REVENUE ADMINISTRATION

SALES TAX DEPARTMENT

Sales tax, the most important source of revenue to the State, was first introduced in the former State of Madhya Pradesh in Central Provinces and Berar with effect from 1st June 1947 by the Central Provinces and Berar Sales tax Act, 1947 (XXI of 1947). The Act underwent various amendments from time to time. The former Act was replaced on 1st January 1960 and the Bombay Sales Tax Act (LXXVI of 1959) was brought into force from 1st January 1960.

Dealers liable to pay tax.-Under the Bombay Sales Tax Act, 1959, the dealers have been divided in three categories, viz., (1) importer, (2) manufacturer and (3) others.

In respect of the importer the liability to pay tax commences when the value of any goods imported is not less than Rs. 2,500.00 and his total turnover of sales or purchases exceeds Rs. 10,000.00. The manufacturer becomes liable to pay tax if the value of goods manufactured by him exceeds Rs. 2,500.00, his total turnover of sales or purchases exceeds Rs. 10,000.00 and his taxable sales or purchases exceed Rs. 2,500.00 or more.

The other dealers become liable to pay tax if the total value of their purchases or sales exceeds Rs. 30,000.00 and their taxable sales or purchases exceed Rs. 2,500.00.

As soon as any of the dealers from the above category becomes liable to pay sales tax he has to apply for registration. When registered he has to file returns under section 32 of the Bombay Sales Tax Act. The dealers under the Sales Tax Act in the district were 1,401 and 1,312 in 1957-58 and 1958-59, respectively.

The dealers are assessed under section 33 of the Bombay Sales Tax Act. The assessments are completed after allowing deductions contemplated under sections 7, 8, 9 and 10 of the Bombay Sales Tax Act, 1959. For the purpose of assessment the dealers are divided in 2 categories (1) non-document holders and (2) document holders.

On fulfilment of certain conditions stated in sections 23, 24, 25, 26 and 27 the dealer is entitled to hold documents known as licence, authorisation, recognition and permits. On the strength of his documents a dealer can purchase goods without payment of tax to his vendor or on concessional rates under section 11 of the Bombay Sales Tax Act. Section 35 of the Act contemplates reassessment of the dealer if his turnover has escaped assessment under section 33 of the Act.

Penalty has been provided under section 36 for not furnishing the returns in time and payment of tax and concealment of transactions by the dealer.

If the dealer fails to pay the amount of tax assessed, the same is recovered as arrears of land revenue under section 38 of the Bombay Sales Tax Act. Section 39 of the Act provides for special mode of recovery. Under this section recovery can be effected from a person who holds money on behalf of the defaulter.

Section 37 of the Act provides for forfeiture of tax collected by the dealer in contravention of the provisions under this Act.

Section 52 of the Act provides for reference of any dispute arising from the assessment of a dealer to the department.

Provisions for appeals against the assessment order have been made in sections 54 to 61 of the Bombay Sales Tax Act.

Section 62 provides for rectification of mistakes apparent in the records.

Section 63 provides for prosecution of the persons committing various offences. The compounding of offences has been provided for under section 69 of the Bombay Sales Tax Act.

There are 5 schedules incorporated in the Act. Schedule A deals with tax free commodities. The other Schedules are concerned with provisions for bringing the commodities under the purview of the sales tax and general sales tax. Sections 13 and 14 provide for the imposition of purchase tax under the Act.

For regularising the administration of the Act, the Bombay Sales Tax Rules, 1959 have been framed.

The Act being a multi-point one, provisions pertaining to the set-off to be given are made under the Rules and such set-off is ordinarily given to dealers who manufacture goods for sale or who export goods outside the State.

Classes of tax.-Unlike the Bombay Sales Tax Act (1953) the Central Provinces and Berar Sales Tax Act (1947) provided for the levy of tax only at the point of sale, i.e., it was a single point tax. The provisions of section 4 (6) of the Act which came into force with effect from 1st December 1953 do not actually amount to purchase tax but are only intended to seal off a loophole for evasion of sales tax on goods purchased on the strength of declarations.

No tax was levied on goods specified in Schedule II which consists of 43 entries. Goods specified in Part I of schedule I were taxable at one anna in a rupee up to 7th April 1957. This rate was changed to 7 paise after the introduction of decimal coinage system. The goods specified in Part II of schedule I were taxable at 3 pies in a rupee up to 7th April 1957 and 2 paise from 8th April 1957 onwards. All other goods not covered by any of the entries of Schedule I or II were taxable at 6 pies in a rupee up to 7th April 1957 and at 3 paise from 8th April 1957 onwards.

The scheme of the Act (1947) is such that no tax is imposed on the sale of goods made in the course of inter-state trade and commerce. Further, tax on a particular transaction is to be paid only once. Generally the wholesalers or manufacturers are not required to pay tax, unless they sell their goods to unregistered dealers or customers direct. The goods required directly for use in the manufacture of articles for sale can also be purchased free of tax by manufacturers and by giving declaration in the prescribed form to the seller.

Administrative Organisation.- The Sales Tax Officer exercises the powers delegated to him by the Commissioner of Sales Tax for administration of the Act. He registers the dealers liable to pay tax and receives returns from them. After the close of the year adopted for the purpose of calculation by the dealers, the sales tax office prepares the assessment case on the strength of returns furnished by the dealers. The dealer is assessed under section 33 by the Sales Tax Officer.

Immediately above the Sales Tax Officer there is the Assistant Commissioner of Sales Tax (Administration) who supervises the work of the Sales Tax Officers within his jurisdiction. There is also the Assistant Commissioner of Sales Tax (Appeals) who hears appeals preferred against the assessment orders passed by the Sales Tax Officers. Over the Assistant Commissioners there is one Deputy Commissioner who exercises control over the Assistant Commissioners and Sales Tax Officers for the administration of Act. The Deputy Commissioner exercises both appellate and administrative powers. At the apex of the sales tax organisation is the Commissioner of Sales Tax, who, exercises all the powers under the Bombay Sales Tax Act, 1959. Under section 55 of the Act the dealer can go in appeal against the order passed by the Assistant Commissioner of Sales Tax (Appeals) to the Sales Tax-Tribunal or to Deputy Commissioner of Sales Tax in the Second Appeal.

Section 61 relates to certain questions of law arising out of the orders passed by the Tribunal.

Statistics of Collections.-The following statement gives the amount of Sales Tax collected in Buldhana district:-

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