Section 10A of The Central Sales Tax Act, 1956
1[10A. Imposition of penalty in lieu of prosecution.--, 2[(1)] If any person purchasing goods is guilty of an offence under clause (b) or clause (c) or clause (d) of section 10, the authority who granted to him or, as the case may be, is competent to grant to him a certificate of registration under this Act may, after giving him a reasonable opportunity of being heard, by order in writing impose upon him by way of penalty a sum not exceeding one-and-a-half times 3[the tax which would have been levied under sub-section (2) of section 8 in respect of the sale to him of the goods, if the sale had been a sale falling within that sub-section]: Provided that no prosecution for an offence under section 10 shall be instituted in respect of the same facts on which a penalty has been imposed under this section. 4[(2) The penalty imposed upon any dealer under sub-section (1) shall be collected by the Government of India in the manner provided in sub-section (2) of section 9--
- (a)in the case of an offence falling under clause (b) or clause (d) of section 10, in the State in which the person purchasing the goods obtained the form prescribed for the purposes of 5[sub-section (4) of section 8] in connection with the purchase of such goods;
- (b)in the case of an offence falling under clause (c) of section 10, in the State in which the person purchasing the goods should have registered himself if the offence had not been committed.]
Summary
- If a dealer is guilty of certain false representations or misuse of goods under Section 10, the tax department can impose a financial penalty instead of prosecuting them in court.
- Prosecuting means taking someone to court for a crime, and a financial penalty is a fine that avoids court trials.
- This alternative financial penalty can only be applied for specific offences, namely false representation of registration details, false claims about goods, or failing to use goods for their declared purpose.
- The maximum financial penalty that can be imposed is one and a half times the tax that would have been charged if the transaction had been a normal unregistered sale.
- Before any penalty is imposed, the dealer must be given a reasonable opportunity to be heard.
- If the tax authorities impose this penalty, they cannot launch a criminal prosecution in court on the same set of facts.
- The penalty is collected on behalf of the central government using the state's regular tax recovery mechanisms.
Practical examples
FAQ
1. Can a dealer be both prosecuted in court and fined under Section 10A of the Central Sales Tax Act, 1956?
No, Section 10A of the Central Sales Tax Act, 1956 states that if a penalty is imposed under this section, no criminal prosecution can be started against the dealer on the same facts.
2. What is the maximum penalty rate under Section 10A of the Central Sales Tax Act, 1956?
The maximum penalty under Section 10A of the Central Sales Tax Act, 1956 is one and a half times the tax that would have been levied under Section 8(2) if the sale had been a standard taxable sale.
3. Who has the authority to impose a penalty in place of prosecution under Section 10A of the inter-state tax law?
The tax authority who granted, or is competent to grant, the dealer's registration certificate has the power to impose the penalty under Section 10A of the Central Sales Tax Act, 1956.
4. For which specific Section 10 offences can a penalty in place of prosecution be imposed under Section 10A?
Under Section 10A of the Central Sales Tax Act, 1956, a penalty can only be imposed if a person is guilty of an offence under clause (b), clause (c), or clause (d) of Section 10.
Test yourself
Q1.Under Section 10A of the Central Sales Tax Act, 1956, what is the maximum penalty that can be imposed on a dealer in place of prosecution?
Q2.Under Section 10A of the Central Sales Tax Act, 1956, for which of the following offences under Section 10 can a penalty be imposed in place of prosecution?
Q3.Under Section 10A of the Central Sales Tax Act, 1956, what is required before the tax authority can issue a penalty order in writing?
Q4.Under Section 10A of the Central Sales Tax Act, 1956, what happens once a penalty has been imposed on a dealer for a specific set of facts?