from the date of judgment or order of any court or Appellate Board in cases falling under clause (e),' shall be substituted;

(ii) In sub-section (2), for the word 'twice', the figure and word '3.5 times', and for the words 'less than', the words 'less than three times', shall be substituted;

(iii) after sub-section (3), the following sub-section shall be inserted, namely,-

(4) Subject to such restrictions and conditions and in such manner as may be prescribed, a dealer, on whom a penalty has been imposed under sub-section (2), may opt to pay a lump sum amount, which shall be twice the amount of tax assessed or reassessed. Once the dealer has exercised the option he shall not have any right to challenge the order of penalty in any forum.

18. Amendment of Section 24

In Section 24 of the principal Act, -

(i) in sub-clause (ii) of clause (c) of sub-section (5), for the words, brackets and letters 'sub-clause (b) and (c)', the words, brackets and letters 'clause (b) and sub-clause (i) of clause (c)' shall be substituted;

(ii) in sub-section (6),-

(a) the words, bracket and figures 'under sub-section (4) of Section 18' shall be omitted;

(b) for the words 'two percent' the figures and words '1.5 percent' shall be substituted;

(iii) sub-section (13) shall be omitted.

19. Amendment of Section 25

In sub-section (5) of Section 25 of the principal Act, for the brackets, figures and word '(11), (12) and (13)', the brackets, figures and word '(11) and (12)' shall be substituted.

20. Omission of Section 34

Section 34 of the principal Act shall be omitted.

21. Amendment of Section 37

In sub-section (1) of Section 37 of the principal Act,-

(i) after the words 'registered dealer', the words 'or person other than a registered dealer' shall be inserted;

(ii) words, bracket and figure 'sub-section (3) of' shall be omitted.

22. Amendment of Section 39

For sub-section (2) of Section 39 of the principal Act, the following sub-section shall be substituted, namely,-

(2) Every dealer whose turnover in a year exceeds rupees forty lacs shall get his accounts audited by a chartered accountant and furnish the report of such audit in such manner and within such time as may be prescribed.

23. Substitution of Section 41

For Section 41 of the principal Act, the following Section shall be substituted, namely,-

41 : Delegation of Commissioner's powers and duties

Subject to the provisions of this Act and to such restrictions and conditions as may be prescribed, the Commissioner may, by order in writing, delegate any of his powers and duties under this Act except those under sub-section (2) of Section 64 to any person appointed under Section 3 to assist him :

Provided that powers under Section 38 and 47 shall not be delegated to an officer below the rank of a Deputy Commissioner of Commercial Tax.

24. Amendment of Section 45

In clause (a) of Section 45 of the principal Act, sub-clause (ii) shall be omitted and sub-clause (iii) shall be renumbered as sub-clause (ii).

25. Substitution of Section 46

For Section 46 of the principal Act, the following Section shall be substituted, namely,-

46 : Appeal

(1) Any dealer or person aggrieved by an order passed under this Act, by any officer specified in clause (c) to (f) of sub-section (1) of Section 3 may, in the prescribed manner, appeal against such order to the Appellate Authority :

Provided that no appeal shall lie against an order determining the date on which liability of a dealer to pay tax arises or against a notice issued under this Act for assessment or reassessment except after an assessment or reassessment order is passed.

(2) Any dealer or person aggrieved by an order passed in appeal under sub-section (1) may, in the prescribed manner, appeal against such order to the Appellate Board.

(3) Where the Commissioner considers any order passed under sub-section (1) by any Appellate Authority other than Deputy Commissioner erroneous he may file an appeal against such order before the Appellate Board within two calendar years from the date of such order.

(4) Notwithstanding anything contained in the rules or the regulations framed under any law for the time being in force or under the provisions of Section 4, any officer not below the rank of Deputy Commissioner duly authorised by the Commissioner in this behalf shall also have the right to be heard at the hearing of the appeal under sub-section (2) and (3).

(5) No first appeal against an order of assessment, with or without penalty or against an order imposing penalty shall be admitted by the Appellate Authority unless out of the total balance due from the dealer, payment of tax and other amounts admitted by the dealer to be due from him along with,

(i) in case of an appeal against an ex parte order, five percent, or

(ii) in other cases, ten percent,

of the remaining amount over and above the admitted amount is paid by the dealer and the memorandum of appeal is accompanied by a satisfactory proof of payment of such amount and thereupon the Appellate Authority shall stay the recovery of the balance of tax and / or penalty till the decision of appeal.

(6) No second appeal shall be admitted by the Appellate Board unless, out of the total balance due from the dealer after the order passed in first appeal, twenty percent of such balance is paid by the dealer and the memorandum of appeal is accompanied by a satisfactory proof of payment of such amount and thereupon the Appellate Board shall stay the recovery of the balance amount till the decision of the appeal.

(7) Every appeal shall be filed within sixty days from the date of communication of the order against which the appeal is to be filed.

(8) Subject to such procedure as may be prescribed and after such further enquiry as it may think fit,

(a) the Appellate Authority shall dispose of every appeal within one calendar year from the date of filing of such appeal and in disposing of such appeal, the Appellate Authority may,-

(i) confirm, reduce, enhance or annul the assessment or reassessment of tax or interest or imposition of penalty or both but shall not remand the case; or

(ii) pass such order as it may deem fit, in case of an appeal not covered by sub-clause (i).

(b) the Appellate Board shall make an endeavour to pronounce its order in writing within one calendar year from the date of filing of appeal and in disposing of such appeal, the Appellate Board may,-

(i) confirm, reduce, enhance or annul the assessment or reassessment of tax or interest or imposition of penalty or both; or

(ii) set aside the assessment or reassessment or the imposition of penalty or both and direct the officer whose order of assessment or imposition of penalty has been appealed against, to make a fresh assessment or re-impose penalty, after making such enquiry as it may direct; or

(iii) pass such order as it may deem fit.

(9) Notwithstanding anything contained in clause (a) of sub-section (8), where an appeal can not be disposed of within one calendar year by the appellate authority, the State Government may by notification for reasons to be recorded in writing extend the period for the disposal of such appeals by such further period as may be specified in such notification.

(10) In the case of an order passed by the Appellate Authority, such order subject to the provisions of sub-section (2) and (3) of this Section or sub-section (1) of Section 47, as the case may be, shall be final and in the case of an order passed by the Appellate Board such order, subject to the provisions of Section 53, shall be final.

26. Amendment of Section 47

In Section 47 of the principal Act,-

(i) in sub-section (1),-

(a) for the bracket and letter '(b)', the bracket and letter '(c)' shall be substituted;

(b) in proviso,-

(i) in clause (i), for the word 'Deputy Commissioner', the word 'Authority' shall be substituted;

(ii) clause (iii) shall be omitted,

(ii) in sub-section (2), for the words and figure 'appointed under Section 3' the words, brackets, letters and figure 'appointed under clauses (c) to (f) of Section 3' shall be substituted,

(iii) For sub-section (4), the following sub-section shall be substituted, namely,-

(4) The provisions of sub-sections (4) to (7) of Section 46 shall, mutatis mutandis, apply to appeals filed under sub-section (3).

27. Amendment of Section 48

In Section 48 of the principal Act, for the words 'Deputy commissioner', the words 'Authority' shall be substituted.

28. Substitution of Section 49

For Section 49 of the principal Act, the following Section shall be substituted, namely,-

49 : Court fee stamps on memorandum of appeal

A memorandum of appeal filed under Section 46 or sub-section (3) or sub-section (5) of Section 47 shall bear court fee stamps of such value as may be prescribed.

29. Amendment of Section 52

In Section 52 of the principal Act,-

(i) in the marginal heading and sub-sections (1), (2) and (3), for the words 'Deputy commissioner', the word 'Authority' shall be substituted;

(ii) for sub-section (4), the following sub-section shall be substituted, namely,&

(4) Subject to such restrictions and conditions and in such manner as may be prescribed, a dealer, on whom a penalty has been imposed under sub-section (2) may opt to pay in lieu of penalty a lump sump amount, which shall be twice the amount of tax evaded, and once the dealer has exercised the option he shall not have any right to challenge the order of penalty in any forum.

30. Amendment of Section 53

In sub-section (1) of Section 53 of the principal Act, for the words brackets and figures 'clause (i) of sub-section (2)', the words, brackets and figures 'sub-sections (2) and (3)'shall be substituted.

31. Amendment of Section 54

In clause (a) of sub-section (3) of Section 54 of the principal Act, for the word 'Deputy commissioner', the word 'Authority' shall be substituted.

32. Amendment of Section 55

In Section 55 of the principal Act,-

(i) for the marginal heading, the following marginal heading shall be substituted, namely,-

'Detection and checking of evasion of tax by dealers liable to pay tax and power of Commissioner to investigate into tax evasion by a dealer'

(ii) for sub-section (1), the following sub-section shall be substituted, namely,-

(1) If upon any information which has come into the knowledge of Commissioner and he has reason to believe that any dealer has evaded payment of tax or is indulging in evasion of tax under this Act or under the Act repealed by this Act, for reasons to be recorded in writing, he may direct any of the officers referred to in clauses (c) to (g) of sub-section (1) of Section 3 to proceed to investigate into the tax evasion by such dealer.

(iii) sub-section (2) shall be omitted;

(iv) in sub-section (3), for the words, brackets, letter and figure 'On receipt of the report from the committee in respect of a dealer or on his own motion in pursuance of the provisions of clause (b) of sub-section (2)', the words, bracket and figure 'In pursuance of the provisions of sub-section (1)' shall be substituted;

(v) after sub-section (4), the following proviso shall be inserted, namely,-

Provided that if the Commissioner can not examine the documents relating to the business of such dealer on the spot, he may, for reasons to be recorded in writing, seal such documents in a box or bag or container or packet and seize the box or bag or container or packet and after the seizure, the Commissioner shall serve upon the dealer, a notice in the prescribed form, and on the date fixed, he shall open the seal of the seized box or bag or container or packet in the presence of the dealer or an agent of the dealer entitled to appear in accordance with the provisions of Section 23 and in the presence of at least two other persons examine the documents kept in the box or bag or container or packet and after examination of the documents, the Commissioner may seize such documents as he considers necessary and grant a receipt thereof to the dealer.

(vi) for sub-section (5), the following sub-section shall be substituted, namely,-

(5) For the purpose of clause (b) of sub-section (3), the Commissioner may

(a) enter and search any place of business of such dealer or any other place whether such place be the place of his business or not, where the Commissioner has reason to believe that the dealer keeps or is for the time being keeping any accounts, registers or documents of his business or stock of goods relating to his business and the Commissioner may, for exercising the powers under this clause, seal or break open the lock of any door, box, locker, safe, almirah or any other receptacle in order to continue the inspection subsequently or where the keys thereof are not produced on demand or are not available;

(b) also search any person who leaves or is about to enter or is already in the place referred to in clause (a), if the Commissioner has reason to suspect that such person has secreted about his person, books of accounts or other documents relating to the business of such dealer; and

(c) if considered necessary, get the search proceedings video graphed or recorded in suitable electronic medium for use as evidence.

(vii) in sub-section (6),-

(a) in clause (b), for the words 'five times' the figure and word '3.5 times' shall be substituted;

(b) in clause (c), for the words 'five times' the figure and word '3.5 times' shall be substituted;

(c) after clause (e), the following clause shall be inserted, namely,-

(ea) Subject to such restrictions and conditions and in such manner as may be prescribed, a dealer, on whom a penalty has been imposed under clause (c), may opt to pay in lieu of penalty a lump sum amount, which shall be twice the amount of tax referred to in clause (b) and once the dealer has exercised the option he shall not have any right to challenge the order of penalty in any forum.

33. Substitution of Section 57

For Section 57 of the principal Act, the following Section shall be substituted, namely,-

57 : Establishment of check posts and inspection of goods while in movement

(1) The State Government or the Commissioner may, with a view to prevent or check evasion of tax under this Act, set up or erect in such manner as may be prescribed, check posts or barriers at such places in the State, excluding railway premises, as may be notified in the official gazette and an officer, not below the rank of Assistant Commercial Tax Officer shall be in-charge of the check post (hereinafter referred to as the check post officer) and he shall be assisted by other category of officials :

Provided that the Commissioner shall not set up a check post or erect a barrier for a period exceeding six months at a time.

(2) The driver or the person in-charge of a vehicle or carrier or of goods in movement (hereinafter referred to as the transporter) shall 

(a) carry with him an invoice, bill or challan or any other document and prescribed declaration forms issued by the consignor or consignee of the goods in movement and challan, bilties or any other document issued by the transporter;

(b) stop the vehicle or carrier at every check-post or bring and stop the vehicle or carrier at the nearest check-post, while entering and leaving the limits of the State, set up under sub-section (1);

(c) furnish all the documents including prescribed declaration forms relating to the goods before the check post officer;

(d) give all the information relating to the goods; and

(e) allow the inspection of the goods by the check post officer or any other person authorised by the check post officer :

Provided that the documents including prescribed declaration forms shall be required to be carried and / or furnished only in respect of the goods as may be notified by the State Government.

(3) The form of declaration specified in sub-section (2) shall be obtained by a registered dealer in the prescribed manner.

(4) The documents required to be furnished under sub-section (2), may be furnished by means of such electronic devices, and may be accompanied by such processing fee, as may be prescribed.

(5) Where any goods are in movement within the territory of the State of Madhya Pradesh, any officer, not below the rank of an Assistant Commercial Tax Officer, as may be authorised by the Commissioner, may for the purposes of this Act, stop the vehicle or the carrier or the person carrying such goods, for inspection, at any place or inspect such goods and the documents relating to the goods which are in the possession or control of a transporting agency or person or other such bailee and the provisions of sub-section (2) shall mutatis mutandis apply.

(6) Where any goods in movement are not supported by documents as referred to in sub-section (2), or documents produced appear false or forged, the check post officer or the officer empowered under sub-section (5), for reasons to be recorded in writing may -

(a) direct the transporter not to part with the goods in any manner including re-transporting or rebooking, till a verification is done or an enquiry is made, which shall not take more than seven days;

(b) detain or seize the goods or the vehicle or carrier along with the goods and shall give a receipt of the goods or the vehicle or carrier along with the goods, if seized, to the person from whose possession or control they are seized;

(c) release the goods or the vehicle or carrier along with the goods seized in clause (b) in favour of the transporter, during the pendency of the proceeding if adequate security in the form of cash security or irrevocable bank guarantee of the amount equal to the penalty leviable under sub-section (8) or (10) is furnished.

(7) The officer empowered under sub-section (5), who stops the vehicle or carrier, may direct the transporter to take the vehicle or carrier along with the goods and the documents to the nearest check post or any Commercial Tax Office to be named by him and stop it and keep it stationary there till such time as may be required for action in accordance with the provisions of this section, and the officer shall reach such check post or such Commercial Tax Office at the earliest and immediately on reaching there initiate action for seizure of goods or the vehicle or carrier along with the goods and impose penalty in accordance with the provisions of this section.

(8) The check post officer or the officer empowered under sub-section (5), after having given the transporter a reasonable opportunity of being heard and after having held such enquiry as he may deem fit, shall,-

(i) release the goods or the vehicle or carrier along with the goods in favour of the transporter, if he is satisfied that no violation of the provisions of sub-section (2) has taken place; or

(ii) impose, if he is not satisfied, on him for possession or movement of goods, whether seized or not, in violation of the provisions of sub-section (2) or for submission of false or forged documents or declaration, a penalty equal to maximum 3.5 times of the amount of tax which would have been payable if the goods were sold within the State on the date of inspection :

Provided that the amount of penalty shall not be less than 3 times of the amount of tax.

(9) Where a transporter, in possession or control of goods, is found to be in collusion with a dealer involved in avoidance or evasion of tax, the check post officer or the officer empowered under sub-section (5) shall detain the vehicle or carrier of such transporter and after affording him an opportunity of being heard and with the prior approval in writing of the Deputy Commissioner having jurisdiction, may confiscate such vehicle or carrier.

(10) Notwithstanding anything contained in this section, where the transporter abstains from bringing or stopping the vehicle or carrier at the check post as provided under clause (b) of sub-section (2), the check post officer or the officer empowered under sub-section (5) may detain such vehicle or carrier and, after affording an opportunity of being heard to the transporter, may impose, in addition to a penalty which may be imposed under sub-section (8), a penalty equal to maximum twice the amount of tax which would have been payable if the goods were sold within the State on the date of detention.

(11) The check post officer or the officer empowered under sub-section (5) may release the goods in favour of the transporter, if seized and not already released under clause (c) of sub-section (6), on payment of the penalty imposed under sub-section (8) or (10).

(12) If the amount of penalty specified in the order passed under sub-section (8) or (10) is not paid within fifteen days of the service of the order, the check post officer or the officer empowered under sub-section (5) shall, notwithstanding anything to the contrary provided in this Act or in any law for the time being in force, cause the goods to be sold in such manner as may be prescribed and apply the sale proceeds thereof towards the penalty and refund the balance, if any, to the transporter and if the sale proceeds of the goods are not sufficient to cover the amount of penalty or the goods can not be sold despite the efforts made for the same, the said officer shall cause the vehicle or carrier to be sold in the aforesaid manner and apply the sale proceeds thereof towards the balance of penalty and refund the balance of such sale proceeds, if any, to the transporter.

(13) Where the officer seizing the goods, at any time during the pendency of the proceeding under sub-section (8) or (10), is of the opinion that the goods are subject to speedy and natural decay or when the expenses of keeping them in custody are likely to exceed their value, he may cause them to be sold in such manner as may be prescribed without waiting for the completion of the proceedings relating to the imposition of penalty and keep the sale proceeds thereof in deposit till the completion of said proceedings and the amount so kept in deposit shall be applied towards such penalty, if any, as may be imposed and the balance, if any, shall be refunded to the transporter according to the provisions of sub-section (12).

(14) The transporter may authorise, in such manner as may be prescribed, the consignor or consignee of the goods or the vehicle or carrier along with the goods seized under this section, to appear before the check post officer or the officer empowered under sub-section (5) in the proceedings under sub-section (8) or (10) and such consignor or consignee shall be deemed to be the transporter for all purposes mentioned in the aforesaid sub-sections and the provisions of Section 31 shall apply to proceedings under this section as if the transporter is a dealer.

(15) If a transporter fails to give information as required from him under clause (d) of sub-section (2) about the consignor, consignee or the goods within such time as may be specified or transports the goods with forged documents, besides imposing the penalty under sub-section (8), it shall be presumed that the goods so transported have been sold in the State of Madhya Pradesh by him and he shall be deemed to be a dealer for those goods under this Act.

(16) The provisions of this Act shall, for the purpose of levy, collection and assessment of tax, payment and recovery of tax and interest, appeal and revision, apply to the transporter deemed to be a dealer under sub-section (15).

(17) Subject to such restrictions and conditions and in such manner as may be prescribed, a transporter, on whom a penalty has been imposed under sub-section (8), may opt to pay in lieu of penalty a lump sum amount, which shall be twice the amount of tax referred to in sub-section (8) and once the transporter has exercised the option he shall not have any right to challenge the order of penalty in any forum.

Explanation  For the purposes of this Section 

(i) Vehicle or carrier means any means of transportation to carry goods from one place to another place; and

(ii) Goods in movement means,-

(a) the goods which are in the possession or control of a transporting agency or person or other such bailee;

(b) the goods which are being carried in a vehicle or carrier belonging to the owner of such goods; and

(c) the goods which are being carried by a person.

34. Omission of Section 59

Section 59 of the Principal Act shall be omitted.

35. Omission of Section 60

Section 60 of the Principal Act shall be omitted.

36. Substitution of Section 63

For Section 63 of the principal Act, the following Section shall be substituted, namely,-

63 : Power to call for information from banking Companies, non-banking financial companies or insurance companies

The Commissioner or any other person appointed under Section 3 to assist him, not below the rank of an Assistant Commercial Tax Officer may, for carrying out the purposes of this Act, require any banking or non-banking financial companies or insurance companies or any officer thereof to furnish any information or statement useful for or relevant to any proceeding under this Act.

37. Amendment of Section 71

In sub-section (2) of Section 71 of the principal Act,-

(i) clause (b) shall be omitted;

(ii) in clause (g), after the word 'dealer', the words 'or a person other than a registered dealer' shall be inserted;

(iii) after clause (i), the following clause shall be inserted, namely,-

(i-a) (1) the manner in which tax audit is to be undertaken under sub-section (1) of Section 19;

(2) the form of notice under sub-section (6) of Section 19

(iv) sub-clause (vi) of clause (l) shall be omitted;

(v) for clause (r), the following clause shall be substituted, namely,&

(r) the prescription of further powers of authorities under clause (v) of sub-section (1) of Section 43;

(vi) in clause (s),

(a) in sub-clause (i), for the brackets and figures '(4)' and '(6)', the brackets and figures '(3)' and '(5)' shall be substituted respectively;

(b) in sub-clause (ii), for the words 'Deputy Commissioner' and the bracket and figure '(6)', the word 'Authority' and the bracket and figure '(8)' shall be substituted respectively;

(c) in sub-clause (iii), for the bracket and figure '(3)', the bracket and figure '(2)' shall be substituted;

(vii) after sub-clause (i) of clause (w), the following sub-clause shall be inserted, namely,-

(i-a) the form of notice under proviso to sub-section (4) of Section 55.

38. Amendment of Section 72

In the proviso to Section 72 of the principal Act,-

(i) in clause (i),

(a) in sub-clause (b), for the words, 'exemption from' the words 'exemption from or deferment of' shall be substituted;

(b) for sub-clause (e), the following sub-clause shall be substituted, namely,-

(e) Notwithstanding anything contained in sub-clause (b) and subject to such restrictions and conditions as may be specified, the State Government may, in respect of registered dealers,-

(i) who were eligible to avail of the facility of exemption from or deferment of payment of tax immediately before the commencement of this Act; and

(ii) who would have continued to be so eligible had this Act not come into force,

formulate a scheme to allow them such facility as it may think fit for the balance un-expired period or cumulative quantum of tax, whichever is earlier;

(ii) in clause (iv), for the word 'Tribunal', wherever it occurs, the words 'Appellate Board' shall be substituted.

39. Substitution of Section 73

For Section 73 of the principal Act, the following Section shall be substituted, namely,-

73 : Transitory provisions

(1) Where a registered dealer holds the stock of any goods specified in Schedule II on the date of commencement of this Act, he shall furnish the particulars thereof in such form, within such period, in such manner and to such authority as may be prescribed.

(2) Where any goods specified in Schedule II of this Act other than those specified in Part III of the said Schedule purchased on or after 1st April, 2005 and held in stock by a registered dealer on the date of commencement of this Act are tax paid goods within the meaning of the Act repealed by this Act, and are for sale by him on or after the said date within the State of Madhya Pradesh or in the course of inter-State trade or commerce, he shall claim or be allowed in respect of such goods, in such manner and within such period as may be prescribed, an input tax rebate,-

(i) at the rate as the State Government may, by notification, specify, if such goods are for sale within the State; and

(ii) at the rate specified in sub-section (1) of Section 8 of the Central Sales Tax Act, 1956 (No. 74 of 1956) or the rate as the State Government may, by notification, specify, whichever is lower, if such goods are for sale in the course of inter-State trade or commerce.

(3) (a) Where any goods specified in Schedule II of this Act held in stock by a registered dealer, on the date of commencement of this Act, are goods manufactured out of tax paid goods other than those specified in Part III of the said Schedule consumed or used as raw material or used as packing material or used as explosives in mining and are for sale in the State of Madhya Pradesh or in the course of inter-State trade or commerce on or after the said date, such dealer shall claim or be allowed in such manner and within such period as may be prescribed, an input tax rebate in respect of such tax paid goods, at the rate as the State Government may, by notification, specify.

(b) Where any goods specified in Schedule II other than those specified in Part III of the said Schedule purchased by a registered dealer on or after 1st April, 2005 and held in stock on the date of commencement of this Act are tax paid goods for consumption or use as raw material for/in the manufacture or processing or mining of or for use as packing material in packing of or for use as explosives in mining of, any goods specified in Schedule II for sale by him in the State of Madhya Pradesh or in the course of inter-State trade or commerce, such dealer shall claim or be allowed, in such manner and within such period as may be prescribed, an input tax rebate at the rate as the State Government may, by notification, specify.

(4) The sale of goods specified in Part III of Schedule II of this Act which are in the nature of tax paid goods, on or after the said date shall not be liable to tax under this Act.

(5) The provisions of sub-section (5) of Section 14 shall mutatis mutandis apply to input tax rebate that may be claimed or allowed under sub-sections (2) and (3).

(6) No input tax rebate under this Section shall be claimed or be allowed to a registered dealer who opts for composition under Section 11.

(7) Input tax rebate under this Section shall be allowed only after determination by Commissioner in such manner and within such time as may be prescribed.

Explanation - For the purpose of this Section the expressions 'raw material' and 'tax paid goods' shall have the meaning assigned to them in clauses (r) and (x), respectively, of Section 2 of the Act repealed by this Act.

42. Substitution of Schedule I

For Schedule I to the principal Act, the following Schedule shall be substituted, namely,-

SCHEDULE I

(See section 16)

43. Substitution of Schedule II

For Schedule II to the principal Act, the following Schedule shall be substituted, namely,-

SCHEDULE II

[ See section 9 ]

44. Omission of schedule III

Schedule III of the Principal Act shall be omitted.