JKNP & ASSOCIATES

9. Levy and Collection of Tax and Penalties

(1) The tax payable by any dealer under this Act on sales of goods effected by him in the course of inter-State trade or commerce, whether such sales fall within clause (a) or clause (b) of Section 3, shall be levied by the Government of India and the tax so levied shall be collected by the Government in accordance with the provisions of sub-section (2), in the State from which the movement of the goods commenced:

1. Sub-section (8) is as amended from 10th September 2004 by Section 118(b) of Finance Act (23 of) 2004.

2.The meaning given in this clause for the term in a zone which the Central Government may be notification, in the Official Gazette specify in this behalf.

Provided that, in the case of sale of goods during their movement from one State to another, being a sale subsequent to the first sale in respect of the same goods and being also a sale which does not fall within sub-section

(2) of Section 6, the tax shall be levied not collected---

(a) where such subsequent sale has been effected by a registered dealer in the State from which the registered dealer obtained or, as the case may be, could have obtained, the form prescribed for the purposes of clause[a] of sub- section [4] of section 8 in connection with the purchase of such goods, and

(b) where such subsequent sale has been effected by an unregistered dealer in the State from which such subsequent sale has been effected. 

(2) Subject to the other provisions of this Act and the rules made there under, the authorities for the time being empowered to assess, re-assess, collect and enforce payment of any tax under the General Sales Tax law of the appropriate State, shall on behalf of the Government of India, assess, re-assess, collect and enforce payment of tax, including any interest or penalty payable by a dealer under this Act as if the tax or interest or penalty payable by such a dealer under this Act is a tax or interest or penalty payable under the General Sales Tax law of the State; and for this purpose they may exercise all or any of the powers they have under the General Sales Tax law of the State and the provisions of such law, including provisions relating to returns, provisional assessment, advance payment of tax, registration of the transferee of any business, imposition of the liability of a person carrying on business on the transferee of, or successor to, such business, transfer of liability of any firm or Hindu undivided family to pay tax in the event of the dissolution of such firm or partition of such family recovery of tax from third parties, appeals, reviews, revisions, references, refunds, rebates, penalties, charging or payment of interest compensation, of offences and treatment of documents furnished by a dealer is confidential shall apply accordingly;

Provided that if any State or part thereof there is no general sales tax law in force, the Central Government may, by rules made in this behalf make necessary provisions for all or any of the matter specified in this sub-section.

(2-A) All the provisions relating to offences, interest and penalties (including provisions relating to penalties in lieu of prosecution for an offence or in additions to the penalties or punishment for an offence but excluding the provisions relating to matters provided for in sections 10 and 10-A) of General sales Tax law of each state shall, with necessary modifications, apply in relation to the assessment, reassessment, collection and the enforcement of payment of any tax required to be collected under this Act in such State or in relation to any process connected with such assessment, re-assessment, collection or enforcement of payment as if the tax under this Act were a tax under such Sales Tax Law. 

(2-B) If the tax payable by any dealer under this Act is not paid in time, the dealer shall be liable to pay interest for delayed payment of such tax and all the provisions for delayed payment of such tax and all the provisions relating to due date for payment of tax, rate of interest for delayed payment of tax and assessment and collection of interest for delayed payment of tax, of the General Sales Tax law of each State, shall apply in relation to due date for payment of tax, rate of interest for (a) of have been omitted by Section 5of the Taxation (Amendment) Act(16 of) 2007, from 1st April 2007. delayed payment of tax, and assessment and collection of interest for delayed payment of tax under this Act, in such States as if the tax and the interest payable under this Act were a tax and an interest under such Sales Tax law.

(3) The proceeds in any financial year of any tax, including any interest or penalty, levied and collected under this Act in any State (other than a Union Territory) on behalf of the Government of India shall be assigned to that State and shall be retained by it; and the proceeds attributable to Union Territories shall form part of the Consolidated Fund of India.