Special Provision relating to Advance Recovery of Tax on Sales and Supplies to Governments and Other Persons
(1) Notwithstanding anything contained in this Act but subject to the provisions of Section 14, 49 and 57, 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 one lac during a year made to,-
(i) the State Government; or 3
(ii) Central Government; or
(iii) 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) 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.3
(4) 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-section (1), (2) or (3), 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 Section 43 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 and or any penalty imposed but not deposited under this Section.
Explanation: A “person” in this Section includes all officers or authorities who are competent or authorised to make payment of the sale-price including the tax charged in respect of sales to State Government or Central Government or to 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-sections (4) and (5) of Section 44 of the Act 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.