CHAPTER VIII

OFFENCES, PROSECUTION AND PENALTIES

Section 58: Offences and Prosecution

(1) Any person who-

(a) fails to pay without reasonable cause within the time

allowed the tax assessed on him under this Act; or

(a) not being a registered dealer, falsely represents that he is or was a registered dealer at the time when he sells or buys goods ; or

(b) being liable to pay tax under this Act, carries on business as a dealer beyond thirty days from the date on which he becomes liable to obtain registration without applying for registration under and in accordance with the provisions of Section 15 or Section 16; or

© refuses to permit or refuses or neglects to produce for inspection or examination any book , document or account or refuses to display materials in a computer or in a computer floppy or refuses to allow copies or print out to be taken in accordance with the provisions of Section 42; or

(d) issues a false tax invoice, retail invoice, bill, cash memo, voucher or other documents which he knows or has reasons to believe, to be false; or

(e) acts in contravention of the provisions of this Act or the rules made thereunder,

shall, without prejudice to his liability under any other law for the time being in force, and in addition to the recovery of tax or any other dues payable by him under this Act, on conviction, be punishable with fine which may extend to five thousand rupees, and where the default is a continuing one, to a further fine which may extend to rupees one hundred for every day after the first day during which the default continues:

Provided that in the event of a second or subsequent conviction under clause (a) of this sub-section, the minimum punishment to be warded shall be a fine of two thousand or the amount of tax involved in the offence, which ever is lesser.

(2) Notwithstanding any thing contained in sub-section (1), any person who willfully-

(a) submits a false return of turnover under this Act; or

(b) being liable to pay tax under this Act fails to submit without reasonable cause return of his turnover under the provisions of this Act, or the rules made thereunder, or fails to deposit the tax before or alongwith the return as provided in Section 23; or

© maintains or produces false accounts , registers or documents;or

(d) issues or furnishes a false certificate or declaration by reason of which a tax on sale or purchase ceases to be leviable under this Act or the rules made or the notifications issued thereunder; or

(e) makes a false verification or declaration on an application for registration or in connection with any other proceeding under this Act; or

(f) evades payment of tax which he is liable to pay under this Act; or

(g) obstructs or prevents an officer empowered under Section 42 from performing any of the functions specified in Section 42 or Section 43; or

(h) participates in an unlawful assembly with a view to prevent or obstruct an officer from performing his functions or discharging his duties under this Act; or abuses or threatens an officer; or

(i) issues a false tax invoice, or retail invoice or bill or cash memo without sale of goods shown in such tax invoice or retail invoice or bill or cash memo ;or

(j) receives a false tax invoice or retail invoice or bill or cash memo from a dealer without purchase of goods shown in such tax invoice or retail invoice or bill or cash memo; or

(k) claims an input tax credit on the basis of false tax invoice or retail invoice or bill or cash memo; or

(l) uses or furnishes a prescribed form of declaration or certificate which has not been obtained by him or his authorized agent from the prescribed authority in the prescribed manner; or

(m) transfers a prescribed form of declaration or certificate to any other dealer or person except for lawful purposes; or

(n) receives or possesses a prescribed form of declaration or certificate which has not been obtained in accordance with the provisions of this Act or the rules made thereunder ;or

(o) produces a false proof of deposit of any amount of tax or fee, or penalty or any sum due under this Act,

(p) tampers with any seal put under sub-section (7) of Section 42; or

(q) demands or charges on the sale of purchase of any goods any tax, not due under the provisions of this Act; or

® refuses or neglect to furnish any information which may be in his knowledge or possession and which he has been required to furnish for the purpose of this Act, or furnishes information which is false in any material particulars; or

(s) carries on or continues to carry on business as a dealer without furnishing the security demanded under Section 20; or

(t) imports or transport or attempts to import or transport or abets the import or transport any goods in contravention of the provisions of Section 48 and Section 49; or

(u) fails to obtain authorisation for transit of goods or to deliver the same in contravention of the provisions under Section 50; or

(v) fails to pay the amount in respect to which moratorium has been granted under provisions of Section 79, within the time specified therein,

shall, without prejudice to his liability under any other law for the time being in force, and in addition to the recovery of tax or any other dues payable by him under this Act, on conviction, be punishable with simple imprisonment which may extend to one year or with fine not exceeding ten thousand rupees, or both, and where the default is a continuing one, a further fine which may extend to two hundred rupees for every day after the first day during which default continues:

Provided that in the event of a second or subsequent conviction the minimum punishment to be awarded shall be simple imprisonment for a term of three months;

Provided further that notwithstanding any thing contained in this sub-section, no person shall be proceeded against the relevant offence if the total amount of tax evaded or attempted to be evaded is less than five thousand rupees during an assessment year.

(3) Nothing in Chapter XXXVI, of the Code of Criminal Procedure, 1973 shall apply to-

(i) any offence punishable under this Act; or

(ii) any other offence which under the provisions of that Code may be tried along with such offence, and

every offence referred to in clause (i) or clause(ii) may be taken cognizance of by the Court having jurisdiction under this Act as if the provisions of that chapter were not enacted;

Provided that no Court shall take cognizance of any offence under this Act or under the rules made thereunder except with the previous sanction of the Commissioner, and no Court inferior to that of a Magistrate of Ist class shall try any such offence.

Section 59: Offences by Companies

(1) If the person committing an offence under this Act is a company, the company as well as every person-in-charge of, and responsible to, the company for the conduct of its business at the time of commission of the offence shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

(2) Notwithstanding any thing contained in sub-section(1), where an offence under this Act has been committed by a company and it is proved that this offence has been committed with the consent or connivance of, or that the commission or the offence is attributable to any neglect on the part of any director, manager, managing agent or any other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation : For the purpose of this Section-

(w) “company” means any body corporate and includes a firm or other association of individuals; and

(b) ” director” in relation to a firm means a partner in the firm.

Section 60: Composition of Offences

(1) If the assessing authority has reasons to believe that any person has committed or is reasonably suspected of having committed an offence under this Act, he may, either before or after the institution of proceedings of any offence punishable under Section 58 or under the rules made under this Act, accept from such person by way of composition of such offences-

(i) where the offence consists of a failure to pay any tax recoverable under this Act, a sum of money not exceeding double the amount of tax in addition to the tax so recoverable;

(ii) where the offence consists of an evasion of any tax recoverable under this Act, a sum of money not exceeding rupees one thousand or double the amount of tax recoverable, which ever is greater, in addition to the amount of the tax recoverable;

(ii) where the offence consists of import or transport or abetment to import or transport of any goods in contravention of provisions of Section 48, a sum of money not less than the amount of tax involved under any of the provisions of this Act but not more than three times of the amount of such tax or forty percent of the value of goods involved which ever is higher;

(iii) in other cases a sum not exceeding five thousand rupees.

Provided that in case where proceedings have already been instituted the

assessing authority shall exercise the powers under this Section, with the permission of the Commissioner or any other officer authorised by him for this purpose.

Explanation: For the purpose of this Section the assessing authority includes an officer not below the rank of Commercial Tax Officer Grade II.

(2) On payment of such sum as may be determined by the assessing authority under sub-section (1) no further proceedings shall be taken against the accused person in respect of the same offence and any proceedings, if already taken, shall stand abated.

Section 61: Offences and Penalties

(1) If the assessing authority is satisfied that any dealer or other person-

(i) has, without reasonable cause failed to furnish the return of his turnover or to furnish it within the time allowed and in the manner prescribed; or

(ii) has submitted a false return of his turnover under this Act; or

(iii) has concealed particulars of his turnover or has deliberately furnished inaccurate particulars of such turnover; or

(iv) has maintained or produced false accounts, registers or documents; or

(v) has, without any reasonable cause failed-

a. to deposit the tax due under the Act, before furnishing the return or along with the return the tax due, or

b. to pay within the time allowed the tax due under the provisions of the Act; or

c. to deposit with the return , the amount realised as tax in excess of the amount due under the Act or any amount in lieu of such tax by giving it any name or colour; or

(vi) fails to issue a tax invoice, or a retail invoice, bill or cash memo in accordance with the provisions of Section 63, or has issued a tax invoice or a retail invoice with incomplete or incorrect particulars or having issued such invoice he has failed to account for it correctly in his books of accounts; or

(vii) fails to issue a challan or transfer invoice or transport memo in respect of dispatch or delivery of goods in accordance with the provisions of this Act; or

(viii) being liable for registration under this Act carries on or continues to carry on business beyond thirty days from the date on which he becomes liable to obtain registration, without obtaining registration or with out furnishing the security demanded under Section 20; or

(ix) makes a false verification or declaration on an application for registration or in connections with any other proceedings under this Act; or

(x) refuses to permit or refuses or neglects to produce for inspection or examination any book, document or account or display materials in a computer or in a computer floppy or refuses to allow copies or printout to be taken in accordance with the provisions of Section 42; or

(xi) obstructs or prevents an assessing officer, an officer authorized under sub-section (3) of Section 25, an officer empowered under Section 42 or the officer-in-charge of check post or barrier established under Section 47 from performing any of his functions under this Act; or

(xii) provokes or invites other person or persons with a view to prevent an officer from performing his functions under the Act or participates in an unlawful assembly with a view to prevent an officer from discharging his duties under this Act, or abuses or threatens any officer; or

(xiii) closes or leaves the place of his business with a view to prevent inspection under this Act or the rules made thereunder; or

(xiv) refuses or neglects to furnish any information which may be in his knowledge or possession and which he has been required to furnish for the purposes of this Act, or furnishes information which is false in any material particulars; or

(xv) issues or furnishes a false or a wrong form of declaration or certificate or issues a tax invoice, retail invoice, bill or cash memo with out sale of goods by reason of which a tax on sale or purchase ceases to be leaviable under this Act or the rules made thereunder; or

(xvi) makes use of a prescribed form of declaration or certificate which has not been obtained by him or his principal or agent in accordance with the provisions of this Act or the rules made thereunder; or

(xvii) transfers a prescribed form of declaration or certificate to any other person except for lawful purposes under the provisions of this Act or the rules made thereunder ; or

(xviii) realizes any amount as tax on sale on purchase of goods or any amount in lieu of such tax by giving it any different name or colour in contravention of the provisions of sub-section (1) or sub-section (2) of Section 22; or

(xix) wrongly claims an amount as input tax credit or claims an input tax credit on the basis of false tax invoice, retail invoice, bill or cash memo; or

(xx) produces a false proof of deposit of any amount of tax or fee or penalty or any sum due under this Act; or

(xxi) imports or transports, or attempts to import or transport, abets the import or transport any goods in contravention of the provisions of Section 48 or Section49;or

(xxii) fails or refuses to stop or keep stationary his vehicle or vessel when asked to do so by the officer-in-charge of a checkpost or barrier established under Section 47 or by an officer empowered under Section 42; or

(xxiii) fails to obtain authorization for transit of goods or to deliver the same, as provided in Section 50; or

(xxiv) being a transporter or forwarding agent who receives any goods from the driver or person in charge of a vehicle coming from out side the State for carrying them out side the State but fails to prove that goods have been carried out side the State; or

(xxv) being a transporter or hirer or driver or person in charge of a vehicle has prepared documents showing the destination of goods to a place out side the State, fails to produce copies of authorisation for transit of goods along with goods before the officer-in-charge of the exit checkpost and/or fails to prove that after obtaining authorisation for transit from officer-in-charge of the entry checkpost, goods have been carried out side the State; or

(xxvi) does not maintain books, accounts, documents in the prescribed manner; or

(xxvii) receives or possesses with an intention to cause loss to the revenue, any prescribed form of declaration or certificate which has not been obtained by him or his principal or agent in accrodance with the provisions of this Act or the rules made thereunder; or

(xxviii) knowingly uses a false registration number including the registration number of another person, with a view to evade or avoid or shift the liability to pay the tax; or

(xxix) fails to furnish the audit report in contravention of the provisions of Section 65; or

(xxx) otherwise acts in contravention of the provisions of this Act or the rules made thereunder,

(xxxi) fails to pay the amount in respect to which moratorium has been granted under provisions of Section 79, within the time specified therein,

it may, after such inquiry as deemed necessary, direct that such dealer or person shall pay, by way of penalty, in addition to the tax, if any, payable by him,-

(a) in a case referred to in clause (viii), a sum of rupees two hundred for each month or part thereof for the default during the first three months and rupees five hundred for every month or part thereof after the first three months during which the default continues,

(b) in a case referred to in clause (v) and clause (xxxi), a sum not less than ten percent but not exceeding twenty five percent, of the amount due if the amount due is upto ten thousand rupees and fifty percent, if the amount due is above ten thousand rupees,

© in a case referred to in clause (xviii) a sum not less than the amount of tax but not exceeding three three times of the amount of tax relasised,

(d) in a case referred to in clause (i), clause (xiii),clause (xiv) , clause (xxvi), clause (xxix) and clause (xxx), a sum not exceeding five thousand rupees;

(e) in a case referred to in clause (ii), clause (iii), clause (iv), clause (ix), clause (x), clause (xi), clasue (xii) , clause(xxii) and clause (xxviii) a sum not exceeding ten thousand rupees,

(f) in a case referred to in clause(xix) and clause (xx) a sum of rupees five thousand or three times of the amount claimed whichever is higher,

(g) in a case referred to in clause (xv), clause (xvi) clause (xxi), clause (xxiii), clause (xxiv) and clasue (xxv) a sum not exceeding forty percent of the value of goods involved or three times of tax leviable on such goods under any of provisions of this Act, which ever is higher,

(h) in a case referred to in clause (vi) and clause (vii) a sum of rupees one hundred or double the amount of tax involved, which ever is higher for the first default, or two hundred rupees or four times of the tax involved which ever is higher, for the second and each subsequent default,or

(i) in a case referred to in clause (xvii) and clause (xxvii) a sum equal to three times of the amount of tax treating the turnover of the goods liable to tax or forty percent of value of the goods mentioned on it which ever is higher, and if the form of declaration or certificate is blank, a sum not exceeding ten thousand rupees;

Explanation: the assessing authority includes an officer not below the rank of Commercial Tax Officer Grade II posted at the checkpost or an officer authorised to exercise powers under Section 42 or Section 43 or both, as the case may be.

(2) A copy of the order passed under sub-section (1) shall be served on a dealer or the person concerned and the amount imposed by way of penalty shall be deposited by such dealer or person in the prescribed manner within thirty days of such service failing which it may be recovered as if it were an arrear of land revenue.

(3) No order shall be made under sub-section (1), unless the dealer or the other person concerned has been heard or has been given a reasonable opportunity of being heard.

(4) No prosecution under Section 58 shall be instituted in respect of the same facts on which a penalty imposed under this Section has been paid in addition to the tax due.

(5) The provisions of this Section shall mutatis mutandis be applicable to the executer, administrator and the legal representative of the deceased person.