Creation of loan liability of a dealer having a newly set up industrial unit or in the expanded portion of an existing industrial unit, for the amount of output tax deferred and agreement therefor.

174. (1) Where a dealer desires to admit under sub-rule (7) of rule 165 a loan liability of an amount equal to the amount of such output tax deferred upon creation of loan liabilitin accordance with the provisions of that sub-rule in respect of a year or part of a year, h shall, ordinarily within sixty days from the end of such year, make an application in Form No. 73 to the authority specified by State Government under that sub-rule (hereinafter referred to as the specified authority) for creation of such loan liability till the expiry of the available eligible period up to which payment of such amount of tax has been deferred.

(2) In the application referred to in sub-rule (1), the dealer shall furnish, inter alia, the following particulars -

(a) due date or dates for furnishing of the returns under sub-section (1) of section 32 in respect of which payments of output tax have been deferred;

(b) due date or dates as specified in the notice or notices issued under sub-section (2) of section 45 or clause (b) of sub-section (3) of section 46 by which payments of the amount of tax had to be made;

(c) amount of output tax payable for each return period or part of a return period falling within a year;

(d) amount of tax which was payable or due in terms of each notice issued under sub-section (2) of section 45, or clause (b) of sub-section (3) of section 46 and is eligible for deferment;

(e) total amount (c) + (d) of tax against which loan liability is sought to be created;

(f) due dates for payment of such deferred tax after the expiry of the period up to which it has been deferred (specify separately for each period).

(3) On receipt of the application referred to in sub-rule (1), if the specified authority is satisfied that a loan liability should be created against the amount of output tax deferred in respect of a dealer, he shall, by an order in writing, pass an order directing such dealer to enter into an agreement in this behalf with the State Government.

(4) On presentation of an agreement in Form No. 74 by the dealer, such agreement in terms of the order referred to in sub-rule (3) shall be duly executed, signed and sealed by the specified authority for and on behalf of the State Government on one part and by the dealer on the other part, and such agreement shall remain valid till the amount of tax deferred becomes payable under sub-rule (6) of rule 165.

(5) Upon execution of an agreement in the manner referred to in sub-rule (4), a loan liability for a dealer for an amount equal to the amount of tax which has been deferred under sub-rule (1) of rule 165 shall be created and thereupon, the specified authority shall  send a certificate in Form No. 75 to the dealer certifying that the amount payable by, or due from, the dealer under the Act for a year or part of a year comprising the period or periods in respect of which the loan liability has been created, shall be deemed to have been paid by such dealer on the prescribed date as applicable to him for furnishing his return under sub-section (1) of section 32 or on the date on which payment of tax according to the notice issued to him under sub-section (2) of section 45, or clause (b) of subsection (3) of section 46 becomes payable by him.

(6) The deed of agreement duly executed, signed and sealed by both the parties referred to in sub-rule (4) shall be retained by the specified authority until the full payment of the amount is made by the dealer against his loan liability before the expiry of the available eligible period up to which such amount of tax has been deferred or until the date on which such amount of tax becomes payable by the dealer under sub-section (6) of rule 165.

(7) If a dealer makes payment of the amount of output tax deferred in respect of which a loan liability of such dealer has been created before the expiry of the period up to which such loan liability has been created according to the agreement, he shall apply in writing to the specified authority for discharging him from his loan liability.

(8) If the specified authority is satisfied that the loan liability equal to the amount of output tax deferred has been discharged by the dealer under sub-rule (7), he shall return immediately the deed of agreement to the dealer and intimate him that he has been discharged from his loan liability.

(9) In the event of -

(a) discontinuation or closure of the business of a dealer,

(b) cessation of his liability to pay tax, or

(c) cancellation of his certificate of registration at any time before the expiry of the available eligible period up to which loan liability has been created, such dealer shall, within fifteen days from the date of such discontinuation, cessation of liability or cancellation, make payment of the entire amount of the loan liability equal to the amount of output tax deferred.