An Act to provide for the levy of a general tax on the sale or purchase of goods in Punjab and for the repeal of the Punjab General Sales Tax Act, 1941.
It is hereby enacted as follows:-
Section 1. Short title extent and commencement
(1) This Act may be called 'the Punjab General Sales Tax Act, 1948.
(2) It extends to the whole of the State of Punjab.
(3) It shall come into force on the 1st May 1949.
Section 2. Definitions
In this Act, unless there is anything repugnant in the subject or context,
a. "Assessing authority" means any person authorised by the State Government to make any assessment under this Act
b. "Commissioner" means the Excise and Taxation commissioner appointed under sub-section (1) of section 3;
c. Omitted w.e.f 1-4-60 by Pb. Act 18 of 1960
d. "Dealer" means any person including a Department of Government who in the normal course of trade sells or purchases any goods in the State of Punjab irrespective of the fact that the main place of business of such person is outside the said State and where the main place of business of any such person is not in the said State, dealer includes the local manger or agent of such person in Punjab in respect of such business.
1. A co-operative society or a club or any association which sells or supplies goods to its members or purchases goods specified in Schedule C is a dealer within the meaning of this clause.
2. A factor, a broker, a commission agent, a dealer's agent, an auctioneer or any other mercantile agent by whatever name called, and whether of the same description as herein before mentioned or not, who carries on the business of selling, supplying or purchasing goods and who has in the customary course of business, authority to sell goods belonging to principals or to purchase goods on their behalf is a dealer.
3. for the purpose of this clause, "Government" will include the Central Government or the Government of any other State
(dd) "declared goods' means goods declared under section 14 of the Central sales Sales Tax Act, 1956, to be of special importance in inter-State trade or commerce.
(e) "Goods" means all kinds of movable property and goods consumed at business premises other than newspapers, actionable claims stocks, shares, or securities.
(f) "Prescribed" means prescribed by rules made under this Act.
(ff) purchase' with all its grammatical or cognate expressions, means the acquisition of goods specified in Schedule 'C' or of goods on the purchase where of tax is payable under any provision of this Act 1 for cash or deferred payment or other valuable consideration otherwise than under a mortgage, hypothecation, charge or pledge
(g) 'registered' means registered under this Act
(h) "sale" means any transfer of property in goods other than goods specified in Schedule C for cash or deferred payment or other valuable consideration, but does not include a mortgage, hypothecation, charge or pledge ;
(1) A transfer of goods on hire purchase or other installment system of payment shall, not withstanding that the seller retains a title to any goods as security for payment of the price, be deemed to be a sale.
(hh) 'Tribunal' means the Tribunal constituted under section 3 -A
(i) 'turnover' includes the aggregate of the amounts of (sales and purchases & parts of Sales and purchase) actually made by any dealer during the given period less any sum allowed as cash discount (and trade discount) according to ordinary trade practice, but including any sum charged for anything done by the dealer in respect of the goods at the time of or before, delivery thereof.
(1) The proceeds of any sale made outside the State of Punjab by dealer who carries on business both inside and outside Punjab shall not be included in the turnover.
(2) The turnover of any dealer in respect of transaction of forward contract, in which goods are actually not delivered, shall not be included in the turnover.
(j) 'Year' means the financial year
(k) 'import' means the bringing of goods into Punjab from any place outside its limits
(1) 'trade' 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 the motive to make profit and whether or not any profit accrues from such trade, commerce, manufacture, adventure or concern ; and
(ii) any transaction in connection with or ancillary or incidental to such trade, commerce, manufacture, adventure or concern.
Section 3. Taxing authorities
1. for carrying out the purposes of this Act the State Government may appoint a person to be Excise and Taxation Commissioner, and such other persons to assist him as it thinks fit.
2. Persons appointed under the sub- section (1) shall exercise such powers as may be conferred, and perform such duties as may be required, by or under this Act.
3. All persons appointed under subsection (1) and the Presiding Officer of the Tribunal shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code.
Section 3A. Constitution of Tribunal
1. The State Government shall, by notification in the official Gazette, constitute one or more Tribunals as the State Government may deem fit, to exercise the functions conferred by this Act.
2. A Tribunal shall consist of one person only to be appointed by the State Government.
3. A person shall not be qualified for appointment as a presiding Officer of a Tribunal, unless
a. he is serving or a retired judge of the High Court or
b. he is serving or a retired member of the Indian Adrninistrative Service who is or has been a Financial Commissioner.
4. No person shall be appointed or continue as a Presiding officer of a Tribunal, if he has attained the age of sixty-five years.
5. Subject to the provisions of sub-section (4), the term of office of the Presiding Officer of a Tribunal shall be three years and he shall not be eligible for re-appointment.
6. The Presiding Officer of a Tribunal shall be entitled to such salaries and allowances and shall be governed by such conditions of service as may be prescribed.
7. The Presiding Officer of a Tribunal may be removed from the office by the State Government, if -
a. he is adjudged an insolvent, or
b. he takes up employment outside the duties of his office ; or
c. in the opinion of the State Government,
i. he has become incapable of acting on account of unsoundness of mind or any other reason or
ii. he is guilty of such misconduct as would render him unfit to continue as Presiding Officer, or
iii. he is convicted of an offence involving moral turpitude.
8. The Presiding Officer of a Tribunal may, at any time by writing under his hand addressed to the State Government resign his office, but his resignation shall take effect from the date on which it is accepted.
(8-A) Nothing in subsections (5), (6),(7) and (8) will apply to a. serving Judge of the High court or to a serving member of the Indian Administrative Service appointed as presiding Officer of a Tribunal and they shall be governed by such conditions of service as are applicable to them as judge of the High court or member of the Indian Administrative Service, as the case may be :
Provided that the term of office shall not in either case exceed three-year.
9. A vacancy in the office of the Presiding Officer of a Tribunal shall be filled by the State Government as soon as practicable in accordance with the provisions of the Act and the proceedings before a Tribunal may be continued from the stage at which the vacancy is filled.
10. No order made and no act done or proceedings taken under this Act by or before a Tribunal shall be called in question in any manner on the ground merely of any defect in the constitution of the Tribunal.
11. Subject to such conditions and limitations as may be prescribed, a Tribunal shall have power to award costs, and the amount of such costs shall be recoverable from the person ordered to pay the same as arrears of land revenue.
12. Subject to any rules that may be made in this behalf, a Tribunal shall follow such procedure, as it may deem fit.
13. A Tribunal shall,, subject to any direction given by the State Government, sit at such place or places within its jurisdiction as it may deem fit.
14. The State Government may appoint such officers and servants as may be required to enable a Tribunal to carry out its functions under the Act.
15. The administrative expenditure of a Tribunal including all salaries, allowances and pensions, if any, payable to or in respect of the Presiding Officers and servants of a Tribunal shall be charged upon the consolidated fund of the State.
Section 3B. Jurisdiction of Tribunals in case there are more Tribunals than one
In the event of the State Government constituting more Tribunals than one, the State Government shall by notification, define the local limits of jurisdiction of each Tribunal and where an appeal, application or revision pending before a Tribunal relates to the local limits of an area which, as result of the issue of such a notification, has fallen within the jurisdiction of another Tribunal, such an appeal application or revision shall stand transferred to and be heard and decided by the other Tribunal.
Section 3C. Dissolution of Tribunal
Notwithstanding anything contained in sub-section (5) of section 3-A, where there are more Tribunals than one, the State Government may, at any time by reason of insufficiency of work pending before the Tribunals, dissolve any Tribunal and no Presiding Officer of the Tribunal affected by such dissolution shall have any claim against the State Government.
Section 4. Incidence of taxation
(1) Subject to the provisions of sections 5 and 6 every dealer except one dealing exclusively in goods declared tax - free under section 6 whose gross turnover during the year immediately proceeding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming, into force of this Act and purchases made after the commencement of the East Punjab General Sales Tax (Amendment) Act, 1958:
Provided that the tax shall not be payable on sales involved in the execution of a contract which is shown to the satisfaction of the assessing authority to have been entered into before the commencement of this Act.
(2) Every dealer to whom sub-section (1) does not apply or who does not deal exclusively in goods declared to be tax-free under section 6 shall be liable to pay tax under this Act on the expire of 30 days after the date on which his gross turnover during any year first exceeds the taxable quantum
Provided that in the case of a dealer who imports any goods for sale or use in manufacturing or processing, or who manufacturers or processes any goods for sale, the liability to pay tax shall commence with effect from the date on which his gross turnover 'during any year first exceeds the taxable quantum.
(2-A) Notwithstanding anything contained in sub-sections (1) and (2), no tax on the sale of any goods shall be levied if a tax on their purchase is payable under this Act.
(3) Every dealer who has become 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 gross turnover has failed to exceed the taxable quantum and such further period after the date of such expiry' as may be prescribed, and on the expiry of this later period his liability to pay tax shall cease.
(4) Every dealer, whose liability to pay tax has ceased under the provisions of sub-section (3) shall again be liable to pay tax under this Act with effect from the date on which his gross turnover first exceeds the taxable quantum.
(5) In this Act the expression "taxable quantum" means -
(a) in relation to any dealer who imports for sale or use in manufacturing or processing any goods in Punjab, Nil
Provided that the provisions of this clause shall not apply to a dealer who had placed orders for import of goods before the 8th August, 1952, but received such goods on or after that date and his gross import for sale or use in manufacturing or processing any goods in Punjab did not exceed Rs. 5,000 during the Year and he did not make any other import of goods after the said date
(b) in relation to any dealer, who himself manufactures or produces any goods for sale, 10,0001 rupees.
(bb) in relation to any dealer, who runs a tandoor, loh dhaba, hotel, restaurant halwal shop, bakery or other similar establishment wherein Indian food preparations, including tea, are served, 40,000 rupees.
(c) in relation to any particular classes of dealers not falling within clauses (a), (b) and (bb)l such sum as may be prescribed ; or
(d) in relation to any other dealer, 1,00,0001 rupees :
Provided that the registration of dealers already registered under this clause shall not be cancelled until their turnover in each of three consecutive years does not entitle them to cancellation under clause (b) of sub-section (6) of section 7.
Section 4A. Liability of dealer registered under Parliament Act NO.74 of 1956 to pay tax
A dealer registered under Central Sales Tax Act, 1956 (Parliament Act No. 74 of 1956) who is not liable to pay tax under section 4 shall nevertheless be liable to pay tax under this Act on any sale or purchase made by him inside the State of Punjab:
Provided that nothing herein shall apply to a dealer who deals exclusively in goods declared tax-free under section 6.
Section 4B. Levy of purchase tax on certain goods
Where a dealer who is liable to pay tax under this Act purchases any goods other than those specified in Schedule Bfrom any source and -
i. uses them within the Union Territory of Chandigarh (hereafter in this section referred to as the Union Territory) in the manufacture of goods specified in Schedule B, or
ii. uses them within the Union Territory in the manufacture of any goods, other than those specified in Schedule B, and sends the goods so manufactured outside the Union Territory in any manner other than by way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, or
iii. uses such goods for a purpose other than that of resale within the Union Territory, or sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, or
iv. sends them out side the Union Territory other than by the way of sale in the course of inter-State trade or commerce or in the course of export out of the territory of India, and no tax is payable on the purchase of such goods under any other provision of this Act, there shall be levied a tax on the purchase of such goods at such rate not exceeding the rate specified under sub-section (1) of section 5 as the Central Government may direct".
Section 5. Rate of tax
(1) Subject to the provisions of this act there shall be levied on the taxable turnover of a dealer a tax at such rates not exceeding seven paise in a rupee as the State Government may by notifications direct
This rate has been enhanced to 8 paise In a rupee vide Chandigarh Administration Notification No. 559-F (I1) (6) -9613161 dated 220.127.116.11
Provided that a tax at such rate, not exceeding ten paise in rupee, as may be so notified may be levied on the sate of goods as specified in Schedule 'A' appended to this Act from such date as the Government after giving by notification not less than twenty days notice of its intention so to do may by like notification add to or delete from this Schedule, and thereupon this Schedule shall be deemed to have been amended accordingly:
SCHEDULE for the 2nd and 3rd Provisio the following Provisio added vide Punjab Act No. 23 of 1975 as extended to Union Territory, Chandigarh on 18.104.22.168
Provided further that the rate of tax shall not exceed four paise in a rupee in respect of any declared goods
Explanation.- The amount of tax shall be calculated to the nearest rupee by ignoring fifty paise or less and counting more than fifty paise a one rupee.
(1-A) The State Government may by notification direct that in respect of such goods other than declared goods, and with effect from such date as may be specified in the notification the tax under sub-section (1) shall be levied at the first stage of sale thereof and on the issue of such notification the tax on such goods shall be levied accordingly:
Provided that no sale of such goods at a subsequent stage shall be exempt from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to the assessing authority in the prescribed form and manner a certificate duly filled in and signed by the registered dealer, from whom the goods were purchased.
Explanation.- For the purpose of this sub-section, the first stage of sale in respect of any goods in relation to any class of dealers shall be such as may be specified by the State Government in the notification.
(I-B). On and with effect from the date of extension of the Punjab General Sales Tax (Amendment and Validation), Act, 1978 to the Union Territory of Chandigarh, tax on margarine under sub-section (1) shall be levied at the first stage of sale thereof, which stage shall, -
(a) In the case of a dealer who brings into the Union Territory of Chandigarh margarine from any place outside the union Territory Chandigarh, be the stage of sale when such dealer sells margarine for the first time in the Union Territory of Chandigarh
(b) in the case of dealer who manufacture margarine with in the Union Territory of Chandigarh, be the stage of sale when such dealer sells margarine for the first time in Union Territory of Chandigarh ; and
(c) in the case of any other dealer who has not purchased margarine from a dealer referred to in the proceeding clause, be the stage at which such dealer sells margarine for the first time in the Union Territory of Chandigarh ,
Provided that no sale of margarine at a subsequent stage shall be exempted from tax under this Act unless the dealer effecting the sale at such subsequent stage furnishes to the assessing authority in the prescribed from and manner a certificate duly filled and signed by the registered dealer from whom the margarine was purchased.
(2) In this Act the expression "taxable turnover" means that part of a dealer's gross turnover during any period, which remain after detecting therefrom -
(a) his turnover during that period on -
(i) the sale of goods declared tax-free under section 6
(ii) Sales to a registered dealer of good other than sales of goods liable to tax at the first stage under sub-section (I-A) declared by him in a prescribed from as being intended for resale in the State of Punjab or Sale in the course of inter-State trade or commerce or sale in the course of export of goods out of the territory of India, or of goods specified in his certificate of registration for use by him in the manufacture in Punjab of any goods other than goods declared tax-free under section 6, for sale in Punjab, or sale in the course of inter State trade or commerce or sale in the course of export of goods out of the territory of India and on sales to a registered dealers of containers or other materials -for the packing of such goods :
Provided that in case of such sales, a declaration duly filled up signed by the registered dealer to whom the goods are sold and containing prescribed particulars on a prescribed form obtained from the prescribed authority is furnished by the dealer who sells the goods:
Proviso omitted vide Punjab Act No. 3 of 19731
(iii) Deleted by Punjab Act VI of 19521
(iv) sales to any undertaking supply in 'electrical energy to the public under a licence of sanction granted or deemed to have been granted under the Indian Electricity Act, 1910, of goods for use by it in the generation or distribution of such energy
(v) sales or purchases of goods falling under section 29;
(vi) the purchase of goods which are sold not later than six months after the close of the year to a registered dealer, or in the course of inter-State trade or commerce, or in the course of export out of the territory of India :
Provided that in the case of such a sale to a registered dealer, a declaration, in the prescribed form and duly filled and signed by the registered dealer to whom the goods are sold, if furnished by the dealers claiming deduction.,
(vii) such other sales or purchases as may be prescribed ;
(b) The amount of sales tax included in the gross turnover.
(3) Notwithstanding anything contained in this Act, -
(a) in respect of declared goods, tax shall be levied at one stage and that stage shall be -
(i) in the case of goods liable to the sales tax, the stage of sale of such goods by the last dealer liable to pay tax under this Act,
(ii) in the case of goods liable to purchase tax, the stage of purchase tax, the stage of purchase of such goods by the last dealer liable to pay tax under this Act ;
(b) the taxable turnover of any dealer for any period shall not include his turnover during the period on any sale or purchase of declared goods at any stage other than the stage referred to in sub-clause (1), or as the case may be, sub-clause (11) of clause (a).
Section 5A. Levy of additional tax
(1) notwithstanding anything contained in this Act there shall be levied and collected on the taxable turnover of a dealer, an additional tax which shall be calculated at the rate of ten per centum of the tax payable by him under this Act:
Provided that the aggregate of the tax and the surcharge payable under this Act, shall not exceed in respect of goods, declared to be of special importance in inter-State trade or commerce by section 14 of the Central Sales Tax -Act, 1956, the rate fixed by section 15 of that Act.
(2) Except as otherwise provided in sub-section (1), the provisions of this Act, shall, so far as may be, apply in relation to the additional tax leviable under sub-section (1) as they apply in relation to the tax leviable under any other provision of this Act.
Section 6. Tax free goods
(1) No tax shall be payable on the sale of goods specified in the first column of Schedule Bsubject to the conditions and exceptions, if any set out in the corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which are declared tax free from time to time under this section.
(2) The State Government, after giving by notification not less than twenty days notice of its intention so to do, may by the like notification add or delete from Schedule Band thereupon Schedule Bshall be deemed to be amended accordingly.
Section 7. Registration of dealers
(1) No dealer shall, while being liable to pay tax under this Act, carry on business as a dealer unless he has been registered and possesses a registration certificate.
(2) Every dealer required by sub-section (1) to be registered shall make application in this behalf in the prescribed manner to the prescribed authority.
(3) If the said authority is satisfied that an application for registration is in order, he shall, in accordance with such rules and on payment of such fees as may be prescribed, register the applicant and grant him a certificate of registration in the prescribed form which may specify the class or classes of goods for the purposes of sub-clause (ii) of clause (a) of sub-section (2) of section 5.
(4) The Commissioner may from time to time, by order, amend or cancel any certificate of registration on -
(a) information furnished under section 16 or
(b) information received that the dealer has violated any provision of this Act or the rules made thereunder -,or
(c) any other sufficient cause including misuse of the certificate or cessation of liability to payment of tax under this Act :
Provided that no order affecting any person adversely shall be made under this sub-section without affording a reasonable opportunity of being heard.
(5) When any dealer (has paid the amount of penalty imposed under section 231 in respect of any contravention of sub-section (1) of this section, the Commissioner shall register such dealer and grant him a certificate of registration, and such registration shall take effect as if it had been made under sub-section (3) of this section on the dealer's application.
(6) When -
(a) any business in respect of which a certificate has been granted upon application made under sub-section (2) has been discontinued or transferred; or
(b) the gross turnover of any such business has during each of three consecutive years failed to exceed the taxable quantum ; or
(c) the certificate of registration granted under the Central Sales Tax Act, 1956 to a dealer liable to pay tax by virtue of the provisions of section 4-A but who is not otherwise liable to pay tax under section 4, has been cancelled.
the commissioner shall cancel the registration and the cancellation shall come into force after the expiry of such period as may be prescribed.
Section 8. Voluntary Registration
(1) Any dealer except one dealing exclusively in goods declared tax-free under section 6 whose gross turnover during a year exceeds 15,000 rupees may notwithstanding that he may not be liable to pay tax under section 4, apply in the prescribed manner to the prescribed authority for registration under this Act.
(2) The provisions of sub-sections ('y) and (4) and clause (a) of sub-section (6) of section 7 shall apply in respect of application for registration under this section.
(3) Every dealer who has been registered upon application made under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act whether his gross turnover exceeds the taxable quantum or not.
(4) The registration of a dealer upon application made 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.
(5) Subject to the provisions of sub-section (4), a dealer registered upon application made under this section may apply in the prescribed manner not less than six months before -the end of a year to the authority which granted him his certificate of registration for the cancellation of such registration to take effect at the end of the year in which the application for such cancellation is made and the said authority shall, unless the dealer is liable to pay tax under section 4, cancel the registration accordingly.