THE DELHI VALUE ADDED TAX (SECOND AMENDMENT) ACT, 2005 - F.14(29)/LA/2005/333 - Delhi Value Added Tax

THE DELHI VALUE ADDED TAX (SECOND AMENDMENT) ACT, 2005

GOVERNMENT OF NATIONALCAPITALTERRITORY OF DELHI
FINANCE (ACCOUNTS) DEPARTMENTDELHI SACHIVALAYA, I.P.ESTATE: NEW DELHI-02

No.F.14(29)/LA/2005/333

Dated:- 16/11/05

NOTIFICATION

No.F.14(29)/LA/2005/- The following Act of the Legislative Assembly of the National Capital Territory of Delhi received the assent of the Lt. Governor on the 2nd November, 2005 and is hereby published for general information:-

"THE DELHI VALUE ADDED TAX (SECOND AMENDMENT) ACT, 2005"
(DELHI ACT 10 of 2005)

(As passed by the Legislative Assembly of the National Capital Territory of Delhi on the 26th September, 2005)

[2nd November, 2005]

 

An Act further to amend the Delhi Value Added Tax Act, 2004

BE it enacted by the Legislative Assembly of the National Capital Territory of Delhi in the Fifty-sixth Year of the Republic of India as follows:-

1. Short title, extent and commencement.-

(1) This Act may be called the Delhi Value Added Tax (Second Amendment) Act, 2005.

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

(3) Except for the provisions of sections 4 and 5, clause (a) of section 7, sections 9, 32 and 33 which shall be deemed to have come into force with effect from the 1st day of April, 2005, the remaining provisions of this Act shall come into force with effect from the date of the publication of this Act in the official Gazette.

2. Amendment of section 2.

In the Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005))(hereinafter referred to as "the principal Act"), in section 2, in sub-section (1) -

(a) for clause (f), the following shall be substituted, namely:-

"(f) "capital goods" means plant, machinery and equipment used, directly or indirectly, in the process of trade or manufacturing or for execution of works contract in Delhi;";

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

"(j)  dealer" means any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business, buys or sells goods in Delhi directly or otherwise, whether for cash or for deferred payment or for commission, remuneration or other valuable consideration and includes , -

(i) a factor, commission agent, broker, del credere agent or any other mercantile agent by whatever name called, who for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of the business, buys or sells or supplies or distributes any goods on behalf of any principal or principals whether disclosed or not ;

(ii) a non-resident dealer or as the case may be, an agent, residing in the State of a non-resident dealer, who buys or sells goods in Delhi for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of the business;

(iii) a local branch of a firm or company or association of persons, outside Delhi where such firm company, association of persons is a dealer under any other sub-clause of this definition;

(iv) a club, association, society, trust, or cooperative society, whether incorporated or unincorporated, which buys goods from or sells goods to its members for price, fee or subscription, whether or not in the course of business;

(v) an auctioneer, who sells or auctions goods whether acting as an agent or otherwise or, who organizes the sale of goods or conducts the auction of goods whether or not he has the authority to sell the 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;

(vi) a casual trader ;

(vii) any person who, for the purposes of or consequential to his engagement in or in connection with or incidental to or in the course of his business disposes of any goods as unclaimed or confiscated, or as unserviceable or scrap, surplus, old, obsolete or as discarded material or waste products by way of sale.

Explanation.- For the purposes of this clause, each of the following persons, bodies and entities who sells any goods whether in the course of his business, or by auction or otherwise, directly or through an agent for cash or for deferred payment or for any other valuable consideration, shall, notwithstanding anything contained in clause (d) or any other provision of this Act, be deemed to be a dealer, namely:-

(i) Customs Department of Government of India administering Customs Act, 1962 (52 of 1962);

(ii)  Departments of Union Government, State Governments and Union territory Administrations;

(iii) Local authorities, Panchayats, Municipalities, Development Authorities, Cantonment Boards;

(iv) Public Charitable Trusts;

(v)  Railway Administration as defined under the Indian Railways Act, 1989 ( 24 of 1989) and Delhi Metro Rail Corporation Limited;

(vi) Incorporated or unincorporated societies, clubs or other associations of persons;

(vii) Each autonomous or statutory body or corporation or company or society or any industrial, commercial, banking, insurance or trading undertaking, corporation, institution or company whether or not of the Union Government or any of the State Governments or of a local authority;

(viii) Delhi Transport Corporation;

(ix)  Shipping and construction companies, air transport companies, airlines and advertising agencies."

3. Amendment of section 3.

In the principal Act, in section 3-

(a)  for sub-section (4), the following shall be substituted, namely:-
"(4) the net tax of a dealer shall be paid within twenty-eight days of the conclusion of the dealer's tax period:

Provided that the Commissioner may, by an order, prescribe that irrespective of the tax period of a dealer or class of dealers, the net tax of a dealer or a class of dealers shall be paid within 28 days of the conclusion of a period shorter than the tax period that may be specified in the order.

Explanation.- The obligation to pay the tax arises by virtue of this provision and is not dependent on furnishing a return, nor on the issue of a notice of assessment to the dealer.";

(b)  after sub-section (9), the following shall be inserted, namely:-

"(10) If any person who, whether as principal, agent or in any other capacity organize any exhibition- cum-sale in Delhi and fails -

(a)  to furnish any information in respect of the goods brought or kept in stock or sold by any participant before or during or after the exhibition - cum-sale,; or

(b)  to ensure that all the participants in the exhibition-cum-sale have obtained registration under this Act and paid due tax ; or

(c)  to permit inspection of the business premises or goods or account and records of the participants ;or

(d)  to permit inspection of the accounts and records of the organizer in respect of the exhibition-cum-sale ;

then, without prejudice to any other action which may be taken against such participant, a presumption may be raised that the goods of the participant who fails to obtain registration under this Act or the goods in respect of which the participant has failed to furnish information or failed to permit inspection, are owned by the organizer and are held by him for sale in Delhi and the provisions of this Act shall apply accordingly.".

4. Amendment of section 4.

In the principal Act, in section 4, in sub-section (1), to clause (d), the following provisos shall be inserted, namely: -

"Provided that tax shall be paid at the rate of four paise in the rupee of the turnover of the dealer pertaining to declared goods, as defined from time to time in the Central Sales Tax Act, 1956 (74 of 1956), involved in the execution of works contract if such goods are transferred from the contractor to the contractee in the same form in which they were purchased by the contractor:

Provided further that in respect of the works contracts which are in the nature of printing works, the rate of tax shall be four paise in the rupee."

5. Amendment of section 7.

In the principal Act, in section 7, after clause (c), the following shall be inserted, namely:-

"(d) in accordance with the notification issued by the Central Government in exercise of its powers under section 3 of the Foreign Aircraft (Exemption from Taxes and Duties on Fuel) Act, 2002(36 of 2002), no tax shall be levied on sales of the fuel and lubricants which are filled into receptacles forming part of any aircraft registered in a country other than India, if-

(i)   the said country is a party to the Convention on International and Civil Aviation, 1944; and

(ii)  the said country has entered into an Air Services agreement with India; and

(iii) the aircraft is operating on a scheduled or non-scheduled service to or from India."

6.  Amendment of section 8.

In the principal Act, in section 8, in sub-section (1), for clause (d), the following shall be substituted, namely:-

"(d) the goods or part of the goods sold have been returned to the dealer within six months of the date of sale; or"

7. Amendment of section 9.

In the principal Act, in section 9 -

(a) in sub-section (2), for clause (f), the following shall be substituted, namely:-

"(f) to the dealers or class of dealers specified in the Fifth Schedule except the entry no.1 of the said Schedule.";

(b) in sub-section (7), after clause (b), the following shall be inserted, namely:-

"(c) any purchase of consumables or of capital goods where the dealer is exclusively engaged in doing job work or labour work and is not engaged in the business of manufacturing of goods for sale by him and incidental to the business of job work or labour work, obtains any waste or scrap goods which are sold by him.";

(c) in sub-section (9) -

(i) in clause (a), in sub-clause (ii), for the second proviso, the following shall be substituted, namely:-

"Provided further that where the dealer transfers such capital goods from Delhi otherwise than by way of sale before the expiry of three years from the date of purchase, he shall , after claiming the balance amount of input tax, if any, not availed earlier in respect of such capital goods, reduce the input tax credit by the prescribed percentage of the purchase price of such capital goods and make adjustments in the input tax credit in the tax period in which these capital goods are so transferred:

Provided also that where a dealer has purchased capital goods and the capital goods are to be used partly for the purpose of making sales referred to in sub-section (1) of this section and partly for other purposes, the amount of tax credit shall be reduced proportionately:";
(ii) in clause (b), for the word "reduced" occurring after the words "claimed in respect of such purchase shall be" and before the words "in the tax period during which such transfer takes place", the word "reversed" shall be substituted.

8. Insertion of new section 11A.

In the principal Act, after section 11, the following shall be inserted, namely:-

"11A. Tax on goods supplied by contractee. - No tax shall be payable under this Act by a contractor on the amount representing the value of the goods supplied by the contractee to the contractor in the execution of works contract in which the ownership of such goods remains with the contractee under the terms of the contract and the amount representing the value of the goods supplied by the contractee to the contractor does not form part of the contract and is not deductible from the amount payable to the contractor by the contractee for the execution of the works contract."

9.  Amendment of section 15.

In the principal Act, in section 15, -

(a) in sub-section (1), for clause (c), the following shall be substituted, namely:-

"(c) the goods were purchased either as trading stock for re-sale in an unmodified form or otherwise or as raw material for incorporation or division into trading stock;";

(b) to sub-section (2), the following Explanations shall be inserted, namely:-

"Explanation I.- For the purpose of this sub-section, the words "input tax borne" means the tax paid by the resident seller under the Delhi Sales Tax Act, 1975 (Act 43 of 1975) or under this Act and the word "tax fraction" shall be construed accordingly.Explanation II.- This section shall apply only if the resident seller had purchased goods in Delhi.".

10. Amendment of section 16.

In the principal Act, in section 16 -

(a)  in sub-section (1), the words "exceeds the taxable quantum under this Act, but" occurring after the clause (b) reading as "turnover in the current year," and before the words "does not exceed fifty lakh rupees" shall be omitted;

(b)  in sub-section (3), in clause (b), the words "exceeds the taxable quantum under this Act, but" occurring after the words "commencement of this Act" and before the words "does not exceed fifty lakh rupees" shall be omitted;

(c)  in sub-section (5), for clause (a), the following shall be substituted, namely:-

"(a) not purchase goods from a person who is not registered under this Act:
Provided that this restriction shall not apply for the purchase of goods from an un-registered dealer dealing exclusively in goods mentioned in the First Schedule;";

(d)  in sub-section (6), in clause (b), the words "exceeds the taxable quantum under this Act, but" occurring after the words "commencement of this Act" and before the words "does not exceed fifty lakh rupees" shall be omitted;

(e)  after sub-section (11), the following shall be inserted, namely:-

"(12) Notwithstanding anything to the contrary contained in this Act, the Government may -

(a) by notification in the official Gazette, notify schemes of composition, subject to such conditions and restrictions as may be specified therein, of tax payable by a class of dealers or classes of dealers and different types of schemes may be notified for different classes of dealers;

(b) specify, in any scheme of composition of tax payable by the class of dealers or classes of dealers, different rates of taxes for different class or classes of dealers but, in such scheme, the net tax liability of the dealer opting to pay tax thereunder shall not exceed eight paise in the rupee of the turnover of the dealer.".

11. Amendment of section 25.

In the principal Act, in section 25, for sub-section (1), the following shall be substituted, namely:-

"(1) The Commissioner may, if it appears to him to be necessary so to do, for the continuance of the certificate of registration, or for the proper realisation of tax, composition money or other dues payable under this Act or as a condition of registering a person as a dealer or as a condition of making a refund under section 38 of this Act, require a person or prescribed class of persons to furnish security for the proper performance of their responsibilities under this Act or under the Central Sales Tax Act, 1956 (74 of 1956) in the prescribed amount, in the prescribed manner and within such time as may be prescribed."

12. Substitution of new section for section 26.

In the principal Act, for section 26, the following shall be substituted, namely:-

"26. Periodical payment of tax and furnishing of returns.

(1) Every registered dealer who is liable to pay tax under this Act shall furnish to the Commissioner such returns for each tax period and by such dates as may be prescribed and in the prescribed form.

(2) Notwithstanding anything contained in sub-section (1), the Commissioner may require a dealer or class or classes of dealers, as may be notified by him by special or general order, to file, in addition to the returns required to be filed under sub-section (1), the returns in such electronic forms from such date and within such time and in such manner as may be prescribed.

(3) Without prejudice to the provisions of sub-section (1) , any person, being a company or being a person other than a company, required to furnish a return under sub-section(1), may, at his option, on or before the due date, furnish a return in accordance with such scheme as may be specified by the Government in this behalf by notification in the official Gazette and subject to such conditions as may be specified therein, in such form (including on a floppy, diskette, magnetic cartridge tape, CD-ROM or any other computer readable media) and in the manner as may be specified in that scheme, and in such case, the return furnished under such scheme shall be deemed to be a return furnished under sub-section(1), and the provisions of this Act shall apply accordingly."

13. Amendment of section 32.

In the principal Act, in section 32, in sub-section (1), the words, "or more than one tax period by a single order so long as all such tax periods are comprised in one year" shall be inserted at the end thereof.

14.Amendment of section 36A.

In the principal Act, in section 36A -

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

"(1) Any person, not being an individual or a Hindu undivided family, who is responsible for making payment to any dealer (hereinafter in this section referred to as "the contractor") for discharge of any liability on account of valuable consideration payable for the transfer of property in goods (whether as goods or in some other form) in pursuance of a works contract, for value exceeding twenty thousand rupees or such amount as may, by order in writing published in official Gazette, be notified by the Commissioner from time to time, shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by any other mode, whichever is earlier, deduct tax thereon at the rate of two percent.

(1A) Any contractor responsible for making any payment or discharge of any liability to any sub-contractor, in pursuance of a contract with the sub-contractor, for value exceeding twenty thousand rupees or such amount as may, by order in writing and published in the official Gazette, be notified by the Commissioner from time to time, for the transfer of property in goods (whether as goods or in some other form) involved in the execution, whether wholly or in part, of the works contract undertaken by the contractor, shall, at the time of such payment or discharge, in cash or by cheque or draft or any other mode, deduct an amount equal to two percent of such payment or discharge, purporting to be part of full amount of the tax payable under this Act.";

(b) in sub-section (4), for the words "before the expiry of twenty eight days" occurring after the words "person making such deduction" and before the words "following the month in which" the words "before the expiry of fifteen days" shall be substituted;

(c) after sub-section (5), the following shall be inserted, namely:-

"(5A) If any person referred to in sub-section (5) fails to furnish to the contractor the certificate of tax deduction at source within seven days of making payment or discharge, the person shall be liable to pay, by way of penalty, a sum of one hundred rupees per day from the day of making payment to the contractor or discharge until the failure is rectified:

Provided that the amount of penalty payable under this sub-section shall not exceed twenty thousand rupees.".

15. Amendment of section 38.

In the principal Act, in section 38 -

(a) in sub-section (3), for clause (a), the following shall be substituted, namely:-

" (a) refunded to the person, -

(i) within one month after the date on which the return was furnished or claim for the refund was made, if the tax period for the person claiming refund is one month;

(ii) within two months after the date on which the return was furnished or claim for the refund was made, if the tax period for the person claiming refund is a quarter; or ";

(b) for sub-section (7), the following shall be substituted, namely : -

"(7) For calculating the period prescribed in clause (a) of sub- section (3), the time taken to -

(a) furnish the security under sub-section (5) to the satisfaction of the Commissioner; or

(b) furnish the additional information sought under section 59; or

(c) furnish returns under section 26 and section 27, shall be excluded.".

16. Insertion of new section 40A.

In the principal Act, after section 40, the following shall be inserted, namely:-

"40A. Agreement to defeat the intention and application of this Act to be void. -

(1) If the Commissioner is satisfied that an arrangement has been entered into between two or more persons or dealers to defeat the application or purposes of this Act or any provision of this Act, then, the Commissioner may, by order, declare the arrangement to be null and void as regard the application and purposes of this Act and may, by the said order, provide for the increase or decrease in the amount of tax payable by any person or dealer who is affected by the arrangement, whether or not, such dealer or person is a party to the arrangement, in such manner as the Commissioner considers appropriate so as to counteract any tax advantage obtained by that dealer from or under the arrangement.

(2) For the purposes of this section -

(a) "arrangement" includes any contract, agreement, plan or understanding, whether enforceable in law or not, and all steps and transactions by which the arrangement is sought to be carried into effect;

(b) "tax advantage" includes, -

(i) any reduction in the liability of any dealer to pay tax,(ii) any increase in the entitlement of any dealer to claim input tax credit or refund,

(iii) any reduction in the sale price or purchase price receivable or payable by any dealer."

17. Amendment of section 43.

In the principal Act, in section 43 -

(a) for sub-section (3), the following shall be substituted, namely:-

"(3)Any amount of tax, interest or penalty, composition money or other amount due under this Act which remains unpaid, shall be recoverable-

(a) as arrears of land revenue, or

(b) by the Commissioner in accordance with the provisions of sub-section (6) of this section and the rules regulating the procedure of recovery of tax, interest or penalty, composition money or other amount due as may be prescribed.";

(b) after sub-section (5), the following shall be inserted, namely:-

"(6) Where any amount of tax, interest or penalty, composition money or other amount due under this Act is recoverable in accordance with the provisions of clause (b) of sub-section (3), the Commissioner may prepare a recovery certificate (hereinafter referred to as "certificate") under his signature specifying the amount of such tax, interest or penalty, composition money or other amount due from the dealer, casual dealer, transporter, carrier or transporting agent, owner or lessee or occupier of warehouse, owner of any goods or any other person (hereinafter referred to as the "certificate-debtor") and he shall cause the said certificate to be served upon the certificate debtor, in such manner and form as may be prescribed and proceed to recover from the certificate-debtor the amount specified in the certificate by one or more of the following modes in accordance with the rules as may be prescribed:-

(a) attachment and sale of movable property of the certificate debtor;

(b) attachment and sale of immovable property of the certificate- debtor;

(c) arrest of the certificate-debtor and his detention in prison for a period of fifteen days;

(d) appointing a receiver for the management of the movable and immovable properties of the certificate-debtor.

(7) The Commissioner may serve upon the defaulter the recovery certificate under sub-section(6), notwithstanding that proceedings for recovery of such tax, interest or penalty, composition money or other amount due have been initiated or continuing by any other mode.

(8) On the service of the certificate under sub-section(6) upon a certificate- debtor.-

(a) any private transfer or delivery of any of his immovable property or of any interest in any such property, shall be void against any claim enforceable in the execution of the certificate; and

(b) the amount due from time to time in respect of the certificate shall be a charge upon the immovable property of the certificate-debtor, to which every other charge created subsequently to the service of the said certificate shall be postponed.

(9) The certificate-debtor may, within thirty days from the service of the certificate, present to the Commissioner a petition denying his liability in whole or in part. 

(10) The Commissioner shall hear the petition, take evidence, if necessary, and determine whether the certificate-debtor is liable for the whole or any part of the amount for which certificate was signed.

(11) Where any proceedings for the recovery of any tax, interest or penalty, composition money or other amount due remaining unpaid have been commenced under this section and the tax, interest or penalty, composition money or other amount due is subsequently modified, enhanced or reduced in consequence of any assessment made, or  order passed on objection, appeal, revision or review under this Act, the Commissioner may inform the certificate-debtor and there upon such proceedings may be continued as if the tax, interest or penalty, composition money or other amount due as so modified, enhanced or reduced has been substituted for the tax, interest or penalty, composition money or other amount due which was to be recovered under sub-section (3)

18. Substitution of new section for section 44

In the principal Act, for section 44, the following shall be substituted, namely:-

44. Application of the Delhi Land Reforms Act, 1954 for purposes of recovery.-

(1) For the purposes of recovery of any amount recoverable as arrears of land revenue under this Act, the provisions of the Delhi Land Reforms Act, 1954 (Delhi Act 8 of 1954), as to the recovery of arrears of land revenue shall, notwithstanding anything contained in that Act or in any other enactment, be deemed to be in force throughout Delhi and the provisions of the Revenue Recovery Act, 1890 (1 of 1890) shall have effect accordingly.

(2) For the purpose of sub-section (1) -

(a)  The Additional Commissioner of Value Added Tax and the Joint Commissioner of Value Added Tax shall have  and exercise all the powers and  perform all the duties of the Deputy Commissioner under the  Delhi Land Reforms Act, 1954 (Delhi Act 8 of 1954);

(b)  The Deputy Commissioner of Value Added Tax shall have and exercise all the powers and perform all the duties of Revenue Assistant under the said Act;

(c)  The Value Added Tax Officers and the Assistant Value Added Tax officers shall have and exercise all the powers and perform all the duties of Tehsildar and Assistant Collector of the First Grade under the said Act.

19. Amendment of section 45

In the principal Act, in section 45 -

(a) in clause (b), after sub-clause (ii), the following shall be inserted, namely:- 

"(iii)  any recovery proceedings initiated on the basis of an assessment or  notice of demand served upon a person before the disposal of such objection or appeal, may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before the person made the objection or appeal."

(b) after clause (b), the following shall be inserted, namely:-

"(c) no recovery proceedings in relation to such Government dues shall be invalid by reason only that no fresh notice of demand was served upon the dealer or person after the disposal of such objection or appeal or such Government dues have been enhanced or reduced in such objection or appeal."     

20.  Insertion of new section 46A

In the principal Act, after section 46, the following shall be inserted, namely:-

46A Provisional attachment to protect revenue in certain cases. -

(1) Where, during the course of inquiry of any proceeding including any proceeding for  recovery of any amount due in respect of any person or dealer or during any inspection or search in relation to the business of any person or dealer under this Act, the Commissioner is of the opinion that for the purpose of protecting the interest of the revenue it is necessary so to do, he may,  notwithstanding anything contained in any law for the time being in  force or any contract to the contrary, by order in writing, attach provisionally any property movable or immovable,  belonging to  such person or dealer.

(2) Every such provisional attachment shall cease to have effect after the expiry of a period of six months from the date of the order made under sub-section (1):

Provided that  the Commissioner may, for reasons to be recorded in writing, extend the aforesaid period by such further period or periods as he thinks fit, so, however, that the total period of extension shall not in any case exceed two years:

Provided further that the Commissioner may, by an order, revoke such order if the person or the dealer furnishes to the Commissioner, a Bank Guarantee in such time, for such period as may be specified by the Commissioner in this behalf.

Provided also that the power under this section shall be exercised by the Commissioner himself or by the Additional Commissioner to whom the Commissioner has delegated such power.

21.  Amendment of section 47

In the principal Act, in section 47, after clause (b), the following shall be inserted, namely:-

Explanation - In this section "assets" includes land, building, machinery, plant,  equipments, shares, securities and fixed deposits in the banks, vehicles, furniture and fixture to the extent to which any of the assets aforesaid does not form part of the stock in trade of the business of the person.

22. Insertion of new section 47A

In the principal Act, after section 47, the following shall be inserted, namely:-

47A. Liability under this Act to be the first charge. -

Notwithstanding anything contained in any contract to the contrary, but  subject to any provision regarding creation of first charge in any Central Act for the time being in  force, any amount of tax, penalty, interest, composition money, sum forfeited, fine or any other sum  payable by a dealer or any other person under this Act, shall be the first charge on the property of the dealer or, as the case may be, the person.

23. Amendment of section 74

In the principal Act, in section 74, in sub-section (1) after the fourth proviso, the following shall be inserted, namely:-

"Provided also that no objection shall be made to the Commissioner against an order made under section 84 or section 85 of this Act if the Commissioner has not delegated his power under the said sections to other Value Added Tax authorities."

24. Insertion of new sections 74A and 74B

In the principal Act, after section 74, the following shall be inserted, namely:-

74A. Revision. -

(1) After any order including an order under this section or any decision in objection is passed under this Act, rules or notifications made thereunder, by any officer or person subordinate to him, the Commissioner may, of his own motion or upon information received by him, call for the record of such order and examine whether -

(a)  any turnover of sales has not been brought to tax  or has been  brought to   tax at lower rate, or has been incorrectly classified,  or any claim is incorrectly granted or that the liability to tax is understated, or

(b) in any case, the order is erroneous, in so far as it is prejudicial to the interest of revenue, and after examination, the Commissioner  may pass an order to the best of his judgment, where necessary.

(2)(a) For the purpose of the examination and passing of the order, the Commissioner may require, by service of notice, the dealer to produce or cause to be produced before him such books of accounts and other documents or evidence as he thinks necessary for the purposes aforesaid.

(b) Notwithstanding anything contained to the contrary in section 34, no order under this section shall be passed after the expiry of four years from the end of the year in which the order passed by the subordinate officer has been served on the dealer.

(c) Notwithstanding anything contained to the contrary in section 34, where in respect of any order or part of the said order passed by the subordinate officer, an order has been passed by any authority hearing the objection or any appellate authority including the Tribunal or such order is pending for decision in objection or  in appeal, or an objection or an appeal is filed, then, whether or not the issues involved in the examination have been decided or raised in the objection or the appeal, the Commissioner may,  within five years of the end of the year in which the said order passed  by the subordinate officer has been served on the dealer, make a report to the said  objection hearing authority or the appellate authority including the Tribunal regarding his examination or the report or the information received by him and the said appellate authority including the Tribunal shall thereupon, after giving the dealer a reasonable opportunity of being heard, pass an order to the best of its judgment, where necessary. 

(3) If the Commissioner has initiated any proceeding before an appropriate forum against an issue which is decided against the revenue by an order of the Tribunal, then the Commissioner may, in respect of any order, other than the order which is the subject matter of the order of the Tribunal, call for the record, conduct an examination as aforesaid, record his findings, call for the said books of account and other evidence and pass an order as provided for under this section as if the issue was not so decided against the revenue, but shall stay the recovery of the dues including the interest or penalty, insofar as they relate to such issue until the decision by the  appropriate forum and after such decision, may modify the order of revision, if necessary.

(4) No proceedings under this section shall be entertained on any application made by a dealer or a person.

74B.Rectification of mistakes and Review [Rule 36B] -

(1) Notwithstanding anything contained to the contrary in section 34, the Commissioner may, at any time within four years from the end of the year in which any order passed by him has been served, on his own motion, rectify any mistake apparent on record and shall within the said period or thereafter rectify any such mistake which has been brought to his notice within the said period, by any person effected by such order.

(2) The provisions of sub-section (1) shall apply to the rectification of a mistake by the appellate authority or an objection hearing authority as they apply to the rectification of mistake by the Commissioner :

Provided that where any matter has been considered and decided in any proceedings by way of objection or appeal or review in relation to any order or part of an order, the authority passing the order on objection, appeal or review,  may, notwithstanding anything contained in this Act, rectify the order or part of the order on any matter other than the matter which has been so considered and decided. 

(3)  Where any such rectification has the effect of reducing the amount of the tax or penalty or interest, the Commissioner shall refund any amount due to such person in accordance with the provisions of this Act.

(4) Where any such rectification has the effect of enhancing the amount of the tax or penalty or interest or reducing the amount of refund, the Commissioner shall recover the amount due from such person in accordance with the provisions of this Act.

(5) Save as provided in the foregoing sub-sections, and subject to such rules as may be prescribed, any assessment or re-assessment made or order passed under this Act or the rules made thereunder by any person appointed under section 66 may be reviewed by such person suo motu or upon an application made in that behalf.

25. Amendment of section 76

In the principal Act, in section 76 -

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

(1)  Any person aggrieved by a decision made by the Commissioner under sections 74, 84 and 85 of this Act may appeal to the Appellate Tribunal against such decision:

Provided that no appeal may be made against a non-appealable order under section 79 of this Act.          

Explanation: The Commissioner does not appeal to the Appellate Tribunal but may make a re-assessment of tax where he is of the opinion that further tax is owed.

(b) after sub-section (12), the following shall be inserted, namely:-         

(13) Any order passed by the Appellate Tribunal may be reviewed suo-motu or upon an application made in that behalf:

Provided that, before any order which is likely to affect any person adversely is passed, such person shall be given a reasonable opportunity of being heard.

26.Amendment of section 79   

In the principal Act, in section 79, in sub-section (1)-

(a)  in clause (i), the word "or" occurring at the end thereof, shall be omitted-

(b)  in clause (j), for the concluding words "Appellate Tribunal or a court", the words "Appellate Tribunal or a court; or", shall be substituted-

(c)  after the clause (j) as so amended and before the brackets and words "(in this Act referred to as "non-appealable orders")", the following shall be inserted, namely:-

"(k) a notice served on the person under sub-section (10) of section 84."

27. Amendment of section 81

In the principal Act, in section 81, in sub-section (2), in clause (a), after the words "received by the commissioner or" and before the words "the other party;"; the words "served upon" shall be inserted.

28.Amendment of section 86

In the principal Act, in section 86-

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

(4) Where a person who is required to be registered under this Act has failed to apply for registration within one month from the day on which the requirement arose, a person shall be liable to pay, by way of penalty, an amount equal to one thousand rupees per day, from the day immediately following the expiry of the said period until the person makes an application for registration in the prescribed form, containing such particulars and information and accompanied by such fee, security and other documents as may be prescribed:

Provided that the amount of penalty payable under this sub-section shall not exceed one lakh rupees.

(b) for sub-section (9), the following shall be substituted, namely;-

(9)  If a person required to furnish a return under Chapter V of this Act -

(a) fails to furnish any return by the due date; or

(b) fails to furnish with a return any other document that is required to be furnished with the return; or

(c) being required to revise a return already furnished, fails to furnish the revised return by the due date;

the person shall be liable to pay, by way of penalty, a sum of one hundred rupees per day from the day immediately following the due date until the failure is rectified:

Provided that the amount of penalty payable under this sub-section shall not exceed ten thousand rupees.

(c) after sub-section (20), the following shall be inserted, namely;-

(21) Where a casual trader who is required to be registered under this Act has failed to apply for registration within stipulated period, the casual trader shall be liable to pay, by way of penalty, an amount equal to five thousand rupees per day, from the day immediately following the expiry of the due date until the person makes an application for registration under this Act ;

Provided that the amount of penalty payable under this sub-section shall not exceed one lakh rupees.

(22) If a casual trader required to furnish a return under this Act-

(a) fails to furnish any return by the due date ; or

(b) fails to furnish with a return any other document that is required to be furnished with the return ;

the person shall be liable to pay, by way of penalty, a sum of one thousand rupees per day from the day immediately following the due date until the failure is rectified:

Provided that the amount of penalty payable under this sub-section shall not exceed ten thousand rupees.

(23) Where any person who, whether as principal, agent or in any other capacity organizes any exhibition- cum-sale in Delhi and fails -

(a) to furnish any information in respect of the goods brought or kept in stock or sold by any participant before or during or after the exhibition - cum-sale,; or

(b) to ensure that all such participants in the exhibition-cum-sale have obtained registration under this Act and paid due tax ; or

(c) to permit inspection of the business premises or goods or account and records of the participants ;or

 (d) to permit inspection of the accounts and records of the organizer in respect of the exhibition-cum-sale ;

such person shall be liable to pay, by way of  penalty,  a sum equal to  fifty thousand rupees or a sum equal to the amount of tax payable on such goods if such goods were sold in Delhi, whichever is greater.

29. Amendment of section 95

In the principal Act, in section 95-

(a) For the title words, "Dealer to declare name of manager of business", the words "Dealer to declare the name of the manager of business and permanent account number" shall be substituted;

(b) After sub-section (2), the following shall be inserted, namely:-

(3)  Every dealer liable to pay tax under this Act who is liable to obtain a   Permanent Account Number (PAN) under the Income Tax Act, 1961, (43 of 1961), shall communicate to the Commissioner, in the prescribed time and manner, the said number if he has obtained the same and, in any other case, shall state whether he has applied for the same and provide the details of the application

(4)  Any person who fails to furnish a declaration or, as the case may be, a revised declaration as provided in sub-section (1) and sub-section (2) of this section or fails to communicate the permanent account number obtained under the Income Tax Act, 1961 (43 of 1961) or as the case may be, fails to state whether he has applied for the same and fails to provide the details of the application, as provided in sub-section (3) of this section, shall be liable to pay by way of penalty, a sum of ten thousand rupees.  

30. Insertion of new section 100A

In the principal Act, after section 100, the following shall be inserted, namely:-

100A. Automation

(1)  The Government may, by notification in Official Gazette, provide that the provisions contained in  the Information Technology Act, 2000 (21 of 2000), as amended from time to time, and the rules made and directions given under that Act, including the provisions relating to digital signatures, electronic governance, attributation,  acknowledgement and dispatch of electronic records, secure electronic records and secure digital signatures and digital signature certificates as are specified in the said Notification, shall , insofar as they may, as far as feasible, apply to the procedures under this Act.

(2)  Where a notice or communication is prepared on any automated data processing system and is properly served on any dealer or person, then the said notice or communication shall not be required to be personally signed by the Commissioner or any other subordinate officer to him, or person and the said notice or communication shall not be deemed to be invalid only on the ground that it is not personally signed by the Commissioner.

31.Amendment of section 102 

In the principal Act, in section 102-

(a) In sub-section (2)-

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

(ua) the manner and the form in which the recovery certificate under section 43 of this Act is to be served and the amount mentioned in the said certificate is to be recovered.

(ii) for clause (ze), the following shall be substituted namely;-

(ze)the form and manner in which an objection under section 74 of this Act or an application for review under section 74B of this Act may be filed and the fee payable in respect thereof;

(iii) in clause (zk), for the words "the declaration" occurring after the words "manner in which" and before the words "under section", the words "the declaration or the communication" shall be substituted

(b) after sub-section (2), the following shall be inserted, namely;-

      (2A)Without prejudice to any provision made in this behalf, any rule made under this Act may be made so as to be retrospective to any date not earlier than the date of commencement of this Act:

      Provided that no rule shall be given effect retrospectively if it would have the effect of prejudicially affecting the interests of a dealer

32. Amendment of section 103

In the principal Act, in section 103-

(i) for the word "prospectively" occurring after the words "Seventh Schedules," and before the words "and thereupon", the words "either retrospectively or prospectively", shall be substituted.

(ii) To section 103 as so amended, the following proviso shall be inserted, namely:-

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

33.Amendment of section 105    

In the principal Act, in section 105, after sub-section (3), the following shall be inserted, namely:-

"(4)Where a dealer registered under the repealed Delhi Sales Tax on Works Contract Act, 1999 (Delhi Act 9 of 1999), (hereinafter referred to in this sub-section as "the repealed Act"), is liable to pay tax under this Act, and has at any time prior to the 1st day of April, 2005 entered into any works contract,  where the total contract value was inclusive of the tax payable under the repealed Act,  and the execution of the said work contract has continued after the 1st day of April, 2005, then the liability of the dealer to pay tax under this Act shall be discharged at the rates applicable under this Act, and the liability so discharged in respect of the said contract shall not exceed the liability which would have accrued under the repealed Act if it had continued to be in force and in the case of a dealer who had opted for composition of tax under the repealed Act, the liability under this Act in respect of a contract where the execution has started before the 1st day of April, 2005 and has continued thereafter shall not exceed the sum which would have been payable by way of composition in respect of the said contract under the repealed Act if it had continued to be in force.

Provided that the provisions of this sub-section shall be valid up to the 31^st day March of 2007.

Provided further that the provisions of this sub-section shall not apply where the contract value has been changed on account of increased liability under this Act.

      Provided also that the provisions of this sub-section shall apply only if there was no provision in the contract for revising the value of the contract on account of the change of tax liability."

(V.K.Bansal)

Joint Secretary (Law, Justice & L.A.)