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(1) When two or more companies are to be amalgamated by the order of a Court or of the Central Government and the order is to take effect from a date earlier to the date of the order and any two or more such companies have sold or purchased any goods to or from each other in the period commencing on the date from which the order is to take effect and ending on the date of the order, then such transactions of sale and purchase will be included in the turnover of the sales or of purchases of the respective companies and will be assessed to tax accordingly.
(2) Notwithstanding anything contained in the said order, for all of the purposes of this Act, the said two or more companies will be treated as distinct companies and will be treated as such for all periods up to the date of the said order and the registration certificates of the said companies will be cancelled, where necessary, with effect from the date of the said order.
(3) Words and expressions used in this Section, but not defined, will have the respective meanings to them in the Companies Act 1956.
CHAPTER VIII INSPECTION OF ACCOUNTS, DOCUMENTS, SEARCH OF PREMISES AND ESTABLISHMENT OF CHECK POSTS
69. Bureau of Investigation
(1) The State Government may, by an order published in the Official Gazette, constitute a Bureau of Investigation, and it shall consist of such personnel and in such number of officers and such hierarchy of supervision and control, as may be specified by the State Government in the said order.
Provided that if authorities appointed under sub-Section (1) of Section 4 are specified as such it shall without prejudice to the powers under sub-Section (1) of Section 4 exercise the powers of an authority under Section 62, 70, 71, 72 and 73 for carrying out the purpose of this Act.
(i) The Commissioner may, by an order published in the Official Gazzette, authorise an officer of the Bureau of Investigation to exercise the powers of an authority appointed under Section 4 in respect of such matter, as may be specified in the order.
(ii) The Bureau of Investigation shall function under the control and supervision of the Commissioner, and shall discharge such duties as may be assigned to it, by the Commissioner, including investigation of offences under Section 87 of this part.
70. Production and Inspection of Accounts and Documents and search of premises —
(1) The prescribed authority may, subject to such conditions as may be prescribed, require any dealer to produce before him any accounts or documents, or to furnish any information, relating to stocks of goods of, or to sale, purchase and delivery of goods or to payments made or received by the dealer or any other information relating to his business, as may be necessary for the purpose of this Act.
(2) All accounts, registers and documents, records, computer or any electronically stored data relating to stocks of goods of, or to purchase, sale and delivery of goods, payments made or received by any dealer and all goods and cash kept in any place of business of any dealer, shall at all reasonable time be open to inspection by the prescribed authority, and the prescribed authority may take or cause to be taken such copies or extracts of the said accounts, registers or documents and such inventory of the goods and cash found as appears to him necessary for the purpose of this Act.
(3) If the prescribed authority has reasons to believe that any dealer has evaded or is attempting to evade the payment of any tax due from him, he may, for reasons to be recorded in writing, seize such accounts, registers or documents of the dealer as may be necessary, and shall grant a receipt for the same, and shall retain the same for so long as may be necessary in connection with any proceeding under this Act or for the prosecution, under any law.
(4) For the purposes of sub-Section (2) or sub-Section (3) the prescribed authority may enter and search any place of business of any dealer or any other place where the prescribed authority has reason to believe that the dealer keeps or is for the time 46 being keeping any account, registers or documents of his business or stocks of goods relating to his business.
(5) (a) If the Prescribed Authority has reasons to believe that any dealer has evaded or is attempting to evade the payment of any tax due from him, he may, for reasons to be recorded in writing, shall have the powers to seize such goods not properly accounted for in the books, accounts, registers and other documents of the dealer or the Broker, or the owner of the warehouse, or the clearing, booking or forwarding agent, or the person engaged in the business of transporting goods in the manner prescribed.
(b) The Prescribed Authority shall, in a case where the dealer or the person incharge of goods as mentioned in clause (a) fails to produce any evidence or fails to satisfy the said authority regarding the proper accounting of goods, impose a penalty, after allowing an opportunity of hearing in the prescribed manner to the dealer or such person, which shall be equal to three times the amount of tax calculated on the value of such goods and the goods shall be released as soon as the penalty is paid.
(c) If the dealer or the person in-charge of the goods mentioned in clause (a) demands time for production of necessary documents in support of proper accounting, the authority referred to in clause (a) shall release the goods on the condition that the dealer or such person furnishes a security equivalent to three times the amount of tax calculated on the value of the goods, either in the form of cash, to be deposited in a Government treasury, or in the form of Bank guarantee or in such other form as acceptable to the authority.
(d) If the goods seized under clause (a) are not claimed by any person, the authority referred to in the said clause shall arrange for the safe custody of goods.
(e) In case the penalty imposed under clause (b) is not paid or the goods remain unclaimed for a period of thirty days or more from the date of seizure, the goods so seized shall be sold by auction in the prescribed manner and the sale proceeds shall be appropriated towards the amount of penalty imposed under clause (b); The balance of the sale-proceeds, if any, shall be deposited in the Government Treasury and shall be refunded to the lawful claimant in the prescribed manner:
Provided that in the case of goods of a perishable nature, the prescribed authority may decide to sell the goods by auction before a period of thirty days.
(f) In case where the goods have been released on furnishing of a security as mentioned in clause (c) and evidence regarding proper accounting of goods, to the satisfaction of the authority referred to in clause (a), is not produced within the date granted from the date on which the security is furnished, the amount of security shall stand forfeited to the State Government. If, however, evidence or document to the satisfaction of the authority mentioned in clause (a) regarding the proper accounting of goods is produced within the said date granted, the security shall be released in the prescribed manner.
(6) (i) The power conferred under sub-Sections (3), (4) and (5) shall include the power to break open the lock of any box or receptacle or door of any other place or premises where any accounts, registers or other documents or goods may be kept or are reasonably suspected to be kept.
(ii) The powers conferred under sub-Sections (3), (4) and (5) shall also include the power to seal any box or receptacle, godown or building where any accounts, registers or other documents or goods may be kept or are reasonably suspected to be kept.
(7) An authority appointed under Section 4, may require the assistance of any person, public servant or police officer in making a search and a seizure or for safe custody of goods seized under this Section, and such person, public servant or police officer shall render necessary assistance in the matter.
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(8) Where any books of accounts, other documents, money or goods are found in the possession or control of any person in the course of any search under sub-Section
(2), (3) or (5), it shall be presumed, unless it is proved to the contrary, that such books of accounts, documents, money or goods belong to such person.
Explanation:- For the purposes of this Section the expression “proper accounting”, shall-
(i) in the case of a dealer, mean that the goods have either not been entered in the books of accounts or they have been classified in a manner which is likely to lead to evasion of tax payable under this Act; or
(ii) in the case of the owner of a warehouse, or a clearing, booking or forwarding agent, or a person engaged in the business of transporting goods, mean properly entered in such registers and accounts as may be prescribed under sub-Section (2) of Section 73.
71. Survey —
(1) With a view to identify dealers who are liable to pay tax under the Act, but have remained unregistered, the prescribed authority shall from time to time cause a survey of unregistered dealers to be taken.
(2) For the purpose of the survey, the prescribed authority may by general or special notice require any dealer or class of dealers to furnish the names, addresses and such other particulars as he may find necessary relating to the persons and dealers who have purchased any goods from or sold any goods to such dealer or class of dealers during any given period.
(3) For the purposes of survey, the prescribed authority may call for details and particulars regarding the services provided by public utilities and financial institutions including banking companies, which he is of the opinion, will be relevant and useful for the purposes of the survey. He may from time to time cause the results of the survey to be published in any manner that he thinks fit so however as not to disclose or indicate the identity of any particular unregistered dealer identified during the survey.
(4) The prescribed authority may for the purposes of the survey enter any place where a person is engaged in business but is unregistered or has not applied for grant of the certificate of registration, whether such place will be principal place of business or not of such business and require any proprietor, employee or any other person who may at that time and place be attending in any manner to, or helping in, the business;
(i) to afford him the necessary facility to inspect such books of accounts or other documents as he may require and which may be available at such place,
(ii) to afford him the necessary facility to check or verify the cash, stock or other valuable article or things which may be found 'there in, and
(iii) to furnish such information as he may require as to any matter which may be useful for, or relevant to any proceedings under this Act.
Explanation -For the purposes of this sub Section, a place will also include any other place in which the person engaged in business or the employee or other person attending or helping in business stays and a place where any books of accounts or other documents or any part of the cash, stock or other valuable articles or things relating to the business are or is kept.
(5) The prescribed authority shall enter the place where the person is carrying on business only during the hours at which such place is open for business and in case of any other place only after sunrise and before sunset. The prescribed authority may make or cause to be made extracts or copies from books of accounts and other documents inspected by him, make an inventory of any cash stock or other valuable articles or thing checked or verified by him, and record the statement of any person which may be useful for, or relevant to, any proceeding under this Act.
(6) The prescribed authority, in exercise of the powers under this Section shall on no account, remove or cause to be removed from the place where he has entered any books of accounts other documents or any cash, stock or other valuable article or thing.
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