Delhi Sales Tax, 1975

Introduction to Delhi Sales Tax

CHAPTER-I Preliminary

1. Short title, extent and commencement.

(1) This Act may be called the Delhi Sales Tax Act, 1975.

(2) It extends to the whole of the National Capital Territory of Delhi.

(3) It shall come into force on 3[such date] as the Administrator may, by notification in the Official Gazette, appoint.
 

2. Definitions:

In this Act, unless the context otherwise requires:-

(a) “Lieutenant. Governor” means Administrator of National Capital Territory of Delhi as appointed by the President under Article 239 of the Constitution.

(b) “Appellate Tribunal” means the Appellate Tribunalconstituted under section 13

(c) “business” includes:-

(i) any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or 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, and

(ii) any transaction in connection with, or incidental ancillary to, such trade, commerce, manufacture, adventure or concern.

(d) “Commissioner” means the the Commissioner of Sales Tax appointed under sub-section (1) of section 9.

(e) “Dealer” means any person who carries on business of selling goods in Delhi and it includes:-

(i) the Central Government or the State Government carrying on such business,

(ii) an incorporated society (including a co-operative society) Club or Association which sells or supplies goods whether or not in the course of business to its members for cash or for deffered payment or for commission, remuneration or other valuable consideration

(iii) a manager, factor, broker, commission agent or any del credere or any mercantile agent,by whatever named called, and whether of the same description as herein before mentioned or not, who sells goods belonging to any principal whether disclosed or not , and

(iv) an auctioner who sells or auctions goods belonging to any principal whether disclosed or not , and whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal

(f) “Delhi” means the 5[National Capital Territory] of Delhi

(g) “Goods” includes all materials, articles, commodities and all other kinds of movable property, but does not include newspaper, claim stocks, shares, securities or money.

(h) “Manufacture” , with its grammatical variations and cognate expressions, means producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting any goods, but does not include any such process or mode of manufacture as prescribed.

(i) “Official Gazette” means the Delhi Gazette.

(j) “prescribed” means prescribed by rules

(k) “registered” means a dealer registered under this Act

(l) “Sale” means any transfer of property in goods by one person to another for cash or for deferred payment or for any other valuable consideration and includes-

(i) A transfer of goods on hire purchase or other system of payment by instalments, but does not include a mortgage or hypothecation of or a charge or pledge on goods

(ii) Supply of goods by a society (including a Co-Operative Society), club, firm or any association to its members for cash or deferred payment, or for commission, remuneration or other valuable consideration, whether or not in course of business and

(iii) Transfer of goods by an auctioner referred to in sub-clause (iv) of clause (e)

(m) Sale Price means the amount payable to the dealer as consideration for the sale of any goods including any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery of the goods other than the cost of freight or delivery or the cost of installation, but less the sum which is allowed as cash discount on that good.

(n) “tax” means the tax payable under this Act

(o) “turnover” means the aggregate of the amount of sale price receivable, or if adelear so elects, actually received by a dealer in respect of any sale of property in goods, made during any prescribed period in any year after deducting the amount of sale price, if any, refunded by the delear to a purchaser in respect of any goods purchased and returned by the purchaser within the prescribed period

PROVIDED that an election as aforesaid once made shall not be altered except with the permission of the Commissioner and on such terms and conditions, as he may think fit to impose

(p) “year” means the financial year
 

CHAPTER-II Incidence and Levy of Tax

3. Incidence of tax

(1) Every dealer whose turnover of sales during the year immediately preceding the commencement of this Act exceeds the taxable quantum and every dealer who at the commencement of Act,is registered or liable to pay tax under Central Sales Tax Act,1956 (74 of 1956) shall be liable to pay tax under this Act on all sales effected by him on or after such commencement

(2) Every dealer to whom sub-section (1) does not apply, shall:

(i) with effect from the date immediately following the day on which his turnover calculated from the commencement of any year first exceeds, within such year, the taxable quantum, be liable to pay tax under this Act on all sales effected by him after that day.

(ii) if he becomes liable to pay tax under the Central Tax Act, 1956 (74 of 1956) or is registered as a dealer under the said act at any time after the commencement of of this Act, be liable to pay tax on all tax on all sales affected by him or on his behalf within Delhi on or after the date he become so liable or is registered under the said Act, whichever is earlier

(3) Every dealer who becomes 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 turnover has failed to exceed the taxable quantum and such further period after the date of such expiry may be prescribed and on the expiry of such further period his liability to pay tax shall cease:

PROVIDED that any dealer may, after the expiry of one-year following the year in which his turnover has failed to exceed the taxable quantum, apply for the cancellation of his certificate of registration, and on such cancellation, his liability to pay tax shall cease:

PROVIDED FURTHER that in respect of any goods purchased by any dealer before the date of any cancellation and remaining unsold or unutilised for the purpose for which they are purchased , he shall be liable to pay so much of tax as would have been payable had he not been registered as a dealer on the date

(4) Every dealer whose liability to pay tax under this Act has ceased under sub-section (3),shall,if his turnover calculated from the commencement of any year again exceeds the taxable quantum, on any day within such year, be liable to pay such tax with effect from the date immediately following the day on which his turnover first exceeds the taxable quantum, on all sales affected by him after that day.

(5) Any dealer whose certificate of registration has been canceled under sub-section (3) of section 20,shall:

(i) if his turnover calculated from the date of cancellation of such certificate exceeds the taxable quantum on any day within the year or

(ii) if his turnover calculated from the commencement of any subsequent year, exceeds the taxable quantum on any day within the year be liable to pay tax under this Act with effect from the date immediately following the day on which such turn over again first exceed the taxable quantum on all sales effected by him after that day of goods imported by him from outside Delhi or manufactured by him in Delhi or purchased by him without payment of tax leviable under this Act.

(6) No dealer who deals exclusively on one or more classes of goods specified in the Third Schedule shallbe liable to pay any tax under this Act.

(7) For the purposes of this Act, “taxable quantum” means,

(a) in relation to any dealer who imports for sale any goods into Delhi - Nil,

(b) in relation to any dealer who manufactures goods for sale regardless of the value of goods manufactured - [Rs. 2,00,000-00] ¹,

(c) in relation to any other dealer - [4,00,000-00] ²

PROVIDED that if the ³[Lieutenant Governor] is of opinion that having regard to the difficulty in maintaining accounts or for other sufficient cause, the taxable quantum in respect of any class of dealers falling under clause (b) or (c) should be increased, the ⁴[Lieutenant Governor] may, by notification in the official Gazette, fix in respect of such class of dealers such taxable quantum, not exceeding ⁵[5,00,000 for clause (b) and Rs. 10,00,000] for clause (c), as may be specified in the notification.

⁶[Explanation - For the purpose of computation of taxable quantum under sub-section (7), the turnover of sales effected by a dealer shall be taken into account irrespective of whether such sales are taxable under this Act or not.]

1. Increased from Rs.1,00,000/- vide Notification No. F.101(48)/2001-Fin(A/Cs)138-146 dated 31.3.2001 w.e.f. 1.4.2001 earlier raised from Rs.30,000/- to Rs.1,00,000/- vide Delhi Sales Tax Amendment Act 1994 w.e.f. 8.4.1994.

2. Increased from Rs. 2,50,000/- vide Notification No. F.101(48)/2001-Fin(A/Cs)138-146 dated 31.3.2001 w.e.f. 1.4.2001 earlier raised from Rs.1,00,000/- to Rs. 2,50,000/- vide Delhi Sales Tax Amendment Act 1994 w.e.f. 8.4.1994.

3. Subs. By Notification No. F.4/(120)/94 Fin.(G)/2137 to 2145 dated 2.3.1998 Delhi Act 1 of 1998, for “Union Territory” (w.e.f 2-3-1998).

4. Subs. By Notification No. F.4/(120)/94 Fin.(G)/2137 to 2145 dated 2.3.1998 Delhi Act 1 of 1998, for “Union Territory” (w.e.f 2-3-1998).

5. Subs. for the word “Rs. 2.50 lacs for clause (b) and Rs. 5.00 lacs” by Delhi Sales Tax (Second Amendment) Act 2000, dt. 19.2.2001 w.e.f 8-4-1994.

6. Subs. by Delhi Sales Tax (Amendment) Act, 1994 w.e.f. 8-4-1994, and again by Delhi Sales Tax (Second Amendment) Act, 2000, dt. 19.2.2001 w.e.f. 8.4.1994.
 

CHAPTER-II Incidence and Levy of Tax

4. Rate of tax

(1) The tax payable by a dealer under this Act shall be levied -

(a) ¹[ in the case of taxable turnover in respect of the goods specified in the first schedule, at the rate of twelve paise per rupee].

(b) in the case of taxable turnover inrespect of the goods specified in the second schedule, at such rate not exceeding four paise in a rupee as the ²[Lieutenant Governor] may, from time to time , by notification in the official Gazette, determine

(C) in the case of taxable turnover in respect of any food or drink served for consumption in a hotel or restaurant or part thereof, with which a cabaret floor show or similar entertainment is provided therein, at the rate of forty paise in a rupee

(d) ³[(cc) in the case of taxable turnover in respect of the goods specified in the forth schedule, at the rate of twenty paise in a rupee.] (CCC) ⁴[***]

(i) in the case of taxable turnover of any other goods , at the rate of ⁵[eight paise] in a rupee

PROVIDED that the ⁶[Lieutenant Governor] may ⁷[***] by notification in the Official Gazette, add to or omit from, or otherwise amend, the First Schedule, the Second Schedule or the Forth Schedule,either retrospectively or prospectively, and there upon the First Schedule, the Second Schedule ⁸[ or the case may be the Forth Schedule], shall be deemed to be amended accordingly:

PROVIDED FURTHER that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interest of any dealer:

PROVIDED ALSO that in respect of any goods or class of goods the ⁹[Lieutenant Governor] is of opinion that it is expedient in the interest of the general public so to do, he may ¹⁰[***] by notification in the Official Gazette, direct that the tax in respect of taxable turnover of such goods or class of goods shall, subject to such conditions may be specified, be levied at such modified rate not exceeding the rate applicable under this section, as may be specified in the notification.

(2) For the purposes of this Act, “taxable turnover” means that part of a dealer's turnover during the prescribed period in any year which remains after deducting there from :-

(i) sale of goods, the point of sale at which such goods shall be taxable is specified by the ¹¹[Lieutenant Governor] under section 5 and in respect of which due tax is shown to the satisfaction of the commissioner to have been paid

(ii) sale of goods declared tax-free under section 7

(iii) sale of goods not liable to tax under section 8

(iv) sale of goods which are proved to the satisfaction of the commissioner to have been purchased within a period of twelve months prior to the date of registration of the dealer and subjected to tax under the Bengal Finance (Sales Tax) Act,1941 (Bengal Act VI of 1941),as it wasthen in force, or under this Act

(v) sale of registered dealer -

(A) of goods of the class or classes specified in the certificate of registration of such dealer,as being intended for use by him as raw materials in manufacture in Delhi of any goods, other than specified in the Third Schedule or news papers, -

(1) for sale by him inside Delhi or

(2) for sale by him in the course of inter-State trade or commerce being a sale occasioning, or effected by transfer of documents of title of such goods during the movement of such goods from Delhi or

(3) for sale by him in the course of export outside India being a sale occasioning the movements of such goods from Delhi, or a sale affected by transfer of documents of title to such goods effected during the movement of such goods from Delhi, to a place outside India and after the goods have crossed the customs frontiers of India or

(B) of goods of the class or classes specified in the certificate of the registration of such dealer as being intend for resale by him in Delhi, or for sale by him in the course of inter-state trade or commerce or in the course of export outside India in the manner specified in sub-item (2) or sub-item (3) (A), as the case may be and

(C) of containers or other materials, used for the packing of goods, of the class or classes specified in the certificate of registration of such dealer, other than goods specified in the Third Schedule, intended for sale or resale

(vi) such other sales as are exempt from payment of tax under section 66 or as may be prescribed :

PROVIDED that no deduction in respect of any sale referred to in subclause (iv) shall be allowed unless the goods, in respect of which deduction is claimed, are proved to have been sold by the dealer within a period of twelve months from the date of his registration and the claim for such deduction is included in the return required to be furnished by the dealer in respect of the said sale:

¹²[PROVIDED FURTHER that no deduction in respect of any sale referred to in sub-clause(v) shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable from the prescribed authority in the manner and subject to such condition as may be prescribed is furnished in the prescribed manner and within the prescribed time, by the dealer who sells the goods:]

PROVIDED ALSO that where any goods are purchased by a registered dealer for any of the purposes mentioned in sub-clause (v), but are not so utilised by him, the price of the goods so purchased shall shall be allowed to be deducted from the turnover of the selling dealer but shall be included in the taxable turnover of the purchasing dealer and

(b) the tax collected by the dealer under this Act as such and shown separately in cash memoranda or bills, as the case may be.

1. Rate of tax on goods under the First Schedule have been varied by Notification No. F.4(44)/90-Fin.(G) (ii) dated 8th February, 1993, Notification No. 4(11)/94-Fin.(G)(I), dated 19th May 194, Notification No. F.4(11)/94-Fin.(G), dated 2nd June 194, Notification No. F.4(1)/(99)-Fin. (G)(ii). dated March 31, 1999, etc.

2. Subs. by Notification No. F.4/(120)/94 Fin.(G)/2137 to 2145 dated 2.3.1998 Delhi Act 1 of 198, for “Union Territory” (w.e.f. 2-3-1998). 3. Subs. by Delhi Sales Tax (Amendment) Avt, 2000 w.e.f. 6-1-2000 for “ lottery tickets at the rate of twenty paise in the rupee” [Inserted by Delhi Sales Tax (Second Amendment) Act, 1994 w.e.f. 3-12-1994].

4. Omitted by Delhi Sales Tax (Amendment) Act, 2000, w.e.f. 6-1-2000 earlied read as “in the case of taxable turnover in respect of liquor (foreign and Indian made foreign liquor) at the rate of fifteen paise in the rupee”.

5. Subs. by No. F.4(52)/99-Fin(G)(viii)/1564 dt. 15.1.2000 w.e.f. 16-1-2000.

6. Subs. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998.

7. Words “with the previous approval of the Central Government and” deleted by Delhi Act 1 of 1998 w.e.f. 2.3.1998.

8. Inserted by The Delhi Sales Tax (Amendment) Act, 2000, w.e.f. 6-1-2000.

9. Subs for “Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998.

10. Words “with the previous approval of the Central Government and” deleted by Delhi Act 1 od 1998, (w.e.f. 2.3.1998).

11. Subs. for “Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998.

12. Subs. by Delhi Sales Tax (Second Amendment) Act, 2000, dt. 19.2.2001 w.e.f. 19.2.2001 for “ PROVIDED FURTHER that no deduction in respect of any sale referred to in sub-clause (iv)shall be allowed unless a true declaration duly filled and signed by the registered dealer to whom the goods are sold containing the prescribed particulars in the particulars in the prescribed form obtainable from obtainable from the prescribed authority is furnished in the prescribed manner and within the prescribed time, by the dealer who sells the goods.”
 

CHAPTER-II Incidence and Levy of Tax

5. Power of Administrator to prescribe points at which goods may be taxed

Notwithstanding anything contained in the Act, the ¹[Lieutenant Governor] may, be notification in the Official Gazette and subject to such conditions, if any, as may be specified therein, specify the point of sale at which any goods or class of goods may be taxed, and on the issue of such notification, the points of sale in relation to any such goods or class of goods other than the point of sale so notified, shall be exempt from payment of tax under this Act:

²[PROVIDED that no such exemption shall be allowed unless a true declaration duly filled and signed by the registered dealer by whom the goods are sold and containing the prescribed particulars in the prescribed form obtainable form the prescribed authority in the manner and subject to such conditions as maybe prescribed is furnished in the prescribed manner and within the prescribed time, by dealer who purchases the goods.]

PROVIDED FURTHER that the Administrator may, if he is of opinion that it is necessary in public interest so to do, by notification in the Official Gazette, exempt, subject to such restrictions and conditions as may be specified therein, any dealer or class of dealers from furnishing a declaration under the first provison

1. Subs. for “Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 2. Subs. by Delhi Sales Tax (Second Amendment) Act, 2000, dt. 19.2.2001 w.e.f. 19.2.2001 for “PROVIDED that no such exemption shall be allowed unless a true declaration duly filled and signed by the registered dealer by whom the goods are sold and containing the prescribed particulars in the prescribed form the prescribed authority is furnished in the prescribed manner and within the prescribed time, by who purchases the goods.”
 

CHAPTER-II Incidence and Levy of Tax

6. Burden of proof

The burden of proving that in respect of any sale effected by a dealer he is not liable to pay tax under this Act shall lie on him.
 

CHAPTER-II Incidence and Levy of Tax

7. Tax-free goods

(1) No tax shall be payable under this Act on the sale of goods specified in the Third Schedule subject to the conditions and exceptions, if any, set out therein.

(2) The ¹[Lieutenant Governor may] by notification in the Official Gazette, add to, or omit from, or otherwise amend, the Third Schedule either retrospectively or prospectively, and thereupon the Third Schedule shall be deemed to be amended accordingly :

PROVIDED that no such amendment shall be made retrospectively if it would have the effect of prejudicially affecting the interests of any dealer.

1. Subs. for “Administrator may with the previous approval of the Central Government and” by Delhi Act 1 of 1998, w.e.f. 2.3.1998
 

CHAPTER II- Incidence and Levy of Tax

8. Certain sales and purchases not liable to tax

Nothing in this Act or the rules made thereunder shall be deemed to impose, or authorise the imposition of a tax on any sale or purchase of any goods when such sale or purchase takes place-

(i) In the course of inter-state trade or commerce, or

(ii) Outside Delhi, or

(iii) In the course of the import of the goods into or export of the goods out of the territory of India

Explanation - Section 3,4 and 5 of the Central Sales Tax Act, 1956 (74 of 1956) shall apply for determining whether or not a particular sale or purchase takes place in the manner indicated in clause (i), clause (ii) or clause (iii) of this section.
 

CHAPTER III - Sales Tax Authorities and Appellate Tribunal

9. Sales tax authority

(1) For carrying out the purposes of this Act, the ¹[ Lieutenant Governor] shall appoint a person to be the Commissioner of Sales Tax.

(2) To assist the Commissioner in execution of his functions under this Act, the ²[ Lieutenant Governor] may appoint as many Additional Commissioners of Sales Tax, Sales Tax Officers and such other persons with such designations as the Administrator thinks necessary.

(3) The Commissioners shall have jurisdiction over the whole of Delhi and the other persons appointed under sub-section (2) shall have jurisdiction over such areas as Commissioner may specify.

(4) The Commissioner and other persons appointed under sub-section (2) shall exercise the powers may be conferred, and perform the duties as required by or under this Act.

1. Subs. for “Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998.
2. Subs. for “ Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998
 

CHAPTER III- Sales Tax Authorities and Appellate Tribunal

10. Delegation of Commissioner's powers

Subject to such restrictions and conditions as may be prescribed, the Commissioner may by order in writing delegate any of his powers under this Act except those under sub-section (3) of section 9 and sub section (1) of section 52 to any person appointed under sub-section (2) of section 9.

PROVIDED that the powers of the Commissioner under clauses (i) to (vi) (both inclusive) of sub-section (3) of section 41 shall not be delegated to any person lower in rank than that of a Sales Tax Officer, and those under sub-section (1) of section 49 shall not be delegated to any person other than an Additional Commissioner of Sales Tax appointed under sub-section (2) of section 9.
 

CHAPTER III- Sales Tax Authorities and Appellate Tribunal

11. Power to transfer Proceedings

(1) The Commissioner may, by order in writing, transfer any proceedings or class of proceedings under any provision of this Act from any person appointed under sub-section (2) of section 9 to any other person so appointed whether or not such other person has jurisdiction in respect of the area to which such proceedings or class of Proceeding relate, and the Commissioner may likewise transfer any such proceedings (including a proceeding already transferred under this section) from any such person to himself.

(2) The person to whom any proceeding is transferred under sub-section (1) shall proceed to dispose it of as if it had been initiated by himself.

(3) The transfer of a proceeding shall not render necessary the reissue of any notice already issued before such transfer and the person to whom the proceeding is transferred may, in his discretion, continue, continue it from the stage at which it was left by the person from whom it was transferred.

Explanation - For the purposes of this section, “proceedings” in relation to any person whose name is specified in any order issued thereunder, means all proceedings under this Act in respect of any year which may be pending on the date of such order or which may have been completed on or before such date, and includes also such proceedings which may be commenced after the date of such order in respect of any year.
 

CHAPTER III - Sales Tax Authorities and Appellate Tribunal

12. Disputes regarding territorial jurisdiction

(1) No person shall be entitled to call in question the jurisdiction of any sales tax authority appointed under section 9, not being an appellate authority, after the expiry of ninety day from the date of receipt by that person of any notice under this Act issued by such sales tax authority.

(2) Any objection as to the jurisdiction of any such sales tax authority may be raised within the period aforesaid by submitting a memorandum to the authority concerned who shall refer the question to the Commissioner and the Commissioner shall after giving the person raising the objection a reasonable opportunity of being heard, make an order determining the question and his decision in this behalf shall be final.
 

CHAPTER III - Sales Tax Authorities and Appellate Tribunal

13. Appellate Tribunal

(1) The [Lieutenant Governor] shall, as soon as may be after the commencement of this Act, constitute an Appellate Tribunal Tribunal consisting of one or more members, as it thinks fit, to exercise the powers and discharge the functions conferred on the Appellate Tribunal by or under this Act:

PROVIDED that where the Appellate Tribunal consists of one member that member shall be a person who has held a civil judicial post for at least ten years or who has been a member of the [Indian Legal Service] (not below Grade III) for at least three years or who has been in practice as an advocate for at least ten years, and where the Appellate Tribunal consists of more than one member, one such member shall be a person be a person qualified as aforesaid.

(2) Where the number of members of the Appellate Tribunal is more than one, the ³[Lieutenant Governor] shall appoint one of those members to be the Chairman of the Appellate Tribunal.

(3) Subject to the provisions of sub-section (1), the qualifications and other conditions of service of the member or members constituting the Appellate Tribunal and the period for which such member or members shall hold office, shall be such as may be determined by the ⁴[Lieutenant Governor]

(4) Any vacancy in the membership of the Appellate Tribunal shall be filled up by the ⁵[Lieutenant Governor] as soon as practicable.

(5) Where the number of members of the Appellate Tribunal is more than one and if the members differ in opinion on any point, the point shall be decided according to the opinion of the majority, if there is a majority, if there is a majority, but if the members are equally divided, the decision of the Chairman of the Appellate Tribunal thereon shall be final.

(6) Subject to the previous sanction of the ⁶[Lieutenant Governor], the Appellate Tribunal shall, for the purpose of regulating its procedure and disposal of its business, make regulations consistent with the provisions of this Act and the rules made thereunder.

(7) The regulations made under sub-section (6) shall be published in the Official Gazette.

(8) The Appellate Tribunal shall, for the purpose of discharging its functions, have all the powers which are vested in the Commissioner under section 42 and any proceeding before the Appellate Tribunal shall be deemed to be a judicial proceeding within the meaning of section 193 and 228, and for the purpose of section 196 of the Indian Penal Code, 1860 (45 of 1860) and the Appellate Tribunal shall be deemed to be a civil court for all the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973. (2 of 1974)

3. Subs. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 4. Subs. for “Central Legal Service” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 5. Subs. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 6. Subs. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 7. Sub. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998. 8. Subs. for “Central Government” by Delhi Act 1 of 1998, w.e.f. 2.3.1998.
 

CHAPTER IV- Registration, Amendment and Cancellation

14. Registration

(1) No dealer shall, while being liable to pay tax under section 3, carry on business as a dealer unless he has been registered and possesses a certificate of registration.

(2) Every dealer required by sub-section (1) to be registered shall make an application for registration within such time, in such manner and to such authority, as may be prescribed.

(3) If the said authority is satisfied that the application is in order, it shall, in accordance with such rules as may be prescribed, register the applicant within the prescribed period and grant him a certificate of registration in the prescribed form which shall specify the goods or class of goods for the purposes of sub-clause (v) of clause (a) of sub-section 4:

PROVIDED that if the said authority is of opinion that the application is not in order, it shall, by an order passed within the said period and for reasons to be recorded in writing, reject the application

PROVIDED FURTHER that no goods or class of goods in respect of which the ¹[ point of sale] has been specified by the ²[Lieutenant Governor] under section 5 shall be specified in a certificate of registration, and where a notification is issued under that section subsequent to the grant of any certificate of registration in respect of any goods or class of goods specified in a certificate, the said certificate shall be deemed to have been amended to omit the references to such goods or class of goods.

(4) For the removal of doubts, it is hereby declared that the goods or class of goods to be specified in a certificate of registration granted under sub-section (3) of this section or sub-section (2) of section16 shall not include goods referred to in sub-clause (i) or sub clause (a) of sub-section(2) of section 4.

1. Subs. by Act 38 of 1978, for “point of sale.” 2. Subs. for “Administrator” by Delhi Act 1 of 1998, w.e.f. 2.3.1998

15. Voluntary registration

(1) Any dealer, other than a dealer who deals exclusively in one or more classes of goods specified in the Third Schedule whose turnover during a year exceeds twenty-five thousand rupees may, notwithstanding that he may not be liable to pay tax under section 3, apply for registration under this section.

(2) The provision of sub-section (2), (3) and (4) of section 14 shall, as far as may be, apply in relation to registration of dealers under this section.

(3) Every dealer who has been registered under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act.

(4) The registration of a dealer under this section shall be in force for a period of not less than three complete years and shall remain in force thereafter unless cancelled under the provisions of this Act.
 

CHAPTER IV- Registration, Amendment and Cancellation

16. Provisional Registration

(1) Any person who intends to establish a business in Delhi for purpose of manufacturing goods of a value exceeding thirty thousand rupees per year, may, not-with standing that he is not required to be registered under section 14, apply for provisional registration in such manner and to such authority as may be prescribed.

(2) If the said authority, after making such inquiry as it may consider necessary, is satisfied as to the bona fide intention of the person making the application, it may, subject to such restrictions and conditions it may impose, grant a provisional certificate of registration on such person furnishing such security as it may consider necessary and shall specify in such certificate the goods or class of goods for the purposes of sub-clause (v) of clause (a) of sub-section (2) of section 4.

(3) Every person who has been granted a provisional certificate of registration under this section shall, for so long as such certificate is in force, be liable to pay tax under this Act.

(4) A provisional certificate of registration granted under this section shall be in force for such period as may be specified therein.

(5) The authority prescribed under sub-section (1) may, on application made in this behalf in the prescribed manner and subject to such restrictions and conditions as it may impose, extend, from time to time, the period specified in the provisional certificate of registration.

(6) The provisions of section 18 shall, so far as may be, apply in relation to security required to be furnished under sub-section (2) of this section.

(7) If a person, who has been granted a provisional certificate of registration under this section, fails without sufficient cause to establish a business within the period specified in such certificate or fails to comply with any of the restrictions or conditions subject to which such certificate was granted, he shall be liable to pay a penalty equal to one and a half times the amount of tax which would have been payable had he not been so registered under this section.
 

17. Special registration

(1) No dealer shall, while being liable to pay tax under sub-section (5) of section 3, carry on business as a dealer unless he obtained a special certificate of registration.

(2) Every dealer required to be registered under sub-section (1) shall make an application for registration within such time, in such manner and to such authority, as may be prescribed.

(3) If the said authority is satisfied that the application is in order, it shall, in accordance with such rules as may be prescribed, grant a special certificate of registration to the applicant in the prescribed form:

PROVIDED that the said authority shall not specify in any such certificate the goods or class of goods for the purposes of sub-clause (v) of clause (a) of sub-section (2) of section 4.
 

18. Security from certain class of dealers

(1) The Commissioner may, if it appears to him to be necessary so to do for the proper realisation of the Tax, composition money or other dues payable under this Act or for the proper custody and use of the forms referred to in the second proviso to clause (a) of sub-section (2) of section 4, or the first proviso to section 5, as the case may be, impose, for reasons to be recorded in writing as a condition of the grant of the certificate of registration under section 14, section 15 or section 17 to a dealer of the continuance in effect of such certificate granted to any dealer, a requirement that the dealer shall furnish in the prescribed manner and within such time as may be specified in the order of such security or, as the case may be, such additional security as may be so specified, for all or any of the aforesaid purposes

(2) No dealer shall be required to furnish any security or additional security under sub-section (1) unless he has been given an opportunity of being heard and the amount of security or additional security that may be required to be furnished, shall-

(a) in the case of a dealer liable to pay tax under sub-section (2) of section 3 who has applied for the grant of a certificate of registration under section 14, be such amount as the Commissioner may, having regard to the nature and size of the business of such dealer, determine for the payment of the tax for which the dealer may be or become liable under this Act:

(b) in a case where security is to be given for the proper custody and use of the forms referred to in sub-section (1), be the amount of tax determined by the Commissioner which is likely to be saved by dealer by the issue of such forms:

(c) in the case of a dealer liable to pay tax under sub-section (2) of section 3 who has applied for the grant of a certificate of registration under section 14, be such amount as the Commissioner may, having regard to the nature and size of the business of such dealer, determine for the payment of the tax for which the dealer may be or become liable under this Act:

(3) Where the security or additional security furnished by a dealer is in the form of a security bond and the surety dies or becomes insolvent, the dealer shall, within thirty days of the occurrence of such event, inform the authority granting the certificate of registation and shall, within ninety days of such occurrence, execute a fresh surety bond.

(4) The Commissioner may be order, for good and sufficient cause, and after giving the dealer an opportunity of being heard, forfeit the whole or any part of the security furnished by a dealer.

(5) Where, by reason of an order under sub-section (4) the security furnished by any dealer is forfeited in whole or is rendered insufficient, he shall furnish a fresh security of the requisite amount or, as the case may be, shall make up the deficiency in such manner and within such period as may be specified in the order.
 

CHAPTER IV- Registration, Amendment and Cancellation

19. Amendment of certificate of registration

then, merely by reason of any of the circumstances aforesaid, it shall not be necessary for the dealer, or¹[the firm which changed the constitution] or the new trustees, or the new guardian, or as the case may be, the partners of such partnership business, to apply for a fresh certificate of registration and on information being furnished in the manner required by section 40 the certificate of registration shall be amended.

1 Subs. by Act 38 of 1978, for “the firm who charged the constitution.”
 

20. Cancellation of certificate of registration

(1) Where -

(a) any business in respect of which a certificate of registration has been granted to a dealer under this Act, is discontinue or

(b) in the case of transfer of business by a dealer, the transferee already holds a certificate of registration under this Act or

(c) a dealer has ceased to be liable to pay tax under this Act, the Commissioner may cancel the certificate of registration of such dealer or the transferor, as the case may be, from such date as may be specified by him :

PROVIDED that in a case referred to in clause (a) or clause (b), the certificate of registration shall be deemed to be inoperative with effect from the date of discontinuance or transfer of the business, as the case may be, and in a case referred to clause (c) from the date on which the dealer's liability to pay tax has ceased, notwithstanding the fact that the order of cancellation is passed or that the particulars of the dealer regarding cancellation are published, as required by section 65, in the Official Gazette, after the aforesaid date:

PROVIDED FURTHER that where a dealer has failed to furnish information regarding discontinuance of his business as required by section 40, the Commissioner shall before canceling the certificate from any specified date, publish in the Official Gazette, a notice of his intention so to do for the information of the dealer and shall hear objections, if any, of the dealer before passing the order.

(2) A dealer registered under section 15 may, subject to the provisions of sub-section (4) of that section, apply in the prescribed manner not later than six months before the end of a year to the Commissioner for cancellation of his certificate of registration and the Commissioner shall, unless the dealer is liable to pay tax under section 3, cancel the certificate of registration accordingly, and such cancellation shall take effect from the end of the year.

(3) Notwithstanding anything contained in sub-section (1) and (2), the Commissioner may at any time for reasons to be recorded in writing and after giving the dealer an opportunity of being heard, cancel the certificate of registration held by such dealer from such date as the Commissioner may specify in this behalf -

(a) if the dealer has failed to pay tax (including any penalty) due from him under any provisions of this Act or

(b) if the dealer holds or accepts or furnishes or causes to be furnished a declaration for the purposes of sub-clause (v) of clause (a) of sub-section (2) of section 4 or section5 which he knows or has reason to be false or

(c) if the dealer who has been required to furnish the security under the provisions of section 18 has failed to furnish the security under the provisions of section 18 has failed to furnish such security or

(d) if the dealer contravenes or has contravened any of the provisions of this Act or

(e) if the dealer has been convicted of an offence under this Act or under the Bengal Finance (Sales Tax) Act 1941 (Bengal Act, VI of 1941), as then in force in Delhi or

(f) if there is any other reason which in the opinion of the Commissioner warrants such cancellation

(4) (a) If an order of cancellation passed under sub-section (3) is set aside as a result of an appeal or other proceeding under this Act, the certificate of registration of the dealer shall be restored and he shall be liable to pay tax as if his certificate had not been canceled.

(b) If any dealer whose certificate of registration has been restored under clause (a) satisfies the Commissioner that tax has been paid by such dealer on sale of goods made to him during the period his certificate of registration was inoperative which, but for the cancellation of such certificate he would not have paid, then the amount of such tax shall be adjusted or refunded in such manner as may be prescribed.

(5) Every dealer who applies for cancellation of his registration shall surrender with his application the certificate of registration granted to him and every dealer whose registration is canceled otherwise than on the basis of his application shall surrender the certificate of registration within seven days of the date of communication to him of the order of cancellation.

(6) If a dealer fails to surrender his certificate of registration as provided in sub-section (5), the Commissioner may, by an order in writing and after giving the dealer an opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum not exceeding twenty-five rupees for every day of default.

(7) The cancellation of a certificate of registration shall not affect the liability of any person to pay tax due for any period prior to the date of such cancellation, but remains unpaid or is assessed thereafter notwithstanding that he is not liable to pay tax under this Act.

(8) Where by any order passed under this Act it is found that any person registered as a dealer ought not to have been so registered, then notwithstanding anything contained in this Act, such person shall be liable to pay tax for the period commencing with the date of his registration and ending with the date of such order, as if he were a dealer.
 

21. Periodical payment of tax and filing or returns

(1) Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.

(2) Every registered dealer and every other dealer who may be required so to do by the Commissioner by notice served in the prescribed manner shall furnish such returns of turnover by such dates and to such authority as may be prescribed.

(3)Every registered dealer required to furnish returns under sub-section (2) shall pay into Government Treasury or the Reserve Bank of India or in such other manner as may be prescribed, the full amount of tax due from him under this Act according to such return and shall where such payment is made into a Government Treasury or the Reserve Bank Of India furnish alongwith the return a receipt from such Treasury of Bank showing the payment of such amount.

(4)If any registered dealer discovers any mistake or error in any return furnished by him, he may at any time, before the expiry of three months next following the last date prescribed for furnishing of the return, furnish a revised return, and if the revised return shows a higher amount of tax to be due that was shown in the original return, it shallbe accompanied by a receipt showing payment in the manner provided in sub-section (3) of the excess amount.

(a)in the case of an individual, by the individual himself, and where the individual is absent from India by the individual concerned or by some person duly authorised by him in this behalf and where the individual is mentally incapacitated from attending to his affairs, by his guardian or by any other person competent to act on his behalf

(b)in the case of a Hindu undivided family, by a Karta, and where the Karta is absent from India or mentally incapacitated from attending to his affairs, by any other adult member of such family

(c)in the case of a company or local authority, by the principal officer thereof

(d)in the case of a firm, by any partner thereof not being a minor

(e)in the case of any other association, by any member of the association or the principal officer thereof and

(f)in the case of any other person, by that person or by some person competent to act on his behalf.

(6)For the purposes of sub-section (5) of this section and section 59 the expression “ principal officer” shall have the meaning assigned to it under clause (35) of section 2 of the Income-tax Act, 1961(43 of 1961).

Advocate Chikirsha Mohanty

Greater Kailash - 1, Delhi
5 years

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