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THE BIHAR VALUE ADDED TAX ACT, 2005

Title : THE BIHAR VALUE ADDED TAX ACT, 2005

Year : 2005



(1) Every person, being-

(a) A dealer, who is not registered under this Act, by a notice served in the manner prescribed by the prescribed authority;

(b) A registered dealer (other than a dealer permitted under section 15 to pay tax at a fixed rate in lieu of the tax payable by him),shall furnish a true and complete return in respect of all his transactions relating to sales, purchases, receipts and despatches of goods and any other transactions prescribed specifically for each month, on or before the end of the next following month to the prescribed authority in such form and in such manner as may be prescribed.

(2) Without prejudice to the provisions contained in sub-section (1), every person, being-

(a) A dealer, who is not registered under this Act, by a notice served in the manner prescribed by the prescribed authority;

(b) A registered dealer (other than a dealer permitted under section 15 to pay tax at a fixed rate in lieu of the tax payable by him),shall furnish a true and complete statement in respect of all his transactions relating to sales and purchases of goods and any such details as may be prescribed for each completed quarter on or before the end of the month following the end of the quarter to the prescribed authority in such form and in such manner as may be prescribed.

(3) Every registered dealer shall furnish to the prescribed authority, on or before the due date, a true and complete return in respect of every financial year in the form and manner prescribed.

Explanation.- In this sub-section, "due date" means -

(a) Where the dealer is a company within the meaning of the Companies Act, 1956 (1 of 1956), the 30th day of November of the year following the year to which such return relates;

(b) Where the dealer is a person, other than a company,-

(i) In a case where the accounts of the dealer are required under this Act or any other law to be audited or where the report of an accountant is required to be furnished under section 54, the 31st day of October of the year following the year to which such return relates;

(ii) In any other case, the 31st day of July of the year following the year to which such return relates.

(4) Every dealer who has been permitted to pay tax under section 15 shall file a quarterly abstract statement for each completed quarter on or before the end of the month following the end of the quarter to the prescribed authority in such form and in such manner as may be prescribed.

(5) If the due date prescribed for the filing of quarterly statement or monthly return or quarterly abstract statement or annual return happens to be a holiday, the next date on which the office opens shall be deemed to be the due date.

(6) Notwithstanding anything contained in sub-section (1) or sub-section (2), the prescribed authority may, for specific reasons to be recorded in writing, extend the date of filing such return or quarterly statement, as the case may be, subject to the condition that such an extension may be allowed only once and for a period not exceeding thirty days from the due date; but the Commissioner may allow extension beyond thirty days for reasons to be recorded in writing subject to the condition that such an extension may be allowed only once and that also for a period not exceeding three months.

(7) If a dealer, having furnished a monthly return under sub- section (1) or the quarterly statement under sub-section (2), discovers any omission or wrong statement therein, he may furnish a revised return or statement, as the case may be, in the form and manner prescribed to the prescribed authority at any time before the due date within the meaning of sub-section (3):

Provided
that no such return or statement shall be taken into consideration if, upon information or otherwise and for reasons to be recorded in writing, the prescribed authority is satisfied that the return or statement originally furnished was deliberately false or that it was furnished with intent to defraud the State Government of its revenue.

(8) If a dealer fails to furnish the return within the time specified under sub-section (1) or the quarterly statement under sub-section (2) or the quarterly abstract statement under sub-section (4), the prescribed authority shall, after giving such a dealer an opportunity of being heard in the manner prescribed, impose a penalty at the rate of twenty-five rupees for every day of such failure.

(9) (a) Every dealer liable to furnish the return under sub-section (1) shall also deposit the tax payable, according to the return on or before the fifteenth day of the following month in such manner as may be prescribed and shall enclose the proof of payment in the form and manner prescribed along with the return.

(b) Every dealer permitted to pay tax under section 15 shall also deposit the tax, arrived at after applying the rate specified in the notification issued under section 15 to his quarterly turnover, on or before the fifteenth day of the month following the quarter to which it relates and shall enclose the proof of payment in the form and manner prescribed along with the statement required to be furnished under sub-section (4).

(c) Subject to the provisions of sub-section (10), if any registered dealer submits a revised return under sub-section (7) and if the amount of tax due from such dealer according to the revised return is higher than the amount which was due according to the original return, such revised return shall be accompanied by a receipt showing the payment of extra amount of tax in the manner provided in clause (a).

(10) If a dealer, required to furnish the return under sub-section (1) or statement under sub-section (4), fails to pay the amount of tax payable according to the provisions of sub-section (9), such dealer shall be liable to pay interest-

(a) In respect of tax payable under sub-section (9), by him in accordance with the return or the quarterly abstract statement or revised return, as the case may be; or

(b) In respect of the tax payable for the period for which he has failed to furnish returns under sub-section (1) or quarterly abstract statement under sub-section (4),at the rate of one and a-half per cent. per month of the amount due from the date the tax so payable had become due to the date of its payment.

Explanation.- For the purposes of this sub-section-

(i) Where the period of default in payment of tax covers a period less than a month, the interest payable on such tax in respect of such period shall be computed proportionately;

(ii) "Month" shall mean thirty days.

(11) Any interest levied or penalty imposed under this section shall be without prejudice to any action, which is or may be taken under section 81.(12) A rebate at the rate of half per cent. of the amount of tax admitted to be due in the return furnished under sub-section (1), subject to a maximum of fifty thousand rupees in a year, shall be allowed to a registered dealer who has furnished the return within the due dates specified under this section and has paid such amount in full on or before the date specified for payment of tax under this section.



(1) The prescribed authority shall, within the time and in the manner prescribed, scrutinize every return filed under sub-sections (1) and (3) of section 24 for the purpose of ascertaining that-

(a) All calculations contained therein are arithmetically accurate;

(b) The output tax, the input tax, the tax payable and interest payable, if any, have been computed correctly and properly;

(c) The rates of tax have been applied correctly; and

(d) Evidence, as prescribed, has been furnished with regard to payment of tax and interest payable, if any.

(2) If, upon scrutiny under sub-section (1), the prescribed authority discovers any error, he shall serve a notice in the prescribed form on the concerned dealer directing him to-

(a) Pay, within thirty days, the extra amount of tax along with the interest, if any, payable and furnish the challan evidencing such payment; or

(b) Explain, within thirty days, that the return or returns filed by him do not suffer from any error and all requirements specified in clauses (a) to (d) of sub-section (1) have been complied with.

(3) (a) The prescribed authority shall, in a case falling under clause (b) of sub-section (2) and after giving the dealer a reasonable opportunity to adduce necessary evidence, pass such order in the matter as it may deem fit.

(b) If, pursuant to an order under clause (a), any tax or interest is found to be payable by a dealer, a notice in the form and manner prescribed, shall be served upon the dealer requiring him to pay the tax and interest within the time as may be prescribed.

(c) Any tax or interest payable under clause (b) shall be deemed to be an arrear of tax within the meaning of section 39.



(1) Subject to the provisions of section 25, the tax due in respect of a financial year from every registered dealer, who has furnished the return and statement mentioned in section 24, shall be deemed to have been assessed.

(2) Notwithstanding anything contained in sub-section (1), the Commissioner may, in the interest of revenue, select any registered dealer for detailed audit of his business, on the basis of a selection model as may be prepared for such purpose, incorporating therein such criteria as may be deemed fit by the Commissioner.

(3) The audit of the business of a dealer selected under sub- section (2) shall be conducted, within a period of twenty-four months from the due date within the meaning of sub-section (3) of section 24, in such manner as may be prescribed.



(1) If a registered dealer fails to furnish before the due date specified under sub-section (3) of section 24-

(a) The returns specified under sub-section (1) or sub-section (3) of section 24; or

(b) The quarterly abstract statement under sub-section (4) of section 24; or

(c) The statement under sub-section (2) of section 24,the prescribed authority shall, after giving the dealer a reasonable opportunity of being heard, assess to the best of its judgment, the amount of tax due from the dealer and interest, if any.

(2) Any assessment made or interest levied under this section shall be without prejudice to any action, which is, or may be, taken under section 81.



(1) If upon information which has come into his possession, the prescribed authority is satisfied that reasonable grounds exist to believe that any dealer has been liable to pay tax under this Act in respect of any period, and has nevertheless willfully failed to apply for grant of certificate of registration, or, having so applied, failed to furnish any particulars or information required for the purposes of section 19, the prescribed authority shall, after giving the dealer a reasonable opportunity of being heard, assess, to the best of its judgment, the amount of tax due, if any, from the dealer in respect of such period and all subsequent periods; and the prescribed authority may, direct that the dealer shall pay, by way of penalty, in addition to the amount of tax so assessed, a sum of one hundred rupees for every day of the period during which the dealer failed to apply for registration or failed to furnish any particulars or information required for the purposes of section 19 or an amount equal to the amount of tax assessed, whichever is higher:

Provided
that no proceeding for such assessment shall be initiated except before the expiry of two years from the expiry of the period to which it relates:

Provided further that a proceeding initiated under this sub-section shall be completed within a period of four years from the date of initiation.

(2) Any assessment made, interest levied or penalty imposed under this section shall be without prejudice to any action which is, or may be, taken under section 81.



Notwithstanding anything contained in any other provision of this Act, where the assessment involves a decision on a point which is concluded against any of the authorities specified in sub-section (1) of section 10 by a judgment of the Tribunal and an appeal has been filed under section 79, then unless otherwise directed by the High Court, the prescribed authority may complete the assessment as if the point was not so decided against such authority, but shall stay the recovery of such of the dues including tax, penalty, interest or amount forfeited, if any, in so far as they relate to such point, until the decision by the High Court and after such decision, may modify the assessment order, if found necessary, after giving the dealer a reasonable opportunity of being heard.



(1) Notwithstanding anything contained in section 19, or section 26 and subject to such rules as may be prescribed, it shall be open to the prescribed authority or any other officer authorised by the Commissioner in this behalf to make provisional or final assessment of turnover of sale or purchase of goods, as the case may be, effected by any dealer residing outside the State of Bihar and carrying on business temporarily by way of fair, mela or by way of any other similar mode in the State of Bihar.

(2) If a dealer referred to in sub-section (1) claims that the sales affected by him are not of goods imported by him, the onus to prove such claim shall lie on the claimant.



(1) If the prescribed authority is satisfied, either on the basis of audit conducted under sub-section (3) of section 26 or otherwise, that reasonable grounds exist to believe that, in respect of any assessment under this Act or under the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, during any period, any sale or purchases of goods liable to tax under this Act or the said Act, for any reason, has been under-assessed or has escaped assessment, or has been assessed to tax at a lower rate, or any deduction therefrom has been wrongly made, or an input tax credit has incorrectly been claimed, the prescribed authority shall, in such manner as may be prescribed and after serving on the dealer a notice in the form and in the manner prescribed, proceed to assess or re-assess, as the case may be, the tax payable by such dealer within four years from the expiry of the year during which the original order of assessment or re-assessment was passed, in a case where the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, and the provisions of this Act shall, so far as may be, apply accordingly as if the notice under this sub-section was a notice under section 27:

Provided that the amount of tax shall be assessed or re-assessed after allowing such deductions as were allowable during the said period and at the rates at which it would have been assessed had the turnover not escaped assessment.

(2) (a) The prescribed authority shall, in a case where the dealer has concealed, omitted or failed to disclose full and correct particulars of such sale or purchase or input tax credit, direct that the dealer shall, besides the amount of interest payable under sub-section (10) of section 24, pay by way of penalty, a sum equal to three times the amount of tax which is or may be assessed on the turnover of sale or purchase which escaped assessment.

(b) The penalty imposed under clause (a) shall be in addition to the amount of tax, which is or may be assessed on the turnover of sale or purchase which escaped assessment.

(3) Any assessment or re-assessment made and any penalty imposed under this section shall be without prejudice to any action, which is or may be taken under section 81.



(1) If the prescribed authority is satisfied that any registered dealer-

(a) Has concealed any sales or purchases or any particulars thereof, with a view to reduce the amount of tax payable by him under this Act; or

(b) Has furnished incorrect statement of his turnover or incorrect particulars of his sales or purchases in the return furnished under sub-section (1) of section 24 or quarterly statement under sub-section (2) of section 24 or quarterly abstract statement under sub-section (3) of section 24; or

(c) Has claimed input tax credit in excess of the amount of input tax credit to which he is entitled under this Act,the prescribed authority shall, after giving such a dealer an opportunity of being heard in the prescribed manner, by an order in writing, direct that he shall, besides the amount of interest payable under sub-section (10) of section 24 and in addition to any tax which may be determined to be payable by him under the Act, pay by way of penalty, a sum equal to three times the amount of tax on the concealed turnover or on concealed or incorrect particulars or excess input tax credit claimed.

(2) The penalty under sub-section (1) may be imposed before completion of assessment, and for determining the amount of penalty, the prescribed authority may quantify the amount of tax provisionally in the prescribed manner.

(3) Any penalty imposed under sub-section (1) shall be without prejudice to any action, which is or may be taken under section 81.



Where an objection has been made by the Comptroller and Auditor-General of India in respect of an assessment or re-assessment made or scrutiny of any return filed under this Act, the prescribed authority shall proceed to re-assess the dealer with respect to whose assessment or re-assessment or scrutiny, as the case may be, the objection has been made in the manner prescribed:

Provided that no order under this section shall be passed without giving the dealer an opportunity of being heard.



No assessment and demand on account of any tax, interest or penalty shall be invalid or affected by reason only of any mistake in the name, residence, place of business or status of any person liable to pay the tax, interest of penalty or by reason only of clerical error or other defect of form, if the provisions contained in this Act and the rules made there under have, in substance, been complied with.



(1) For the purposes of this Act, the taxable turnover of a dealer shall be that part of his gross turnover which remains after deducting therefrom-

(a) The aggregate value of the transactions specified in section 6;

(b) Sale price on account of sales exempted under section 7;

(c) In the case of works contract, the amount remaining after deducting from the gross value of the contract the amount on account of the following, namely:-

(i) Labour charges for execution of the works contract,

(ii) Amount paid to sub-contractor on account of labour and services,

(iii) Charges for planning, designing and architects fees,

(iv) Charges for obtaining on hire, the machineries and tools used in the execution of the works contract,

(v) Cost of consumables such as water, electricity, fuels, etc., used in execution of the works contract, the property in which is not transferred in the course of execution of a works contract,

(vi) Cost of establishment of the contractor to the extent, it is relatable to supply of labour and services,

(vii) Other similar expenses relatable to supply of labour and services,

(viii) Profit earned by the contractor to the extent it is relatable to the supply of labour and services, and

(ix) Goods or transaction exempted under section 6 or section 7;

(d) Value of goods transferred otherwise than by way of sale;

(e) The value of goods sold but returned to the dealer within a period of six months from the date of the original sales and in respect of which the selling dealer has issued to the purchasing dealer a credit note specified in section 53;

(f) Sale price at the subsequent stages of sale of such goods as are specified in Schedule IV as being subject to tax at the first point of their sale in the State of Bihar, if necessary evidence as required by sub-section (2) of section 13 are filed along with the return filed by the dealer under sub-section (3) of section 24.

(2) Where a dealer claims that he is not liable to pay tax on any part of his gross turnover in respect of any goods by reason of transfer of such goods by him to any other dealer or to his agent or to his principal, as the case may be, for sale, the burden of proving such claim shall be on the dealer and for this purpose, along with other evidences as may be prescribed, he shall furnish before the prescribed authority a declaration in a form and in the manner prescribed.



The tax payable by a dealer shall be calculated according to the following formula, namely:-

T = A-B

Where-

T means the tax payable by the dealer,

A means the output tax under this Act, and

B means the total amount of input tax credit allowable to the dealer under section 16 or section 17.



Except for a proceeding under sub-section (2) of section 26, section 28, sub-section (1) of section 31 and section 33, no proceeding for assessment of tax payable by a dealer under this Act in respect of any period shall be initiated and completed except before the expiry of two years from the expiry of such period:

Provided
that a proceeding for re-assessment in pursuance of or as a result of an order on appeal, revision or review shall be initiated and completed before the expiry of one year from the expiry of the year during which such order was communicated to the assessing authority:

Provided further that the Commissioner may, on being satisfied that it is necessary so to do and for reasons to be recorded in writing, extend in a case or class of cases, the said period of two years to such further period not exceeding two years.



In computing the period of limitation prescribed for assessment or re-assessment, as the case may be, under section 27 or section 28 or section 29 or section 30 or section 31 or section 32 or section 33, the time during which any assessment or re-assessment proceedings remained stayed under the order of any competent court shall be excluded.



(1) The tax payable under this Act shall be paid in the manner hereinafter provided.

(2) The amount of-

(i) Tax estimated in advance under sub-section (7) of section 3, or

(ii) Tax due according to the returns filed by the dealer where full payment of such amount has not been made, or

(iii) Tax assessed or re-assessed under section 26 or section 27 or section 28 or section 29 or section 30 or section 31 or section 32 or section 33 or in pursuance of or as a result of an order on appeal, revision or review, less the sum, if any, already paid by the dealer, or

(iv) Interest chargeable or penalty imposed, if any, under any of the provisions of this Act,shall be paid by the dealer or the person concerned into a Government Treasury or a bank authorised in this behalf by the State Government, or in such other manner as may be prescribed and by such date as may be specified in a notice issued by the prescribed authority for this purpose and the date to be specified shall, ordinarily, not be less than thirty days from the date of service of such notice:

Provided that the authority may, in respect of any particular dealer or a person, and, for reasons to be recorded in writing, extend the date of such payment, or allow such dealer to pay tax or interest due and the penalty, if any, by installments in the manner prescribed:

Provided further
that where the prescribed authority considers it expedient in the interest of revenue, it may, for reasons to be recorded in writing, require any dealer, or person, to make such payments forthwith.

(3) If a dealer or a person fails to make payment of any amount of tax by the period specified in the notice issued under sub-section (2) or fails to make payment of tax by the date extended or has defaulted in making payment of installments under the first proviso of the said sub-section, the dealer shall, for such failure or default, pay, in addition to the amount of tax, an amount by way of simple interest calculated at the rate of one and a-half per cent. for each calendar month or part thereof on the amount of such tax.

(4) Where, in course of any proceeding, the prescribed authority finds that any dealer has-

(i) Wrongly claimed either the whole or part of his turnover as not taxable and, has consequently, paid lesser amount of tax than payable by him; or

(ii) Wrongly declared his turnover or any particulars thereof and thereby has reduced the amount of tax payable under this Act; or

(iii) Wrongly claimed input tax credit in excess of what he is entitled to under this Act,the dealer shall pay, in addition to the amount of tax assessed under any proceeding as aforesaid, simple interest at the rate of one and a-half per cent. for each calendar month or part thereof on the difference of the amount previously admitted and tax finally assessed from the date, the tax would have been payable had the dealer not committed any of the acts mentioned in clause (i) or clause (ii) or clause (iii):

Provided
that where the recovery of tax or any part thereof assessed under any proceeding under this Act is stayed as a result of an order on appeal or by any competent court, the amount of such interest shall be recoverable after the final order is passed and such order is confirmed from the date the tax first became due.

(5) If a dealer or a person has failed, without reasonable cause, to make payment of any amount of tax by the date specified in the notice issued under sub-section (2) or forthwith as required by the second proviso thereto, or in like manner has failed to make payment of tax and interest by the date extended under the first proviso of the said sub-section or has defaulted in payment of installments or has not paid the amount of interest due, the prescribed authority, after giving the dealer a reasonable opportunity of being heard, may direct that the dealer shall pay, in the prescribed manner, by way of penalty for such failure, an amount which shall be five per cent. per month of the amount payable following the expiry of such date for each subsequent month and part thereof.

(6) Subject to the provisions of sub-sections (2), (4) and (5), any amount of tax, interest together with penalty, if any, which remains unpaid after the date specified in the notice issued under sub-section (2), or penalty imposed under sub-section (5) and remaining unpaid shall, without prejudice to any other mode of recovery, be recoverable as if it were an arrear of land revenue:

Provided that where an appeal in respect of such amount has been entertained under section 72, the appellate authority may, subject to such rules as may be made by the State Government under this Act, stay recovery of such amount or portion thereof for so long as the appeal remains pending or for such shorter period as the said authority may consider to be adequate.



(1) Subject to the provisions of section 6, any person responsible for paying sale price or any amount purporting to be the full or part payment of sale price in respect of sales or supplies of taxable goods exceeding rupees two lakh fifty thousands during a year made to the State Government or the Central Government or a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled either wholly or partly by the State Government or the Central Government, shall, at the time of payment, subject to such conditions and restrictions as may be prescribed, deduct an amount at the rate as may be specified by the State Government, by a notification, on account of tax on the amount of such payment:

Provided
that the rate or rates to be specified by the State Government shall not be more than the rate of tax applicable to the goods sold or supplied.

(2) Notwithstanding any law or contract to the contrary, the person making such deduction shall be lawfully competent to make such deduction.

(3) The payment of the amount deducted under sub-section (1) into the Government Treasury in the prescribed manner, shall be the liability of the person making such deduction.

(4) The payment of the amount deducted under sub-section (1) into the Government Treasury by the person making the deduction shall be deemed to be a payment by or on behalf of the seller or supplier concerned.

(5) If any person contravenes any or all of the provisions of sub-sections (1), (3) and (4), he shall be liable to pay, by way of penalty, a sum not exceeding twice the amount of tax deductible under sub-section (1):

Provided
that such penalty shall not be imposed unless the person contravening the provisions is given an opportunity of being heard by the prescribed authority.

(6) The provisions of sections 39 and 47 for recovery of any amount of tax due from a dealer shall, mutatis mutandis, apply for recovery of any amount of tax deducted or any penalty imposed but not deposited under this section.

Explanation.-For the purposes of this section, the "person" in this section shall include all officers or authorities who are competent or authorised to make payment of the sale-price in respect of sales to the State Government or the Central Government or to a company, corporation, Board, authority, undertaking or any other body owned, financed or controlled wholly or partly by the State Government or the Central Government.

(7) The provisions of sub-section (5) of section 41 shall, mutatis mutandis, apply, so far as it relates, to issuance of certificate to person from whose bills deduction has been made and for filing of quarterly statements by the person making the deductions.



(1) Subject to the provisions of section 6, every person, responsible for making any payment in discharge of any liability on account of valuable consideration payable in respect of transfer of property in goods (whether as goods or in some other form) vested in the execution of a works contract shall be lawfully competent to deduct an amount at the rate or rates, not exceeding four per cent. to be specified by the State Government, in a notification published in the Official Gazette, purporting to be a part or full amount of tax payable on the sale of such goods from every bill or invoice raised by the works contractor as payable by the person and no such payment or discharge of any such bill or invoice raised by a works contractor shall be made without deduction as aforesaid.

Explanation.-For the purposes of this section, the "person" in this section shall include all officers and authorities of the Central or the State Government or of a company, corporation, Board, authority, co-operative societies, undertaking or any other body constituted or formed under any Act and of any firm or association of persons and organisation:

Provided that, the State Government may prescribe the conditions subject to which no such deductions shall be made.

(2) No such payment or discharge of any bill or invoice raised in respect of transfer of property in goods (whether as goods or in some other form) by a works contractor shall be made without the deduction referred to in sub-section (1):

Provided
that no deduction under sub-section (1) shall be made where the payment is made as advance prior to the commencement of the execution of such works contract until it forms part of the sale price payable for transfer of property in goods (whether as goods or in some other form):

Provided further that no deduction under sub-section (1) shall be made from the payment or any part thereof, where-

(a) The payment or any part thereof does not relate to any transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract;

(b) The dealer produces a certificate issued by the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, in-charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no further liability to pay tax in terms of the provisions of section 15 of the Central Sales Tax Act, 1956 (74 of 1956)

(c) The dealer produces a certificate issued by the Deputy Commissioner, Commercial Taxes or the Assistant Commissioner, Commercial Taxes or the Commercial Taxes Officer, in charge of the concerned Circle to the effect that the payment or any part thereof relates to such transfer of property in goods (whether as goods or in some other form) on which he has no liability to pay tax in terms of the provisions of section 6.

(3) The amount deducted under sub-section (1) shall be adjusted against the amount of tax finally assessed or determined as being payable by the concerned works contractor and any amount deducted in excess of the tax so assessed or determined shall be refunded in accordance with the provisions of this Act.

(4) The deduction referred to in sub-section (1) shall be made in the manner prescribed.

(5) The person making the deduction shall issue a certificate, in the form and manner prescribed, containing such particulars as may be required to be mentioned therein, to the works contractor or person from whose bill or invoice such deduction has been made and such certificate shall be deemed to be a valid discharge of liability in terms of provisions of sub-section (9) of section 24 to the extent of amount of deduction made under sub-section (1).

(6) If any person contravenes any or all of the provisions of sub-sections (1), (2) and (5), the prescribed authority shall, after giving a reasonable opportunity of being heard, by order in writing direct that such person shall pay by way of penalty, a sum not exceeding twice the amount of tax deductible or deducted and not deposited in the Government Treasury.

(7) The provisions of sections 39 and 47 shall, mutatis mutandis, apply for recovery of any amount of tax deducted but not deposited into the Government Treasury or any penalty imposed under this section.



Notwithstanding anything contained in any law for the time being in force, no person shall be awarded by-

(i) The State Government; or

(ii) The Central Government; or

(iii) A company, corporation, board, authority, undertaking or any other body which is owned, financed or controlled either wholly or partly by the State Government or the Central Government,any contract involving sale or supply of goods and no person shall be granted any licence to carry on any trade or commerce unless he produces to the State Government or the Central Government or the company, corporation, board, authority, undertaking or any other body which is owned, financed or controlled either wholly or partly by the State Government or the Central Government, a tax clearance certificate, granted by the prescribed authority in the form and manner prescribed, to the effect that the prescribed authority has no objection to the awarding of such contract or the granting of such licence to the person concerned:

Provided
that no such certificate shall be granted to any person who is not a registered dealer under this Act or, being a registered dealer, has made a default in the payment of any tax, penalty or interest due under this Act:

Provided further
that if a person not liable to tax under this Act applies for the grant of certificate under this section and in whose case the value of the contract or, as the case may be, the anticipated turnover in the immediately succeeding twelve months exceeds the limit specified in sub-section (2) of section 3, he shall be granted such certificate subject to the condition that he shall furnish, to the prescribed authority, an undertaking to the effect that he shall apply for grant of certificate of registration in the manner and within the period prescribed and in the event of failure to do so the concerned Government or person or authority shall terminate the contract awarded to the person.



(1) Without prejudice to the provisions of sections 40 and 41, no person, who is not a registered dealer, shall collect from any person any amount, by whatever name or description it may be called, towards or purporting to be tax on sale of goods.

(2) No registered dealer shall collect from any person any such amount exceeding the amount arrived at after applying the rate of tax specified under section 14 to the sale price of the goods sold.

(3) If any person or a registered dealer contravenes the provisions of sub-section (1) or sub-section (2), the prescribed authority shall, after giving an opportunity of being heard in the manner prescribed, by an order in writing direct that such person or registered dealer shall pay by way of penalty a sum equal to twice the amount collected in contravention of the provisions of sub-sections (1) and (2).



(1) Any amount collected, by any person in contravention of the provisions of sub-section (1) or sub-section (2) of section 43 or any amount collected by any person by way of tax, by whatever name called, or in any other manner not payable under any provision of this Act, shall be liable to forfeiture to the State Government.

(2) If the prescribed authority, in the course of any proceeding under this Act or otherwise, has reason to believe that any amount is liable for forfeiture under sub-section (1), it shall serve, on the person who has collected such amount, a notice in the prescribed form requiring him to show cause why the said amount should not be forfeited to the State Government and on receipt of the reply, if any, and after making such inquiries as may be deemed fit, he shall make an order of forfeiture if the amount is found so liable.

(3) Where an order of forfeiture under sub-section (2) has been made, the person making the unauthorised collection shall forthwith pay the amount so forfeited to the State Government, if it has not already been paid and on his failure to do so, such amount shall be recoverable from him as if it were a tax due from him.

(4) Where an order for forfeiture is passed, the Commissioner shall publish or cause to be published, in the prescribed manner, a notice for information of the persons from whom the amount so forfeited had been collected giving such details as may be prescribed.

(5) On the publication of the notice under sub-section (4) a refund of such amount or part thereof may be claimed from the State Government within one year from the date of publication of the said notice by the person from whom it was unauthorisedly realised by way of tax and for this purpose the person claiming the refund shall make an application in the prescribed form.

(6) On receipt of an application under sub-section (5), the Commissioner shall hold such enquiry as he deems fit and if he is satisfied that the claim is valid and admissible and that the amount so claimed as refund was actually paid to the State Government and no refund or remission in respect of that amount was granted, the Commissioner shall refund such amount or any part thereof to the person concerned.

(7) Notwithstanding anything contained in this Act or in any other law for the time being in force, where any amount collected by any person is forfeited to the State Government under this section, such forfeiture shall, if the amount forfeited has been paid to the State Government, discharge him of the liability to refund the amount to the person from whom it was so collected.



Any tax, interest or penalty payable under this Act shall be rounded off to the nearest ten rupees and shall be paid accordingly.



(1) All authorities appointed under section 10 shall, for the purpose of recovery of tax, interest and penalty under this Act, have the same powers as are vested in the certificate officer under the Bihar and Orissa Public Demand Recovery Act, 1914 (Bihar and Orissa Act 4 of 1914).

(2) Any proceeding under sub-section (1) before any authority appointed under section 10 shall be deemed to be a proceeding for recovery of the public demand under the Bihar and Orissa Public Demands Recovery Act, 1914 (Bihar and Orissa Act 4 of 1914) and all provisions of the said Act for recovery, attachment, sale, arrest shall mutatis mutandis apply.



(1) Notwithstanding anything contained in section 39 or any law or contract to the contrary, the prescribed authority may, at any time or from time to time, by notice in writing (a copy of which shall be forwarded to the dealer at his last address known to the said authority) direct-

(a) Any person from whom any money is due or may become due to a dealer who has failed to comply with a notice of demand served under section 39; or

(b) Any person who holds or may subsequently hold any money for or on account of such dealer,to pay into Government treasury, in the manner specified in the notice issued under this sub-section, either forthwith or upon the money becoming due or being held, or within the time specified in the notice (not being before the money becomes due or it is held) so much of the money as is sufficient to pay the amount of tax due from the dealer, together with interest and penalty, if any, under this Act or the whole of the money when it is equal to or less than that amount.

(2) The authority issuing a notice under sub-section (1) may, at any time or from time to time, amend or revoke any such notice or extend the time for making any payment in pursuance of the notice.

(3) Any person making any payment in compliance with a notice issued under sub-section (1) shall be deemed to have made the payment under the authority of the dealer and the receipt from the Government Treasury shall constitute a good and sufficient discharge of the liability of such person to the dealer to the extent of the amount specified in the receipt.

(4) Any person discharging any liability to the dealer after service on him of the notice issued under sub-section (1) shall be personally liable to the State Government to the extent of the liability discharged or to the extent of the liability of the dealer for tax, interest and penalty, whichever is less.

(5) Where a person on whom a notice is served under sub-section (1) proves to the satisfaction of the authority which issued the notice that the money demanded or any part thereof was not due to the dealer or that he did not hold any money for or on account of the dealer, at the time the notice was served on him, nor is the money demanded or any part thereof, likely to become due to the dealer or be held for or on account of the dealer, nothing contained in this section shall be deemed to require such person to pay into the Government Treasury any such money or part thereof, as the case may be.

(6) If any person contravenes any of the provisions of sub-sections (1) and (4) of this section, the prescribed authority shall after giving an opportunity of being heard by an order in writing direct that such person shall pay by way of penalty a sum not exceeding twice the amount payable under sub-section (1).

(7) Any amount of money which a person is directed to pay under sub-section (1) or for which he is personally liable to the State Government under sub-section (4), shall, if it remains unpaid, be recoverable as an arrear of land revenue.

(8) No action shall be taken under this section in respect of any amount of tax, interest and penalty, if any, the date of payment of which has been extended or the realisation of which has been stayed under this Act during the period of such extension or stay.

(9) The provisions of this section shall be without prejudice to any action that may be taken for recovery of the arrears of tax, interest and penalty, if any, due from the dealer or person.



The liability of a surety under this Act shall be co-extensive, to the extent of the amount of security, with that of the defaulting dealer and all modes of recovery enforceable against the dealer shall be enforceable against the surety by the prescribed authority.



Where, during the pendency of any proceeding relating to assessment, re-assessment or recovery of any tax, interest or penalty payable under this Act or the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, any person or dealer creates a charge on or parts with the possession, by any mode of transfer whatsoever including sale, mortgage, gift or exchange, of any of his assets in favour of any person with the intention of defrauding the revenue, then, notwithstanding anything to the contrary contained in any Act or contract, such charge or transfer shall be void as against any claim in respect of any tax or any other sum payable by the dealer as a result of the completion of such proceeding or otherwise.



Notwithstanding anything contained in any other law for the time being in force, no proceeding, for the purposes of sub-section (6) of section 39 or sub-section (7) of section 47, shall be initiated under this Act except before the expiry of twelve years from due date within the meaning of sub-section (3) of section 24:

Provided that the period of limitation for the registered dealer availing of the tax deferment under section 23A of the Bihar Finance Act, 1981 (Bihar Act 5 of 1981), as it stood before its repeal by section 94, shall be reckoned from the last date of repayment of the deferred amount of tax:

Provided further
that when an appeal or application for review has been filed, the period of limitation as aforesaid shall run from the date of order passed on such appeal, application for review or from the date of order passed in pursuance of or as a result of such order, whichever is later.



Notwithstanding anything to the contrary contained in any law for the time being in force, any amount of tax and interest and penalty, if any, payable by a dealer or any other person under this Act shall be a first charge on the property of the dealer or such person.

Last updated on July, 2016

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