(1) Notwithstanding anything contained in section 40, in the case of a dealer, whose
main business is to sell goods in the course of the export of the goods out of the
territory of India, the assessing authority, upon receiving the return for a tax period
and application for provisional refund along with the proof of export, pending audit
and investigation to establish the correctness of the claim and consequent assessment,
shall, allow provisional refund of the excess amount of input tax credit for such tax
period on account of sale in the course of the export of the goods out of the territory
of India, within thirty days from the date of receipt of such application:
Provided that if any amount of tax, fee or penalty or any other amount either under
this Act or under the Central Sales Tax Act, 1956 or under the erstwhile Act is due
against such dealer the amount found refundable first shall be adjusted towards such
amount of tax or fee or penalty, as the case may be, and excess, if any, shall be
refunded to the dealer:
Provided further that, before granting refund, the assessing authority may require
the dealer to furnish security of amount equivalent to amount of refund to its
satisfaction where,-
(a) the dealer has been involved in tax evasion under this Act or erstwhile Act or
under the Central Sales Tax Act 1956; or
(b) the dealer has obstructed or prevented the officers empowered under this
Act in performing any of his functions or duties assigned to him under this
Act; or
(c)the dealer has misused in any way the declaration or the certificate prescribed
under this Act or under the Central Sales Tax Act, 1956 or under the erstwhile
Act or under the Uttar Pradesh Tax on the Entry of Goods into Local Areas
Act, 2007;or
(d) the dealer is defaulter of the payment of tax on the sale or purchase of goods
under this Act or under the Central Sales Tax Act, 1956 or under the erstwhile
Act; or
(e)the dealer has violated any provision of this Act resulting in the loss of
revenue.
Explanation- For the purposes of this section,-
(i) ʻmain business of exportʼ in relation to a dealer shall mean the dealer whose
aggregate of turnover of sales in the course of export of goods outside the
territory of India under sub-sections (1) and (3) of section 5 of the Central
Sales Tax Act, 1956, for any tax period exceeds fifty percent of the
aggregate of turnover of sale of all goods-
(a)within the State;
(b)in the course of export of goods out of the territory of India; and
(c) in the course of inter-State trade or commerce.
(ii) where any application is incomplete the date of completion of that
application shall be deemed to be the date of application.
(2) If, on assessment, the provisional refund granted under sub-section (1) is found to be
in excess, then the excess amount of refund shall be recovered from the dealer along
with interest at the rate of fifteen percent per annum and for the period commencing
on the date of provisional refund and ending with the date of payment of the amount,
as tax due from the dealer.
(3) If the application is not in order or contains wrong particulars it shall be rejected by a
speaking order in writing and the dealer shall be informed accordingly:
Provided that no application shall be rejected without affording the dealer an
opportunity of being heard .
(4) Notwithstanding any thing contained in the first proviso to sub-section (1) where any
industrial unit has been declared sick by any competent court or authority constituted
under any law for the time being in force, the provisional refund under this section
shall be allowed if such industrial unit satisfied that,-
(a)the package for rehabilitation of the sick unit has been approved by a competent
court or an authority;
(b) the State Government has deferred the arrear against such unit under section 71
and
(c)the conditions imposed by the State Government for deferment of the arrear has
been complied with.
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