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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(4-a)(a) Where a dealer, who transfers property in goods (whether as goods or in some other form) involved in the execution of works contract (hereinafter referred to as the contractor) enters into further contract for assigning such works contract, either wholly or in part thereof to other dealer (hereinafter referred to as sub-contractor), directly or otherwise,

and the sub-contractor executes such works contract then each or either of them shall be jointly and severally liable to pay tax, and notwithstanding anything contained in this Act, the contractor and the sub-contractor shall pay tax proportionately in the prescribed manner in respect of transfer of property in goods (whether as goods or in some other form) involved in the execution of such works contract.

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

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

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

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