close

 

40A . Withholding of refund in certain cases

 (1) Notwithstanding anything to the contrary contained in any other provision of this Act or in any judgment, decree or order of any Court, Tribunal or other authority, where after giving reasonable opportunity of being heard to the dealer or the person concerned, the Commissioner is satisfied on the report of the assessing authority that,-     

(a) the dealer has submitted false return of the turnover or has concealed particulars of his turnover or has deliberately furnished inaccurate particulars of such turnover or has prevented the assessing authority or any other competent authority from making inspection and examination of books, accounts or documents maintained or goods shown to be held in stock by such dealer or obstructed any competent  authority in performing his functions under this Act; or 

(b) any purchase in respect of which input tax credit in any return has been claimed, is not verifiable;or

(c) the dealer has obtained tax invoices without making actual purchase of goods; or

(d) the dealer has failed to furnish any security demanded from him under any provision of this Act or the Central Sales Tax Act, 1956;or

(e)  the circumstances exist involving fraud ,

        and where the Commissioner is of the opinion that if refund is allowed, it may not be possible to realize any amount of tax or penalty likely to be levied, he may permit the assessing authority to pass an order for withholding, as a security, such amount of refund as would be sufficient to cover the amount of tax or penalty or both, as the case may be, likely to be levied, for a period as may be determined by the Commissioner.

(2)  Where the assessing authority finds that the circumstances mentioned in sub-section (1) exist and sufficient material is available on the record, it shall send a report to the Commissioner along with the material for seeking the permission to withhold the amount of refund

(3)   The assessing authority shall complete the proceeding for assessment or penalty or both, pending before him within such  period as may be determined by the Commissioner:

Provided that if the Commissioner is satisfied that the circumstances exist which would prevent the assessing authority to complete the assessment or penalty proceeding within the determined period, he may extend the period not exceeding 90 days.

(4) After the completion of the proceeding withheld amount shall be adjusted against demand created due to assessment or penalty proceeding and the balance if any shall be refunded along with interest at the rate of twelve percent per annum from the date on which refund has become due, in the manner provided under this Act and the rules made thereunder.

 Explanation: For the purposes of this section refund includes the refund of input tax credit.