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Indirect Tax Laws

Notes 12. Sale or Purchase is effected by transfer of …………… of title to the goods after the goods
have crossed the customs frontier of India.
13. The certificate will be cancelled if dealer is not liable to pay any tax under …………… Act.

14. Certificate of …………… may be amended at the request of customer.

12.10 Procedures under CST Act

Procedures are important for any taxation law. Often valuable tax concessions are lost or penalties
are imposed only because prescribed procedures are not followed.
Procedures for CST Act are covered as follows:
 Rules framed by central government
 Rules framed by state governments under CST Act

 Rules as prescribed in state sales tax laws of each state.
Central Sales Tax Act is a peculiar Act - though the tax is levied as Central Sales Tax, it is
administered by respective state governments. In bharat heavy electricals v. Uoi - air 1996 sc
1854 = (1996) 102 stc 373 (sc) = 1996(4) scc 230 = jt 1996(4) sc 427, it was held that state machinery
Acts as machinery of central government for administration of CST Act. In khemka & co. V. State
of maharashtra air 1975 sc 1549 = (1975) 3 scr 753 = 1975(2) scc 22, it was held that substantive laws
of central Act must be applied. State Act is applicable for procedures alone.
CST Act and rules framed by central government make provisions for very few procedures. In
respect of other procedures and provisions, provisions as applicable in the state in respect of the
general sales tax law of the state are also applicable in respect of Central Sales Tax in respect of
dealers registered in that state. State governments are also authorised to frame rules under CST
Act.

Some provisions of state laws applicable to CST - section 9(2) of CST Act provides that all
provisions of 'general sales tax law' of each state, except those provided in CST Act and rules
itself, in respect of the following shall also apply to persons liable under Central Sales Tax Act
in that state:

 Periodic returns
 Assessment, provisional assessment and reassessment
 Advance payment of taxes
 Registration of transferee and imposition of tax liability on transferee

 Recovery of tax from third parties
 Appeals, review, revision and references [except in case of appeals u/s 6a or 9]
 Refunds, rebate, penalties and interest
 Compounding of offences

 Treatment of documents furnished by dealer as confidential.
 Offences and penalties (except those covered in CST Act itself)
State authorised to administer and collect tax - CST Act is administered by states. The state
authorised to collect tax is authorised to administer the tax.

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