Notification regarding rates on diesels, Cigarette and cigars & Cold drinks

GOVERNMENT OF PUNJAB

DEPARTMENT OF EXCISE AND TAXATION

(EXCISE AND TAXATION-I BRANCH)

NOTIFICATION

  1^st October, 2014

No. S.O. 163/ P.A.8/2005/S.8/2014.- Whereas the State Government is satisfied that circumstances exist, which render it necessary to take immediate action in public interest;

            Now, therefore, in exercise of the powers conferred by sub-section (3) of Section 8 of the Punjab Value Added Tax Act, 2005 (Punjab Act No.8 of 2005), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make  the following amendment in Schedule “E”, appended  to said Act, with immediate effect by dispensing with the condition of previous notice, namely :-

AMENDMENT

In the said Schedule,-

(i)            for serial number 1 and entries relating thereto, the following serial number and entries relating thereto, shall be substituted, namely:-

"(1) Diesel other than premium diesel                       9.75 per cent";

(ii)          in serial number 15,-

(a)  for item 3, the following item and entries relating thereto, shall be substituted, namely:

" 3 Cold Drinks, aerated drinks and soda      27.5 per cent";

and

(b)  for item 25, the following item and entries relating thereto, shall be substituted, namely:-

"25 Cigarette and Cigar                                    30 per cent".

           

               D.P. REDDY,

                 Financial Commissioner Taxation and

                                                                                            Secretary to Government of Punjab  
                                                                                            Department of Excise and Taxation.

   

E- Trip & E-ICC Mandatory on Paper Board

E- Trip & E-ICC Mandatory on Paper Board Sold By Manufacturers

Office of the Excise & Taxation Commissioner. Punjab

ORDER

In exercise of powers conferred upon me under Punjab VAT Act and Rules, 2005, I specify the following commodities under Rule 2(hh) for the purposes of Rule 64-A:- 

Sr. No.	Name of the Specified Goods
1.	Paper Board sold by manufacturers in the State of Punjab

2. Further, under Rule 64-A(3), I notify the maximum transition time for delivery of goods from one destination to another :-

For distance up to 100 Kms	6 Hours
For distance up to 200 Kms	10 Hours
For distance above 200 Kms	14 Hours

Chandigarh, dated,                                                                              Anurag Verma

the 2nd September,2014                                            Excise & Taxation Commissioner,

                                                                                                               Punjab

No.: P.A.E.T.C.898-A dt. 04.09.2014

Office of the Excise & Taxation Commissioner. Puniab

ORDER

In exercise of powers conferred upon me under Punjab VAT Act and Rules, 2005, I specify the following commodities under Rule 2(hh) for the purposes of Rule 64-B:- 

Sr. No.	Name of the Specified Goods
1.	Paper Board sold by manufacturers located in the State of Punjab

2. Further, under Rule 64-B(3), I notify the maximum transition time for delivery of goods from one destination to another :-

For distance up to 100 Kms	6 Hours
For distance up to 200 Kms	10 Hours
For distance above 200 Kms	14 Hours

Chandigarh, dated,                                                                              Anurag Verma

the 2nd September,2014                                            Excise & Taxation Commissioner,

                                                                                                               Punjab

No.: P.A.E.T.C.898 dt. 04.09.2014

Monthly return in form VAT-16 under the Punjab VAT Act has been made online

Monthly return in form VAT-16 under the Punjab VAT Act has been made online

Government of Punjab

Department of Excise & Taxation

Public Notice

Kind Attention: Dealers/Chartered Accountants/Lawyers/Other Stakeholders

Subject:-        Online filing of VAT-16.

                   We are pleased to announce that filing of monthly return in form VAT-16 has been made online. So, dealers will not have to visit our offices to submit VAT-16 in physical form. The monthly return for the month of August, 2014 and thereafter can be filed online through the form available on the website of the Department.

Excise and Taxation Commissioner, Punjab

Denial to grant Input tax credit on Flimsy Grounds by the VAT Authorities without following the settled law laid down by Hon’ble Supreme Court of India and by the High Courts

Denial to grant Input tax credit on Flimsy Grounds by the VAT Authorities without following the settled law laid down by Hon’ble Supreme Court of India and by the High Courts

Every Registered Dealer is the agent of Department of Excise & Taxation as while granting the registration, every registered dealer is authorized to collect the tax while selling the goods to the purchasers to make the accountability different types of annexures alongwith return are prescribed beside the maintenance of account books but unfortunately, now a days, VAT Authorities has failed to understand the basic spirit of Value Addition Tax as well as the concept of registration and cancellation.

         

As Registration is birth and cancellation is death so both are having their own role in the tax fields. Here it is pertinent to point out that while exercising both the powers which deals with grant of registration and cancellation must be exercised with extra cautious. As the scheme of the VAT Act clearly classifies  the liability of seller and purchaser but now a days VAT Authorities are disallowing the input tax credit mainly on the below mentioned grounds:

(a) Purchase from cancelled dealer   

(b) Paper Transactions

(c)  Purchase from bogus dealer

(d) Purchase from the sellers who has not deposited the tax

(e) Purchase from the sellers who has purchased the goods from the persons whose registration stands cancelled

That before arriving any conclusion the authority must apply their mind as they are enjoying the vast powers one of them is cross examination but number of times inspite of repeated requests, the authorities are denying the same although it is one of the effectious mode to arrive at the truth as well settled by the Hon’ble Supreme Court of India and by the different High Courts while deciding the below mentioned case:

1)                39-STC Page-478

2)                30-STC Page-211

3)                 5-PHT Page-350

4)                10-PHT Page-263

5)                 1-PHT Page- 79 (M/s. Devi Das Gopal Kishan Vs. State of Punjab)

6)                Swadeshi Polytex Ltd vs Collector of Central Excise, Meerut 2000 (122) ELT 641 has held at para 4 of the judgement as under: “In the facts and circumstances of the present case, we consider that this contention is well-founded. When the collector has to decide afresh, he should, if he intends to rely upon the statement of any such person, give an opportunity of cross-examination to the appellant.”

Flimsy Grounds on the basis of which VAT Authorities are disallowing the claims of genuine purchasers

(a)            Purchase from cancelled dealer   

Inspite of the settled law laid down by the Hon’ble Punjab and Haryana High Court delivered in the case of Arjan Radio House Vs. Assessing Authority reported in 31-STC-49 1973 on the Issue of cancelled dealer Authorities working under the Act failed to appreciate the same why so reason best known to them.

The Judgement throws the flood of light on the concept of credit from the purchases made from cancelled dealer as the Hon’ble Judges has observed that the knowledge regarding cancellation of TIN cannot in law be attributed to the purchasing taxable person like the appellant till the cancellation is published as provided in rule 13(6) of the Punjab VAT Act, 2005.

This issue was also clinched by the Delhi High Court while deciding the case of CST Vs. Hari Om Oil Co. (Delhi High Court 87-STC-493) and by different other High Courts like Bombay High Court while deciding the case of Suresh Trading Company Vs State of Maharashtra which was later on confirmed by the Hon’ble Supreme Court of India while deciding the case of State Of Maharashtra vs Suresh Trading Company on 7 February, 1996

1996 (3) SCALE 536, (1997) 11 SCC 378, 1998 109 STC 439 SC

                   It is equally well settled that registration cannot be cancelled retrospectively.  Your kind consideration is invited to the judgments reported as ADM Stores Vs. Commissioner of Sales Tax 18-STC-305 and M.C. Aggarwal Vs. Sales Tax Officer 64-STC-298.

That inspite of settled law the authorities working under the Act are not following the same even the provision of the  Act are followed whereas it is well settled by the Hon’ble Supreme Court of India that the authorities working are bound by the provisions of the Act.  Kind attention is invited Reliance is placed upon Supreme Court of India Ruling in the case of CCC Vs. Doaba Cooperative Mills 1198 (37) ELT –478 wherein, it has been that: -

“ Authorities functioning under an Act bound by its provisions”

(b)            Paper Transaction

It is astonishing that department is also rejected the claim of ITC on the ground that goods were not physical received by the purchaser and only bill was raised without appreciating that physical delivery is the basic ingredient to complete sale and in the absence of same the figure cannot be added in GTO if still department want to disallow the credit on purchases then automatically output tax is to be reduced. It is equally well settled by the Hon’ble Punjab and Haryana High Court while deciding the case Pahar Chand & Sons vs State of Punjab 30 STC 211. Even in certain circumstances where pre- intimation in the shape of E-Trips were given to the department in those cases too the department is raising the eyebrows by quoting that it is a case of paper transaction.

(c)Purchase from bogus dealer

That in number of cases department is rejecting the claim on the ground that seller is a bogus dealer but no action is usually taken against the seller and the claim of ITC of purchaser is disallowed without appreciating that the liability of seller cannot be shifted to buyer. Even this type of approach is burdening the purchaser as well as seller which ultimately resulted in excess recovery then the actual loss whereas it is well settled that assessee may be bad but assessing authority should not

(d) Purchase from the sellers who has not deposited the tax

That every seller is an agent of government who is to collect the tax and under an obligation to deposit the same but unfortunately the authorities are recovering their tax from the purchasers by disallowing their ITC inspite of the fact it is not permissible as per the scheme of the Act as the primary liability cannot be shifted as settled by the Hon’ble Supreme Court of India  

Star judgments of the Hon’ble Supreme Court and Hon’ble High Court

            Kind attention is invited towards the judgement of the Hon’ble Madras High Court in the case of the state of Tamil Nadu Vs. Raichael Chacko Reported in 59 STC 144, in which it was observed as under:

      “The assessee purchased rubber from the two persons, who were registered dealers and also had license from the rubber board, and claimed that those purchases were not the first purchases in the state and therefore the assessee was not liable to pay the purchase tax. The assessing authority rejected the claim on the ground that the two persons had merely lent their names without actually handling the goods and therefore the assessee should be taken to be the first purchaser of the rubber in the state. The Assessee’s appeal to the appellate assistant commissioner failed. The tribunal in the appeal held that the purchases of the rubber made by the assessee from the two persons were second purchases and therefore the sale of rubber being taxable only on first sales, the assessee who was not the first purchaser could not be made liable to pay the tax. The Tribunal also held that the ad hoc addition made by the Appellate Assistant Commissioner could not be legally sustained. On revision:

      Held that the tribunal came to the right conclusion. So long as the assessee’s purchases were second purchases from a person or persons who were then registered dealers, the assessee could not made liable to tax under section 3(2) of the Tamil Nadu General Sales Tax Act, 1959. Once there had been earlier purchase inside the state, it was for the revenue to proceed against the forst purchaser and merely had not paid the tax, they could not proceed against the second purchaser when the statute admittedly exempted the second sales from tax.”

 

    Second Authority on this point is 35 STC Page No. 50

      To claim benefit of tax on the ground that the sales effected by the assessee were second sale they need not show that their seller had in fact paid the tax at the first  point and it was enough for them to show that the earlier taxable sales and that the tax was really payable by their sellers.

      That this decision was affirmed by the Hon’ble Supreme Court of India in the state of Tamil Nadu Vs. Raman & Co. and others (93 STC 185), which is as under:

    

 “ From the decision of the Madras High Court in State of Madras Vs. Raman & Co. [1974] 33 STC Page no.1 to the effect that the assessee, which purchases condemned railway coaches sold by the railway department and components of nissen huts sold by the director of supplies and disposals and later dismantled them and sold the resultant timber and iron materials in bulk as scrap, was exempted from tax, because what the assessee purchased was scrap and when he sold the scrap later he was only a second seller, the state preferred an appeal to the supreme court. The Supreme Court dismissed the appeal holding that there was no merit in the appeal.”

      Decision of the Madras High Court in State of Madras Vs. Raman & Co. [1974] 33 STC page No. 1 affirmed.

      From the decision of the madras High court in Govindan & Co. Vs. State of Tamil Nadu [1975] 35 STC 50 to the effect that to claim benefit of tax on the ground that the sales effected by the assesses were second sales, they need not show that their sellers had in fact paid the tax at the First point and it was enough for them to show that the earlier sales were taxable sales and that the tax was really payable by their sellers, the state preferred an appeal to the Supreme Court. The Supreme court dismissed the appeal holding that there was no merit in the appeals.”

      From the above judgement it is crystal clear that once a proper vat invoice is given as prescribed under the law in a prescribed form has been furnished by a dealer to the assessing authority. The appellant is entitled to claim input tax credit from the payment of Vat tax. On a subsequent sales for the goods on which the vat tax has been paid at the stage of the first seller and it is not the duty of the subsequent seller to pay vat tax if the first seller has not paid the vat tax and it is the duty of the department to proceed against him and not the purchasing dealer.

(e)            Purchase from the sellers who has purchased the goods from the persons whose registration stands cancelled

Number of times the authorities raising the eyebrow while granting the input tax credit that the seller who has sold the goods has purchased the goods from the cancelled dealer and try their level best to deny the claim which is totally against the basic principle of concept of VAT

Conclusion

It is worthwhile to discuss that the officers who are passing the orders without following the settled law and the provision of the Act are just creating paper demands which is ultimately creating a mess for the revenue as well as the dealer as in these type of cases the department is not getting any revenue rather the machinery of the department is involved in unnecessary litigation and it has been rightly observed by the Hon’ble Judges of the Madras High Court reported in 92 STC Page No 621 that incompetent officer without knowledge of law are harmful both for the revenue and the state on the one hand and assessee on the other hand, if officers who do not have the knowledge and correct appreciation of the law and the principles upon which power to assess and realize tax is exercised, are appointed and allowed to hold office of responsibility, their such acts bring a bad name to the revenue administration so it is very necessary that while dealing with these situations the assessee should not be denied of his legitimate claim of input tax credit on flimsy grounds.

J S Bedi Advocate

Office at Jalandhar:
5/13, Central Town, Jalandhar-144001.

 Office at Punjab & Haryana High Courts:

Chamber no. 85

EFFECTS OF NOTIFICATION DATED 15.11.2013 ON INPUT TAX CREDIT WHICH IS APPLICABLE FROM 01.04.2014

Input tax credit is the amount which every taxable person who fulfills the conditions is entitled the claim the benefit of same while discharging his output tax liability. In other words, it can be said that after calculating the figure of Output tax liability the taxable person is liable to deposit the tax by deducting the figure of Input tax credit which taxable person avails under different circumstances which is explained as under:

(a)               INPUT TAX – As per Section 2 sub-clause (o) of the Punjab Value Added Tax Act, 2005, “input tax” in relation to a taxable person means value added tax (VAT), paid or payable under this Act by a person on the purchase of taxable goods for resale or for use by him in the manufacture or processing or packing of taxable goods in the State.

(b)               INPUT TAX CREDIT – As per Section 2 sub-clause (p) of the Punjab Value Added Tax Act, 2005, “input tax credit” means credit of input tax (in short referred to as ITC) available to a taxable person under the provisions of this Act.

o    Input tax includes tax paid on:

(i)                    Purchases of raw material;

(ii)                  Goods purchased for resale;

(iii)                Purchase of capital goods such as machinery or equipment for use in business;

(iv)                Tools and accessories used in business; and

(v)                  Packing material for resale and use in manufacture

o    Input tax credit or set-off is the allowance of input tax against the tax payable on the sale and purchase of goods.

o    Net VAT payable by a taxable person is equal to the output tax payable less available input tax credit.

o    for use in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-State trade or commerce or in the course of export.

Now the Excise & Taxation Department has introduced new amendment in Section 13(1)  w.e.f. 01/04/2014 which has changed the concept of availing the Input tax credit

After Amendment

Section 13(1) lays down as under:

13.  (1)   A taxable person shall be entitled to the input tax credit, in such  manner and subject to such conditions, as may be prescribed, in respect of input tax on taxable goods, including capital goods,  purchased by him from a taxable person within the State during the tax period:

"Provided that the input tax credit shall not be available as input tax credit unless such goods are sold within the State or in the course of inter-state trade or commerce or in the course of export or are used in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-state trade or commerce or in the course of export."

Prior to Amendment

13.  (1)   A taxable person shall be entitled to the input tax credit, in such  manner and subject to such conditions, as may be prescribed, in respect of input tax on taxable goods, including capital goods,  purchased by him from a taxable person within the State during the tax period:

Provided that such goods are for sale in the State or in the course of inter-State trade or commerce or in the course of export or for use in the manufacture, processing or packing of taxable goods for sale within the State or in the course of inter-State trade or commerce or in the course of export:

By virtue of this amendment the taxable person can only avail the input tax credit when such goods are sold or used in the manufacturing processing of taxable goods mean for sale.

EFFECTS OF THIS AMENDMENT

The major effect of this amendment is on every business community as earlier while calculating the output tax liability. The taxable person deducts the value of Input tax credit by considering the goods which were lying in the stock but now taxable person cannot avail the Input tax credit for the goods which were lying in the stock unless such goods are sold or used in manufacturing or processing.

Conclusion

No doubt that government will get the revenue immediately instead of getting two or three month later but this change will effect the trade circles as every dealer has to maintain more records for maintaining such type of cumbersome accountability which will ultimately create problems both for the dealers as well as for the officers   who has to keep check and to frame assessments.

Authored by

J S Bedi Advocate

Circular regarding Collection of C forms

Excise & Taxation Officer has issued a circular for collection of manual C forms for the third and Fourth Quarter of 2013-14. The copy of the circular is enclosed herewith

ADVANCE TAX LEVIED ON FIVE NEW ITEMS

ADVANCE TAX LEVIED ON FIVE NEW ITEMS W.E.F. 7^TH MARCH, 2014  UNDER THE PUNJAB VAT ACT, 2005

Punjab Government has levied advance tax on five new items in addition to the previous list of thirty items w.e.f. 7^th March, 2014. The list of the items added are mentioned below:

31. Plastic Fabric and Bags                       5.5%
32. Paper Board                                        5.5%
33. Brass                                                   5.5%
34. Nickel                                                 5.5%
35. Timber                                               5.5%

The copy of notification is reproduced for kind reference:

PUNJAB GOVT. GAZ. (EXTRA), MARCH 11, 2014
(PHGN 20, 1935 SAKA)
403
452/03-2014/Pb. Govt. Press, S.A.S. Nagar
PART III
GOVERNMENT OF PUNJAB
DEPARTMENT OF EXCISE AND TAXATION
(EXCISE AND TAXATION-II BRANCH)
NOTIFICATION

The 7th March, 2014 No.S.O.20/P.A.8/2005/S.6/Amd.(1)/2014.-Whereas the State Government is satisfied that circumstances exist, which render it necessary to take immediate action in public interest; Now, therefore, in exercise of the powers conferred by sub-section (7) of section 6 of the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make the following amendment in the Government of Punjab, Department of Excise and Taxation, Notification No. S.O. 90/P.A.8/2005/ S.6/2013 dated the 04th October, 2013, namely:-

AMENDMENT

In the said notification, in the Table, after serial Number 30, and entry relating thereto, the following shall be added, namely:-

31. Plastic Fabric and Bags        5.5%
32. Paper Board                         5.5%
33. Brass                                    5.5%
34. Nickel                                  5.5%
35. Timber                                 5.5%
 

D.P. REDDY,
Financial Commissioner Taxation and
Secretary to Government of Punjab,
Department of Excise and Taxation

Registration / Amendment/ Cancellation Under The Punjab Value Added Tax Act, 2005

VAT system is to rationalize the tax burden and bring down in general the price level and to bring in simplicity and transparency in the tax structure thereby improving the tax compliances and eventually to ensure revenue growth and for that registration plays vital role and for obtaining the same certain documents and process is involved  it is an effort to compile all the provisions relating to liability, amendment, cancellation of registration under the Punjab Vat Act, 2005

Registration Liability

Who are Liable                                                        Turnover Exceeds

A Manufacturer                                                              1 Lac

A Person, running Restaurant or Hotel                            5 Lac

A person who is running a bakery                                  10 Lac

An Importer of taxable goods for sale or

use in Manufacturing activities within the

State                                                                              1 Lac

A Person who receives goods on

consignment or branch transfer basis from

within or outside the State on which no tax

paid under this Act                                                         1 Lac

A person liable to pay purchase tax under

Section 19                                                                      1 Lac

A person who wants voluntary registration                       10 Lac

A person dealing in taxable goods, who is

registered under the Central Sales Tax Act,

1956                                                                               Nil

Any other person for VAT                                              50 Lac

Any Person for TOT Registration                                    5 Lac

Detail of Documents required for New Registration Number under the Punjab VAT Act, 2005 and Central Sales Tax Act, 1956.

1.     Form VAT-1.

2.     Central Sales Tax Form.

3.     Rs.2, 000.00 for Registration Certificate Fee under Punjab VAT Act, 2005 &Punjab Municipal Fund.

4.     Surety Bond or Bank Guarantee.

a)     Under Punjab VAT Act, 2005 in favour of Excise & Taxation Officer- Cum- Designated Officer, Jalandhar.

b)    Under CST Act, 1956, Jalandhar.

c)     Each Rs. 50,000.00 ( Fifty Thousand Only)

5.     Affidavit.

6.     Purchase Bill outside the State as required under VAT & CST Act.

7.     4 Passport Size Photo.

8.     Proof of place of Business.

9.     Residence Proof of Person.

10.                        MOA and AOA in case of Company.

11.                        Bank Account of the Firm / Company.

12.                        Copy of PAN Card of the Firm / Company.

13.                        Partnership Deed in case of Partnership.

14.                        Nature of Business

a) Detail of Items required for manufacturing / resale / use in Work Contract.

Persons liable to register.

Section 21 (1) No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act.

(2) Every person required to be registered under sub-section (1), shall make an application for registration, within a period of thirty days from the date when such person becomes liable to pay tax under this Act, in the prescribed manner to the designated officer.

(3) If the designated officer is satisfied that the application for registration is in order, he shall, in accordance with such manner and on payment of such fee, as may be prescribed, register the applicant and grant him a registration certificate in the prescribed form:

Provided that if the designated officer is satisfied that the particulars contained in the application are not correct, or are incomplete or that any evidence or information required for registering the applicant, is not furnished, he may, after necessary inquiry and after giving the applicant an opportunity of being heard, reject the application for reasons to be recorded in writing.  However, the applicant may submit a fresh application for registration in accordance with the provisions of

this Act:

Provided further that during the pendency of an application for registration, he shall file return and pay the due amount of tax, in the prescribed manner.

(4) Where a person has contravened the provisions of sub-section (1), the designated officer shall, subject to action under section 52 or section 60, as the case may be, register such person and grant him a registration and such registration shall take effect as if, it had been granted under sub-section (3) on the application made by the person.

(5) When any person, who was registered before the appointed day under the repealed Act, and continues to be so registered on the day, immediately before such appointed day, and is liable to pay tax under this Act on such appointed day, the designated officer shall, within thirty days of receipt of application in the prescribed form, issue to such person, in the prescribed manner, a fresh registration under this Act for VAT or TOT, as the case may be.

(6) For the purpose of identification of taxpayers, the Commissioner or the  designated officer, shall issue a VAT Registration Number ( hereinafter in short referred to as VRN) to every taxable person and TOT Registration Number (hereinafter in short referred to as TRN) to every registered person.

(7) Every taxable person or a registered person, who is allocated a registration number, shall mention his VRN or TRN, as the case may be, in all returns, forms or any other documents, used for the purposes of this Act.

(8) Every person, who is liable to pay tax, and who is a Hindu undivided family or an association of persons, club or society or firm or company or, who is engaged in business as the guardian or trustee or otherwise on behalf of another person, shall make a declaration to the designated officer, stating the name of the person or persons, who shall be deemed to be the manager or managers of such person’s business for the purposes of this Act.

(9) Save as otherwise provided in section 77, a registration, granted under this Act, shall be personal to the person to whom it is granted and shall not be transferable.

Voluntary registration for VAT

Section 22

(1) Subject to the provisions of sub-section (3) of section 6, any person except one dealing exclusively in goods declared tax-free under section 16, may apply in the prescribed manner to the designated officer for registration under this Act.

(2) The provisions of sub-sections (2), (3) and (5) of section 21, shall apply in respect of applications for registration under this section.

(3) Every person, 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.

Amendment of registration.

23. The designated officer may from time to time, by order in writing, amend registration on information furnished under section 76.

Cancellation of registration

24. (1) The designated officer may, on an application made to him, or otherwise, by an order in writing, cancel registration, on -

(a) an information received that a business, in respect of which a registration was granted under sub-section (3) of section 21, has been discontinued; or

(b) an information received that the person has violated any of the provisions of this Act or the rules made there-under; or

(c) non-filing of return or non-payment of due tax under this Act; or

(d) any other sufficient cause including misuse of the registration or cessation of liability to payment of tax under this Act; or

(e) the registration granted under the Central Sales Tax Act, 1956, to a person liable to pay tax by virtue of the provisions of section 7, but who is not otherwise liable to pay tax under section 6, has been cancelled.

(2) Where registration is cancelled under this section without making an application by the person concerned, no order for such cancellation shall be passed by the designated officer, without affording an opportunity of being heard.

Security from certain classes of persons.

25. (1) Every person applying for registration under this Act, shall furnish a security of rupees fifty thousand in the manner, prescribed for securing proper and timely payments of tax or any other sum, payable by him under this Act:

Provided that the security already furnished by a person registered under the repealed Act, shall be deemed to have been furnished under this Act.

(2) The designated officer granting registration, may, on application made by a person for release, discharge or refund of the security, order the release, discharge or refund of the whole security or any part thereof, furnished by him, if the same is not required

Explanation.- The designated officer shall not be required to retain security or surety furnished by a person on behalf of a taxable person or registered person, if the registration of such a person has been cancelled under this Act and nothing remains due against such a person.

(3) Where it appears expedient to the designated officer, granting registration, so to do, for the proper realisation of, tax payable under this Act, he may, at any time while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the person, to whom the registration has been granted, to furnish within such time, as may be specified in the order and in the prescribed manner, such additional security, not exceeding rupees two lac in addition to the security, furnished under sub–section (1), as may be specified in the order, for the aforesaid purpose:

 (4) The designated officer, granting the registration, may, by an order in writing, for good and sufficient cause, forfeit or realise the whole or any part of the security or additional security furnished by a person for recovery of any amount of tax or penalty due or payable by a person:

Provided that no order shall be passed under this sub-section without giving the person concerned, an opportunity of being heard.

(5) In case the security is rendered insufficient because of the order made under sub–section (4), the person concerned shall furnish further security to make up for the amount, which has fallen short, in such manner and within such time, as may be prescribed.