Sales tax clauses amended

By Our Staff Reporter

NEW DELHI, DEC. 1. In a significant move, the Sales Tax Department of the Delhi Government has amended Section 64 of ``The Delhi Sales Tax'' giving powers to the enforcement and tax sleuths to detain and seize vehicles which are found to be carrying tax evading goods. In addition, some measures have also been taken to simplify tax laws to benefit small traders.

Officials informed that at present, the Act does not permit officials to detain and seize vehicles carrying such goods even if their connivance is established. Therefore, it was decided to amend the Act. There is large scale inter-state transportation of goods, especially of readymade garments in which tax is evaded to the tune of crores. This happens regularly in consignments earmarked for Uttar Pradesh.

Similarly, some amendments have also been made to give power to the government to revive the limit for compulsory registration in respect of manufacturers of goods of Rs. 5 lakh and in respect of any other dealers to Rs. 10 lakh.

According to the Finance Minister, Mr. Mahinder Singh Saathi, sales tax accounts for 65 to 70 per cent of the tax revenue of the Delhi Government. Under the existing Act, trading among registered dealers is facilitated by using statutory forms issued by the Department. While the Government has taken several measures to simplify the procedure, especially to law abiding dealers, at the same time, it was also taking steps to prevent the misuse of these forms.

With this view , the previous Government had amended the Delhi Sales Tax rules. However, these were struck down by the High Court on the ground that the rule making power contained in Section 71 of the Act does not specifically confer the power on the Lieutenant-Governor to provide the categories of the dealers or the disqualification by reference to which the issuance of forms may be denied by the prescribing authority.

However, to overcome this hurdle, an amendment to the existing clause of Section 71 and also Sections 4 and 5 of the Act would ensure that there is no judicial hurdle and the objective of amending the rules is recognised.

Mr.Saathi said that it had also been decided to reduce the maximum period of assessment from three to two years. This was being done on the recommendations of expert committees like as Dr. Raja Chelliah Committee and a study by the Asian Development Bank. This was also a necessary pre-condition to implement Value Added Tax scheme.

Another important issue is issuance of cash memo for purchases made. According to the existing Act, all transactions above Rs. 10 should be accompanied by a cash memo. This has now become unpracticable. It is, therefore, decided to raise the limit for issuing of cash memo to Rs. 100.

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