(मात्र भारतीय लेखापरीक्षा तथा लेखा विभाग के कममचाररयों के उपयोग हेतु )

(For use by the Officials of the Indian Audit and Accounts Department only)

कायामलय प्रधान महालेखाकार (आर्थथक एिम राजस्ि क्षेत्र लेखापरीक्षा), गुजरात, अहमदाबाद

Office of the Principal Accountant General (Economic and Revenue Sector Audit),

Gujarat, Ahmedabad

राजस्ि क्षेत्र लेखा परीक्षा स्कंध की वनयमािली

MANUAL OF REVENUE SECTOR AUDIT GROUP

प्रधान महालेखाकार (आर्थथक एिम राजस्ि क्षेत्र लेखापरीक्षा), गुजरात, अहमदाबाद द्वारा जारी

Issued by

Pr. Accountant General (Economic and Revenue Sector Audit), Gujarat, Ahmedabad

(मा भारतीय लेखापरीक्षा तथा लेखा िवभाग के कमर्चािरय के उपयोग हते ु) (For use by the Officials of the Indian Audit and Accounts Department only)

कायार्लय धान महालखेाकार (आिथक एवम राजस्व क्षे लखेापरीक्षा), गजुरात, अहमदाबाद

Office of the Principal Accountant General (Economic and Revenue Sector Audit),

Gujarat, Ahmedabad

 

राजस्व क्षे लखेा परीक्षा स्कंध की िनयमावली

MANUAL OF REVENUE SECTOR AUDIT GROUP

धान महालखेाकार (आिथक एवम राजस्व क्षे लखेापरीक्षा), गजुरात, अहमदाबाद ारा जारी

Issued by Pr. Accountant General (Economic and Revenue Sector Audit), Gujarat, Ahmedabad

Scanned by CamScanner

i 

PAGE No.

Preface ii

CHAPTER SUBJECT

1 Introductory 1-32

2 Land Revenue 33 -94

3 Stamp Duty and Registration fee 95 - 137

4 Taxes on Motor Vehicle 138 - 226

5 Mining Receipts 227 - 279

6 Electricity duty and Fee 280 - 338

7 Value Added Tax 339 - 414

8 Annexures 415 - 480

Table of Contents

1

ORGANISATION AND FUNCTIONS

1. INTRODUCTION

The Comptroller and Auditor General (CAG) is the sole authority prescribed in the

Constitution entrusted with the responsibility of audit of accounts of the Union and of

the States. It is the duty of the CAG to audit receipts and expenditure of the Union and

each State and the Union Territory Governments. Article 151 of the Constitution of

India lays down that the Reports of the Comptroller and Auditor General of India

relating to the accounts of the Union and of the States shall be submitted to the

President or the Governor, as the case may be, who shall cause them to be laid before

each House of Parliament or Legislature.The duties of the CAG extend to audit of

Government Companies,Corporations and bodies and authorities in accordance with

the laws made by the legislature and rules made thereunder.

Principal Accountant General (PAG), Economic and Revenue Sector Audit

(E&RSA)-Gujarat, is CAG‘s principal officer in IAAD for the State of Gujarat, with

its head office (HO) at Ahmedabad. PAG coordinates IAAD‘s interface with the

State Government of Gujarat (GoG) and the media. PAG‘s core audit function areas

are: audit of all the Departments/Agencies/Public Sector Undertakings (PSUs)

/Autonomous Bodies (Abs)/Statutory Corporations falling under the Economic and

Revenue Sectors of GoG.

1.1 ORGANISATIONAL STRUCTURE

The Organisational Structure of Office of the PAG (E&RSA), Ahmedabad is as

follows:

CHAPTER 1

Principal Accountant General

(Economic & Revenue Sector Audit)

DAGAdministration &Public Information

Officer

Sr Audit Officer/ Administration

Audit Officer/General Office Management

Audit Officer/Bills

Audit Officer/Information Technology

Management Group

Audit Officer FINAT

Audit Officer/SFR Sr. Audit Officer/

Central Audit Report

DAGRevenue Sector Audit

Sr Audit Officer/Revenue Sector Audit I

Sr Audit Officer/Revenue Sector Audit II

Audit Officer/Revenue Sector Report

DAGEconomic

Sector Audit -I

Sr Audit Officer/ES-I Hqrs-I

Audit Officer/ES-I Hqrs-II

Sr Audit Officer/ES-I Report

RAO/GSRTC

Secretary to AG

(Secretariat/ Quality Assurance)

DAGEconomic

Sector Audit -II

Sr Audit Officer/IR HQ1 & HQ2

Sr Audit Officer/Draft Para

Sr Audit Officer/ FAAP

RAO/PAO, Gandhinagar

RAO/PAO, Ahmedabad

Welfare Officer

1

2

The cadre control of Senior Audit Officers (Sr.AOs)/Audit Officers (AOs)/Assistant

Audit Officers (AAOs) of civil cadres are with the Principal Accountant General and

the cadre control below the level of AAOs viz., Multi Tasking Staff (MTS), Record

Keeper/ Daftry, Data Entry Operators, Auditors, Sr. Auditors, Supervisors are with

Dy. Accountant General (Administration), O/o PAG (E&RSA).

1.2 AUDIT MANDATE

The CAG derives his authority and functions mainly from the provisions of Articles

149 to 151 of the Constitution of India. Article 149 of the Constitution provides that

the CAG shall exercise such powers and perform such duties in relation to the

accounts of the Union and of the States and of any other authority or body as may be

prescribed by or under any law made by the Parliament. Parliament passed the

necessary legislation, namely CAG‘s (Duties, Powers and Conditions of Service) Act

in 1971 (DPC Act, 1971). The Audit Mandate for conducting audit of Government

Companies, Statutory Corporation, Autonomous Bodies and Government Department

is detailed below:

1.2.1 AUDIT OF GOVERNMENT DEPARTMENTS

Section 13of the DPC Act, 1971 prescribes the duty of the CAG-

(a) to audit all expenditure from the Consolidated Fund of India and of each State

and of each Union Territory having Legislative Assembly and to ascertain

whether the moneys shown in the accounts as having been disbursed were legally

available for and applicable to the service or purpose to which they have been

applied or chargedand whether the expenditure conforms to the authority which

governs it.

(b) to audit all transactions of the Union and of the State relating to Contingency

Funds and Public Accounts.

(c) to audit all trading, manufacturing, profit and loss accounts and balance sheets

and other subsidiary accounts kept in any department of the Union or of a State.

Section 16 of the DPC Act, 1971 prescribes the duty of the CAG to audit all receipts

which are payable into the Consolidated Fund of India and of each State and of each

Union Territory a Legislative Assembly and to satisfy himself that the rules and

procedures in that behalf are designed to secure an effective check on the assessment,

collection and proper allocation of revenue and are being duly observed and to make

for this purpose such examination of the accounts as he thinks fit and report thereon.

1.2.2 AUDIT OF AUTONOMOUS BODIES

According to Section 14 (1) of the DPC Act, 1971, where anybody is substantially

financed by grants and loans from the Consolidated Fund of India or of any state or of

any Union Territory having a Legislative Assembly, the CAG shall subject to the

provision of any law for the time being in force applicable to the body or authority, as

the case may be, audit all receipts and expenditure audited by him.

3

Section 14 (2) of the DPC Act, 1971 prescribes that notwithstanding anything

contained in sub-section (1), the CAG may with the previous approval of the

President or the Governor of a State or the Administrator of a Union Territory having

a Legislative Assembly, as the case may be, audit all receipts and expenditure of any

body or of any State or of any Union Territory having Legislative Assembly, as the

case may be, in a financial year is not less than one crore.

Section 14 (3) of the DPC Act, 1971 prescribes that where the receipts and

expenditure of any body or authority are, by virtue of the fulfillment of the conditions

specified in sub-section (1) or Sub-section (2), audited by the CAG in a financial year,

he shall continue to audit the receipts and expenditure of that body or authority for

further period of two years that notwithstanding anything contained in sub-section (1)

or Sub-section (2) are not fulfilled during any of the two subsequent years.

1.3 REGULATIONS

In pursuance of Section 23 of the Comptroller and Auditor General‘s (Duties, Powers

and Conditions of Service) Act, 1971, the Comptroller and Auditor General of India

hereby made the Regulations, viz., Regulations on Audit & Accounts 2007.

These Regulations apply to the staff of the Indian Audit andAccounts Department and

all ministries and departments of the UnionGovernment, State Governments and

Union Territory Governments as well as bodies, authorities and enterprises, to which

the audit or accounts jurisdictions of the CAG extend. Further, standing orders,

guidelines and practice notes issued by the CAG also guide the conduct of audits.

The CAG is not obliged to carry out, modify or refrain from carrying out an audit or

suppress or modify audit findings, conclusions and recommendations in the light of

any directions by the executive. This, however, does not preclude requests to the CAG

by the executive proposing matters for audit.

1.4 AUTHORITY WITH REGARD TO AUDIT

Under Section 18 read with Section 2(e) of the CAG‘s (DPC) Act, the CAG has the

authority:

(a) to inspect any office of accounts under the control of the Union Government or of

a State Government or of a Union Territory having a legislative assembly;

(b) to require that any accounts, books, papers and other documents which deal with

or form the basis of or are otherwise relevant to the transactions to which his

duties in respect of audit extend, shall be sent to such place as he may appoint for

his inspection; and

(c) to put such questions or make such observations as he may consider necessary,to

the person in charge of the office and to call for such information as he may

require for the preparation of any account or report which it is his duty to prepare.

The person in charge of any office or department, the accounts of which are audited

by the CAG, shall afford all facilities for such inspection and comply with requests

for information in as complete a form as possible and with all reasonable expedition.

4

1.5 REQUESTS FOR SPECIAL AUDIT

The CAG or any officer so authorized shall give due consideration to a request for

special audit of a programme, project or organisation within the audit jurisdiction

provided that every such request:

(a) is made with the approval of the Secretary to Government of the concerned

department;

(b) shall state the justification and reasons that necessitate a special audit, including

the results of any preliminary inquiry, investigation or study that may have

already been conducted; and

(c) specify the period to be covered in the special audit.

The decision of the CAG or any officer so authorised in regard to the special audit

shall be final.

1.6 BROAD OBJECTIVES OF AUDIT

The broad objectives of audit are to ensure legality, regularity, economy, efficiency

and effectiveness of financial management and public administration mainly through

assessment as to:

(1) Whether the financial statements are properly prepared, are complete in all

respects and are presented with adequate disclosures (financial audit);

(2) whether the provisions of the Constitution, the applicable laws, rules and

regulations made thereunder and various orders and instructions issued by

competent authority are being complied with (compliance audit); and

(3) the extent to which an activity, programme or organisation operates

economically, efficiently and effectively (performance audit).

1.7 AUDITING STANDARDS

Auditing Standards prescribe the norms of principles and practices, which the

Auditors are expected to follow in the conduct of Audit. They provide guidance to the

Auditor that helps determine the extent of auditing steps and procedures that should

be applied in the audit and constitute the criteria or yardstick against which the quality

of audit results are evaluated.

The auditing standards of the International Organization of SupremeAudit Institutions

(INTOSAI) have been suitably adapted with dueconsideration of the Constitution of

India, relevant Statutes and rules for theauditing standards for the Supreme Audit

Institution of India (SAI). The Auditing Standards were issued by the Indian Audit

and Accounts Department in March 2002.

The auditing standards shall inter alia include the following:

(a) Basic postulates

(b) General standards

(c) Field standards

(d) Reporting standards

5

1.7.1 RELEVANCE AND APPLICATION OF AUDITING STANDARDS

Auditing standards provide the framework for performing high quality audit.

Compliance with these standards is expected to ensure that a high quality of audit is

performed for achieving the audit objectives.

Auditing standards shall apply both to the individual auditor and the audit

department.

All audits on behalf of the Comptroller and Auditor General are required to be

conducted as per the auditing standards. In other words, auditing standards shall

apply to all types of audit including financial audit, compliance audit and

performance audit.

Auditing standards shall be consistent with the guiding principles of auditing

standards as contained in Regulations on Audit and Accounts 2007.

1.8 PRE-RESTRUCTURING

The erstwhile State Revenue Audit (SRA) Wing of the Office of the Accountant

General (C&R Audit), Gujarat, Ahmedabad was responsible for the audit of the

revenue receipts of the State Government.

The SRA Wing in Gujarat comprised of SRA Section, STRA Section and SRA

(Report) Section.

1.9 RESTRUCTURING OF INDIAN AUDIT & ACCOUNTS DEPARTMENT

As a part of Restructuring of Indian Audit & Accounts Department, Head Quarters

Office intimated (March 2012) implementing restructuring of all Audit Offices in all

the States and Union Territories with effect from 2 April 2012.

The prime objective was to instil an integrated perspective for audits, by integrating

audit of government offices, local bodies, special purpose agencies, autonomous

bodies, PSUs etc., into suitable sectoral audits, such as ―Social‖, ―Economic‖,

―General‖ and ―Revenue‖. Therefore, the structural changes in the field offices had

corresponding changes in the audit planning and audit products with due sectoral

perspective.

After restructuring in May/June 2012, SRA was renamed as Revenue Sector Audit

Wing. The wing was assigned with the audit of Revenue Department and Commercial

Tax Offices under the Finance Department. Thereafter in April 2014, few departments

were interchanged wing-wise. Due to these changes, at present RSA wing is

conducting audit of Commercial Tax Offices (under Finance Department), Revenue

Department{except branches/offices under the purview of Accountant General

(General and Social Sector Audit)}, Office of Commissioner of Geology and Mining,

Offices of Assistant Geologists/Geologists (under Industries & Mines Department),

Office of Chief Electrical Inspector and Collector of Electricity Duty, Offices of

Electrical Inspectors/Assistant Electrical Inspectors, Director of Petroleum (under

Energy & Petrochemicals Department) and Commissioner of Transport, Regional

Transport Offices/ Assistant Regional Transport Officer (under Ports & Transport

Department) as well as Audit of One Autonomous Body.

The following table shows the Department wise number of units and Autonomous

Body under the Revenue Sector Audit wing as on June 2015:

6

Name of Department/

Autonomous Bodies

Total Units

Finance 159

Revenue 450

Port and Transport 29

Industries and Mines 33

Energy and Petro Chemicals 28

Autonomous Body 1

Total 700

The Sanctioned Strength of Sr.AO/AO, AAO and Auditor for RSA wing of O/o PAG

(E&RSA) as on 31 March 2015 is as follows:

Cadre Sanctioned Strength Total

Headquarter Field

Sr. AO/AO 3 9 12

AAO 6 34 40

Sr.Auditor/Auditor 12 17 29

1.10 CODE OF ETHICS

The organization of the Comptroller and Auditor General of India has decided to

adopt a Code of Ethics keeping in view the international best practices to provide a

clear guidance on the standards of behavior expected from the members of the Indian

Audit & Accounts Department. The code incorporates values and principles contained

in the Central Civil Services Conduct Rules for Government Servants in India (CCS

Conduct Rules) and suitably adapted broad principles contained in ISSAI 30

(INTOSAI Standards for Supreme Audit Institutions). This Code is applicable to all

the individuals working in the auditing and accounting wings of the IA&AD and all

the individuals working for or on behalf of this Department i.e. consultant, expert,

statutory auditors etc.

In order to comply with the Code the action to be taken is as follows:

(i) As referred in Para 3.24 of the Code, a declaration in the format prescribed in

Annexure I of the Code is required to be signed separately by each member of the

audit team, including the supervisory Officer prior to the commencement of the

audit. A copy of the declaration should be given to the head of the audited entity

as soon as the audit commences. Each declaration should be enclosed in original

with the Inspection Report having acknowledgement from the Management.

(ii) Similarly a declaration as prescribed in the Annexure-II is to be obtained from

outside auditors engaged on contract with the SAI like expert, consultant,

statutory auditors etc. A copy of the declaration should be given to the head of the

audited entity as soon as the audit commences. Each declaration should be

enclosed in original with the Report to be submitted to SAI India.

(Authority: I/B/5/954-PPG/41-2012 Dt.25 September 2012)

7

1.11 ORGANISATION AND CONTROL

The RSA Wing is headed by a Group Officer. The Wing is further divided into RSA I

(Hq), RSA II (Hq) and RSA (Report) Section.

Each Section is under the charge of a Branch Officer. The Branch Officer of these

Sections are assisted by AAOs and other subordinate staff. The duties and

responsibilities of RSA (Report) Section are dealt with in Para1.21.

The duties and responsibilities of RSA I and RSA II (Hqs) are as follows:

RSA I (Hq) is the controlling section for the audit of receipts and expenditure of

Commercial Tax Offices.

RSA II (Hq) is the controlling section for the audit of receipts and expenditure of

offices under the control of Revenue Department, Commissioner of Transport,

Commissioner of Geology and Mining and Chief Electrical Inspector. This section

also has one Autonomous Body (GSDMA) under its audit purview.

1.12 AUDIT PLAN

The Audit Plan structure for each year shall be drawn considering the organizational

set up of the department with particular reference to the audit domain. The Annual

Audit Plan shall aim at ensuring independent, reliable, balanced and timely reporting

on public finance and governance, adopting best practices in Government auditing

with optimum utilization of available resources, by conducting financial audit,

performance and compliance audits of various functions and activities of the

Government. The Audit Plan may basically be based on the vision and strategic

objectives laid out in Strategic Audit Plan. Categorization of units may be based on

revenue of the auditee unit, risk perception linked to the budget estimates of the

department, State Budget speech and past audit results.

Man days for audit plan may be worked out keeping in view the auditable units for

conducting audit vis-à-vis the manpower available for the field staff and considering

the yard stick of working days in a year after deducting estimated days of monthly

meetings, in-house/external training programmes etc. These man days may then be

allocated between Performance Audits, Thematic Audits, Follow-up Reviews and

balance for conducting the Compliance Audit.

The categorization has been made based on the prescribed criteria for units indicating

―A‖ as High Risk, ―B‖ for Medium Risk and ―C‖ for Low Risk which are as follows:

1.12.1 SELECTION CRITERIA ADOPTED BY RSA I (HQ) SECTION

For Value Added Tax, Profession Tax, Entry Tax and Purchase Tax on sugarcane, the

percentage of revenue collected by a particular unit vis-à-vis total revenue collected

has been considered for selection of unitsfor audit plan. It may not be possible to

cover all the units of Commercial Tax Departments in a single audit year due to the

fact that the audit universe being large vis-à-vis the manpower available. Therefore,

emphasis may be given to High Risk units; at the same time it may also be ensured

that all the units are covered in a span of five years as suggested in Strategic Audit

Plan.The categorization of units has been done on the basis of revenue realized as

shown below:

Category A: Units having receipt of 2% or more of the overall revenue

8

Category B: Units having receipt of 0.5% or more but less than 2% of the overall

revenue.

Category C: Units having receipt of less than 0.5% of the overall revenue.

Further office of the Commissioner of Commercial Tax (HOD), Joint Commissioner

of Commercial Tax (flying squad), 20 Dy. Commissioner of Commercial Tax

(DCCT), Corporate units, 2 Petro units may also be categorized as ―A‖ units where

the risk perception is high.

1.12.2 Selection criteria adopted by RSA II (Hq) Section

Sl.No. Name of

Department

Tax Audited Criteria Adopted for

categorizing

Criteria Adopted for

selection of units.

1 Revenue Stamp Duty &

Registration

Fees

Land Revenue

Revenue is the main

criteria adopted. Further

HODs are also

categorized as ―A‖. The

categorization of units

into A,B,C has been

done as under:

A=units with more than

2% revenue

B= units with ½% or

more but less than 2%

C= units less than ½%

A Category Units selected

on the basis of available

man days.

B Category

(1) units due for >2 years

(2) on the basis of available

man days.

C Category

(1) units due for > 3 years

(2) on the basis of available

man days.

Dy. Collector

(Stamp Duty

Valuation

Office)

All these authorities are

adjudicating authorities

only and hence treated as

‗C‘ Category units.

C Category

(1) units due for > 3 years

(2) on the basis of available

man days.

Land Revenue

Revenue figure can be

collected from V L C.

All HODs have been

categorized as ‗A‘

HODs & A Category units

selected on the basis of

available mandays selected

B Category

(1) units due for > 2 years

(2) on the basis of available

man days.

C Category

(1) units due for > 3 years

(2) on the basis of available

man days.

2 Port and

Transport

Motor Vehicle

Tax/Passenger

and Goods Tax

Revenue is the main

criteria adopted. Further

HODs are also

categorized as ―A‖. The

categorization of units

into A,B,C has been

done as under:

A=units > or = 4%

revenue

B= units 1% =4%

C= units <1%

HOD & Major A Category

unit selected on the basis of

man days available.

B Category

(1) units due for > 2 years

(2) on the basis of available

man days.

C Category

(1) units due for > 3 years

(2) on the basis of available

man days.

3 Industries and

Mines

Mining

Receipts

Revenue is the main

criteria adopted. Further

HODs are also

HOD and Major units of A

Category selected on the

basis of revenue and man

9

categorized as ―A‖. The

categorization of units

into A,B,C has been

done as under:

A=units > or = 4%

revenue

B= units 1% =4%

C= units <1%

days available.

B Category (1) units due for

> 2 years

(2) on the basis of available

man days.

C Category (1) units due

for > 3 years

(2) on the basis of available

man days.

4 Energy and

Petrochemical

Electricity Duty

and Inspection

Fees

HODs are categorized as

―A‖.

The other units mainly

dealing with levy and

collection of Inspection

fees have been

categorized as ‗C‘.

HOD Office has been

selected on the basis of man

days available.

C Category (1) units due

for > 3 years

(2) on the basis of available

man days.

5 Autonomous

Body

Audit u/s 14 of

D P C

As prescribed in

Autonomous Body –

Manual

The Audit Plan of each year for the subsequent financial year, after consolidation by

Central Audit Report Section, is submitted to CAG‘s Office during August/

September for approval.

1.12.3 FRAMING OF AUDIT PROGRAMMES

The quarterly audit programme is prepared for each local audit party based on the

receipt of approval of the Audit Plan for its implementation from Head quarters. After

approval of programme by the Group Officer, the same is issued to Local Audit

parties. The Audit Programme (Quarterly) be uploaded on the official website of

office of the PAG (E&RSA), Ahmedabad, Gujarat.

The composition of local audit party generally consists of one Sr. AO/AO, One AAO

and one Auditor keeping in view the nature, and complexity of the work of auditee

organization. In respect of low risk auditee units, the audit may be done by the AAOs.

Besides, the supervision at Group Officer level is done for audits as per the

programme approved by the PAG (E&RSA).

1.12.4 DURATION OF AUDIT

There are no well-laid down norms for fixing the duration of audit. The time

allocation is closely reviewed to decide the duration of audit keeping in view the

availability of audit resources and increase in the volume of activities of the auditee

units.

The Inspecting Officers may indicate their suggestions for increase in the duration of

audit for future audits in the Title sheet while forwarding the draft inspection reports.

In consideration of these aspects duration of audit may be decided by RSA I (Hq)

Section.

1.13 COMMUNICATION OF AUDIT PROGRAMME

An intimation of audit should be sent to the management of the concerned auditee unit

at least two weeks in advance detailing the names of the audit party personnel and the

10

duration and type of audit. Quarterly tour programmes as approved by the PAG

should be intimated to the Inspecting Officers and local audit parties well in advance.

A programme register shall be maintained by RSA I & II (Hq) Sections. The

extension of audit programme if any, along with detailed justification to be submitted

to theGroup Officer for prior approval.

1.14 DUTIES AND RESPONSIBILITIES

The allocation of duties and responsibilities to AAOs, Sr. Auditors, Auditors, Clerk-

cum- Typist and Data Entry Operators would be entrusted by the Branch Officer. The

following are the important duties and responsibilities entrusted to the RSA (Hqs I

and II) Sections:

RSA I (HQ) SECTION

i. This Section has been entrusted with the responsibility of preparation of quarterly

tour programmes for audit of units of Commercial Tax as well as other state

receipts;

ii. Preparationof Audit plan in respect of VAT

iii. Vetting LARs in respect of Value Added Tax, Central Sales Tax and Profession

Tax;

iv. Issuance of Factual Notes to RSA (Report) Section;

v. The Section is responsible for organizing monthly meetings of the wing as well as

making arrangements for in-house training; as well as nominations for training at

RTI/RTC

vi. Convening of Audit Committee Meetings;

vii. Checking of T.A. bills of the field party members with their approved tour

programme and weekly diaries of work done and other records maintained at the

headquarter Section and to forward the same to the Bills Section of the office for

re-imbursement;

viii. Maintenance of Guard files of the circulars received from the

C & AG of India and arrange for their circulation to the field parties and Sr. Audit

Officers/AOs/Inspection Officers to serve as their guide for the audit work.

RSA II (HQ) SECTION

i. This Section has been entrusted with the responsibility of preparing the Target for

RSA wing.

ii. Preparing Audit Plan of RSA II & consolidation of Audit Plan of RSA wing.

iii. Vetting of LAR in respect of audit of receipts and expenditure of offices under the

control of Revenue Department {except branches under the purview of

Accountant General (General and Social Sector Audit)}, Commissioner of

Transport, Commissioner of Geology and Mining and Chief Electrical Inspector;

Director of Petroleum and the Autonomous Body.

iv. Issuance of Factual Notes to RSA (Report) Section for further vetting;

v. Convening of Audit Committee Meetings;

11

vi. Consolidation of various returns/ information of the wing for onward transmission

to the Comptroller and Auditor General‘s Office.

vii. Dealing the court cases when received.

viii. Maintenance of Guard files of circulars received from CAG & Resolutions &

Orders received from Revenue Department regarding allotment of Government

Land. Guard file in respect of circulars of any received in respect of other taxes is

also maintained.

1.15 VERIFICATION OF OUTSTANDING PARAS OF OLD IRS

(i) The local audit parties shall strive to settle as far as possible, all the outstanding

paras of previous LARs after verification of their compliance by the auditee

units. If necessary the paras may be settled after discussion with the head of the

office audited. The results of verification may be recorded in the verification

sheet of LARs which may be submitted to the Group Officer for final orders of

settlement of the paras.

(ii) The issue of quality and pendency of Inspection Reports (IRs) was reviewed at

Headquarters and the Comptroller and Auditor General of India has approved

the following course of action in this regard:

As a one time measure, all outstanding paragraphs in the Inspection Reports

pertaining to the period more than five years (prior to 2003-04) may be

reviewed and except for cases where recoveries are involved, cases which are

under discussion by PAC/COPU and paras which are still valid (for instance,

projects which may have been taken up a decade back, but are not yet complete

despite significant expenditure due to lack of approvals or poor design etc.) may

be forwarded to the respective departmental Secretaries/ Chief Secretary with a

request for necessary follow up action in each case.

Only such paras should be included in Part-II A of Inspection Report which can

be developed further for Audit Report of the same year or within the next 2-3

years. The monetary limit of paras in Part-II A should be the same as the

monetary limit for the FNs/PDPs. For findings involving serious systematic

issues, no monetary limit should apply.

(Authority Letter No: 137/RSCS/Coordn/Aud Pln/2008/279 dated 04.02.2009)

(iii) Pendency of old vintage IRs/Paras were being noticed during inspections of

various Audit Offices across India. Headquarters vide letter no

137/RSCS/Coordn/Aud Pln/2008/279 dated 04.02.2009 issued instructions to

review all outstanding para pertaining to the period more than five years to

forward to the respective departmental Secretaries/Chief Secretary with a

request for necessary follow up action in each case. Necessary action in this

regard needs to be taken and progress may be furnished in enclosed Proforma

along with Quarterly Compliance Reports being rendered by the Audit Officers

to the Inspection Wing.

(Authority Letter No: 722/Inspection/307/2-13-14 Dated 29.09.2014)

12

1.16 PROCESSING & ISSUE OF LAR

The draft LAR should be vetted carefully to ensure that all the working paper

requirements as explained above have been complied with and the audit evidence in

the form of key documents is available and is sufficient and appropriate.

The draft LAR duly vetted is to be submitted to the Group Officer for approval and to

be issued within 30 daysfrom the date of completion of audit or such other period as

prescribed in this regard to the Head of the Department or the authority concerned.

The Factual Notes, if any, are required to be sent to the RSA (Report) Section along

with a copy of the paragraph of the LAR along with relevant key documents for its

further processing for inclusion in the Audit Report (Revenue Sector) Government of

Gujarat.

1.17 IR MAIN

The RSA Hqs (I & II) Sections are required to maintain the ‗IR Main‘, a software

developed in-house, to cater to the requirement of monitoring LARs and money value

objections, to avoid delays in issuance of inspection reports, pursuance of objections

and preparing the periodical returns. The database consists of four components

namely, Offices to be audited, Inspection Reports, Audit Objections and Potential

Draft Paragraphs.

1.18 PURSUANCE OF LAR

The officer in charge of the auditable entity shall send the reply to theLARwithin one

months of its receipt.In case of non-receipt of replies; the periodical reminders may be

issued at appropriate level till it is settled.

1.19 MISCELLANEOUS DUTIES (HQS)

(i) PROGRESS REPORT OF ISSUE OF LARS

To watch the prompt disposal of draft LARs received from the field parties, a return is

to be submitted to the Group Officer on 7th of every month. The Branch Officer in-

charge of the Section should ensure its submission.

(ii) INWARD REGISTER

An Inward Register to watch the disposal of important correspondence received from

C&AG and Government etc., will be maintained in Headquarters Sections. A weekly

report of outstanding letters is to be prepared and submitted to the Group Officer and

once in a quarter to PAG.

(iii) COMPUTATION OF EXTERNAL ARREARS

Following time schedule is prescribed for computing the external arrears in respect of

outstanding objections relating to VAT Audit and other State Receipts Audit:

(a) Under assessment and over assessments - 20 minutes

(b) Defective procedure - 15 minutes (Authority: CAG‟s letter No.3409/Rev.A/616-67 dated 31.07.1968)

13

(iv) DEALING WITH GENERAL MATTERS

RSA I & II (Hqs) Sections shall deal with all general matters and necessary

instructions in the form of circulars etc., are issued after getting approval of Group

Officer. The calendar of returns shall be maintained by both the HeadquarterSections

and the various returns should be submitted on due date to the Group

Officer/AG/C&AG.

(v) REGISTER OF WEEKLY DIARIES

A register to watch the receipt of weekly diaries from LAPs should be maintained by

RSA I (Hq). The weekly diaries on receipt, may be entered in the registerwhich shall

be put up to theBranch Officer for approval. In case of supervised audits, the weekly

diaries are required to be countersigned by the Inspecting officers.

(vi) REGISTER OF TA BILL

The register is intended to record the receipt of the TA Bill from Sr.Auditors and

AAOs posted in the LAPs. The T.A. Bills shall be verified with reference to the tour

programmes, dairies and leave account etc. and forwarded to the Sr. AO/AOBills

Section for sanction and disbursement. The Inspecting Officers may submit the TA

Bills directly to AO/Bills.

1.20 PRESERVATION OF OLD RECORDS

SL.NO. CATEGORY OF RECORDS PERIOD OF PRESERVATION

1.

Local Audit Reports finally

closed as no audit objection is

outstanding

5 years for annual and 6 years for

biennial audits from the date of

issue of report or till the settlement

of all paras whichever is later.

2.

Files related to the instructions

and directions issued by the C &

AG from time to time regarding

scope of audit.

Permanent

3. Digest of important cases Permanent

4. Digest of Supreme Court

decisions

One year from the end of the year in

which all the cases included in the

Digest have appeared in the Sales

Tax Cases.

5. Audit Programme files Three years from the end of the year

to which it relates

6. Clarifications issued by the

Government

Till they are included in the

bulletins.

7. Bulletin referred to in 6 Permanent

(Authority: CAG letter No.443/Tech.Admin/1/770-68 dtd.16/12/1968)

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1.21 GENERAL

Consequent to restructuring, the State Receipt Audit (Report) Section was renamed as

Revenue Sector Audit Report) Section which is being controlled by Group Officer

(RSA). This Section is under the supervision of Branch Officer.

The allocation of duties and responsibilities to AAOs, Sr. Auditors, Auditors, Clerk-

cum- Typist and Data Entry Operators would be entrusted by the Branch Officer.

The duties and responsibilities of the Section are as follows:

1.22 LAYOUT OF THE CHAPTERS

The layout of Chapters in the Audit Report of the Comptroller and Auditor General of

India (Revenue Sector) Government of Gujarat contains information relating to the

trend of revenue receipts of the State, recovery position results of the paragraph etc.

The format of this Chapter is prescribed by the CAG Office from time to time.

Theformat was last revised vide CAG‘s Letter No:598/WR-SRA/45/K. Centre/2014

Dated 14.08.2014.The draft report are to be submitted to the Head Quarters within the

time schedule as prescribed from time to time through Central Audit Report (CAR)

Section.

1.23 DRAFT PARAGRAPHS

RSA (Hqs I & II) Section identifies the Potential paragraphs from the Inspection

Reports and prepares Factual Note (FN) and forwards the same to the ReportSection

after obtaining the approval of the Group Officer for further processing. The approved

FNs received from Hqs.Section are entered into FN register and are scrutinized with

relevant key documents submitted.

Potential Draft Paragraphs (PDP) are prepared and issued to the Head of the Auditee

Departmentwith the approval of the Group Officer in respect of FNs which are found

fit for inclusion in the Audit Report. The FNs which are deficient in key documents or

want of some additional information are returned to Hqs. section for collecting the

missing key documents from the field parties. If the PDP is not found appropriate for

inclusion in the Audit Report, a note would be put up for its closure to the Hqs.

section with the approval of the PAG.

The PDPs issued would be processed as Draft Para further in the Section and

submitted to CAR Section who independently examines the case along with the

relevant key documents and put up the case file for the approval of the PAG for issue

to the Government/Department. After approval, the case would be entered into the DP

Register. The DPs are consolidated Chapter-wise and sent to CAG‘s Office which is

returned with queries. The DP section prepares compliance to these observations in

annotated form and incorporates the reply of the Department/Government in the DP.

The DP is revised or modified, if required, based on the observations of CAG‘s Office

or the reply of the Company/Department.

The targets fixed by the PAG at the beginning of each financial year in sending the

material to CAG‘s Office may be strictly adhered to.

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1.23.1 MONETARY VALUE

The minimum monetary value limit for the DPs for inclusion in the State Reports for

Revenue was prescribed by CAG Office before restructuring during the year 2005 and

2006, respectively. The monetary limit was reviewed by ADAIs of State Report

Wings and they approved (March 2015) the monetary value for DPs which was

revised from ` 5 lakh to ` 10 lakh for Gujarat State. As an exception, if PAG feels a

paragraph of smaller value should be included in the Report, based on detailed

justification submitted, respective ADAIs could take view on its inclusion in the

Reports. In case of DPs involving fraud and embezzlement money value would not be

a criterion. (Authority Letter No: 251/WR/Coord/DPs/Money value/74-2014 Dated 20.04.2015)

1.24 PERFORMANCE AUDITS (PAS)

An independent risk assessment should be carried out at the audit planning stage and

it should include consideration of any information received from the public or media

on suspected cases of fraud and corruption. The audit plan should focus on the high

risk areas (as indicated in paragraph 13.8 of Standing Order on Role of Audit in

Relation to cases of Fraud and Corruption issued by the IA&AD on 6 September

2006). Based on this risk assessment, the audit objectives are developed and audit

procedures are designed so as to secure reasonable expectation of detecting and

evaluating irregularities arising from fraud and corruption.

A risk analysis is carried out for the selection of PAs for the audit report as per

Headquarter guidelines are discussed in paragraph 1.34. An audit party is identified

for conducting the audit. The entity and concerned Administrative Department are

intimated for taking up the audit. An entry conference is held with the

Government/Department to discuss the objectives, scope, methodology, criteria and

sampling techniques to be applied in the PA. The PA Implementation Guidelines and

Audit Design Matrix (ADM) are prepared in case of State PAs and sent to CAG

Office for approval.

In case of Horizontal PAs, the guidelines and ADM are received from CAG Office.

Fortnightly progress reports are called from the audit parties giving details of the

progress of the PA. The Draft reports of the PA are submitted by the local audit

parties to the Report section as per schedule. The Draft reports are vetted at the Report

section and key documents are verified and submitted it to the Central Audit Report

Section for an independent review. The same is issued to the entity and concerned

Administrative department and Finance department with a request to reply within six

weeks after the approval of PAG. An Exit conference is held with the

Government/Department to discuss the audit observations and to obtain the views of

them. The PAs are sent to CAG Office which are returned by them with their

observations. The Report section prepares compliance to the queries in annotated

form and incorporates the reply of the Government/Department in the PA. The PA is

revised or modified if required based on the observations of CAG Office or the reply

of the Government/Department.

Reports of individual cases of suspected fraud/corruption should be confidentially

addressed, in the first instance, to the controlling authority concerned with the

approval of Group Officers. More serious cases should be confidentially reported to

the Secretary of the Administrative Department concerned and the investigative

16

authorities either over the signature of PAG or by Group Officers with the approval of

PAG.

The targets fixed by the PAG at the beginning of each financial year in sending the

material to CAG‘s Office may be strictly adhered to.

1.25 DRAFTING OF AUDIT REPORT

The reporting style should be direct, simple and precise. Long and complicated

sentences should be avoided. Legal jargons and complex words should be avoided as

far as possible. The ‗Style Guide‘ issued by IAAD (2nd

Edition November 2005)

should be referred to while drafting the Audit Report.

1.25.1 CONFIDENTIALITY OF MATERIAL FOR AUDIT REPORTS

The issue of maintenance of confidentiality of the Audit Reports has been

reconsidered in the light of media reports on leakage of audit reports prior to its

tabling in the Parliament/State Legislature. It has been decided that in order to

maintain confidentiality/secrecy of draft Audit Report and the material for Audit

Report, the following points should invariably be practiced:

The confidentiality may be claimed once a conscious decision is taken by the

Head of the Department in the field office to develop any audit observation

whether in the form of Draft para/Long para/Review etc., for probable inclusion in

the Audit Report.

Any such material and records relating thereto should have restricted access and

placed in password protected computers. The level up to which the access to

report material is to be provided should be decided by the Head of the Department

in the field offices.

A confidentiality statement as per the prescribed format should be got signed from

those dealing with the report material (including outside parties engaged for

design and printing of report) and placed on record.

All the pages of the material decided to be processed for inclusion in the Audit

Report should be marked as Confidential and issued to the Audited Unit or

Administrative Department/Government in Sealed Cover with a remark ―To be

opened by Addressee only‖.

While forwarding the draft material to the audited unit or concerned

Administrative Department/ Government for verification of fact and figures

mentioned in the draft material for Audit Report and for eliciting their comments

thereon, it should categorically be mentioned that views expressed in the material

so issued are interim and may change depending upon the response of audited unit

or concerned Administrative Department/Government. Besides, it should also

invariably be mentioned in the forwarding letter that the audited

unit/Administrative Department/Government should also exercise due care to

ensure confidentiality of draft material for Audit report.

The report material may invariably be sent through official mail and to the official

addresses only with a request to acknowledge receipt.

17

In case, the material is transmitted by Email the following should be expressed:

o “This electronic mail message and any attached file(s) contain information

intended for the exclusive use of the individual or entity to which it is addressed

and may contain information that is proprietary, privileged, confidential, and/or

recipient, you are hereby notified that any viewing, copying, disclosure or

distribution of this information may be subject to legal restriction or sanction.

Please notify the sender of any unintended receipt and delete the original

message along with all attachments thereto without making any copies.”

The above instructions may be strictly followed to ensure the confidentiality /secrecy

of the material contained in the draft Audit Report and may also be brought to the

notice of all the Officers/staff connected with the Audit Report work for strict

compliance. In addition to the above, HODs may also place further controls as

deemed fit to ensure confidentiality of Audit Reports. (Authority Letter No:II/S/5/258-PPG/24-2012 Dated 27.07.2012)

1.25.2 BOND COPY

A spot discussion on the paragraphs proposed for inclusion in the Audit Report is

carried out in this office by the CAG Office team with reference to the annotated form

and supporting key documents. Subsequently, the report is formatted as per the style

guide issued by the CAG and the formatted bond copy after the approval of PAG is

sent to CAG Office as per the schedule. The officials of Report section visits CAG

Office, New Delhi for assistance in approval of bond copy. While forwarding, the

bond copy of the Audit Reports to CAG Office, PAG should indicate in the

forwarding letter the number of cases of fraud and corruption if any, included in the

Report with the money value of the concerned paragraphs. Further, the following

documents should also accompany the bond copy:

(i) For the purpose of measuring audit effectiveness, the CAG Office has

prescribed a matrix (Annexure 1) for allotment of weights for Audit Reports.

The money value together with classification (R1, R2 etc.,) should be indicated

in the margin of each paragraph included in the bond copy of the Audit Report.

In addition to this, a consolidated report of the weighted matrix may also be sent

at the time of sending bond copy of the Report. Further, in case of draft

paragraphs where the entire amount of the draft paragraph issued to

Government/Department has been recovered at the instance of audit, the money

value may be taken into account for working out the financial impact of the

Audit Reports from 2004-05 onwards. A reference in this regard may be made

in the paragraph ―Response of the Department to Draft Audit Paragraph‖ and

the fact that recoveries have been made in full may be depicted in this

paragraph.

(ii) In order to assess the quality and impact of audit, the CAG Office had

prescribed that the bond copy of Audit Report may be accompanied by

Assurance Memo signed by the Pr. Accountant General/Principal Audit

Officers. The Assurance Memo should contain the following declarations:-

(a) That the Audit Plan for the year has been fully implemented.

18

(b) That all observations pointing out lapses in the implementation of systems

and procedures and all weaknesses in the responsibility centers have been

discussed with the heads of administrative departments and assurances

obtained in regard to corrective measures for arresting potential risks.

(c) That all contested evidences have been conclusively handled with reference

to the facts at the disposal of audit.

(d) That in respect of reviews of schemes, samples have been selected based on

risk analysis and judgement sampling and that the evidence of such exercise

is available on record.

(iii) A Certificate from Dy. Accountant General (A & E) confirming the figures

appeared in Chapter I of the Audit Report matches with Finance Accounts of the

State for the year of Report may also be sent along with the bond copy.

The targets fixed by the PAG at the beginning of each financial year in sending the

material to CAG‘s Office may be strictly adhered to.

(Authority: CAG Office letter No: 256-SRA/3(i)/2005 dated 29.04.2005& letter No: 116-Audit (AP)/4-2003

dated 22.08.2003)

1.25.3 PRINTING AND TRANSLATION

In order to bring uniformity in allotment of number to Audit Reports and new design

for front and back cover of the Audit Report (State Government), the detailed system

enumerated in the CAG Office letters No.99/PPG/8-2012 dated 26 March 2012 &

No.135/PPG/8-2012 dated 24 April 2012 may be followed.

After the approval of Bond copy, the English version is checked for correctness of

facts and figures. Thereafter, printing approval is sought from the CAG Office and on

receipt of the same; the material is given to the press for printing of the Audit Report.

Simultaneously, the English version of the approved and checked bond copy is given

for translation in the local language. A weekly status report is sent to CAG office

regarding the status of printing and translation. The translated material from the

translator is received in batches and is verified by an official assigned with the work

which is thereafter vetted by the Report section. The final translated Audit report

received from the translator is formatted as per style guide and given for printing.

Minimum two Proof reading are done at the press to ensure minimizing the mistakes

in formatting or printing.

To have good quality of printing of Audit Reports and Annual Finance &

Appropriation Accounts, Senior Management in this office has decided to get the

same printed through private press. However, option for printing of Audit Reports

through Government Press is open, if the quality of printing is up to the desired

standards.

For administrative approval in respect of printing of Audit Reports through private

press, the requisite details to be furnished in the prescribed format to CAG Office.

While forwarding the requirement of fund, the following to be ensured that:

Requirement of fund may be made after proper market survey and best

competitive price;

19

Requirement of fund may be projected only for which the printing is to be

undertaken and payments to be made during the Financial Year.

Previous liabilities, if any, may also be mentioned in the enclosed Annexure with

due justification. Administrative approval awarded previously and payment not

made till date, will deem to have lapsed as at the end of the financial year. (Authority: Circular No.15/Staff/2012 dated 26/04/2012)

1.25.4 COUNTERSIGNATURE AND PLACEMENT

The final hard rexin bound printed copies are sent to CAG Office for countersignature

of the CAG. As per Regulation 210(2) under Chapter 15 of Regulation on Audit &

Accounts (Amendment), 2012, a signed copy of the audit report shall simultaneously

be sent to the Secretary to the President of India or the Governor of the State or Union

Territory having legislative assembly or the Administrator of Union Territory, as the

case may be, informing him of requisite copies having been sent to the Ministry/

Department of Finance.

1.26 DISCUSSION OF THE AUDIT REPORT

Replies which are received from the Government in UOR form after placement of the

Report in State Legislature are processed further and vetting remarks are offered after

the approval of PAG. The Audit Reports are selected by the Public Accounts

Committee (PAC) for discussion. Replies to UOR remarks are submitted by the

Department to PAC. The above reply is sometime given by PAC to this office for

preparation of Questionnaire for use in the discussion during the PAC meetings.

Based on our questionnaire, the PAC Chairman or member of PAC questions the

Secretary/Pr. Secretary of the concerned Department. Based on the discussion, the

PAC either settles the Para or gives recommendations on the paragraphs through PAC

report. The Government/Department has to give reply/Action taken Note (ATN) to

the PAC report to this office on which this office gives remarks which are further

discussed by PAC.

1.27 OTHER WORK

(i) DEALING WITH GENERAL MATTERS

RSA Report Section shall deal with all general matters and necessary instructions in

the form of circulars etc., are issued after getting approval of Group Officer. The

calendar of returns shall be maintained by the Section and the various returns should

be submitted on due date to the Group Officer/AG/C&AG.

(ii) PROCEDURE FOR SENDING LETTERS TO CAG OFFICE

Para 2.17.4.2 of Manual of Standing Order (Administrative) Vol.1 (Third Edition)

requires that all correspondence with CAG Office should be undertaken at the level of

Head of the Office i.e. Pr. AG or AG/Pr. Director of Audit. Invariably, such

communications when signed by the Sr. DAG/DAG/Director indicated to that effect

that the communication has been issued with the approval of Pr. AG/AG/Pr. DA.

(iii) MEDIA POLICY FOR INDIAN AUDIT & ACCOUNTS DEPARTMENT

A need was felt to devise a proper media policy to interact with the print or the

electronic media and dissemination of information to the masses in a promise manner

20

regarding the activities of the CAG of India. A broad framework media policy is

given hereunder for compliance.

The CAG will be the nodal officer, or in his absence, the senior most DAI, to

interact with the media on (i) specific requests from the media (ii) dissemination

of information to the media considered largely essential for mass consumption and

(iii) issuing clarifications, if any need to remove distortions or misrepresentations

of facts by the media or an individual or a group. Media Advisor will handle this

work under the direct supervision of the CAG/DAI in close coordination with

their Secretariats/Personal Staff.

Media Advisor will act as a focal point to process all media requests for formal

interviews, except those coming directly to the CAG. He will be the CAG‘s

interface before the media and after consultations with senior officers arrange

suitable replies to the queries from the media.

No press release/press note or a formal reply will be issued to the media without

the express approval of the CAG. It will apply even if the CAG is abroad or on

tour. After approval, the press notes/dispatched, the process notes/release will be

faxed/emailed/dispatched through special messengers to local media offices

through normal channels.

No regular press meet/press conference will be held by any officer other than the

CAG and in case of a State by the PAGs for their respective States after obtaining

approval from the CAG. Media Adviser should be associated with A.G. press

conference as far as possible.

The frequency of the regular press meet/press conference could be once a year

after presentation of bulk reports to Parliament/State Legislatures, highlighting the

main aspects of the report. If necessary CAG may hold regular press meet more

than once a year. All such press meets for the CAG will be organized by the

Media Adviser and Director and for the AGs by the AGs themselves.

Departmental Heads upto the level of DGs/ Principal Directors will keep the

Media Adviser informed of the activities of their departments. They will provide

him with suitable calendar of forthcoming events backgrounds agenda notes and

recommendations of a Conference/Seminar which they deem fit to be

disseminated to the media.

Media adviser will be part of all conferences participated by the CAG as far as

possible.

Media Adviser will be given tabled Reports from all wings.

Pr. Accountants General will keep the CAG informed of the media developments

in their States and e-mail/fax copies of any media reports published/telecast in

local media relating to their CAG functions or regarding State Reports.

The Sr.AO in charge of the Section in DA wing will coordinate with the Media

Adviser regarding feedback on reports published/telecast or broadcast in the

media on CAG activities reports. (Authority Letter No: 221/Com/Med/01/04 Dated 18.01.2005)

21

(iv) Guidance Note regarding direct access to Private Sector records for audit

by CAG

A Guidance note regarding direct access to Private Sector records for audit by CAG is

enclosed for compliance (Annexure-2). Authority: Head Quarter letter no.119/3-PPG/2014 dated 4 July 2014)

(v) Guidance Note on Preface to Audit Reports

A Guidance note on Preface to Audit Reports is enclosed for compliance

(Annexure-3). (Authority: Head Quarter letter no.70 to 160/PPG/44-2013 dated 4 April 2014)

1.28 Preservation of old records

SL.NO. CATEGORY OF RECORDS PERIOD OF PRESERVATION

1.

Policy files containing

instructions of the C & AG issued

from time to time regarding

preparation of Audit Reports.

Permanent

2.

Files containing material to be

collected by the audit parties for

Audit Reports.

Three years from the end of the year

in which PAC has issued their

report on the concerned Audit

Report.

3.

File dealing with the material for

Audit Report on Revenue

Receipts/Revenue Sector already

sent to the C & AG for approval

for inclusion in the State Audit

Report.

(i) Statistical particulars as per item

2

(ii) Draft paragraphs and statements

of under assessments etc., as per

item 1.

(Authority: CAG letter No.443/Tech.Admin/1/770-68 dtd.16-12-68)

LOCAL AUDIT

1.29 AUDITING STANDARDS

As per the Regulation on Audit & Accounts issued (2007) by IA&AD, the field

standards provide an overall framework for conducting and managing an audit which

inter alia include the following:

PLANNING: The auditor should plan audit in a manner which ensures that

an audit of high quality is carried out in an economic, efficient and effective way

and in a timely manner.

SUPERVISION AND REVIEW: The work of audit staff at each level and audit

phase should be properly supervised during audit and a senior member of the audit

staff should review documented work.

EXAMINATION AND EVALUATION OF INTERNAL CONTROL: The

auditor, in determining the extent and scope of audit, should examine and evaluate

the reliability of internal control. Auditors should obtain a sufficient

22

understanding of internal control to plan the audit and determine the nature,

timing and extent of checks to be performed.

COMPLIANCE WITH APPLICABLE LAWS, RULES AND

REGULATIONS: The auditor shall verify compliance with applicable laws,

rules and regulations and highlight deviations, if any.

AUDIT EVIDENCE: Competent, relevant and reasonable evidence should be

obtained to support the auditor‘s judgement as well as conclusions regarding the

organisation, programme, activity or function under audit.

1.30 CONDUCT OF AUDIT BY LOCAL AUDIT PARTIES

The Local Audit Parties (LAPs), on receipt of the quarterly audit programme from the

RSA –Hq I duly approved by the DAG or PAG has to conduct (i) Compliance Audit

or (ii) Thematic Audit or (iii) Performance Audit or (iv) Follow-up Audit, as the case

may be.

The detailed guidelines in conducting the Performance Audit and Follow-up Audit are

discussed separately in Performance Audit, Follow up Audit & IT Audit. Thematic

Audit is the terminology which is being used for audits which may have both

compliance and performance audit objectives. The objectives of such audits are to

focus on a particular audit objective across sectors or audited entities. A brief about

Compliance Audit given in the following paragraph:

1.31 COMPLIANCE AUDIT

Compliance audit examines the transactions relating to expenditure, receipts, assets

and liabilities of Government for compliance with:

the provisions of the Constitution of India and the applicable laws; and

The rules, regulations, orders and instructions issued by the competent authority

either in pursuance of the provisions of the Constitution of India and the laws or

by virtue of the powers formally delegated to it by a superior authority.

Compliance audit also includes an examination of the rules, regulations, orders and

instructions for their legality, adequacy, transparency, propriety and prudence and

effectiveness that is whether these are:

intra vires the provisions of the Constitution of India and the laws (legality);

sufficiently comprehensive and ensure effective control over Government

receipts, expenditure, assets and liabilities with sufficient safeguards against loss

due to waste, misuse, mismanagement, errors, frauds and other irregularities

(adequacy);

clear and free from ambiguity and promote observance of probity in decision

making (transparency);

judicious and wise (propriety and prudence); and

Effective and achieve the intended objectives and aims (effectiveness).

23

1.32 CONDUCT OF STAFF DURING INSPECTION

All the members of the audit inspection party should conduct themselves

professionally and try to avoid any misunderstanding or friction with the members of

the auditee institution. They should not indulge in verbal criticism and avoid frivolous

objections. The party members should comply with the procedures indicated in Code

of Ethics as discussed in paragraph 1.10. The allocation of duties and responsibilities

to AAOs, Sr. Auditors, Auditors, would be entrusted by the Branch Officer. The

Branch Officer should ensure that Sr. Auditors and Auditors are assigned with the

Audit Work invariably so that they would be acquiring the auditing skills over a

period of time.

1.33 PROCEDURE FOR LOCAL AUDIT:

The annual accounts present the financial picture of a Company/ Corporation. The

audit party should apply their mind to appreciate any transaction in its proper

perspective. The party should study the systems of internal check and control, various

manuals prepared and adopted by the Company, administrative orders and annual

report and should also review the agenda and minutes to form an idea of the

institution as a preclude to commence the audit. The Senior member of the Audit

Party would meet the Head of the Unit on the commencement of the audit and

conduct an Entry Conference and the minutes of the meeting would be authenticated

and well documented.

1.33.1 SAMPLING

Quantitative Analysis is a way of measuring things. It involves examination of data

available in any form; it could be the data relating to financials like earnings, revenue,

market share or data relating to programme implementation like details of

beneficiaries etc. The audited entities' data can be analysed by auditors to illustrate or

corroborate a statement. Mathematical, economical, computational and statistical

analyses are some of the quantitative techniques which can be used by the auditors

while analyzing complex data of the audited entity. It is quite possible to analyze the

whole population with the help of the various IT tools available. Data analytics and

other techniques can be used for these purposes. The quantitative analysis can provide

trends, explanation for a particular behaviour and other results.

However, when it comes to substantive testing, it may not be possible to work with

the complete data due to the high volume of data and information associated with a

programme or entity. In such cases, sampling techniques are required to be used. The

nature of the population should be examined to decide the most appropriate sampling

methodology. The sample selected and the sampling approach and methodology

should be documented and shared with the entity.

When selecting an audit sample, specific audit objectives and the attributes of the

population from which the sample is to be drawn should be taken into account. In

determining the sample size, it should be considered whether sampling risk would be

reduced to an acceptable low level. The sample items are to be selected so as to have

a reasonable expectation that all sampling units in the population have an equal

chance of selection. The extrapolation of audit findings based on substantive testing

of audit sample to the whole audit universe has to be considered keeping in view

homogeneity of the population, audit objectives and the analytical tools applied.

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1.33.2 REVIEW OF SPECIAL POINTS REGISTER

LAP should review the cases mentioned in the Special Points Register by the Head

quarters section during the course of the compliance audit and submit its closure

while submitting the Draft Inspection Report to Head Quarters section.

1.33.3 ISSUE OF AUDIT OBSERVATIONS

During the course of audit, the audit party may come across certain observations and

the party members should prepare the "Half Margins" (HMs) by bringing out the facts

of the case appropriately and with proper audit conclusion. The HMs should not be in

the form of Audit Requisition calling information from the auditee. The Pr. AG had

instructed (December 2014) the field audit parties should include minor observations

only in Part-III of the Inspection Report in pursuance of the procedures contained in

CAG‘s Manual of Standing Order.

Further, Pr.AG had instructed the Local Audit Party (LAP) conducting the

Compliance Audit and Performance Audit should obtain the concurrence of Group

Officer and Pr.AG before issuing the Audit Enquiry/POM/Half Margin of their audit

observations involving the money value above Rs.1 crore and Rs.5 crore,

respectively. Therefore, the LAPs should send their draft AE/POM/HM on high value

cases should be promptly sent by e-mail to Group Officer for obtaining the

concurrence of Group Officer or Pr.AG. The LAPs should issue the HM to the auditee

after taking into account the instructions and modifications made by Group

Officer/Pr.AG while giving their concurrence. (Authority: Circular No.DAG (RSA)/Desk Dt.2-12-2014)

In some Court cases, audit has been made a respondent. These are due to the fact that

the assessing officers make audit observations the basis for making additions in

assessments or re-assessments. Hence, Pr. AG had instructed the LAPs conducting the

audit of the offices of Sub Registrar, Dy. Collector (SDVO), Inspector General of

Registration, Collector (in respect of paras pertaining to Stamp duty) to insert the

following note after the audit query emphasizing that the Assessing Officer has to

make an independent assessment :

―Above audit observations are based on the examination of records by the audit team

purely on the basis of records made available by auditee on as is where is basis during

the currency of audit. The audit is conducted under Section 16 of the Comptroller and

Auditor General‘s (Duties, Powers & Conditions of Service) Act, 1971. The Audit

observations are a matter between the Audit and the Auditee. The auditee is required

to reply to audit observations by taking a remedial action if it agrees with the audit

observation or stating its reasons of disagreement with the audit observations.

The Assessing Officer (AO) is required to exercise independent application of mind

while assessing tax/determining additional demand for tax. Audit observations are

one of the inputs that the AO has. In the end, AO has to reach the conclusion based

on his independent assessment. After considering the audit input, if AO reaches the

conclusion that additional demand needs to be raised, he should raise this

independently without citing audit observations. If he cites audit observations in his

demand, his act can be construed as an act in pursuance of audit observations without

independent application of mind. In such a case, the demand notice issued by AO,

even though correct and tenable according to the law, is likely to be set aside purely

25

on technical ground that there was no independent application of mind. This, in the

end, is not in the interest of revenue of the State.

Above position may please be kept in view while taking a remedial action on the audit

observations.‖ (Authority: Circular No.RSA-II/SAO/Misc/2015-16 dated 02.06.2015)

The acknowledgement of the receipt of the HMs by the auditee should be obtained

and kept in a systematic and chronological order on record by the Audit Party. Every

effort may be made to get the replies to the audit observations. However, the drafting

of inspection report should in no case be delayed due to non-receipt of replies to HMs.

It is the primary responsibility of the auditee to satisfy audit by furnishing replies to

the audit observations. The information/figures required during audit may be

compiled by the Audit Party from the files, records and reports. However, a

confirmation of the figures compiled should be obtained from the auditee.

No audit objection should be dropped without the specific approval of the Audit

Officer- in- charge of the party or the Audit Officer-in-charge of RSA Hq Section. If

any objection has been dropped from the draft LAR during its discussion with the

head of the office, the minutes of exit conference should be kept to enable

Headquarters to understand the circumstances under which the audit objection has

been dropped. The Senior member of the LAP should draft the Inspection Report in

the manner enumerated below:

1.33.4 COMMUNICATION OF RESULTS OF AUDIT

The results of local audit and inspection should be set forth in a Local Audit Report

consisting of following parts:

Part-I

(a) Introductory

(b) Outstanding objections in brief from previous reports

(c) Schedule of persistent irregularities

Part-II

Section-A: Major irregularities that are likely to materialize into draft paragraphs of

the Audit Report & cases of system failure.

Section- B: Irregularities which, though not major, are required to be brought to the

notice of higher authorities and followed up by the Pr. AG and instances of recoveries

to be affected and regularized.

Part-III

Test Audit Note containing minor irregularities, to which a schedule of items settled

on the spot should be attached. The procedural irregularities in respect of which the

head of the office has held out assurances about following correct procedure in future

should be noted in this schedule.

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DISCLAIMER CERTIFICATE

It has been decided by the C&AG of India that the inspection report as finally issued

to the Administration or head of office inspected after scrutiny and editing in the

headquarters office of an Accountant General should be formally approved by the

Group Officer. Further, last page of the LAR should contain a disclaimer statement as

given below:

"The Inspection Report has been prepared on the basis of information furnished and

made available by the auditee(s). The Office of the Accountant General (E & RSA),

Gujarat, Ahmedabad, disclaims any responsibility for any misinformation and / or

non-information on the part of auditee."

1.33.5 REVIEW OF OUTSTANDING PARAS OF THE PREVIOUS IRS

The LAP should make concerted efforts to collect the information/ documents called

for by the Head quarters section and also to obtain final replies of the outstanding

paras and submit the para wise verificational remarks in an annotated statement to the

Head Quarters section for its early settlement.

1.33.6 WORKING PAPERS & DOCUMENTATION

The LAP should prepare the working papers and the title sheets for the Compliance

Audit as prescribed by the RSA – Hqrs (I & II) and indicated in Annexure ‗B‘ of

Chapter 2 to 7 for compliance and submission to the RSA Headquarter Sections along

with the Draft LARs. The Draft LAR files for the Compliance Audit may be

submitted within 5 (working days) from the date of completion of audit to the

concerned RSA Headquarter Sections for further issuance to the auditee office. The

AAOs, Sr. Auditors / Auditors should submit their weekly dairies to the Senior

member of the LAP for further submission to RSA – I Hq Section. The Draft LAR

files should be properly indexed and key referenced by the LAP before submission to

the Head Quarters section.

PERFORMANCE AUDIT, FOLLOW-UP AUDIT& IT AUDIT

1.34.1 PERFORMANCE AUDIT

The Performance Auditing guidelines 2004 helped the Department to adopt the

prevalent International Standards of performance auditing and bring about rigour and

discipline in selection of topics through risk based planning and scientific conduct of

audit. However, with the passage of time, a need was felt for revision of these

guidelines in order to stay aligned with the new International Standards for Supreme

Audit Institutions (ISSAIs) and also, at the same time, contextualize it to the IA&AD

based on the lessons learnt by us during conduct of performance audits in various

sectors and governance environments. A stringent process of circulation of exposure

drafts, their examination through workshops, discussions and obtaining written

feedback from officers at all levels was undertaken which has culminated in the new

Performance Auditing Guidelines, 2014.

The new guidelines have several distinguishing features which supersede the

Performance Audit Guidelines 2004 which are as follows:

They lay down a strong conceptual foundation of the principles of Performance

Auditing and emphasise the need to organically link the strategic planning at the

27

headquarters level with the planning process at the field audit level.

The guidelines elucidate different audit approaches that can be adopted.

A new Audit Design Matrix that is to be used and constantly reviewed throughout

the period of audit and linked to the Audit Findings Matrix has been prescribed.

The forceful articulation and mandating of a stringent documentation process.

While outlining the methods of reporting and making recommendations it focuses

on the need for continuous interaction with the audited entities to ensure balanced

reporting.

Further, the need for following up the Performance Audit reports to bring about

improvement in governance has been highlighted. An attempt has also been made

to make the guidelines more concise and focussed.

1.34.1.1 GENERAL OUTLAY OF PERFORMANCE AUDITING GUIDELINES

These guidelines are presented in a sequence as the process of performance audit. The

Department has to deal with a variety of subjects of performance audits and conduct

audit in diverse entity environments. Besides, different structures for audit

management exist in the Department for the Union Government (civil, defence,

railways, communication, revenue and commercial audits) and the audit of State

Governments. It may, therefore, be necessary to adjust the actual process of planning,

field audits and consolidation of the performance audits in the context of the entity

environment and composition of audit offices.

Chapter 2 of these guidelines deals with the Mandate and General Principles

forPerformance Audits.

Chapter 3 deals with the strategic audit planning and selection of subjects.

Chapter 4 enumerates how to plan individual performance audits.

Chapter 5 discusses various elements of implementing the performance audit.

Chapter 6 deals with aspects relating to evidence and documentation.

Chapter 7 deals with the reporting process of draft performance audit report.

Chapter 8 deals with follow-up procedures.

1.34.1.2 QUALITY ASSURANCE

A peer review is performed by an independent team which may be internal or external

to the Department to evaluate whether an organization's internal quality control

system is suitably designed and operating effectively to provide the entity with

reasonable assurance that established policies, procedures and applicable government

auditing standards were being followed. The peer review involves testing the entire

quality control system and not work in process. The Inspection and Peer Review

Wing of Department is responsible for carrying out internal peer reviews. Besides,

external peer reviews can also be arranged to seek assurance of robustness of the

processes.

The Performance Auditing Guidelines 2014 could be accessed on the CA&G‘s Office

Website.

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1.34.1.3 CONSIDERATION OF FRAUD IN PERFORMANCE AUDIT

In Performance Audits, while selecting Objectives, Sub-objectives and Issues the

vulnerability/risk to fraud and corruption should be given due consideration. The

effectiveness of internal controls to prevent and detect fraud and corruption should be

considered as one of the objectives, depending on materiality and risk analysis. A

Detailed guidelines / Standing Order on Role of audit in relation to cases of fraud and

corruption issued by IA&AD in September 2006 may be referred to.

1.34.2 FOLLOW UP AUDIT

C&AG aspired (19 September 2014) the need of carrying out follow-up audits to

review the outcome of accepted Audit recommendations in selected sectors was

agreed to. For this purpose, the feasibility of such audits by identifying a sector based

on performance appraisals conducted during the last five years needed review. A

follow-up is expected to review whether the accepted Audit recommendations have

actually led to any concrete action and, if so, with what results.

Depending on the nature of findings, the Audit product may be appropriately

structured as a standalone Report or as a separate chapter/ paragraph in an existing

Audit Report. Such findings of follow-up audit would supplement the present practice

of giving statistical summary of the follow up action taken by the Government on

Audit findings in the Audit Reports.

(Authority Letter No 745-755 WR/Coord/Sr Mgmt/405-2013 Dated 13.10.2014)

1.34.2.1 Consequent to the above, in order to implement the above requirement,

the following instructions were issued.

A. SELECTION OF TOPICS FOR FOLLOW-UP AUDIT

(i) At least one follow-up audit may be taken up for each State Government and

included in the annual audit plan. In case of Union Government, one follow-up audit

may be taken up in each sector. Selection of topic should be based on the following

criteria:

Performance audits which have not been selected by PAC/COPU and are not

expected to be picked up for examination in near future should be considered for

selection.

Audits conducted at least 3 years ago should be considered, as sufficient time

should be available to the audited entities to implement the recommendations.

Follow-up audits should be taken up of such performance audits where the audited

entity has accepted recommendations given by Audit.

(ii) While selecting a follow-up, the Accountant General should consider the

following questions:

Has the initial issue identified in the earlier audit evolved with time?

To what extent the chances have altered the risks associated with issue raised in

the original report?

(iii) The focus should be to determine the progress achieved in resolving the issues

originally identified. However, issues may evolve with time, and focusing strictly on

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recommendations may result in missing a new concern, as the recommendations may

not be fully relevant to new circumstances or the evolution of the issue. These

concerns should be kept in mind while planning and conducting the audit as well at

the time of reporting audit feelings.

B. AUDIT SCOPE AND METHODOLOGY

(i) The main objective of conducting a follow-up audit is to assess the progress the

audited entity has made toward implementing recommendations of a previous

performance audit. A follow-up should not merely be restricted to checking whether

the recommendations have been implemented but should focus on whether the audited

entity has adequately addressed the problem and remedied the underlying conditions.

The auditor should adopt an unbiased and independent approach.

(ii) Follow-up audit should be initiated as a desk review. Awell-structured

questionnaires could be issued to the audited entity and those charged with

governance of the audited entity to elicit an update on the status of the action taken to

implement the recommendations from earlier audits.The request should include the

following questions:

What action plan or strategy has been drawn by audited entities to implement the

accepted recommendations?

What efforts have been made to implement the action plan or strategy?

How well are these efforts progressing?

(iii) Depending upon the responses received, field audit may be undertaken to validate

the action reported by the audited entity. The extent of field audit to be undertaken

would be decided after the responses of the audited entities. Interviews of the

responsible officers from audited entities can also be taken as the evidence for this

purpose.

(iv) Ideally, the original audit team members should carry out the follow-up, but this

may not always be possible because of conflicting scheduling needs or other reasons.

However, it is important to ensure that team members assigned to the audit follow-up

have the appropriate understanding of the subject matter of the audit. A session at the

initiation of the follow up for a comprehensive briefing or orientation to transfer the

knowledge from the original audit team should be organized, if possible.

C. AUDIT FINDINGS

(i) The status of implementation of accepted recommendations can fall in following

categories:

Insignificant or No progress – assurance without concrete plans is regarded as

insignificant progress.

Substantial implementation – Structure and process are in place and integrated in

some parts of the organisation, and some achieved results have been identified.

Full implementation – Structures and process are operating as intended and

implemented fully in all intended areas of the organisation.

(ii) At the end of the follow-up, the audit team should present and discuss the results

with the audited entity and prepare a report.

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D. REPORTING THE RESULTS OF AUDIT

(i) The follow-up audit should result in a report that provides an assessment of the

adequacy of the corrective action taken to resolve previously reported issues. The

report should not normally repeat recommendations from the previous report. Also, if

there are observations and conclusions on new issues, the audit team may take ―new‖

recommendations to address them.

(ii) The decision of presenting the follow-up report to the legislature would be taken

depending upon the significance of the audit results. The results of audit could be

presented as a chapter in the Audit Report or appear as a para in the relevant chapter.

Sometimes the audit team identifies issues that are important enough to be brought to

the attention of entity management but not necessarily to the attention of the

legislature. This may be done through a management letter.

(iii) While conducting audit follow-up, the audit team may find that the issues have

evolved and need to be redefined. New issues may also be identified and judged from

a risk perspective. In such a scenario, the key issues should be identified for

considering a fresh audit. (Authority Letter No: 48/40-PPG/2012 Dated 25.02.2015)

1.34.3 PUBLIC PRIVATE PARTNERSHIP (PPP)

Several definitions and explanations are readily available to clarify Public Private

Partnerships (PPPs). United Nations define public private partnerships as ―Innovative

methods used by the public sector to contract with the private sector who bring their

capital and their ability to deliver projects on time and to budget, while the public

sector remains the responsibility to provide these services to the public in a way that

benefits the public and delivers economic development and improvement in the

quality of life‖.

The Adopted Models of PPPs are (i) Build, Operate and Transfer (BOT); (ii) Lease,

Operate and Transfer (LOT); (iii) Build, Own, Operate (BOO) or Build, Own,

Operate and Transfer (BOOT); (iv) Design, Build, Finance and Operate (DBFO) or

Design, Build, Finance, Operate and Maintain (DBFOM); (v) Operation Concession;

and (vi) Joint Ventures:

1.34.3.1 MANDATES FOR PUBLIC AUDIT OF PPP PROJECTS

Public Private Partnerships may be formed by different government agencies and

bodies usually to promote and develop infrastructure facilities by inviting private

sector participation. Some examples are given below:

a) Government departments directly or in conjunction with a PSU, investing

resources in a PPP project and authorizing the private sector partner / JVC

to build the project and to provide public services on cost recovery basis

while holding only minority shares in the joint ventures formed for the

purpose;

b) Public sector undertakings (PSUs) contracting with private entrepreneurs

for development of infrastructure facilities by providing concessions /

annuity and / or viability gap funding;

c) Autonomous bodies substantially funded by the Government joining

hands with private sector entities to develop infrastructure projects, with

the former investing in (the assets of) the project.

31

d) Any other combination of the above which has significant investments of

a public agency and shifts the responsibility to provide public services to

a private entity in the PPP mode.

Under the Comptroller & Auditor General‘s (DPC) Act, 1971, and as incorporated in

the Regulations of Audit and Accounts (2007), the audit mandate of the CAG of India

will extend to all types of (promoting) public institutions, namely, government

departments (as the sole auditor of the accounts of the Union and States), PSUs (in

terms of the Companies Act), and to bodies and authorities etc. (as provided under the

DPC Act). The DPC Act however does not directly contemplate the audit of PPP

projects or joint ventures with only minority participation by the government agency

since these are recent innovations under the development strategy. Under the

circumstances, the public auditor shall have to confine his audit to the data, records

and documents in the possession of the government department, PSU or autonomous

body which is the public sector partner of the PPP arrangement, and rely on it for

additional information, as is required to fulfill his tasks.

The exception would appear to be when the President or the Governor of a State

requests the CAG to undertake the audit of a PPP organization in terms of section 20

of the DPC Act. To recall, under Section 20(1) of the Act, the President or the

Governor may entrust the audit of accounts of any body or authority, the audit of

which has not been entrusted to the CAG by or under any law, after consultation with

the former, and on such terms and conditions that may be mutually agreed upon.

Similarly, under Section 20(3) of the DPC Act, the CAG may propose to the President

or to the Governor that he may be authorized to undertake the audit of accounts of a

body or authority, the audit of which has not been entrusted to him by law, if he is of

the opinion that such audit is necessary because a substantial amount has been

invested in or advanced to that body or authority by the Government, and the

President or the Governor may empower the CAG to take up the same. The above

two sections are however qualified by Section 20(3) ibid to provide that in both

cases, the President or the Governor must be satisfied that it is expedient to do so in

public interest, and after giving reasonable opportunity to the body or authority to

make representations with regard to the proposals for such audit.

1.34.3.2 COMMONALITY IN PPP AND PERFORMANCE AUDIT

There are several things in common between PPP audit and performance audit. For

instance, performance audit is concerned with the audit of economy, efficiency and

effectiveness of the programme subjected to audit and embraces:

i) audit of the economy of administrative activities in accordance with

sound administrative principles and practices and management

policies;

ii) audit of the efficiency of utilization of human, financial and other

resources, including examination of information systems, performance

measures and monitoring arrangements and procedures followed by

audited entities for remedying identified deficiencies; and

iii) audit of the effectiveness of performance in relation to the achievement

of the objectives of the audited entity and audit of the actual impact of

activities compared with the intended impact.

32

‗Performance audit is an independent assessment or examination of the extent to

which an entity, programme or organization operates efficiently and effectively, with

due regard for economy‘. It is true that the major entity involved in the PPP is a

private participant who is outside the audit control of the SAI. But at the same, the

entire operations carried out by it will impact the public sector partner which has

sanctioned the grant to build the facility, manage the operations and collect user-fee,

tariff or toll by transferring the assets and the responsibility to do so and share

revenue (or receive viability gap funding or annual payments, as may be). It will also

impact the user community who belong to the public at large. Moreover, the

accountability of the public participant for the provision of service at affordable cost

continues as before in the PPP arrangement. Hence, it is important for the public

auditors to assess the efficiency, economy and effectiveness of the operations of the

PPP from the public accountability angle, and to that extent, the principles of

performance audit would materially apply to PPP audit as well. In a larger sense,

performance audit of any aspect of a public authority‘s functioning may also involve

an examination of the PPP arrangements that such an authority may have entered into.

It will be beneficial therefore to keep in mind the relevant guidelines established in

the SAI-India‘s Performance Auditing Guidelines when planning the audit of PPP

projects.

After identifying several risks and a balanced sharing of these risks between the

public and private sector partners risk, the audit should be conducted as per Public

Private Partnerships (PPP) Infrastructure Projects Public Auditing Guidelines issued

by the IA&AD in 2009.

1.34.4 INFORMATION TECHNOLOGY AUDIT ( IT AUDIT)

As a number of Government Departments, Public Sector Enterprise and Autonomous

Bodies have computerised various areas of their operations, it has become imperative

for audit to change the methodology and technique of conducting audit. As IT is

increasingly being used by the auditee organisations to automate their operations, the

auditor needs to assess the risks associated with the use of these systems and their

vulnerability to these risks.The provisions in Paras 3.22.1 to 3.22.76 of the MSO

(Audit) Second Edition, 2002 may please be referred to.

In addition, the CAG Office had prepared and circulated an Information Technology

Audit Manual containing three volumes:

Volume I contains the IT Audit Process and focuses mainly on IT audit methodology

to be adopted while conducting the IT audit.

Volume II contains the detailed checklists on various controls and application of

CAATs etc., to assist the field audit parties in conducting IT audits.

Volume III focuses on audit programmes for specific applications like audit of ERP

systems, computerized inventory systems, auditing e-Governance etc.

(Authority: CAG Office letter no.365/127-11/ITA-11/ITAM/2006-07 dated 27.11.2006)

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LAND REVENUE

2.1.1 BASIC FEATURES OF LAND REVENUE CODE AND RULES

The Bombay Land Revenue Code was enacted by the Bombay Legislature in 1879.

After the formation of Gujarat State in 1960, the Code continued to be applicable to

the State of Gujarat under the Gujarat Adoption of Laws (State & Concurrent

subjects) Order 1960 with certain modification in the Code which has now been

renamed as the Gujarat Land Revenue Code, 1879. In 1972, the State Government

framed the Gujarat Land Revenue Rules, 1972. The important provisions of the Code

and Rules are brought out below.

2.1.2 LAND VEST IN GOVERNMENT

Reproducing the common law in England, Section 37 of the Land Revenue Code

enacts that all public roads, etc. and all the land not proved to belong to any individual

vest in the sovereign. The Collector can lawfully dispose of Government land subject

to the order of the Government and he may require payment of a price fixed by him

for the land or sell Government land by auction and annex conditions to the grant

(Section.62).

Claims of ownership of land by any individual will be inquired into by the Collector

after issue of proper notice and settled by him (Section.37 (2)).

Land can be assigned by the Collector for special purposes (free pasturage, forest

reserves, municipal or public purposes etc.) and when so assigned, such land shall not

be used for any other purpose than the one authorized, without the sanction of the

Collector (Section.38). In the abstract of VF-I (See chapter-V para 2) such land

granted for public purposes will be seen to appear under B.II-A and B.II-B.

The value of any natural product removed from lands assigned for public purposes is

recoverable by the Collector (Section.39A).

Likewise any person cutting any trees or removing other natural product, which is a

property of the Government from his own land, is liable to Government for the value

thereof. In addition, penalty is leviable for occupation of the land under Section 43 of

the Code.

2.1.3 LIABILITY OF ALL LAND TO PAY LAND REVENUE

Unless exempted, all land is liable to payment of land revenue (Section.45), which is

assessed under section 48, according to the use to which the land is put, namely;

(a) Agriculture

(b) Residence

(c) Industry

(d) Commerce or

(e) for any other purposes.

CHAPTER 2

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Land assessed under one head, say, agriculture is liable to a fresh assessment when

the use of the land changes, say to that of building. Likewise, land held free of

assessment for a sanctioned purpose becomes liable when it is used for any other

purpose.

2.1.4 LAND REVENUE-HOW ASSESSED

Assessment of land to agricultural revenue is determined by a detailed settlement

procedure laid down in chapter VIII-A of the Land Revenue Code and Rule 19A to

19S of the Gujarat Land Revenue Rules, 1972.

On land not covered by a settlement, the Collector is competent to fix the land

revenue (Section 52) by following the procedure laid down in the Rules ibid.

Government may authorize Collector or a survey officer to fix water rates for use of

water vesting in Government and for which no rate is levied under the Bombay

Irrigation Act, 1879 (Section 55).

Land revenue is to be paramount charges on land and failure to pay land revenue

renders such land liable to be forfeited and sold (Section 56).

2.1.5 CONSEQUENCES OF UNAUTHORISED OCCUPATION

For taking up possession of unoccupied Government land, the permission of the

Mamlatdar is required (Section 60).

Penalty for unauthorized occupation of land is leviable as follows.

(a) If used unauthorized for cultivation, the assessment recoverable for the period of

such occupation plus penalty. As regards the levy of penalty, the Collector has the

discretion to levy a fine not exceeding five rupees or a sum equal to ten times the

assessment payable for one year if such sum be in excess of five rupees. With

effect from 3.05.2011, the Collector can impose a fine not exceeding one per

cent of the prevalent annual statement of rate (Jantri) as may be notified by

the State Government from time to time.(Section 61 of the code)

(b) If used for non-agriculture purposes, penalty will be leviable as provided in the

Land Revenue Rules. Rule103 provides for the limit of fine to be levied under

Section 61. When land is unauthorized occupied and used for non-agricultural

purpose, penalty at 100 times the non-agricultural assessment with the proviso that

a fine upto `250 may be levied in any such case irrespective of the area of the land

involved. Under Rule 100, fine for unauthorized N.A. use of land will be fixed by

the Collector which may extend to 40 times the N.A. assessment. The Collector

will also evict the occupant from the land unauthorized held by him, forfeit the

crops raised and remove the buildings constructed (Section 61).

2.1.6 CHANGE OF USE OF LAND FROM AGRICULTURAL TO OTHER

THAN AGRICULTURAL PURPOSE

Land assessed for agriculture can be used for raising farm buildings, constructing

wells or tanks. But if the occupant wants to apply the land to any other purpose, the

permission of the Collector is necessary (Section 65 and 65A).

Such permission when granted can be conditional (Section 67).

For use without permission, the Collector can levy a fine, in addition to the new

assessment fixed by him under Section 48. Save as otherwise ordered by the

Government (Rule 102), fine to be levied will be fixed by the Collector under his

discretion and may extend to 40 times the NA (Rule 100). In order that the Collectors

may follow a uniform practice with regard to imposition of penalty in relation to non-

35

agricultural use without permission, the Government has laid down certain general

principles in Resolutions No. BKHP/1080/59560.k dated 27-8-80 and No.BkHP-

1183-3038-k dtd.20-9-84.

For unauthorized excavation and spoliation of the soil of the Land, fine will extend to

twice that leviable under Rule 100 (Rule 101).

The occupant, tenant or holder of the land using it without permission under Section

65 will in addition to payment of fine and fresh assessment, be liable for eviction from

the land (Section 66).

2.1.7 OCCUPATIONS OF LAND ARE CONDITIONAL

The rights of occupants of land are conditional on the payment of land revenue and

also subject to the other terms annexed to the tenure. Likewise grants of land by the

Collector are subject to the period and the conditions of the grant (Section 68).

In all land, the right of the Government to mines and minerals would always subsist

(Section 69). Transfers of land are not permissible without the sanction of the

Collector and courts will set aside orders of transfers of lands not permitted by the

Collector to be transferred (Section 70).

In notified areas, occupancies are not transferable without the Collector‘s permission

(Section 73A).

Occupancy of a person belonging to any of the Scheduled Tribes is not transferable to

any person without the previous sanction of the Collector which may be given in such

circumstances and subject to such conditions as may be prescribed (Section 73AA).

On transfers of land declared to be not transferable or partable by virtue of any

condition annexed to the tenure by or under the code without previous sanction of the

Government or the collector, such sanction shall not be given except payment of

determined premium to the State Government (Section 73 B).

2.1.8.1 DATES OF PAYMENTS OF LAND REVENUE

Land revenue is recoverable from the crop of the year (Section 138) whose removal

can be prevented by the Collector till payment of land revenue (Section 140).

Collector can take pre-cautionary measures like prevention of the reaping of crops or

attachment of a village in order to secure the payment of land revenue (Sections 141

to 144).

Rue 116(1) lays down that the land revenue payable in respect of lands assessed for

purpose of agriculture only shall be paid in one installment on the following dates:

Class I villages upto 15th

March

Class II villages upto 15th

April

Class III villages upto 15th

April

Provided that the Collector shall be competent to fix every year the date of making

initial demands for payment of land revenue in villages of different classification in

his district taking into account the local conditions.

The classification of villages shown above, made by the Collector under Rule 115 is

as under –

36

Class I Kharif 1 (Kharif villages)

Class II Kharif 2 (Kharif villages where main crop is

cotton)

Class III Rabi Rabi villages

2.1.8.2 CONSEQUENCES OF DEFAULT

Failure to pay land revenue on the due date constitutes default, which would invite the

process for recovery (Section 146 to 148), which is (Section 150) as follows:

(a) Issue of notice of demand (Section 152)

(b) Forfeiture of occupancy or holding and its sale (Section 153)

(c) Distraint and sale of movable property (Section 154)

(d) Sale of defaulters immovable property other than the land on which land

revenue is due (Section 155)

(e) Arrest and imprisonment of the defaulter (Section 157)

The property seized on default will be disposed of by due process of law (Section 165

to 187) and land revenue recovered from the proceeds of the sale.

2.1.9 EXCLUSION OF NON-AGRICULTURAL LANDS FROM SURVEY

SETTLEMENT

In the survey settlement under chapter VIII A of the Land Revenue Code, the

following lands shall not be classified or assessed (Rule 13), namely:

(a) Occupied lands situated in an area in which survey is in progress and which

are used for non-agricultural purposes.

(b) Unoccupied lands situated within any such area, which are likely to be more in

demand for building or industrial purposes than for agricultural and

(c) All lands to which a survey is extended under Section 131.

The Collector shall on receipt of schedule of lands referred to above assess them at

the same rates and for the same periods, as if he were altering an agricultural

assessment under Rules 81 to 85 (Rule 14).

All non-agricultural assessment, rents and fines leviable under Rules 43, 43 A, 43 B,

43C, 47, 80, 80 A, 80 AA, 80 B, 81 (I),81(3), 82, 82A and 82 AA, 90,92, 93 and 99 to

103 shall first be calculated to the nearest paise at the rate (per hectare or otherwise )

sanctioned upto the area chargeable, but if any sum so calculated (i) is less than 10

paise, shall be raised to 10 paise; and (ii) exceeds 10 paise and is not an exact

multiple of 10 paise, shall be raised to the nearest multiple of 10 paise (Rule 14A).

2.1.10 DISPOSAL OF LAND VESTING IN THE GOVERNMENT AND

EXEMPTION FROM LAND REVENUE

The right of Government to mines and mineral products, which is reserved under

Section 69 shall not be disposed of without the sanction of the State Government and

in all grants of land, the right of the mines and mineral products and full liberty of

access to them for purpose of working and searching for them shall be deemed to be

37

reserved (Rule 30).

Under Rule 32, the Collector can gift the possession and also the revenue of land for

the following purposes:

TABLE

Sr.

No.

Purpose Extent of

estimated

revenue free

value

Extend of area

` Acres Hectare

1. For sites for construction at the cost of

a Panchayat or Municipal fund or the

funds of other local bodies, of

(a) Schools or Colleges 10,000 1 ½ 0-60-70

(b) School or College Hostels 20,000 4 1-61-87

(c) Dispensaries 20,000 4 1-61-87

(d) Other Public Works 20,000 4 1-61-87

(ii) Land for the road purposes is

needed by municipalities, Municipal

Corporations, District/Taluka/Village

Panchayats. The roads envisaged are

those approved under town planning

scheme or by the competent authority

(in respect of municipalities and

Municipal Corporation) or for the

purpose of any District Major

Road/Other District Road/Village

approach road which are part of the

approach road development plan.

1,00,000 19.31 8-00-00

2. For sites for the construction of any of

the works referred to in head (1) above

at the cost of a fund other than the

funds specified in that head

4000 2 0-80-94

3. For sites used or to be used in

connection with any scheme under the

community development programme.

2,500 2 ½ 1-01-17

4. For sites used or to be used as market

yards under the management of market

committee established under the

Gujarat Agricultural produce Market

Act,1963

20,000 4 1-61-87

Including the value of trees, if any, on the land, land may be leased at a nominal rent

of `1/- a year for playground or other recreational purposes of Educational Institutions

of Local Bodies, or for Gymnasiums recognised by the Government for a term not

exceeding 15 years by the Collector. When the area and the revenue free value of the

land do not exceed 5 acres (H.2.02.34) and `25,000 in case when the lease is in favour

of a Panchayat, Municipality or any other local authority and 2 ½ acres (H.1-01-17)

and `5,000 when the lease is in favour of any other public body or institution (Rule

32 A).

38

Any land wherever situated, of which the estimated revenue free value does not

exceed `100/-may be sold by the Collector to a private person for a private purpose

(Rule 33).

The Collector may exempt from the payment of land revenue without any limit, lands

used for sites of hospitals, dispensaries, schools and market yards and for other public

purposes, so long as such lands are used for such purposes and yield no profit to

private individuals or local bodies. Land used for sites of buildings solely devoted to

charitable purposes, may be exempted form payment of land revenue by the Collector

upto an annual amount of `50 (Rule 35).

The grants of land under Rules 32, 34 and 35 will be subject to the conditions laid

down in Rule 36.

However, Government of Gujarat vide Revenue Department Resolution

No.MMJ/392002/ 2061/G dated 29.09.2008 decided to allot government land for

education purpose as shown below:

(A) Areas of villages and B C D category nagarpalika area

1 For nursery Land maximum of 200 sq mtrs for construction free

of land price and free of revenue (the play ground is

also included in this).

2 For construction

of

school building

Land available under Gujarat Secondary Education

Act 1974, but up to 600 sq mtrs free of land price

and free of revenue and 25 per cent of the market

value for demand of land in addition to that.

3 For play ground Land available under Gujarat Secondary Education

Act 1974, but land up to maximum 2 (two) acres

(8094 sq mtrs) can be granted on lease at a token

rent of ` 1/- per annum for 30 years and 25 per cent

of the market value for demand of land in addition to

that.

B. Area other than above (all area) including area of urban development

1 For Nursury Land maximum of 200 sq mtrs for construction at 50

per cent of the market value of the land, (the play

ground is also included in this).

2 For construction

of

school building

Land available under Gujarat Secondary Education

Act 1974 is to be allotted at 50 per cent of the

market value of the land.

3 For play ground Land available under Gujarat Secondary Education

Act 1974, but land up to maximum 1 (one) acre

(4,047 sq.mtr) can be granted on lease at a token rent

of ` 1/- per annum for 30 years and 50 per cent of

the market value of the land for demand of land in

39

addition to that.

2.1.11 GRANTS OF LAND FOR AGRICULTURAL PURPOSES OR FOR

RECLAMATION

Any unoccupied survey number not assigned for any special purpose may be granted

by the Collector at his discretion for agricultural purposes to such persons as the

Collector deems fit either upon payment of a price fixed by him or without charge or

may be put to auction and sold subject to the collector‘s confirmation of the highest

bid (Rule 40).

Salt Land or land occasionally inundated by salt-water which is not required for salt

manufacturing, may after consultation with the Commissioner of Salt, be leased by

the Collector for the purpose of reclamation the following terms.

(a) No rent shall be charged for the first 10 years.

(b) Rent at the rate of ` 0.60paise per hectare shall be levied for the next 20 years

on the whole area leased whether reclaimed or not.

(c) After the expiry of 30 years, the lease shall be continued in the case of reclaimed

lands at the rate at which they would be assessed to land revenue from time to

time, if they were subjected to survey settlement and in the case of lands not

reclaimed, at the average rate of the reclaimed lands.

(d) Any portion of land used for public roads shall be exempted from payment of

rent.

(e) If the reclamation is not carried on with due diligence within 2 years, or if half

the area is not reclaimed, so as to be in a state fit for use for agricultural purpose

at the end of 10 years and the whole land at the end of 20 years or if any land he

reclaimed as aforesaid, is not mentioned in a state fit for agriculture, the lease

shall be cancelled at the Collector‘s discretion.

(f) If the land reclaimed is used for non-agricultural purposes, its rent shall be liable

to be revised according to the rates under Rule 81 to 85 whichever may be

applicable to the land in question (Section 40)

The rate of rent in of land given on production of salt and bromine was revised from

time to time. Lastly, the rate of rent was revised from ` 30 per hectare to `150 per

hectare with effect from 10.10.2000 and again ` 300 per hectare with effect from 2

February 2010, with increase on it for every three years from the date of grant of land

for lease.

(Revenue Department Resolution No.MTHJ-1597-1372-k dated 10.10.2000 and

Resolution No.: MJTh-1597-1372-k dated 12.4.2001 and Resolution No:

MJTh/102009/1698/A1 dated 3.02.2010.)

2.1.12 RIVER BED LANDS

Land situated in the bed of a river and not included in a survey number should

ordinarily be leased by the Collector annually by auction to the highest bidder for a

term of one year or such other period as the Collector thinks fit. The accepted bid

shall be deemed to be the land revenue chargeable on such land (Rule 41).

40

2.1.13 GRANT OF LAND FOR NON-AGRICULTURAL PURPOSES

Unoccupied land required or suitably developed for building sites of other non-

agricultural purposes shall ordinarily be sold after being laid out in suitable plots by

auction to the highest bidder wherever the Collector is of the opinion that there is a

demand for any such purposes but the Collector may in his discretion dispose of such

land by private arrangement either upon payment of a price fixed by him or without

charge, as he deems fit (Rule 42).

On land so granted, non-agricultural assessment will be fixed under rule 81 to 85 of

the Land Revenue Rules.

Small strips of land vested in Government adjoining an occupied building site which

cannot be reasonably disposed of as a separate site may be granted by the Collector to

the holder of the site on the same tenure, on which he holds the site on payment of

assessment or rent for the strip of land at the same rate at which he pays assessment or

rent for the said site and on payment of price or premium that the Collector deems

adequate.

2.1.14 ALLOTMENT OF WASTE LANDS FOR NON-AGRICULTURAL

PURP0SE

In suppression of all earlier orders/resolutions, Revenue Department issued

Resolution No. JMN-3988-1785-A dated 28.3.89 for allotment of waste land for non-

agricultural purposes. The purposes are classified as residential, industrial,

commercial and other purposes. The Collector is empowered to grant the waste land

without auction as detailed below: (As amended vide Resolution No. JMN-3998-

1504-(4)-A dtd.17.8.98 and JMN-392000-1697-A dtd.27.11.2000).

TABLE- A

Sr.

No.

Purposes Present limits of power

i.e. up to 27-11-2000

Revised limits of power to

the Collector from date

27-11-2000

Area Price in

` Area Price in `

1. Industrial 2 Hec. 6 lakh 2 Hec. 15 lakh

2. Commercial

(only by auction)

50 Sq.mts. 50,000 50 sq.mts. 1 lakh

3. Residential

(A) For Government

Servant or individual.

(B) Co-operative

house development

Mandli

200 sq.mts.

8000 sq.mts.

50,000

3 lakh

200 sq.mts.

8000 sq.mts.

1 lakh

6 lakh

4. Co-operative Mandli

for making godowns

500 sq.mts. 1 lakh 500 sq.mts. 3 lakh

5. National greed

Scheme

4000 sq.mts. 2,40,000 4000 sq.mts. 5 lakh

6. Co-operative Mandli

and Sanstha for other

purposes and public

trust with levy of

200 sq.mts. 1,20,000 200 sq.mts. 3 lakh

41

occupancy price.

7. Temple,Masjid,Charc

h for religious

purpose with levy of

occupancy price.

200 sq.mts. 30,000 200 sq.mts. 50,000

8. Boards/Corporations

of State Government

with levy of price.

2 Hec. 7,50,000 2 Hec. 15 lakh

9. Central

Government‘s

Departments for

public purpose land

to be granted

1 Hec. 5,00,000 1 Hec. 15 lakh

Hec.= Hector, i.e.10,000 sq.mts.

However, in the case of six cities covered under U.L.C. Act,1976 i.e. (1)

Ahmedabad,(2) Vadodara,(3) Surat, (4) Rajkot, (5) Jamnagar and (6) Bhavnagar, the

Collector is not empowered to grant the land. The proposal is required to be sent to

the State Government.

2.1.15 LAND VALUATION

2.1.15.1 PROCEDURE FOR THE VALUATION OF GOVERNMENT

LAND

Disposal of unoccupied Government land for various purposes, either permanently or

temporarily on occupancy or rental basis are regulated as per the provisions of the

Gujarat Land Revenue Code and Rules made there under. The code also provides for

regularization of unauthorized occupation after recovery of price of the land at the

rate fixed by the Government.

Determination of the market value of the property is essential in case of recovery of

the occupancy price in case of allotment of Government land to the needy persons,

working out the rent of the Government land leased to various parties, levy of stamp

duty and registration fees in respect of instruments executed in the State and

submitted for its registration, etc.

In Gujarat, Government has decided to allot unoccupied Government land, either for

agriculture or non-agriculture purposes to various categories of persons by recovering

the entire market value of the land or allowing at the concessional rate. In case of land

allotted to the occupant with restrictions, Government has a policy to remove the

restrictions in certain circumstances on the request of the occupant by recovery of

premium price of the land at rates fixed by Government from time to time. The

Collector of the District received the proposals in this regards and make suitable

proposals to the Government for the allotment or removals of the restrictions in

respect of the land with recovery of occupancy price or the premium price, as the case

may be and other terms and conditions as per the provisions of the Act, Rules and

Government instructions on the subject. Before that, Collector is required to ascertain

the prevailing market value of the land. The policy and procedure for the

determination of the market value of the land has undergone various changes by the

passage of time.

42

Government decided in September 1966 that in the cases of fixing the price of the

unoccupied Government land for certain specified area and also the specific case

referred by the Collector, the market value was to be determined by the consulting

surveyor of the planning and valuation department after taking into account various

parameters. As per further guidelines issued in June 1993, Government decided that

market value of the land granted for non-agriculture use up to ` 10 lakh is to be

determined the Dy Town Planner and if it exceeds ` 10 lakh by the Chief Town

Planner,

2.1.15.2 FORMATION OF DISTRICT LAND PRICE VALUATION

COMMITTEE (DLVC)

Government of Gujarat decided in January 1998 to form a committee at district level

with District Collector as chairman and District Development Officer and the

concerned Town Planner of Town Planning and Valuation Department as members to

estimate the market value of the land after consideration of various parameters laid

down by Government from time to time. Where the estimated market value exceeds

`50 lakh, the case is referred to the Chief Town Planner (CTP) for his opinion. The

opinion of the CTP is submitted for the approval of the State Level Valuation

Committee (SLVC) consisting of the Secretary/addl. Chief Secretary/ Principal

Secretary of Revenue Department, Urban Development and Urban Housing

Department and Finance Department. Further, Government decided in August 1999 to

include concerned Dy Town Planner in place of concerned Town Planner and added

Residence Deputy Collector as member/secretary in DLVC. The validity period of the

price fixed by the DLVC was six month. Government extended the validity period to

one year from date of fixing of the price by DLVC in February 2004. Further,

Government decided in November 2004 that the price fixed by the DLVC will be

further increased by 12 per cent after lapse of one year from the date of fixation and

will be refixed after a lapse of two years.

2.1.15.3 GUIDELINES FOR VALUATION OF GOVERNMENT LAND (2008)

Revenue Department vide circular No JMN-3907-Mu.N.P-A dated 22.10.2008 issued

instructions for observing the methodology and guidelines (October 2008) formulated

by the department of Town Planning and Valuation under Urban Development and

Urban Housing Department in valuation of land belonging to Government. For taking

into account the factors affecting the valuation of land, selection of available

comparable sales, date of valuation and ratio of the affecting factors shall be

determined which includes, inter alia, the following:

(1) SELECTION OF COMPARABLE SALES

(a) Comparable sales of land within 1 to 1.5 kilometer shall be taken into account.

(b) The concerned office of the Revenue Department will collect the details of all the

sales of the preceding year and send to the Town Planning and Valuation

Department.

(c) Last six months sales in case of Surat, Ahmedabad, Vadodara, Rajkot, Jamnagar

and Gandhinagar and their urban development area shall be taken for the purpose

43

of valuation. If the sales of the last six month is relatively lower than the previous

six month sales, than average of sales of one year shall be taken into account.

Average sale value of last one year shall be taken into account in all the area except

the area covered by clause (c) above.

(1.1) INCREASE FOR THE PERIOD

Average of comparable sales shall be taken into account directly for the purpose of

valuation. Where the comparable sales are not sufficient within the period of six

months or one year, as the case may be, the valuation shall be done after taking into

account the sales of prior period of six months. In that case, the increase at 12 per cent

annually shall be made in the average sales.

(2) DATE OF VALUATION

Date of seating of the DLVC shall be considered as date of valuation.

(3) FACTORS AFFECTING THE VALUATION

After calculating the average of comparable sales, the increase or decrease at

prescribed ratio on the average sale price given after considering the following

factors in valuation of the said land.

(3.1) PROPOSALS FOR THE DEVELOPMENT SCHEME AND

DEVELOPMENT OF THE AREA

There is greater effect of developed area particularly in the city area or the

development scheme is announced for the valuation of the land. The sale value

indicated in the registered sale deed is very less than the prevailing market value. In

view of that, there shall be increase in the average value as per ratio shown in column

3 of the table below.

Note: In the exceptional cases, DLVC can change the percentage, giving the

reasons in writing, in the rural area not covered by Sr. No. 1 and 2 in the original

average sale price proposed at 100 per cent increase.

Sr.

No

Area Additional percentage

(Ratio)

1 Surat city area

(SUDA/including SMC)

400%

(4.0)

2 Ahmedabad, Rajkot,Vadodara,

Bhavanagar, Jamnagar, Junaghadh

and Gandhinagar city area

(incliding UDA/ADA/Municipal

corporation)

200%

(2.0)

3 All the area of the State except (1)

and (2) above

100%

(1.0)

44

(3.2) APPROACH ROAD

Taking into consideration the width of the public road for approach in the land

in question, there shall be increase in the average price as per the percentage

indicated below.

For all the cities, towns and their urban area

Increase Ratio

A Width up to 9.0 meter 10% 0.10

B More than 9.0 mtr and up to 18.0 mtr 25% 0.25

C More than 18.0 mtr and up to 30.0 mtr 75% 0.75

D More than 30.0 mtr and up to 40.0 mtr 100% 1.00

E More than 40.0 mtr and up to 60.0 mtr 150% 1.50

F More than 60.0 mtr road 200% 2.00

G Without any approach road 0 % 0.00

For rural area

Incre

ase

Ratio

A National Highway 175% 1.75

B State Highway 150% 1.50

C Road having width of 18.0 mtr.

or more

100% 1.00

D Road less than 18.0 mtr. without

public road approach

0% 0.00

(3.3) Area of Town planning scheme (TPS) or proposed TPS

As per Gujarat Town Planning and Urban Development Act, the following ratio

shall be considered for factor of town planning scheme.

With reference to the area of land covered under the town planning scheme

Increase Ratio

A Up to the period of

submission to the Govt. on

declaration of preparation of

the draft TPS

100% 1.00

B After road have been opened

on preparation of draft TPS

200% 2.00

But at time of the valuation after the development of the area as per TPS, if the sales

also pertained to the developed area/ approved TPS area or the process for TPS is not

started, no increase shall be allowed in that case.

(3.4) SALES OF AGRICULTURE/ NON-AGRICULTURE USE

Sales shall be considered for the purpose for which the valuation of the land

(Agriculture or non-agriculture) is undertaken. In case of valuation for the purpose of

non-agriculture use, in the specific situation, sales of the particular purpose is not

45

available, average sale for the agriculture purpose shall be increased by 300% i.e. at

the ratio of 3.00. The average sale of non-agriculture shall be made to one third in

case of valuation of agriculture use.

(3.5) IMPLEMENTATION OF ANY SPECIAL PROJECT AFFECTING

THE LAND IN QUESTION

The following increase shall be made if the land for valuation is benefited/ affected by

any special project is being implemented.

Phase of the project Increase Ratio

At the stage of planning 25% 0.25

25% progress after implementation 50% 0.50

More than 50% progress 75% 0.75

100 % completion 100% 1.00

(3.6) Increase for special factors like, allowance of more FSI/Height and allowances

regarding problems of the land by declaration of policy, schemes by the Government

for the balanced growth of any particular area: 50 %

(3.7) MANMADE FACTORS

There shall be related reduction of estimated percentage in valuation of land affected

by manmade factors like canals, high tension electrical lines (66 KV or more), ribbon

development rules, railway line, airport, etc. and the portion of land is to be allowed

and a detailed written note shall be made in the remarks column.

The decrease in respect of point at Sl. No. 2.7 shall not be made in the average sale

but it shall be made at the last stage of calculation i.e. the decrease shall be made from

the last stage of calculation after consideration of all the factors for increase in the

price.

(4) SPECIFIC NATURAL FACTORS

In addition to the factors shown above, the increase or decrease can be allowed suo

motto on the beneficial or adverse impact of any of the specific factors like muddy sea

land, hilly/stony/uneven land, desert land, etc. affecting the said land.

(5) This methodology shall be applicable for the period up to again publishing of

the updated Annual Statement of Rates (Jantri) which was published and made

effective from 1.04.2008 and Government decide to enforce the same with reference

to these guidelines.

Revenue Department circular also included the following instructions in addition to

the instructions mentioned above.

(a) District Land Price Valuation Committee (DLVC) has to consider the

valuation made by the Town Planner as per the guidelines above while taking

decision regarding the price of the land. DLVC shall enclose transactions of the sales

46

and the valuation calculation sheet considered for fixation with action taken note of

seating of DLPC.

(b) Where the valuation of the land done by DLVC exceeds ` fifty lakh and the

cases are sent for the decision of the Government, such cases shall be submitted to the

Chief Town Planner of the Town Planning and Valuation Department for their

opinion.

2.1.15.4 GUIDELINES FOR THE VALUATION OF GOVERNMENT

LAND (2011)

Governmentof Gujarat vide Revenue Department Resolution No. JMN/3910/ 3519/A-

1 dated 26.04.2011 decided to cancel the circular instructions issued vide

No.JMN/3907-Mu.N.P.-A dated 22.10.2008 and issued instructions for the valuation

of land which contains the following additional instructions:

(a) The valuation shall be done as per the rules prevailing on the date of advanced

possession given to Board/Corporations and the date of completion of lease in case of

lease deed. In other cases, valuation shall be done as per the rules prevailing on the

date fixed by the Government for the valuation. However, in case of valuation done

during the period between 22.10.2008 and 26.04.2011 and happens to be orders issued

in future i.e. after issue of resolution dated 26.04.2011, the provisions of the

resolution dated 26.04.2011 shall be considered.

(b). The applicant person/company shall pay service charge at the rate of one per cent

on market value based on prevailing jantri on the total area of the land demanded.

Such amount paid shall not be refundable to the applicant. The application shall be

processed further only after the payment of service charge with the application.

The guidelines in respect of the valuation of Government land has been appended as

schedule. The changes made in the guidelines of 2008 are as mentioned below:

(3.1)Proposals for the development scheme and development of the area

Table has been replaced by the following table.

Note at the bottom of the table has been deleted.

Sr.

No

Area Additional percentage

(Ratio)

1 Surat city area

(SUDA/including SMC)

400%

(4.0)

2 Ahmedabad, Rajkot,Vadodara,

Bhavanagar, Jamnagar, Junaghadh

and Gandhinagar city area (incliding

UDA/ADA/Municipal Corporation)

200%

(2.0)

3 All the Municipalities of grade ―A‖

and ―B‖ of the State except (1) and

(2) above-Inclusive of revenue area

100%

(1.0)

4 Municipalities of grade ―C‖ and

―D‖ and the rural area

50%

(0.50)

47

Clause 3.2 has been modified as under:

(3.2) Approach road

Taking into consideration the width of the public road for approach in the land in

question, there shall be increase in the average price as per the percentage indicated

below.

(i) For the area of Municipal Corporation, Urban Development authority and

area of A and B grade Municipalities

Increase Ratio

A Width up to 9.0 meter 10% 0.10

B More than 9.0 mtr and up to 18.0

mtr

25% 0.25

C More than 18.0 mtr and up to 30.0

mtr

75% 0.75

D More than 30.0 mtr and up to 40.0

mtr

100% 1.00

E More than 40.0 mtr and up to 60.0

mtr

150% 1.50

F More than 60.0 mtr road 200% 2.00

G Without any approach road 0 % 0.00

(ii) For area of C and D Municipality and other rural area

Increas

e

Ratio

A National Highway 50% 0.50

B State Highway 40% 0.40

C Road having width of 18.0 mtr or

more

20% 0.20

D Road less than 18.0 mtr/ without

public road approach

0% 0.00

Clause 3.4 has been modified as under:

(3.4)SALES OF AGRICULTURE/ NON-AGRICULTURE USE

For the area of Municipal Corporation, Urban Development authority and area of A

and B grade Municipalities;

(i) Sales shall be considered for the purpose for which the valuation of the

land (Agriculture or non-agriculture) is undertaken. In case of valuation for the

purpose of non-agriculture use, in the specific situation, sales of the particular

purpose is not available, average sale for the agriculture purpose shall be

increased by 300% i.e. at the ratio of 3.00. The average sale of non-agriculture

shall be made to one third in case of valuation of agriculture use.

(ii) Whereas in the case of C and D grade Municipality area and other rural

area, in such valuation for non-agriculture use, average sale for agriculture use

48

shall be increased by 200% i.e. at ratio of 2.00.The average sale for non-

agriculture use shall be made to 50% in case of valuation for agriculture land.

(iii) Where the permission to purchase the land has been granted to the non-

agriculturist person or the company under section 63 or 63AA of the Gujarat

Land Tenancy Act and the document of sale of land has been registered as non-

agricultural purpose after recovery of stamp duty, the available sale shall not be

increased by 300% or @200%.

Clause 3.5 has been deleted from here and inserted as Clause 4. Clauses 3.6, 3.7 and 4

have been renumbered as 3.5, 3.6 and 3.7 respectively. After clause 3.7, the following

sub-para has been added after clause 3.7.

―The decrease in respect of points at sr. No. 3.6 and 3.7 shall not be made in the

average sale but it shall be made at the last stage of calculation i.e. the decrease shall

be made from the last stage of calculation after consideration of all the factors for

increase in the price.‖

Clause 3.5 has been modified and inserted as clause 4 and clause 5 inserted as under:

(4)In the circumstances whereimplementation of any special project affecting the

land in question

The following increase shall be made at the various stages if the land for valuation is

benefited/ affected by any special project is being implemented.

Phase of the project Increase Ratio

At the stage of planning 25% 0.25

25% progress after implementation 50% 0.50

More than 50% progress 75% 0.75

100 % completion 100% 1.00

As there is no specific definition for such project, where big projects are being

implemented on turnkey project basis and affects the land in adjacent area, the details

of big projects shall be brought to the notice of the committee at state level and the

committee shall determine appropriately after discussion.

(5) No increase shall be allowed even if such special project has been under

implementation in C and D grade Municipality and the rural area.

(6) After considering the entire circumstances, SLVC shall made increase or

decrease in the valuation in respect of the special factors.

In order to establish real and balancing assessment of land price for the purposes of

allotment of land for non-agricultural purposes, it was decided by the Government

that where the purposes involved for the benefit of Government, the land price will be

fixed by the District Land Price Committee (DLPC) at District level and

Secretary/Deputy Secretary's Higher level Committee at State level (SLPC) (with

effect from 15.1.1998) subject to the following conditions:

(1) Where the money value exceed `10 lakh for the land in question and

assessment finalised by the Dy.Town Planner were pending with Chief Town

Planner for his opinion now with effect from 15.1.1998 to be sent to the

District Land Price Committee for finalisation of assessment.

49

(2) Where the money value of land exceeds of `50 lakh and finalised by the

District Land Price Committee, now to be sent to the Chief Town Planner for

their opinion and referred to the State Level Committee for finalising the

cases.

(Revenue Department's Resolution No. JMN/3997-83/A dated 15.1.1998 and circular

No. JMN-3997-83-part-1-A dated 14.7.1998)

2.1.16 IMPOSITION AND REVISION OF NON-AGRICULTURAL

ASSESSMENT

When land assessed for agricultural purposes is subsequently used for any purpose

unconnected with agriculture, the assessment upon the land so used shall be altered

under section 48 (2) and such alteration will be made by the Collector (Rule 80).

The assessment so fixed shall be subject to revision when the period for which the

assessment is made expires (Rule 80A).

With effect from 1.8.1976, Rule 80A has been deleted by the Gujarat Land Revenue

(Second Amendment) Rules 1976. In respect of territories which were formerly

princely state and in which the rates of non-agricultural assessment in force were

different from the standard rates, bring such rates on par with rates laid down in the

Bombay Land Revenue Rules (80AA).

After the amendment of the Gujarat Land Revenue Rules from 1.8.1976, the rate of

non-agricultural assessment in respect of any land held or used for any non

agricultural purpose, the rate of N.A. assessment of which has been fixed at the rates

prior to the amendment or where the terms of payment has been fixed or has expired

can be revised by the Collector from time to time (Rule 80-AAA).

The ordinary rates of non-agricultural assessment extend from the minimum

agricultural assessment of one paisa per sq.mt. in respect of Class II village and two

paisa per sq.mt. in respect of Class-I villages. The Collector may also for special

reasons to be recorded levy non agricultural assessment at a rate higher than the

normal rates in respect of any village, town or city in case in which the land subject to

assessment is situated in an exceptionally favorable position or where it is used

temporarily for a non agricultural purpose or where the purpose for which the land is

used is of a special nature (Rule 81).

With effect from 1.8.1976 rates prescribed under Rule 81 were revised. The details

are given in chapter-4. Rule-82A deals with levy of royalty in addition to minimum

agricultural assessment for land used for brick manufacture.

When land is permitted to be used for non agricultural purpose the specific non-

agricultural purpose for which the permission is granted will be recorded in the order

granting permission and the use of the land for any other purpose without the

permissions of the Collector will be punishable with fine and/or a different assessment

(Rule 84A).

Non-agricultural assessment shall ordinarily be levied upon the whole of the land

within the compound of a building and not merely upon the land covered with the

building alone (Rule 85).

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2.1.17 LEVY OF NON-AGRICULTURAL ASSESSMENT WHEN TO BEGIN

(1)(a) Where permission to use land for any non-agricultural purposes is given under

Section 65, the non-agricultural assessment upon such land shall be levied

from the day on which non-agricultural order is issued.

(b) In the case of building sites held by Co-operative Housing Societies (or the

Bombay Housing Board) which are not built upon non-agricultural assessment

shall be levied for the 3 years subsequent to the date on which possession of

the land was taken or till the date on which non-agricultural use of the land

begins, whichever is later.

(2) The occupant of such land shall inform the Mamlatdar in writing through the

village officer the date on which the non-agricultural use commenced within the

period of one month from such commencement.

(3) If the occupant fails to give information within the period specified in sub-rule

(2), he shall be liable to pay in addition to the non-agricultural assessments, such

fine as the Collector may direct.

(4) Where no permission was given, the non-agricultural assessments for non-

agricultural use shall be levied from the first day of the revenue year in which

the use commenced unless the occupant proves to the satisfaction of the

Collector that the land was used for non-agricultural use at a later date, in which

case the non-agricultural assessment shall be levied from such later date.

(5) The provisions contained in sub-paragraph (1) to (4) of this paragraph have no

force with effect from revenue year 1976-77.

(6) With effect from 1-8-1976, levy of non-agricultural assessment was made

effective from the commencement of the revenue year in which land is so

permitted or deemed to have been permitted to be used or is actually used

without the permission of the Collector.

2.1.18 LEVY OF NON-AGRICULTURAL ASSESSMENT ON LANDS

ACQUIRED BY STATUTORY BODIES

Under the Land Revenue Code, every land put to agricultural or non-agricultural use,

land revenue is payable unless such land is specifically exempt from such payment.

An occupant of land can put his holding to any non-agricultural use only with the

prior permission of the competent authority. However, in cases of statutory bodies,

such permission in respect of land acquired for non-agricultural purposes is not

required to be obtained by the acquiring body. In such cases, permission is deemed to

have been granted and land revenue is assessable at rates applicable to land put to

non-agricultural use from the date the possession of land is handed over to the body

acquiring it. (Revenue Department Resolutions No.: Bkhp/1081/G12/k dtd. 25-7-81,

No.DMR/0181/3343/k dtd.22-3-84, and No.DMR/1081/3343 /k dtd.21-12-89).

2.1.19 PERMISSION FOR NON-AGRICULTURAL USE AND FINE FOR

UNAUTHORISED USE

Fine leviable for breach of the conditions annexed to the grant of land under Section

62 or under the terms and conditions imposed under Section 67 shall be determined

by the Collector at his discretion and subject to Rule (101) which may extend to 40

51

times the non-agricultural assessment imposed (Rule 100).

When the material of the soil of the land is employed for bricks or tiles or pottery

without the permission of the Collector and the value of the land is thereby adversely

affected, the fine leviable shall be at a rate not exceeding double the rate laid down

under Rule 100 (Rule 101).

In exceptional cases, Collectors are required to levy fine not in accordance with the

Rules (100 and 101) but in accordance with the orders issued by the State

Government (Rule 102).

The limit of fine to be levied under Section 61, when land is unauthorisedly occupied

and used for non-agricultural purpose shall be 100 times the non-agricultural

assessment payable under Chapter XIV of the Gujarat Land Revenue Rules, 1972.

However, a fine up to `250 may be levied in any such case irrespective of the area of

the land involved (Rule 103).

2.1.20 MECHANISM FOR DETECTION OF UNAUTHORISED USE OF

LAND

The cases of unauthorized non-agricultural use of land are detected by village talatis

and are reported to taluka and district level authorities for regularization or for

eviction if it cannot be regularized. The supervisory staff at taluka and district levels

during their visits/of inspection of villages and also, by inspections of village records

detailing survey number-wise use of land inter-alia, check such unauthorized cases by

actual visits to particular areas.

2.2.1 ORGANISATION AND FUNCTION OF THE LAND REVENUE

DEPARTMENT

The administration of Land Revenue Department vests with the Principal Secretary of

Revenue Department at Government level. For the purpose of administration, the

State is divided into Districts. The District Collectors are responsible for the

administration of their respective districts. Each district is further divided into

talukasand villages. The Mamlatdar and Executive Magistrates are in charge of the

administration of their respective Taluka and exercise supervision and control on

Talatis who are entrusted with the work of collection of land revenue and other

receipts including recovery of dues treated as arrears of land revenue. TheSettlement

Commissioner and Director of Land Records is the head of the Land Revenue

Department for survey and settlement operations under the control of Secretariat of

the Revenue Department. The process of measuring lands and demarcating their

boundaries is known as ―Survey‖ and the fixation of land revenue of each survey

number is know as ―settlement‖. In the exercise of his functions as a head of the

Survey Department, the Settlement Commissioner is designated as the Director of

Land Records and in exercise of his functions of Settlement of Land Revenue he is

designated as the Settlement Commissioner. There is an internal audit wing in the

Revenue Department headed by Revenue Inspection Commissioner of equivalent post

to the Secretary to the Government of Gujarat for the purpose of internal audit of

offices under the control of Revenue Department.

52

2.2.2 DIRECTOR OF LAND RECORDS

Under the Director of Land Records, there are Superintendents of Land Records who

function as Circle Officers over the District Inspectors of Land Records (DILR). It is

the latter officers who are in actual exercise of the functions of survey of lands. Under

the Land Revenue Code, Government is empowered to direct the survey of any land

with a view to settlement of the land revenue and to record and preservations of rights

connected therewith. Survey charges are to be borne by the Government if the survey

is introduced for the purpose of settlement of revenue, but if it is carried out for

updating the record of rights, the entire cost of such survey is recoverable from the

beneficiaries of the survey as revenue demand. In accordance with the recovery

procedure prescribed by Government, District Inspector of Land Records are required

to maintain khatedar wise, village wise and Taluka wise accounts of various survey

charges to be recovered while the actual work of effecting the recoveries is done by

village Talati to whom detailed statements of khatedar wise demands are sent on

completion of survey work. The main functions of the District Inspector of Land

Records can be stated as follows:

(i) Whenever a fresh survey is undertaken under the orders of the State Government,

the Surveyors working under the District Inspectors of Land Records conduct the

survey on the ground.

(ii) The Surveyors under the District Inspectors also conduct from time to time Pot

Hissa surveys, which represent the measurement of parts of survey number

resulting from partition of property, sale etc. For such surveys fees recoverable

are demanded from the respective land holders in the form of demand statements

prepared by the DILR s and sent to village Talati through Mamlatdars.

(iii) The District Inspectors of Land Records maintain printed village maps showing

survey numbers of lands in each village. These maps are printed by the

photolitho press, Ahmedabad and supplied to the District Inspectors. The maps

are available for sale to the public at prices determined by Government from time

to time.

(iv) The District Inspectors undertake measurement of lands on application by private

parties, in land acquisition cases for Government etc. For private work done by

the District Inspectors of Land Records, appropriate charges are recoverable in

advance at rates laid-down by the State Government from time to time.

(v) ‗Tippan Books‘ are maintained by the District Inspectors which show the maps

of each survey number of a village drawn to scale. The maps in this book of each

survey number represent the official confirmation area etc. of the survey numbers

on the ground. Extracts from this Tippan Book can be supplied to private parties

on application and on payment of appropriate charges.

2.2.3 The detailed working of the office of the District Inspectors of Land Records

is described in the manual of land Records Department and the Manual of Standing

orders of the Department, which may be studied with advantage.

53

2.2.4 SETTLEMENT COMMISSIONER

Under Section-117-E of the Land Revenue Code, a settlement of land revenue is

normally valid for a period of 30 years unless extended or reduced by the

Government. When a fresh settlement of land revenue is completed, the District

Inspector of Land Records will prepare an ‗Akarband‘ showing therein in the land

revenue settled for each survey number in a village. From this ‗Akarband’, a ‗Kayam

Kharda‘ will be prepared by the District Inspector of Land Records and supplied to

the Village Talati, over his signature. It is ‗Kayam Kharda‘, which will show the

assessment of land revenue fixed for each survey number of the village which

constitutes the corner stone of the land revenue accounts.

2.2.5 COLLECTORS AND DISTRICT DEVELOPMENT OFFICERS

In matters relating to land revenue assessment and collection, Collectors and District

Development Officers work under the Settlement Commissioner. Prior to the

introduction of Panchayati Raj in the State on 1-4-1963, the land revenue functions

were solely in the hands of the Revenue Department namely, Collectors and

Mamlatdars. With the introduction of Panchayati Raj from 1-4-1963, many revenue

functions have been transferred by Government to the Panchayat. It can broadly be

stated that the work of revenue collections has been entirely transferred to the

Panchayats, while control over Government lands is continued to be vested in the

Revenue Officers. The Talati-Cum-Mantri at the village level works under both the

Taluka Development Officer and Mamlatdar.

The administrative set of one of the district of the State i.e. Ahmedabad is given

herein under as a model.

There are twenty five branches which function under the Collector and District

Magistrate, Ahmedabad.

The branches are as under:- 1. Prant Offices (Seven)

2. Election Branch

3. Planning Branch

4. Disaster Management Branch

5. Scarcity Branch

6. Record Branch

7. Sardarnagar Township Branch

8. Registry Branch

9. Extra Chitnis Branch

10. Accounts Branch

11. Legal Branch

12. Dy. Chitnis Branch

13. PRO Branch

14. Addl. Chitnis Branch

15. Allien Recovery Branch

16. Nagarpalika Branch

17. DUDA Branch

18. Entertainment Tax Branch

19. District Supply Officer (DSO)

54

20. Mid. Day Meal Branch

21. Mamlatdar krishi panch, Daskroi

22. Second Addl. Spl. Land Acquisition Branch

23. Addl. Special Land Acquisition Branch

24. Chitnis Branch

25. Tenancy and Appeal Branch

Other offices of the Collector in the State may be functioning with the same type of

set up.

1. DY.COLLECTOR ( PRANTOFFICER)

There are seven Prant Offices (Dy. Collector) under the Collector, Ahmedabad. Out of

seven, two offices viz (i) Ahmedabad (West) and (ii) Ahmadabad (East) are located in

the Jilla Seva Sadan, Ahmedabad. The remaining offices are located at (1) Dholka, (2)

Dhandhuka (3) Sanand (4) Daskroi (Ahmedabd) (5) Viramgam.

The following are the main functions of the office:

(1) Scrutiny and finalization of cases falling under Section 43 of the Land Tenancy

Act i.e. cases relating New and restricted tenure land.

(2) Scrutiny and finalization of

(i) N.A. cases

(ii) Cases falling under Section 63 of Gujarat Land Tenancy Act

(iii) Process the cases of grant of Government Land

(iv) Election of Co-op. Societies

(v) Issue certificate to agriculturists

(vi) Review the orders issued by Mamlatdars

(vii) Initiate action under Section 79 of Land Revenue Code, 1879 (Breach of

conditions)

(viii) Decide and finalize cases of encroachment on Government land.

(ix) Verification of rights of ownership under Section 37(2) of land Revenue Code,

1879

(x) Allotment of gharthal plot to weaker Section people as per scheme and policy

of the Government.

2.Election Branch:

2. ELECTION BRANCH

This branch works under direct supervision of Dy. Dist. Election Officer,

Ahmedabad. The DDO of this branch is Addl. Chitnis to the Collector, Ahmedabad

and the branch directly reports to the Collector. The main function of the branch is to

revise electoral rolls and issue election cards. The expenditure of the branch is booked

under the head 2015- 102(1). The grant received under the head 2015 is allocated to

Dy. Collectors and Mamlatdars.

3. PLANNING BRANCH

This branch is headed by District Planning Officer (DPO) who is also DDO of the

branch. The branch receives grant by way of demand draft to undertake the work

approved under MP/MLA scheme. The branch submits progress report of work to

concerned Member of Parliament/MLA and also reports expenditure incurred during

the month. The DPO disbursed the grant for any specific work to any institution, the

utilisation certificate to that effect is to be obtained by DPO.

55

4. DISASTER MANAGEMENT BRANCH

This branch works under Addl. Resident Dy. Collector. The Addl. Chitnis is DDO of

the branch. The main function of the branch is to undertake disaster management

related work, conduct training programes and generate awareness about it in the

public. The grant of received & disbursed for such disaster work & progress there of

reported to the collector.

5. SCARCITY BRANCH

This branch works under Addl. Resident Dy. Collector. The Addl. Chitnis is DDO of

the Branch. This branch undertakes scarcity related work and also maintains PLA of

C.M. Relief Fund (A/c No. 3135020 50000155 UB.F.).

6. RECORD BRANCH

This branch is under Addl. Resident Dy. Collector and Addl. Chitnis is DDO of the

Branch. The main functions of the branch are as under:

(1) To issue certified copies of records/orders asked by the applicants.

(2) To maintain dead stock register

(3) To attend appeal cases filed under RTI Act.

(4) To purchase furniture for the branch and repair thereof.

(5) Payment of mobile bills and auction of old items including furniture of old

office

(6) To award contract for maintenance of computers and to take Xerox machines

on lease

(7) To purchase computer printers for other branches of the office.

(8) All other Contingent Expenditure to be incurred for maintenance of office.

7. SARDARNAGAR TOWNSHIP BRANCH

This branch works under Addl. Resident Dy. Collector who is also DDO of the

Branch. The main work of the branch is to scrutinise proposals received for allotment

of Government land and allot land if proposal is found in order. To maintain a Ledger

of accounts of holder of such land, building etc and watch the changes of such

ownership.

8. REGISTRY BRANCH

This branch works under Extra chitnis to Collector who is also DDO of the branch.

The main function of the branch is to index letters received from outstations as well as

locally from Ahmedabad; assigns numbers and name of branch, pass them to

concerned branches. Similarly, the branch also assigns numbers on compliance of

such letters and sends the reply by post to concerned party (outward work).

9. EXTRA CHITNIS BRANCH

This branch works under Addl. Resident Dy. Collector. The Addl. Chitnis is DDO of

the Branch. This branch is mainly engaged with administration work as detailed

below:

(i) to appoint and transfer Dy. Mamlatdars, clerk, typist, driver, peon

&talatiesetc.

56

(ii) Promotion of clerk/typist

(iii) to maintain information about immovable/movable properties owned by

employees

(iv) to maintain seniority list of employees

(v) to make departmental enquiry

(vi) to grant advance for purchase of house and vehicle

(vii) to maintain personal files of employees

(viii) to attend Other work relating to stepping up of pay/ pension

10. ACCOUNTS BRANCH

This branch is under Addl. Chitnis to Collector who is also DDO of the branch. The

main functions of this branch are as under:

(i) to prepare pay bills of class I, II, III & IV employees of office

(ii) to prepare contingency bills

(iii) to maintain service book of employees

(iv) to attend work relating to budget, grant, HBA, MCA and reconciliation

(v) to prepare GPF bills and pension papers

(vi) to maintain PLA accounts of A/c Nos. ------

(1) 2008042980 S/B A/c with Bank of Maharashtra

(2) 1801631111 -do- Central Bank of India

(3) 10542903910 –do- SBI

(4) 10542887761 –do-

(vii) To maintain Cash book and Bill register

(viii) To pass the T.A./LTC/Home town/TTA bills of Staff

The expenditure incurred towards pay and allowances is booked under the following

heads of accounts:

Head of Grant Type of Expenditure.

(1) 2053 – 93 (NP) Municipal Branch Pay & Allowances

(2) 2217 – 080-001 -01-00 -do-

(3) 2515 -do-=

(4) 2015 – 00 Election Branch Pay & Allowances

(5) 2245 – 001 Scarcity Branch -do-

(6) 2245 – 800 Disaster Branch -do-

(7) 2045 – 00 Entertainment Br. -do-

(8) 2235 – 01 – 001 Sardarnagar township –do-

(9) 3475 – 00- 201-05 (i) Agricultural land cell –do-

(ii) Urban Land ceiling Act -do-

(iii) RTS -do-

(10) 2014-00-114-01-00 Asstt. Public Prosecutor -do-

(11) (i) 2235-02 -103-04-00 (P) Asstt. Chitnis Branch Pay & Allowances

(ii) 2029-00-001- 02-00 -do-

57

11. LEGAL BRANCH

This branch is under Resident Dy. Collector and Addl. Chitnis to collector is DDO of

the branch.

This branch monitors cases pending in different courts.

12. DY. CHITNIS BRANCH

This branch works under Addl. District Magistrate The Addl. Chitnis to collector is

DDO of the branch. The main functions of the branch are as under:

(i) to issue public notification under section 144 of the criminal procedure code.

(ii) to appoint executive magistrate, checking of police stations and maintain law

and order.

(iii) to initiate necessary action under Securitisation Act 2002

(iv) to issue and renew license for revolver and rifles. Issue ―no objection

certificate‖ for storage of petroleum products

(v) to prosecute persons under u/s 39 of the Arms Act

(vi) Police verification

(vii) to appoint contractors for supply of meals to prisoners in the Taluka Sub-jails

(viii) to withdraw police cases and scrutinize application of persons who intend to

take ―Indian Citizenship‖

(ix) to issue and renew license to cinema theaters and video parlours

(x) to appoint Govt. pleaders etc.

13. PRO BRANCH

This branch works under Resident Addl. Collector and he is also DDO of the

Branch. The main functions of the branch are:

1. To attend public complaints

2. To provide information under R.T.I.

3. To ensure smooth working of Jan Seva Kendra.

14. ADDL. CHITNIS BRANCH

This branch works under Addl. Resident Dy. Collector. The Addl. Chitins to

Collector is DDO as well as head of the branch. The main functions of the

branch are as under:

1. To submit report about visit of Governor/Chief Minister and Ministers

2. To intimate programme of President of India and Vice President of India

3. To attend work relating to celebration of Govt. programme as well as

cultural programmes viz-

Republic day/Independence day

Kite festival

Navratri Mahotsav

Swarnim Gujarat

Krishi Mahotsav

Tourism Year

Nirmal Gujarat

Van Mahotsav

Woman‘s day……………..etc.

58

For celebration of above festivals, concerned Govt. Department sends cheque/DD

which is in turn deposited in PLA A/c of the Collector. The Collector issues another

cheque to implementing agencies. The Collector also put certain conditions while

forwarding the cheques to the implementing agencies-

1. the amount should be utilized for the purpose for which it is sanctioned,

2. the implementing agency should submit vouchers of expenditure,

3. to forward the utilization certificate.

4. to issue public notices for acquisition of land

5. to auction condemned Government vehicles and purchase new vehicles

6. to attend misc. work of freedom fighters viz. grant of medical assistance,

assistance at the time of death and process applications for grant of pension to

freedom fighters

7. to attend work relating to grant of old age/ widow pension/ assistance under

social security scheme.

8. to attend work relating to appointment of stamp vendors issue license thereof,

certification of records to be maintained by Stamp vendor. Each year a new

stock & issue register is to be maintained.

9. to attend work relating to application of refund of amount of Stamps,

cancellation of stamps etc.

10. to attend work relating to census

15. ALLIEN RECOVERY BRANCH

This branch works under Addl. Chitins to Collector who is also DDO of the branch.

The main work of the branch is to effect miscellaneous recovery of dues of the

Government. /court etc. viz. Sales Tax, court fee & recovery ordered by labour court,

etc.

16. NAGARPALIKA BRANCH

This branch works under Addl. Chitins to Collector who is also DDO of the branch.

The main functions of the branch are as under:

(i) to conduct election of village panchayat/nagarpalikas

(ii) to assist UPSC in conducting examination

(iii) to forward complaints to chief officer, Nagarpalica for necessary action

(iv) to watch the amounts collected on behalf of the Government. from the public

and credited in to Government accounts.

17. DUDA BRANCH

This branch is under Addl. Chitnis to Collector and Addl. Dy. Resi. Collector is DDO

of the branch. The main functions of the branch are as under:

(i) to process/examine the proposals of Nagarpalika under various schemes viz (a)

Nirmal Gujarat (b) Swarn Jayanti Shehari Rojgar Yojna (c) Swarn jayanti Chief

Minister Shehari Vikas Yojna (d) Vajpayee Nagar Vikas Yojana (e) Umeed Yojna

and (f) Mission Mangalam Yojana

(ii) to issue orders after approval of proposals under above schemes, to maintain

accounts and to submit progress report

(iii) to deposit the grant allotted by Municipal Finance Board under (a) Suvarna

Jayanti Shehri Rojgar Yojana& (b) Ummeed Yojana

59

(iv) to allocate the grant referred to in (iii) above to different Nagarpalikas

depending on their demand.

18. ENTERTAINMENT TAX BRANCH

This branch is under Addl. Chitnis to of Collector who is also DDO of the branch.

The main functions of the branch are as under:

(i) To issue Licences to Cinemas, video parlours & cable operators.

(ii) To approve tickets of cinemas and video parlours.

(iii) To effect recovery of entertainment tax from the proprietors of cinema, video

parlours and cable operators.

(iv) To attend work relating to election viz photography etc.

19. DISTRICT SUPPLY OFFICER (DSO)

This branch works under DSO who is also DDO of the branch. The main functions of

the branch are as under:

(i) Allotment of food grains, sugar and edible oil under public distribution system

(PDS)

(ii) Work relating to ration Cards bearing new bar codes.

(iii) Intimate the Govt. about food grain position in each Taluka.

(iv) Check the records of fair price shops as well as records of license holder of

petrol, diesel and solvent etc. Initiate action in case of any irregularities noticed

during checking/ scrutiny of the records.

(v) To initiate action against such holders.

20. MID-DAY-MEAL BRANCH

The in- charge of this branch are Dy. Collector Mid Day Meals scheme and District

Supply Officer (DSO), Ahmedabad who are also DDO of the branch. The branch

reports to Commissioner, Mid-Day-Meal Scheme, Gandhinagar.

The main functions of the branch are as under:

(i) to serve Mid-Day-Meals to primary to upper primary school children.

(ii) to appoint manager at different centers after scrutiny of the applications

(iii) to conduct Surprise checking of Centers of Mid-Day-Meal.

(iv) to issue of medicines and utensils to centers and to provide shed on the

kitchens

(v) to arrange gas connection for the centers

(vi) to make purchase of all required items under the scheme

(vii) to maintain accounts of grant received

21. MAMLATDAR & KRISHIPANCH, DASKROI

This branch is under Mamlatdar Krishipanch, Daskroi who is also DDO of the

branch. The branch deals with the cases falling under Bombay Land Tenancy Act

and Land Ceiling Act. The branch also recovers premium price in case of sale of land

held under tenancy Act. The branch also opines about premium leviable in such

cases. The branch also maintain tenant register to whom the land given as new

tenure. The Mamlatdar empower to issue a certificate in Form no. 9 to tenant to

prove ownership.

60

22. SECOND ADDL. SPL. LAND ACQUISITION BRANCH

The branch is under Second Addl. Spl. Land Acquisition Officer who is also DDO

of the branch. The main functions of the branch are as under:

(i) to scrutinize the files/proposals received from different organizations for

acquisition of land and prepare public notices under Section 4 & 6 of the

Land Acquisition Act

(ii) to prepare awards and make payment

(iii) to attend court cases pending in different courts

(iv) to auction condemned Govt. vehicles

(v) to maintain PLA/ cash book and monitor progress of work and

(vi) to give opinion in non agricultural and premium cases

23. ADDL. SPECIAL LAND ACQUISITION BRANCH

This branch is under Addl. Land acquisition officer who is also DDO of the

branch: The main functions of the branch are as under-

(i) to acquire land for Express and State Highways and make payment to land

owners.

(ii) to acquire land for corporation

(iii) to maintain PLA /cash book

(iv) to attend election work etc.

24. CHITNIS BRANCH

This branch is under chitins to Collector who is also DDO of the branch. The main

functions of the branch are as under-

(i) to issue non agricultural permission under section 65, 66 & 67 of the Bombay

Land Revenue code.

(ii) to issue permission under section 63 and 63AA of the code.

(iii) to attend land related cases pending in Supreme court / High court.

(iv) to grant permission for conversion of new and restricted tenure land into old

tenure land.

(v) to cheek village records maintained by Talatis

(vi) to prepare statement and register of Govt. dues

(vii) to grant exemption from payment of land revenue.

(viii) To grant/allot the Government land to needy persons.

25. TENANCY AND APPEAL BRANCH

This branch is under Addl. Chitnis to Collector who is also DDO of the branch. The

main functions of the branch are as under:–

(i) to attend appeal and revision cases under Section 74 and 76 of Tenancy Act

(ii) to attend appeal and revision cases under Land Ceiling Act

(iii) to attend cases pending in Supreme court / High court and Revenue

Commission

(iv) to attend work relating to bio metrics and finger prints

(v) to give opinion to Dy. Collector (Prant officers)/ Chitnis branch about non

agricultural / premium cases

61

In short, there are twenty five branches in the Office of the Collector and District

Magistrate Ahmedabad. Each branch deals with different Subject. Pay and

allowances of most of the staff working in the office is drawn by Accounts Branch .

The addl. Chitnis to Collector is DDO of the accounts branch. Grant for various

purposes as mentioned above is received by Dy. Collector (Prant Offices ), Election

branch, planning branch, Disaster management branch, scarcity branch, Accounts

branch, DUDA Branch, Addl. Chitnis branch, District Supply officer (for pay and

allowances), Mid-day meal branch and Land Acquisition branch ( two).

PLA is maintained by the following branches of Collector office-

Sr.

No.

Name of the branch No. PLA NO. Operated since

1

2

3

4

5

6

7

8

9

10

Accounts Branch

Chitnis Branch

Allien Recovery Branch

Election Branch

DUDA Branch

Entertainment tax Branch

Mid-day Meals Branch

Addl. Chitins Branch

Scarcity Branch

Land Acquisition Branch

4

1

1

2

4

1

1

2

1

1

.

2.2.6 TALUKA DEVELOPMENT OFFICERS & MAMLATDARS

Taluka Development Officers work at the Taluka level under the respective District

Development Officers and exercise the powers vested in them in the land revenue

code, Rules and orders. The Mamlatdar can be generally stated to be in charge of

disposals of government waste land, encroachment on such lands, matters relating to

record of rights etc. Other functions on the land revenue side are mostly exercised by

the Taluka Development Officer. These mainly are as follows:

(1) Maintenance of Taluka records outlined in the Land Revenue Accounts

Manual

(2) Grant of NA permissions, regularisation of cases of unauthorized NA use etc.

(3) Disposals of lands vested by Government in Panchayat.

(4) Control over collection of land revenue by Talatis.

2.2.7 TALATIS:

Talatis who works at the village level are also designated as Talati cum Mantris, in

view of the fact that they work under the Taluka Development Officer and also the

62

Mamlatdar. The bulk of the revenue work actually devolves on the Talati who is

entrusted with the maintenance of village records prescribed in the Land Revenue

accounts Manual. The Talatis are also required to report to Circle Officers, working

under the Taluka Development Officers and also Mamlatdars, for cases of

unauthorized NA use, encroachment on Government land, etc.

2.2.8 For an account of the actual procedure for the collection of land revenue and

their accounting please see ―Disposal of Govt. Waste Lands.‖

Consequent on re-structuring of the offices with effect from 1/4/2012, the

audit of District Development Officer& Taluka Development Officer have

been assigned to Accountant General (General & Social Sector) Rajkot.

2.3 LAND CEILING ACT IN GUJARAT

2.3.1 OBJECTS OF THE ACT

In order to make a uniform provision for the whole of the State of Gujarat, in respect

of restriction upon holding agricultural Land in excess of certain limits, so as to

secure the distribution of agricultural land in a manner best suited to sub-serve the

common good, the Gujarat Agricultural Land Ceiling Act (Act No.XXVII) of 1961

was enacted by the State Legislature. A corollary to the imposition of ceiling of land

holding is the expectation of surplus agricultural land and its allotment to persons who

are in need of land for agriculture. The Act makes provision for this and for other

consequential and incidental matters. In 1974, by Gujarat Act No.2 of 1974, the

ceiling limits on land holding originally contained in the 1961 Act were substituted by

a table of maximum land holding.

2.3.2 CLASSIFICATION OF LANDS

For the purpose of the Act, all the villages of the State are classified in one or the

other of nine local areas.

The ceiling limit of land holding is different for each class of local area. Likewise the

lands in each local area are again divided into the following four classes namely.

(I) Perennially irrigated land

(i) Irrigated by a source other than a private source.

(ii) Irrigated by private source.

(II) Seasonally irrigated land

(III) Superior dry crop land

(IV) Dry crop land

The ceiling limit for land holding is the smallest in respect of perennially irrigated

land and the highest in respect of dry crop land.

2.3.3 DECLARATION BY LAND HOLDERS

Every person holding land in excess of the ceiling area prescribed for him is required

to declare within the time limits laid down in the Act, a full Statement to the

Mamlatdar specifying the particulars of the land he possessed.

63

2.3.4 DECLARATION OF SURPLUS

The tribunal constituted under the Act, will then proceed to prepare a list of persons

holding excessive land. The tribunal has been invested with power to examine cases

in which it has reason to believe that any person holding excess land has failed to

furnish a declaration or has furnished incorrect particulars, hold an inquiry and

impose punishment, penalty etc.

The list prepared by the tribunal is published in the prescribed manner and objections

thereto heard by it. On the conclusion of these legal processes the tribunal would

make and order declaring surplus land.

2.3.5 COMPENSATION

The Act provides for the payment of compensation for acquisition of surplus land.

The scales of compensation differ from local area to local area. In class A local area,

the Compensation amounts to 200 times the full land revenue assessment thereof and

to 80 times the full land revenue assessment in class I local area. Provision is also

made for the payment of Compensation for the value of the structure standing on the

acquired land.

The Compensation payable under the Act will be in cash or in the form of transferable

bond carrying interest at 4.5 per cent with a maturity period not exceeding 20 years as

the State Government may decide.

2.3.6 ALLOTMENT OF LAND ACQUIRED

The Act makes provision for the allotment of surplus land acquired by Government.

The allotment will be made in accordance with the order of priority laid down in the

Act on the payment of occupancy price by the allottee, equal to the amount of

compensation determined for the land. The order for priority runs down from co-

operative farming society to agricultural laborers, landless persons and small holders.

2.3.7 BAN ON TRANSFER

Land allotted under the Act, can normally not be transferred by way of sale or

mortgage etc. or subdivided whether by partition or otherwise without the prior

sanction of the Collector. Any transfer or subdivision of such land in contravention of

the provisions of the Act is declared invalid and land so dealt with will stand forfeited

to the State Government.

2.3.8 URBAN LAND (CEILING AND RAGULATION) ACT, 1976

With a view to preventing the concentration of urban land in the hands of a few

persons and speculation and profiteering therein and with a view to bring out an

equitable distribution of land in urban agglomerations to sub serve the common good,

an Act, to provide for the imposition of Ceiling on vacant land in urban

agglomeration, for the acquisition of such land in excess of ceiling limit and to

regulate the construction of buildings on such land, the Urban Land (Ceiling and

Regulation) Act, 1976 has been enacted by the Parliament. Government of Gujarat

has adopted the Act under clause (1) of article 252 of the constitution with effect from

17.02.1976.

64

The Urban Land (ceiling and Regulation) Act 1976 has been repealed vide the Urban

Land (Ceiling and Regulation) Repeal Act, 1999. The Act has received the assent of

the President on 22 March 1999.

2.3.8.1 The Government of Gujarat has passed a resolution in view of clause (1) of

article 252 of the constitution for abolition of the ULC Act and enacted the Abolition

of the Gujarat Urban Land (Ceiling and Ruling) Act, 1976 which was made effective

from 30.3.1999.

2.3.9 According to section 3(1) of the Central Government Repealed Act, 1999, the

Repealed Act shall not affect

(a) the vesting of any vacant land declared surplus under Section 10(3), possession

of which has been taken by the State Government

(b) the validity of any order granting exemption under Section 20(1) or any action

taken there under

(c) any payment made to State Government as a condition for granting exemption

under section 20(1)

2.3.10 According to section 3(2) of the Central Government Repealed Act, 1999,

where any land is deemed to have vested in the state government under section 10(3)

of the Act but the possession has not been taken by the Government and any amount

has been paid by the state government, then such land shall not be restored, unless the

amount paid has been refunded to the state government, possession should not be

taken by the Government in view of the said abolition Act.

2.3.11 According to section 4 of the Central Repealed Act, all proceeding relating to

any order made or purported to be made under the principal Act pending immediately

before the commencement of this Repealed Act, before any court, tribunal or any

other authority shall abate.

However, where the possession of the land has been taken by the Government and

action under Section 11, 12, 13 and 14 of the principal Act is pending, proceeding in

such cases will be continued for their finalisation at various stages.

2.3.12 Except the cases in which application was made prior to and pending as on

30.3.99 under Section 21 and land owner is willing to regularise his case under the

provisions of section 21, the permission may be granted subject to levy of premium

price as prescribed under section 21 but in case of any breach of conditions, the

benefit of concessional rate of premium is not allowed and premium as prescribed by

the Government under the Tenancy Act is leviable.

2.3.13 During the period 17.2.1976 to 30.3.1999, where the land was occupied by the

Government but due to any reasons, entry to that effect was not made in the revenue

records, in such cases, a watch is to be made by the respective Sub-Registrar that such

property should not be sold/transferred. A certificate to the effect that the land was not

acquired by the Government from the appropriate authority should be obtained by the

seller and submitted to the Registering Authority before such document is registered.

65

ASSESSMENT AND COLLECTION OF LAND REVENUE

2.4.1 HISTORY OF LAND REVENUE ASSESSMENT

The present Gujarat State consists of the following parts so far as the basis of Land

Revenue assessment is

i) The Gujarat districts of the Bombay residency

ii) Merged State, areas and territories

iii) Former State of Saurashtra and

iv) Former State of Kutchh

In the Gujarat State districts of the Bombay Presidency, the principal method of Land

revenue was by Survey and settlement under chapter VIII-A of Land Revenue Code.

The present districts of Ahmedabad, Baroda, Bulsar, Kaira, Panchmahals and Surat

contain such areas. For the purpose of settlement under chapter-VIII A of Land

Revenue Code, the village in a taluka were divided into groups on the basis of such

factors as physical configuration climate and rainfall market, communication,

standard of husbandry, population and supply of labour, agricultural resources,

variations in area occupied and cultivated land during the last 30 years, agricultural

wages, price of agricultural commodities, yields of principal crops, rental values of

land used for the purpose of agriculture and sale value of lands used for the same

purpose besides ordinary expenses of cultivating the crops.

2.4.2 Under the land reforms policy of Government, the rental value of land which

was one of the factors for determining the agricultural assessment came under

artificial restrictions. In 1956, therefore, the gross yield was adopted as the basis for

determining the standard rates of assessment in place of the rental value.

2.4.3 For the purpose of settlement or deemed so on consideration of the facts that

some sort of a system more or less akin to the Bombay Land Revenue system

obtained and the rest were considered unsettled. For ad-hoc settlement in scientifically

settled merged area rule 19-N has been framed and for the unsettled merged area rule

19-O has been framed. Both these rules have been framed under Section 52 of Land

Revenue Code. According to the Gujarat Land Revenue Rule 19-N, the village in the

various settlement groups were compared with those in the pre-merged Taluka in

respect of permanent and semi permanent factors like physical configuration, climate

and rainfall, market communications etc. and comparable union areas were fixed. The

standard rates of the scientifically settled merged areas were then and remission was

granted to the extent of the excess of the former over the letter, the former being

continued if lower than the latter.

2.4.4 In respect of unsettled merged areas, the comparable union areas rate was

scaled up or down in proportion to the ratio between the yield of principal crops of

comparable union area with that of merged area and the recoverable rate that worked

out was sanctioned under Gujarat Land Rule Rules 19-O if lower than the prevailing,

if not the prevailing rate being lower was continued. Land Revenue in such areas was

worked out by application of (1) the recoverable rate under Gujarat Land Revenue

Rules 19-O, or (2) the existing rates prevailing in the merged areas, or (3) the rates

worked out on the basis of average cash value of 35 per cent of 1/6th of the gross

produce, whichever was lowest, to the soil classification values through the medium

of the distance from village site scale and actual area of that survey number or its sub-

division.

66

2.4.5 In case of Jagiri areas, however, the assessment of each survey number or

sub-division has been fixed under Section 7 of the Bombay Merged Territories and

Areas (Jagiris Abolition) Act, 1953, by applying the rate of adjoining homogeneous

Khalsa villages.

2.4.6 In the areas of the former Saurashtra State, the Land Revenue assessment has

been fixed under Gujarat Land Revenue Rules 18 and 17 on the analogy of rules 19-N

and 19-O framed under Section 52 of the Land Revenue Code. In deemed settled

Saurashtra areas, the settlement groups of villages are compared with the settlement

groups of union areas, on consideration of permanent and semi permanent factors of

physical configuration climate etc. and the rates obtaining in the merged areas with

those in the comparable union areas are compared, the excess of the former over the

letter has been remitted, the former being continued if lower than the latter, under the

Gujarat Land Revenue Rule 18.

2.4.7 In respect of villages which did not form part of the deemed settled areas

groups of villages have been formed on consideration of factors mentioned above

under the Land Revenue Rule 17. Such lands were divided into two categories viz (i)

classified and (ii) unclassified. In respect of classified lands the standard rates of

comparable union area were applied direct whereas in respect of unclassified lands,

the existing rates or comparable union area rates whichever were lower are

sanctioned. Where the lands are not scientifically classified, they are classified as

good, medium and interior and 2/3rd

of the rate for good lands has been applied to

medium land and 1/3 rd to the interior lands.

2.4.8 For settlement of land revenue assessment in former Kutch State, Rule 19-U

of the Gujarat Land Revenue Rules has been framed under Section 52 of Land

Revenue Code. Under this rule, groups of various villages were formed on

consideration of their homogenity in respect of permanent and semi permanent factors

on the analogy of Rule 19-O and the rates were fixed on the basis of 1/16th of the

cash value of the average gross produce of the predominant crop. As regular soil

classification was not done, the lands were broadly classified into good medium and

inferior and assessment was worked out by applying 2/3rd

rates of the good land to the

medium and 1/3rd

to the inferior land.

2.4.9 RATES OF NON-AGRICULTURAL ASSESSMENT

Rule 81 of Bombay Land Revenue Rules prior to its amendment by Gujarat Land

Revenue (Second amendment) Rules, 1976, prescribed the maximum ordinary rates of

NAA depending upon the class of village. For this purpose the villages/towns were

classified by Collector. Prior to Revenue year 1968-69 (i.e. August to July) the rates

of NAA were 2 per sq.yard for class I villages & Nil per sq.yard for class II villages.

With effect from revenue year 1968-69, metric unit of assessment was introduced and

rates of NAA were revised to 2 paise/sq.metre & 1 paise/sq.meter for class I and class

II villages respectively. Collector may however for special reasons levy NAA at a

higher rate than the minimum prescribed above.

2.4.10 Rule 81 have been amended by Gujarat Land Revenue (Second amendment)

Rules, 1976 effective from 1-8-1976 i.e. Revenue year 1976-77. Under the

amendment for the purpose of NAA the city/town/villages are to be classified in to A,

B, C, D and E category depending upon the population of city/town/village.

Accordingly the NAA. is now leviable at the rates applicable to each class depending

67

upon the use viz. residential, industrial or commercial, to which the land is put. The

revised Rule 81 is given in the appendix I to this chapter.

2.4.11 PAYMENT OF CONVERSION TAX

A new Section 67-A has been introduced in Bombay Land Revenue Code by Bombay

Land Revenue (Gujarat Amendment) Act, 1976 for charging ―conversion tax‖. The

provisions of the new Section are effective from Revenue year 1976-77. The

Conversion Tax is leviable when the land is used for any purpose other than for

agricultural use or for change of use from one non-agricultural use to another non-

agricultural use. The rates of conversion tax depends upon the population of town/city

and also the nature of use of land i.e. whether residential, industrial, commercial or

any other use. Rates of conversion tax chargeable under Section 67-A is given in the

appendix II to this chapter.

2.4.12 The conversion tax is required to be paid in advance by challan into the

treasury, before permission is given under Section 65 or 65-A. In the case of land

used for any non-agricultural purpose without the permission of the Collector, the tax

shall be paid within 15 days of a notice of demand issued by the Collector (Rule 117

B introduced form 1-8-1976).

APPENDIX I

(1) For the purpose of determining generally the rate of non-agricultural assessment,

the Collector shall, from time to time, by a notification in the Official Gazette,

(a) divide villages, towns and cities into the following classes namely :

Class A: The cities of Ahmedabad, Vadodara, Surat, Rajkot, Bhavnagar and

Jamnagar.

Class B: (i) Cities other than those in Class-A above and towns having a

population exceeding 50,000 (ii) Such industrial and allied areas as may be

notified in this behalf by the State Government from time to time irrespective

of the population in such areas.

Class C: Cities and towns with a population of more than 10,000 and upto

50,000 inclusive of the population in areas falling under clause (ii) of class B

within those cities and towns.

Class D: Towns and villages with a population of more than 5,000 and

upto10,000 inclusive of the population in areas, falling under clause (ii) of

class B within those towns and villages.

Class E: Villages with a population upto 5,000 inclusive of the population in

areas falling under clause (ii) of class B within those villages.

(b) determine areas adjoining such villages, towns and cities falling under class,

namely :

Class I: The peripheral area of five kilometers adjoining the cities falling

under class A.

Class II: The peripheral area of one kilometer adjoining the cities and towns

falling under class B.

Class III: The peripheral area of one kilometer adjoining the cities and towns

falling under class C.

68

Explanation I: For the purpose of this rule ―Population‖ means population as

ascertained at the last preceding census of which relevant figures have been

published.

Explanation II: Where a village, town or city or any part thereof falling in a

particular class on the basis of its population also falls within the adjoining

peripheral area of another city, town or village specified in relation to such

other city, town or village in clause (b) and falling in a different classes then

that village, town, city or part thereof shall be reckoned in that one of such two

classes where higher rates of non-agricultural assessment are applicable.

(2) The assessment shall then be fixed by the Collector on the lands used for non-

agricultural purpose with reference to the nature of the non-agricultural use of such

lands at the rates shown in Table A or Table B whichever may be applicable with

effect from the commencement of the revenue year 1989-90, namely:

TABLE-A

Rate per square metre per annum in ‗paise‘ on lands situated in villages, towns or

cities referred to in clause (a) of Sub-Rule (1)

Industrial use

Commercial or

other uses

Class of city,

town, village

Residential

use

Village

industries

Other

industries

A 12 6 20 30

B 8 4 12 16

C 6 3 8 12

D 4 2 6 8

E 1 1 1 1

Provided that in respect of lands falling within the Urban agglomerations to which the

Urban Land (Celling and Regulation) Act, 1976 (Act 33 of 1976) applies, assessment

at double the rates mentioned above shall, with effect on and from 1st August, 1981,

be fixed so long as the land in question is not put to non-agricultural use for which

permission is granted or deemed to be granted.‖

Explanation: For the purpose of this Table, the expression ―village industry‖ shall

have the same meaning as it has in the Bombay Village Industries Act 1981.

TABLE-B

Rate per square metre per annum in paise on lands situated in peripheral areas

referred to in clause (b) of sub-rule1

Class of

peripheral areas

Residential use Industrial use Commercial

or other use

I 8 12 16

II 6 8 12

II 4 6 8

69

Provided further that in respect of lands situated within sites of towns or cities falling

under any class A , B or C.

(a) assessment at 33 1/3 % of the rate applicable to them when put to industrial or

commercial use; and (b) 10% of the rate applicable to them when put to residential

use on or after the 1st August, 1981.

Provided also that where any lands situated in any town or city is already put to

residential use before 1st August, 1981 shall not be liable to any assessment.

Provided also that no assessment shall be fixed by the Collector in respect of land

situated within sites of towns, cities under either ―D‖ or ―E‖.

(3) The non-agricultural assessment fixed by the Collector under Sub-Rule (2) shall

remain in force till such time as it is altered by him under the general or special orders

of the Government.

(Rule 81 as amended by GRNo.GHM 78-34 ML RR/1077-43064L dtd.21-1-78 and

Revenue Department Notification No.GHM-92/36/M-LRR-1089-150-k dtd.8-4-92).

REVISION OF RATES OF NON AGRICULTURE ASSESSMENT

Rule 81(1) of the Gujarat Land Revenue Rules, 1972 has been amended effective

from 1st August 2003 vide the Gujarat Land Revenue (3

rd Amendment) Rules 2003.

Sub-rule (1) of Rule 81 has been substituted as under:

(1) ― For the purpose of determining generally the rate of non-agriculture assessment

leviable, the Collector shall from time to time by a notification in the Official

Gazatte, devide villages, towns and cities in to the following classes, namely:-

Class A:- The cities of Ahmedabad, Vadodara, Surat, Rajkot, Bhavnagar,

Jamnagar, Gandhinagar and area within limit of Ahmedabad Urban Development

Authority (AUDA),

Vadodara Urban Development Authority (VUDA), Surat Urban Development

Authority (SUDA), Rajkot Urban Development Authority (RUDA), Bhavnagar

Urban Development Authority (BADA), Jamnagar Urban Development Authority

(JADA), Gandhinagar Urban Development Authority (GUDA) Junagadh

Municipal Corporation and five kilometers peripheral area of the Junagadh

Municipal Corporation.

Class B: - Cities and towns other than those classified in class A above, and

having a population exceeding one lakh and peripheral area of one kilometer

adjoining to these cities and towns.

Class C :- All areas other than class A and class B above.

Explanation-I :- For the purpose of this rule, ―population‖ means population as

ascertained at the last preceding census of which relevant figures have been

published.

Explanation-II :- Where a village, town or city or any part thereof falling in a

particular class on the basis of its population also falls within the adjoining

peripheral area of another city, town or village specified in relation to such other

city, town or village specified in relation to such other city, town or village falling

in different class then that village, town or city or part thereof shall be reckoned in

that one of such two classes where higher rates of non-agriculture assessment are

applicable.‖

70

(2) For sub-rule (2), and TABLE-A and B there under, the following shall be

substituted, namely:-

―(2) The assessment shall then be fixed by the Collector on the lands used for non-

agricultural purpose with reference to the nature of the non-agricultural use of

such land at a rate shown in the table appended hereto with effect from 1st August

2003.

TABLE

Rate of square meter per annum in paise on lands situated in villages, towns or

cities classified in Sub-rule (1).

Class of city, town;

village

Residential and charitable

use

Any other use

A 50 paise 100 paise

B 25 paise 50 paise

C 10 paise 25 paise

Explanation:- For the purpose of this table, charitable use means such use as the State

Government may by order specify from time to time.‖

Revision of non-agricultural assessment with effect from 1st August, 2007

For sub-rule (2), and TABLE-A and B there under, the following shall be substituted,

namely:-

―(2) The assessment shall then be fixed by the Collector on the lands used for non-

agricultural purpose with reference to the nature of the non-agricultural use of

such land at a rate shown in the table appended hereto with effect from 1st August

2007.

TABLE

Rate of square meter per annum in paise on lands situated in villages, towns or cities

classified in Sub-rule (1).

Class of

city, town;

village

Residential and

charitable use and

educational use

Mining, Brick

production and other

industrial use

Commercial and

other use

A 25 paise 40 paise 60 paise

B 15 paise 25 paise 30 paise

C 10 paise 10 paise 15 paise

Explanation:- For the purpose of this table, charitable use means such use as the State

Government may by order specify from time to time.‖

APPENDIX II

PAYMENT OF CONVERSION TAX BY OCCUPANT FOR CHANGE OF USE

OF LAND IN CERTAIN AREAS

(1) Where any land assessed or held for the purpose of agriculture and situated in

an area specified in column (2) of the Table below (hereafter in this section referred to

as the specified area):

(a) is permitted or deemed to have been permitted, under section 65, to be used

for any other purpose; or

71

(b) is used for any other purpose without the permission of the Collector being

first obtained or before the expiry of the period prescribed in that section.

The occupant of such land shall be liable to pay to the State Government, a tax at the

rate specified in the corresponding entry in column (3), column (4), or column (5), as

the case may be, of the said Table from the date on which such permission is, or is

deemed to have been granted, or from the date on which the land is put to such use,

whichever is earlier‖

(2) Where any land assessed or held for any non-agricultural purpose (hereafter in

this section referred to as the existing non-agricultural purpose) and situated in a

specified area –

(a) is permitted or is deemed to have been permitted, under section 65, to be used

for any other non-agricultural purpose; or

(b) is used for any other non-agricultural purpose without the permission of the

Collector being first obtained or before the expiry of three months from the date of

application for such permission,

The occupant of such land shall be liable to pay to the State Government, a tax at such

rate as is equivalent to difference between the rate of tax applicable to the other non-

agricultural purpose specified in the corresponding entry in column (3), column (4), or

column (5), as the case may be, of the Table below and the rate of tax applicable to the

existing non-agricultural purpose specified in the said column.

Provided that tax shall not be payable under this sub-section if the rate of tax

applicable to the other non-agricultural purpose is lower than the rate applicable to the

existing non-agricultural purpose.

(3) The tax payable under this section shall be known as conversion tax and shall

be payable by the occupant to such authority, in such manner and at such time

as may be prescribed by rules made under section 67-A of the Land Revenue

Code.

TABLE

(WITH EFFECT FROM 1.8.1989 AND 1.8.1993) Sr.

No.

Areas in which

land is situated

Rate of conversion tax per square metre of land

`

When land is

to be used for

temporary

non-

agricultural

purpose

When land

is to be

used for

residential

purpose

When lands is

to be used for

educational

or charitable

purpose

When

land is to

be used

for

industrial

purpose

When

land is

to be

used

for

comme

rcial or

any

other

non-

agricul

tural

purpos

e

Rates

effectiv

e from

the date

1 2 3 4 5 6 7 8

1. Municipal boroughs

and notified areas

with a population

0.20

0.50

0.25

0.60

0.25

0.60

0.50

1.25

0.75

1.85

1-8-89

1-8-93

72

not exceeding

50,000 and their

adjoining areas.

2. Cities and municipal

boroughs with a

population

exceeding 50,000

but not exceeding 1

lakh, and their

adjoining areas

0.40

1.00

0.50

1.25

0.50

1.25

1.00

2.50

1.50

3.75

1-8-89

1-8-93

3. Cities and municipal

boroughs with a

population

exceeding 1 lakh

but, not exceeding

2.5 lakh, and their

adjoining areas

0.80

2.00

1.00

2.50

1.00

2.50

2.00

5.00

3.00

7.50

1-8-89

1-8-93

4. Cities and municipal

boroughs with a

population

exceeding 2.5 lakh,

but not exceeding 5

lakh, and their

adjoining areas

1.20

3.00

1.50

3.75

1.50

3.75

3.00

7.50

4.50

11.25

1-8-89

1-8-93

5. Cities and municipal

boroughs with a

population

exceeding 5 lakh

and their adjoining

areas

1.60

4.00

2.00

5.00

2.00

5.00

4.00

10.00

6.00

15.00

1-8-89

1-8-93

EXPLANATION: - In the above table (a) "adjoining area" means

(1) in relation to the city of Ahmedabad or any other local area which is constituted

to be a city under section 3 of the Bombay Provincial Municipal Corporation

Act,1949 as in force in the state of Gujarat, or a municipal borough with a population

exceeding 2.5 lakhs a peripheral area of five kilometers.

(2) in relation of any other municipal borough a (peripheral) area of one kilometre,

municipal borough or notified area means respectively a municipal borough or a

notified area within the meaning of the Gujarat Municipalities Act, 1963.

(b) "population" means a population as ascertained at the last preceding census of

which relevant figures have been published. (Gujarat Act. No.16 of 1989 read with

Revenue Department Notification No. GHM/89/101-M/LRR/1089/150/k

dtd.31.7.1989).

The rates of conversion tax were revised with effect from 1.8.93 (by Guj.12 of 1993

dtd.31.3.93 and Revenue Department Circular No. LRC/1093/928/k dtd.5.7.93).

REVISION OF RATES OF CONVERSION TAX

The rates of conversion tax were revised with effect from 1st April 2003 (by Gujarat

Act No 14 of 2003 dtd.31.3.2003

―In the Gujarat Land Revenue Code, 1879, in Section 67 A, for the existing table and

Explanation there under, the following Table shall be substituted, namely:-

73

TABLE

Sr.No. Area in which land is situated Rate of conversion per square meter of

land

When land is to be

used for temporary

non-agriculture use

or For residential

or charitable use

(`)

When land is to be

used for industrial

purpose or for any

Other purpose (`)

1 2 3 4

1. Villages, Municipal boroughs,

notified area and cities having

population not exceeding one

lakh as per last census.

2.00 6.00

2. Villages, Municipal boroughs,

notified area and cities with a

population exceeding one lakh as

per last census.

10.00 30.00

Explanation:- In the above table, ―municipal borough‖ or ―notified area‖ means

respectively a municipal borough or a notified area within the meaning of the Gujarat

Municipalities Act, 1963.‖

RECORDS, REGISTER AND RETURNS OF REVENUE ACCOUNTS

2.5.1 The Land Revenue Accounts are based on the manual compiled by F.G.

Hartnell Anderson, Commissioner of Settlement and Director of Land Records of

Bombay Presidency in the 1900 A.D. The mechanism of the accounting system which

is built up from the village level to the District and State level is briefly detailed in

this chapter. The general audit checks to be exercised are also indicated by side for

facility of understanding.

2.5.2. VILLAGE FORM-I (V.F.I)

This form is prepared for each village by the Survey and Settlement Department and it

constitutes the starting point of the Land Revenue accounts. In this form all the land in

the village is shown survey number wise the fixed agricultural assessments

determined for each survey numbers being shown against the survey numbers

themselves. Land not included in survey numbers is added to the surveyed land and

thus the total land available in a village is arrived at in the end. The register also

known as 'Aakar Bandh' or 'Kayam Kharda' is accompanied by an abstract in which

the land available in the village is shown under two main classification namely (A)

land available for cultivation and (B) land not available for cultivation. The suitable

sub-division showing also the total fixed agricultural assessment for each sub head.

The duration of the register is usually the settlement period of 30 years but whenever

the register shows sings of wearing out, the District Inspector of Land Records is to be

approached for a fresh copy of the register which the District Inspector of Land

Records will prepare with reference to the copy of the V.F.I of each village. It is in his

custody in a storing room at the District Office.

74

2-5-3. The register is to be examined in audit to see that it is the one supplied by the

District Inspector of Land Records. The assessment in respect of each survey number

is carried into the ledger in form VII-A, to the account of the Khatedaar who is

holding the survey number. While checking the accounts in the ledger in form VII-A

it should be seen that the assessments are in accordance with VF-I.

2.5.4 Every year the Talati-cum-Mantri also prepares an abstract of V.F.-I. This

abstract should also agree in all respects with the abstract appended to the VF-I

prepared by the District Inspector of Land Records, except for survey corrections

made from time to time. These changes will be in the nature of change of tenure,

change of agricultural land to non-agricultural land and so on. Every changes is

required to be supported by a "Kami-Jasti Patrak or Durasti Patrak” issued by the

District Inspector of Land Records. In respects of changes between talati's abstract

and the abstract of District Inspector of Land Records in respect of which Kami-Jasti

Patrak have not been issued by the District Inspector of Land Records, the procedure

examined in Government Resolution No.NAA-1059/54399/L dtd.19th February 1963,

(page No.102 of Sangrah Vol.I) should be followed by the Talati.

2.5.5 The total assessments as shown in District Inspector of Land Records abstract,

subject to the changes introduced by the Kami-Jasti Patrak should agree with the total

Akar in form VF-V (Tharav Bandh).

2.5.6 VILLAGE FORM II (V.F.II)

In this form fixed revenue other than that shown in VF-I is brought to account. The

form is maintained in three sections

Section-I: contains grants of land outside survey numbers for non-agricultural

purpose, Section-II: bring out details of land granted from survey number for non-

agricultural purpose and Section-III gives details of grants of land for agricultural

purposes but on special terms.

2.5.7 It will be seen from the examples given in Anderson's Manual that the areas of

land shown in this form agree with the areas shown against the concerned sub-heads

in the abstract in form VF-I. Every grant of land for non-agricultural purpose requires

the permission of the Taluka Development Officer or the District Development

Officer depending upon whether the land is situated in a class-II or class-I village. It

should be seen in audit that all lands for which non-agricultural permission has been

duly granted in respect of which non-agricultural assessment have accrued find a

place in the Register. Like-wise the entries in the Register should be verified to see

that non-agricultural permission in respect of each entry has been duly granted and

non-agricultural assessments have been correctly fixed. Like-wise orders in support of

grant of land for agricultural purposes on special terms should be scrutinized. It

should be ascertained and verified that all the N.A. orders issued by the respective

authority have been accounted for in Section-II above in VF-II and demand raised.

2.5.8 Non-agricultural assessment becomes due only when land in respect of which

non agricultural permission has been granted, is put to non-agricultural use. Generally

in the orders issued by the Taluka Development Officer/District Development Officer,

the period is specified during which construction work should be done on land for

which non-agricultural permission is granted. It should be seen in audit whether in

cases of grants of non-agricultural permission, the dates of commencement of non-

75

agricultural use are verified from the intimation of the users or reports of the Talati

and non-agricultural assessments are recovered from the appropriate date.

If the N.A. use not commenced and completed within time limits prescribed in

sanction order, whether a breach of condition cases have been initiated or not should

be brought out.

2.5.9. In the part of the year in which non-agricultural use of a land commences, the

non-agricultural assessment thereon is taken in the accounts as fluctuating revenue in

form VF-IV, from the next year onwards the assessment is carried to fixed revenue in

form-VF-II. The total fixed revenue as shown in VF-II is carried to VF-V.

2.5.10. VILLAGE FORM III (V.F.III)

In this register, details of alienated or Inami land are to be exhibited. Practically all

types of Inams are now abolished and in VF-III there will normally be no entry in any

village. However, if any, entry is exhibited in VF-III, audit has to examine whether

the Inam in question legally subsists.

2.5.11. VILLAGE FORM IV & VIII-B (V.F.IV & VIII-B)

In forms VF-I fixed land revenue was dealt with. In VF-IV fluctuating land revenue

which is of a miscellaneous character is entered. These levies are made as and when

occasion arises. The Talati sends reports to the Taluka Development Officer in cases

liable for such a levy in what are known as slip books. The orders of the Taluka

Development Officer on each case are noted in VF-IV and the recovery of the sums

watched through the concerned ledger account in form VF-VIII-B of the Khatedaar.

The check of these levies can be conducted with reference to the counter foils of the

slip books available with the Talati. While checking the register it should be seen

whether entries entering for more than one year (like lease of land for 3 years) are

carried forward in VF-IV from the previous year's register. The total struck at the end

of the year in this form is carried to VF-V.

2.5.12 This form is a general abstract of the area and revenue both fixed and

fluctuating in respect of each village. The entries in the form are numbered from (a) to

(z) and from (aa) to (gg) and are incorporated from VF-I, VF-II etc. as shown below: -

ENTRY INCORPORATED FORM

(a) Grand total form VF-I

(b) Normally this does not arise

(c) VF-I abstract entry All (a) (area only)

(d) VF-I abstract B(1)

(e) VF-I abstract-B(II)A (Except forest)+ B(II),(b)+B(III)

(f) and (g) (24.07 +34.25+1.10) Except in respect of

Sr.No.24(A) which is assessed to `.19.75. No other land under (B) of

VF-I abstract is assessed to agriculture.

(f) B(II) A(a)

(g) g+h=i- VF-II(ii) VF-II(ii)

(j) c+d+f+i

(k) a-j

(l) VF-III

(m) VF-I abstract a A(I)(b)

76

(n) VF-III(iii) item No.2 (`.30.3 75)

(o) K(l+m+n)

(p) (p,u,r,s) These are sub divisions of (o)

(t) VF-II(II(iii) item (I))

(u) o+t

(v) VF-II(ii)

(w) VF-II(i)

(x) VF-III see also VF-II(ii) entry 4 gymnacium

(y) v+w-x

(z) u+y

(aa) VF-IV

(bb) z+aa

(cc) & (dd) Local Fund Cess is added at appropriate rates

(ee) Rounding off effected

(ff) cc+dd+ee

(gg) bb+ff

2.5.13 The entries in VF V are required to be checked with the assessment shown in

VF-I, VF-II and VF-IV and remission on account of Inami lands as shown in VF-III.

The guide letters in the form are also helpful in the compilation of form TF VII-B

which should be checked with form VF-V.

2.5.14 VILLAGE FORM VI & VII/XII (VF-VI, VII/XII)

These are forms designated to serve as a record of right, index of lands, diary of

mutations and crops. Even though these matters are of an administrative nature, these

forms should be gone through for the period of audit because the entries in these

forms give clue on the following points which fall within our purview.

(1) Lands granted for non-agricultural purposes as noted in form VF- VI might not

be entered in VF-II and non-agricultural assessment might not have been recovered.

(2) Premium due to Government on changes in tenure of land from new or impartial

to old tenure as recorded in form VF-VI might not have been recovered.

(3) In determining the sale price of Government waste land questions regarding

whether the land is Virgin or non Virgin or whether it is titled on eksali basis or not

etc. arise. The combined forms VF-VII/XII are useful in getting such information.

(4) Form VF-VII/XII we may even be able to come across cases in which land is

cultivated but no agricultural assessment is recovered therefore.

(5) Form VII/XII, if the land is not cultivated, whether permission of N.A. is

obtained and noted in VF-VI and other relevant records.

(6) All the entries in VF-VI supported by relevant orders/documents etc. is to be

checked.

It is therefore, necessary that the entries in form VF-VI and VF-VII-XII are

scrutinized in the course of audit with the objects stated above.

2.5.15 VILLAGE FORM VIII-A (VF-VIII-A)

VF VIII-A is a ledger account showing the land held by each Khatedar for

agricultural and non-agricultural purpose on which fixed land revenue is due with

reference to the record of right entries in form VF VI-VII-XII. On the basis of the

77

amount worked out in this ledger, the entries in VF-VIII-B are made so far as fixed

land revenue is concerned. It will be recalled that under VF-I, it was suggested that

the assessments of each survey numbers shown in VF VIII-A should be verified with

the VF-I assessment.

2.5.16 VILLAGE FORM VIII-B (VF-VIII-B)

In this ledger on the debit side demands for fixed land revenue are brought forward

from VF VIII-A. Thereafter, miscellaneous fluctuating revenue, if any, recoverable

form a Khatedar is entered as and when such recovery become due during the course

of the year. In this connection reference is invited to the notes under VF IV. From the

gross demand, remissions and suspensions duly authorized are deducted and the net

demand is arrived at. It will be necessary to see that any suspensions or remissions

noted in the ledger account are correctly granted on the basis of ―annawari‖ valuation

of crops in the concerned revenue year and the remissions granted are according to the

Land Revenue Code/Rule and orders of Government. In this connection paragraph 3

on page 119, 120 of Anderson‘s Manual may be usefully gone through.

2.5.17 In this ledger after completion of postings of the demand side, the Talati will

enter the credit side with reference to receipts granted in from VF IX and strike the

balance to be carried froward to the accounts of the next year. The balance due form

all the Khatedars as worked out from this ledger should agree with from VF XI as

explained later.

2.5.18 VILLAGE FORM IX (VF-IX) Receipt books

This is the form of the land revenue receipt to be issued by the Talati in

acknowledgement of land revenue collections made by him. The form also serves the

purpose of a day book. For each Khata a separate receipt is prepared. The monies

collected are remitted to the treasury from time to time on form VF X (challan)

described later.

2.5.19 The actual total of the pages of the foils in the book since the last challan are

made and brought forward in pencil. The total that is to be written when a challan is

sent is the total since the last challan and not the progressive total to date. At the close

of the year the gross receipts in VF IX are totaled up in a summary to be appended to

the form. In this summary receipts received at Taluka will be added to the collections

made at the village to make up the total collection form which, items not pertaining to

land revenue, if any, will be deducted. Further from the gross collections over

collections relating to future years will be deducted and such over-collections on

account of the year will be added. Then net collections on account of the year will

then tally with the Taluka accounts and also the ―collections‖ columns of the trial

balance sheet (VF XI). of course the difference between the net collections and the

demand after taking into account all suspensions and remissions will represent

unauthorized arrears, balance of which must agree with the details worked out in the

ledgers, in VF VIII-B. For purpose of mutual comparisons the serial Nos. of VF IX

receipts are quoted in VF VIII-B, and the VF VIII-A and VIII-B khata numbers will

be quoted in form VF IX.

2.5.20 The correctness of amount collected from each Khatedar is to be verified in

audit. The totaling of the receipts should receive attention since in land revenue

accounts the general mode of defalcation is to deflate the receipt totals. In

78

departmental inspections the original foils of receipts are called for by the inspecting

officers from a few khatedars and compared with the counter foils to see that original

receipts are not granted by Talati for amounts in excess of those shown in the counter

foils. We can draw attention to erasures or over writings or other manipulations that

may be of a suspicious character. The stock account of the receipt books should be

scrutinized at the village and Taluka levels. In this connection, the instructions

regarding the maintainance of the accounts on page 135 of Land Revenue Accounts

Manual may be gone through.

2.5.21 VILLAGE FORM X (VF-X) (Government Challan)

Remittances to the treasury of cash collected by Talati are made on this form.

Whenever a remittance is to be made, Talati visits the Taluka with forms VF X and

the money to be remitted. A note of the remittance on from VF X is first made in form

TFI before the remittance goes to the treasury. For each village under the Talati a

separate challan is made. The challans are prepared in triplicate of which one copy

remains with the treasury, one copy is sent to the Taluka and third copy goes to the

Talati. The remittance challans should be checked with the day book to ensure that all

money collected has been remitted into the treasury. The usual treasury remittances

check is to be conducted in audit.

2.5.22 VILLAGE FORM XI (VF-XI) Trial Balance

In VF V the consolidated demand for land revenue was worked out by different

categories of lands. Likewise, in the summary of form VF- IX, the total collections

according to the Sr. Nos. of receipts were worked out. The arrears of land revenue

were arrived at from form VF-VIII-B. The details of remission and suspensions

allowed to each khatedar in a VF-VIII-B were worked out in separate files maintained

for the purpose. In order to prove the correctness of the workings in these forms the

trial balance sheet in form XI is prepared. In this form the arrears of land revenues,

the collections suspensions and remissions are worked out for each khatedar. If the

workings in the other forms referred above are correctly done the totals struck at the

foot of form VF XI will agree with the totals in the other respective forms namely VF

V, VF VIII-B and VF IX. The notations given at the closing of form XI refer to the

corresponding entries, in VF V. If the agreement stated above is effected land revenue

accounts may be taken as proved. The completion of this work is known as ―JAMA

BANDHI‖. It should be completed at the end of October of each year.

2.5.23 OTHER VILLAGE FORMS

The remaining village forms like VF VII-B VF XIII etc. are mainly of an

administrative nature and are therefore not dealt with here. Perhaps VF-XVI may be

useful in finding out whether the assessment for any survey number required to be

enhanced for water advantage.

2.5.24 TALUKA FORMS

The chief function of the Taluka is to consolidate the accounts of revenue that may be

realized at the Taluka. For watching such receipts the Taluka Development Officer is

required to keep a register in a suitable form. When all fixed and fluctuating items of

land revenue have been entered in the register the Taluka Development Officer will

79

draw a kitta kalam (Extra items ) Tharav Band with all the heads of the village Tharav

Bandh in form VF V.

2.5.25 TALUKA FORM I

This is consolidated land revenue receipt register for the Taluka as a whole. Reference

to this form is made under VF X also. The remittances made by Talati are entered in

this register chronologically, under the heads of revenue shown therein and periodical

totals struck. The total revenue realized in the Taluka according to TF I should agree

with the totals worked out in form TF V which is described later.

2.5.26 TALUKA FORM II

This account is a duplicate of VF II, maintained as a check on the Talati’s VF-II,

maintained without bifurcation into sections (i) (ii) (iii) etc. as in VF-II. Every lease or

grant of the land is entered in the register in chronological order. When lease or grant

expires, the entry should be struck out. If they are renewed on the same terms then a

note of their renewal should be made against the original entry itself. If renewal is on

different terms, then a fresh entry should be made. The renewal or cancellation of

leases which are about to expire should receive special attention. The register required

careful attention in audit. The Taluka Development Officer may omit to enter some

items which the Talati has entered or vice versa, or the village and Taluka accounts

may not agree. The audit scrutiny should apply not only to the fresh entries since the

last audit but also to expiring items of the earlier years to see whether they have been

attended to. In column 4 of the register the terms and rules under which a lease or

grant is made must be clearly given.

2.5.27. NON AGRICULTURAL SANCTION REGISTER (NASR REGISTER)

In the Taluka, a note-book must be maintained, for control of the disposal of non-

agricultural cases. From this note book, cases in which non-agricultural permissions

have been granted can be found out and if the non-agricultural assessments have

become due under the Land Revenue Rules, then entries in respect of such cases

should be traced in TF II.

2.5.28 The Taluka Development Officer is also responsible for seeing that

miscellaneous revenue is promptly realized. It would not suffice for him to wait every

year till he got a report from Talati that there were some mangoes or some dead wood

or some grazing in a tank etc. which might be sold and then only to take steps to sell

them and realize the revenue. He should take note of all miscellaneous land revenue

in a personal note book in which all auctions which take place every year such as the

sale of waste land or of alluuion, or of the right of collecting ‗Tarawad‘ or of Babul

Pods, or the collections of grazing dues etc. should be taken note of. The price

realized last year should be entered. The Taluka Development Officer‘s personal note-

book should serve as a precaution against unauthorized use of land for grazing etc.

involving loss of revenue to the Government orders for the realization of such revenue

will be noted in form TF IV referred to later.

2.5.29 TALUKA FORM III

In this form the details given in VFIII abstracts are summarized and totaled. As stated

under VF-III cases of alienated or Inami lands are now mostly non-existent.

80

2.5.30 TALUKA FORM IV

This from represents the ―Wasul Baki‖ ledger and is maintained in the form of a

register in which a few pages are allotted to each village with an index provided at the

beginning. On the demand side of the ledger are shown.

(a) All arrears brought forward from last year.

(b) All fixed revenue demand, in the first place as it stood on August 1st, but then

corrected in the last period of the year to agree with the ‗Tharav band‘ as it

stands at the end of the following July.

(c) All demands for miscellaneous land revenue as they become known.

(d) All remissions, suspensions and cancellations of demand, arrears or current as

soon as the amount is known. On the collection side are shown: -

(i) All over-collections or advance payments brought forward from last

year.

(ii) All collections made upon village challans.

(iii)Collections made at the Taluka or other Talukas if any.

The Treasury/A.G. brings to credit all collections whether they be of the current year

or of future years. The collections relating to future years are adjusted by additions or

deductions under the proper columns and plus-minus entries are also made in T.F.I. so

that the ‗Wasul Baki‘ figures may agree with those of the Treasury/A.G. Finally the

closing entries are worked out totally with VF IX and VF XI.

2.5.31 TALUKA FORM V

This is a periodical summary of TF IV and is known as the ―Wasul Baki Patrak‖. The

closing entries of the form as shown in the specimen and the agreement of collection

with Treasury figures may be carefully noted and scrutinized in audit. This from is

made use of at the District level fort compilation of DF.II.

2.5.32 TALUKA FORM VI

This register shows major and minor coercive action taken for recovery of land

revenue. The register may be useful to find out whether suitable action is taken

against khatedars who default in making payment of land revenue. The register may

also be useful as a check on land revenue like notice-fees, fines, expenses of sales etc.

2.5.33 TALUKA FORM VII

This is a summary of balances and remissions compiled from the abstract of VF XI

and give an expansion of TF V into authorized, unauthorized balances and remissions.

2.5.34 TALUKA FORM VIII A & B

The totals of the ―Tharav Bandh‖ in VF V are compiled in these forms (TF VIII-A

Area and TF-VIII-B revenue).

81

2.5.35 TALUKA FORM IX A & B

These abstracts show increases/decreases in area and revenue in the Taluka and can

be gone through for academic interest.

2.5.36 TALUKA FORM.X

This is a calculation sheet for determining the local cess from the consolidated land

revenue.

2.5.37 TALUKA FORM XI

This form represents a ledger of installments for watching cases of payment by

installments like auction sale. In some cases interest is leviable on overdue payment

2.5.38 OTHER TALUKA FORMS

The other Taluka forms are not of interest from the point of view of receipt audit.

2.5.39 DISTRICT FORMS

DF I & II SUPPLEMENTS THERETO

DF is statement showing the details of the land in the District compiled from TF VIII-

A and TF IX-A. More important from the audit point of view is DF II and its

supplements dealing with the revenue collections for the whole district. The figures in

form II are compiled from TF VIII-B and the guide letters in the form show the

columns of TF VIII from which the figures are to be posted here. The following

agreements may be particularly noted.

1. Columns upto 12 are based upon exactly TF VIII-B.

2. Column 13 is based upon 13 of TF VIII-B.

3. Columns 14 to 19 are base upon TF VII as shown in the form and the

arrangement is exactly similar to that described in the remarks to VF. XI and

subject to the same observations.

4. Column 20 to 26 would agree TF-V with the column Nos. of TF V shown

against the respective columns of this form and these are also of course

obtained arithmetically from the preceding columns.

5. Column 27 is obtained form the footnote to the ―Vasul Baki‖ statement (VF 5).

At the end of the form, non-Tharav-band items collected at the Huzur

Treasury only and Book adjustments advised by the A.G. are to be added,

alongwith other revenue realized in this district. The grand total so arrived at

should be in agreement with the District Treasury and A.G.‘s figures.

2.5.40 The other district forms not being of immediate concern from the receipts

audit point of view are not further dealt with.

82

DISPOSAL OF GOVERNMENT WASTE LANDS

2.6.1 DISPOSAL OF GOVERNMENT WASTE LANDS

Disposal of Government waste lands is governed by the orders contained in

Government Resolution. Revenue Department No.LND-3953-V-B dated 20-8-1954,

as amended. In practice, however, permanent disposal has not taken place on any

large scale on account of the following four bans.

(i) Ban on account of Land Utilisation Survey Scheme.

Ban on account of schemes for rehabilitation of persons affected by certain

irrigation and power projects.

(ii) Ban on account of forest settlement.

(iii) Ban on account of aforestation Schemes including the Scheme for

checking the spread of ‗Rann’ of Kutch.

2.6.2 It was decided by Government that except in respect of ban at serial No. (ii) all

other bans should be removed and permanent disposal of Government waste lands

including those leased out from time to time should be undertaken according to the

order contained in the Government Resolution Revenue Department No.LND-3960-

AI dated 1-3-1960 and other orders issued from time to time. In this connection, a

Government Resolution consolidating all earlier orders on the subject has been issued

under Revenue Department Resolution No.JMN-3988-3290 (1) A dtd.15-2-1989

laying down therein the Government policy for disposal of Government waste lands

for agricultural purposes. The disposal of Government waste land for non-agricultural

purposes is governed in accordance with guidelines issued under Revenue Department

Resolution No. JMN/3988/1785/A dtd.28-3-1989.

WADALANDS

2.6.3 Wada lands are lands found attached to houses within or sometimes outside

the village site. Ordinarily it is used for agricultural purposes, especially for storing

produce or for keeping cattle or farm equipments.

2.6.4 In Revenue Department Resolution No.VOL-1079-31448-k dtd.25th

April

1980, the Government have issued detailed rules relating to allotments of Wada Lands

and the recovery of occupancy prices thereupon. The following provisions from the

rules relating to recovery of occupancy prices of Wadas Lands are relevant for

purpose of audit.

2.6.5 WADA LANDS IN VILLAGE SITES

(i) In village sites, Wada lands held by existing holders will be continued in their

possession without payment of revenue, if the lands are kept open.

(ii) If a holder desires to have complete possession rights and sale rights over such

lands with freedom to use the land for NA purpose, the recovery of occupancy prices

will be effected on the following basis:

Population of village Rate for occupancy price

(per square metre) (`)

Upto 1000 0.30

Upto 2000 0.40

83

Upto 4000 0.55

Upto 6000 0.65

Upto 8000 0.80

Upto 10,000 0.90

NOTE:

(1) For the purpose of the above table, the population figures are to be taken

according to the latest census.

(2) When land is allotted to members of the SC or ST, the occupancy prices will

be 25% less.

(3) Land so allotted will be held to be on old tenure and liable to pay non-

agricultural assessment.

(4) When unauthorized construction has been carried out on Wada lands, without

obtaining rightful possession by paying occupancy prices, in addition to

occupancy prices fixed according to rates above, a 25% penalty thereon should

also be leviable.

2.6.6 WADA LANDS IN SIMTAL

Wada lands in Simtal will not be allotted on proprietary basis.

2.6.7 WADA LANDS IN URBAN AREAS

Wada lands in urban area were allowed to be purchased by holders upto 31-12-71.

The recovery of occupancy prices will be at the market price, which will be

ascertained from the Deputy Town Planning Officer. A rebate of `6 per sq.mtr or

25% of the market price which ever is lower, will be given to the members of

Scheduled Cast and Scheduled Tribes. On these lands also, non-agricultural

assessment will be payable. When there is unauthorized NA use on such lands before

rightful possession has been obtained, the occupancy prices recoverable would be

upto twice the market price of the land. As in the case of lands in village sites wada

lands allotted in urban areas will also be held on old tenure.

2.6.8 Wada lands not taken up on ownership basis by the holders upto 31-12-71 will

be resumed by Government and disposed of by auction or otherwise.

2.6.9 CREATION OF WADA LANDS IN FUTURE

In future, no wada lands will be allotted in village sites. In Simtal, land upto

400 sq mtr may be allotted out of ‗Kharaba‘ lands on payment of rent equal to

agricultural assessment by Mamlatdar in village area and by Prant Officer in Nagar

Panchayat area as the case may be. Such allotment will be valid for one year only.

2.6.10 The above orders are in supersession of all previous orders on the subject.

84

CONVERSION OF AGRICULTURAL LANDS INTO NON-AGRICULTURAL

LANDS

2.7.1 BOMBAY TENANCY AND AGRICULTURAL LANDS ACT, 1948

Under the provisions of the above Act, tenants were permitted to buy the lands which

they tilling, as tenants on the 1st April, 1957 (Tiller‘s day). Section 43 of the Act,

prohibits any purchaser of land under the Act, from transferring the land purchased by

or sold to him by sale, gift, exchange, mortgage, lease or assignment or partition,

without the previous sanction of the Collector and without payment of premium to

Government on the transfer. Under this Section, the following orders of Government

have been issued.

(i ) Government of Gujarat, Revenue Department No.GNT/1080/Sankalan/41/J

dated 20/5/80

(ii) Government of Gujarat, Revenue Department No.NSJ/1081/2023/Z dated

13/7/83

(iiii) Government of Gujarat, Revenue Department No. NSJ/1081/2023/Z dated

17/9/84.

2.7.2 The rates of premium to be levied under-section 43 of the Act, as mentioned in

the Government Resolutions dated 20-5-80, 13-7-83 and 17-9-84 are given below

Nature of Transfer Rate of premium

1. Where the lands is to be sold for

an agricultural purpose to any

person or body or institution

In case where land is held Up to 20 years-

75 per cent.

After 20 years-50 per cent of the

difference between the market value or

sale price fixed, whichever is more, of the

land for agricultural use and the aggregate

of the original purchase price paid, and

the value of permanent improvement, if

any, made after the purchase.

2. Where the land is to be sold

bonafide for any non-agricultural

purpose to any person or body or

institution.

In case where land is held Upto 20 years-

80 per cent.

After 20 years-70 per cent of the

difference between the market value or

sale price fixed, whichever is more of the

land for non-agricultural use and the

aggregate of the original purchase price

paid and the value of permanent

improvement, if any, made after the

purchase.

3. Where the land is to be

partitioned or exchanged or where it

is to be leased for agricultural

purpose.

`1 or half the amount of assessment

whichever is more.

4. Where the land is to be leased for

non-agricultural purpose to any

person or body other than an

educational or charitable institution.

One third of the net annual rental (i.e.

gross rental minus NAA. charged and

property tax) every year during period or

lease.

85

5. Where the land is to be

mortgaged for agricultural purpose

to any person or body or institution.

` 1 on the condition that if the land is sold

subsequently premium shall be levied at

the rate of 60 times the assessment (now

at revised rates as shown at serial No.1

above)

6. Where the land is to be gifted for

agricultural purpose to any body or

person other than an educational or

charitable institution.

60 times of the assessment (now at revised

rates as shown at serial NO.1 above).

7. Where the land is to be gifted for

agricultural or non-agricultural

purpose to an educational or

charitable institution.

`1 or half the amount of assessment,

whichever is more.

8. Where the land is to be gifted for

non-agricultural purpose to any

person or body other than

educational or charitable institution.

50% of the difference between the market

value of the land for non-agricultural use

and the aggregate of the original purchase

price paid and the value of permanent

improvement, if any, made after the

purchase (now at revised rates as shown at

Serial No.2 above)

2.7.3 Where the land is to be sold/ or transferred for an agricultural purpose to any

person or body or institution, the premium at the rates of 60 times of assessment shall

be levied subject to the following conditions: -

(1) Where land is held for upto and more than 15 years continuously, holder is

entitled to the above benefit.

(2) Above provision will not be applicable to the area under Land Ceiling Act

applicable to six big cities viz. Ahmedabad, Vadodara, Surat, Bhavnagar,

Jamnagar and Rajkot-.

(3) Above provision will not be applicable to the land covered under area of

Nagarpalika of the State.

(4) The concerned Collectors may take action in the above cases with instruction to

the Talati to remove the words "New and Restricted Tenure" and entered the

words "Premium is leviable only for non-agricultural purposes".

(Government of Gujarat, Revenue Department Resolution No. NST/1081/3152-J

dated 11.3.1996)

Revision of rate for recovery of premium for conversion of land w.e.f. 4.07.2008

Sr.

No.

Purpose Area Period

of

possession

Rate

of

premium

Under which

tenue

transferred

1 Conversion

into old

tenure land

for

agriculture

to

agriculture

All rural area of the

state except the

urban area shown

below:

Erstwhile ULC area,

area of corporation,

area under urban

After 15

years

Zero The land shall

be converted

into old tenure

for agriculture

purpose but

premium is

payable for non

86

use development

authority,

Nagarpalika area,

notified area and

cantonment area

agriculture use.

2 Conversion

into old

tenure land

for

agriculture

to

agriculture

use

All the urban area

shown below:

Erstwhile ULC area,

area of corporation,

area under urban

development

authority,

Nagarpalika area,

notified area and

cantonment area

After 15

years

50 % The land shall

be converted

into old tenure

for agriculture

purpose but

premium is

payable for non

agriculture use.

3 For non

agriculture

use

All the area of the

state

After 15

years

80 % Aftersale/transf

er or conversion

of land, the land

shall be old

tenure land.

Revision of rate for recovery of premium for conversion of land w.e.f. 3.05.2011

Sr.

No.

Purpose Area Period

of

possession

Rate

of

premium

Under which

tenue

transferred

1 Conversion

into old

tenure land

for

agriculture

to

agriculture

use

All rural area of the

state except the

urban area shown

below:

Erstwhile ULC area,

area of corporation,

area under urban

development

authority,

Nagarpalika area,

notified area and

cantonment area

After 15

years

Zero The land shall

be converted

into old tenure

for agriculture

purpose but

premium is

payable for non

agriculture use.

2 Conversion

into old

tenure land

for

agriculture

to

agriculture

use

All the urban area

shown below:

Erstwhile ULC area,

area of corporation,

area under urban

development

authority,

Nagarpalika area,

notified area and

cantonment area

After 15

years

25 % The land shall

be converted

into old tenure

for agriculture

purpose but

premium is

payable for non

agriculture use.

87

3 For non

agriculture

use

All the area of the

state

After 15

years

40 % Aftersale/transf

er or conversion

of land, the land

shall be old

tenure land.

2.7.4 In cases of the land held under Bombay Tenancy Act and held with

restrictions under various abolition Acts and other Acts, and where the permission of

the appropriate authority is required to be obtained , the premium should be levied as

stated above.

CESS/SURCHARGES ON LAND

2.8.1 LEVY OF CESS/SURCHARGES ON LAND

In respect of lands /Building the following cesses are levied in the State.

(i ) Local fund cess

(ii ) Education cess

(iii ) Irrigation cess

2.8.2 LOCAL FUND CESS:

Under Section 169 of the Gujarat Panchayat Act, 1961 (Act No.6 of 1962) the State

Government levied a cess at the rate prescribed from time to time on every rupee of:

(a) Every sum payable to the State Government as ordinary land revenue.

(b) every sum which would have been payable, by a small holder as defined in the

explanation to section 45 of the Bombay Land Revenue Code 1879 in respect

of land held by him.

(c) every sum which would have been assessable on any land as land revenue had

there been no alienation of the land revenue.

The following sums are not however to be taken into account for the purpose of levy

of the cess.

(i ) Penalties and fines, including any charge imposed under Section 148 of the

Land Revenue Code, as penalty or interest in case of default, but not including

any fine levied under Section 65 of the said code and grant of permission to use

the land for a purpose unconnected with agriculture.

(ii ) Occasional fixed payments in commutation of all claims of the State

Government in respect of succession to or transfer of Inams, payable on such

succession or transfer of Inams.

(iii ) Land revenue on service Inam land recoverable from inferior village servants

for periods of unauthorized absence from service and all other such charges of

assessment on Inams and watans for broken periods and past years.

(iv) Fees for grazing when charged per head of cattle.

2.8.3 INCREASE/DECREASE IN THE RATE OF CESS

Under the Act, it is permissible for the District Panchayat to apply to the State

Government for an increase in the rate of cess in relation to that District to such extent

88

and for such period as the District Panchayat may decide. Upon such application the

State Government can by a notification in the Official Gazette increase the rate of cess

suitably. In a like manner the State Government may on an application by the District

Panchayat suspend or remit the collections of cess or any portion thereof in any year

and in any area.

2.8.4 MANNER OF LEVY

The local fund cess is levied in the same manner as land revenue and collected by the

village talati along with land revenue. The talati maintains separate ledgers, receipt

books and other records in respect of local fund cess collection.

2.8.5 EDUCATION CESS

Education cess is levied under the provisions of the Gujarat Education Cess Act, 1962

for the purpose of providing the cost of promoting education.

The Cess consists of

(a) Surcharge on all lands except lands which are included within a village

site and assessed to land revenue.

(b) Tax on lands & buildings in urban areas.

2.8.6 SURCHARGE ON LAND

(A) SURCHARGE ON AGRICULTURAL LAND:

With effect from the revenue year commencing on the 1st day of August 1976, a

surcharge is levied on all lands (except lands included within a village site and not

assessed to land revenue) assessed or held for the purpose of agriculture at the

following rates-where the sum assessed on such land or otherwise payable to the State

Government as land revenue is:

(i ) not more than fifty rupees, twenty paise on every rupee of such sum.

(ii) more than fifty rupees, twenty five paise on every rupee of such sum.

The cess is payable even in cases in which land revenue itself is exempted for one

reason or the other. For the purpose of the Act, ―land revenue‖ will not include

penalty and fine, fees for grazing etc. as in the case of local fund cess.

In computing the amount of surcharge payable as above, the amount shall, if it is not

in a multiple of five paise, be increased to the next higher multiple of five paise.

(B) SURCHARGE ON NON-AGRICULTURAL LAND

The surcharge on land used for non-agricultural purposes and assessed to non-

agricultural assessment will be at the following rates:

(a) 12.50% of the amount of non-agricultural assessment if the land is used for

residential purpose or village industry and situated in an area where the non-

agricultural rates of assessment were fixed or revised within 3 years

immediately preceding the 1st August 1962.

89

(b) 25% of the amount of the NAA if the land is used for residential purpose or

village industry and is situated in any area not covered by (a) above.

(c) 50% of the amount of NAA where the land is used for industry other than

village industry.

(d) 75% of the amount of NAA so levied or leviable, where the land is used for a

commercial purpose, or for the purpose of any trade, profession or business.

Provided that where any land is simultaneously used for two or more purposes and the

part used for each purpose is not separable the surcharge shall be levied at the highest

rate applicable in relation to any of the purposes.

LEASE LAND

Where land is leased by Government, lease rent will be payable and non-agricultural

assessment is not recoverable. Even in these cases, Education cess is leviable on the

notional non-agricultural assessment of the land.

2.8.7 TAX ON LANDS & BUILDINGS

The Act introduced from 1st April, 1970 a tax on lands & buildings situated in the

urban area at the following rates:

(a) Where a building or land is used for residential purpose or any purpose other

than trade, commerce or industry or the carrying on of profession or business.

(i) if the annual letting value thereof exceeds three hundred rupees but does not

exceed one thousand rupees, at the rate of three per cent of the annual letting

value:

(ii) if the annual letting value thereof exceeds one thousands rupees but does not

exceed two thousand and five hundred rupees, at the rate of five per cent of the

annual letting value.

(iii) if the annual letting value thereof exceeds two thousand and five hundred

rupees but does not exceed four thousand and five hundred rupees, at the rate

of six per cent of the annual letting value;

(iv) if the annual letting value thereof exceeds four thousand and five hundred

rupees but does not exceed six thousand rupees, at the rate of seven per cent of

the annual letting value, and

(v) if the annual letting value thereof exceeds six thousand rupees, at the rate of

ten per cent of the annual letting value, and

(b) Where a building or land is used for the purpose of trade, commerce or

industry, or the carrying on of a profession or business,

90

(i) if the annual letting value thereof exceeds three hundred rupees but does not

exceed one thousand rupees, at the rate of seven per cent of the annual letting

value,

(ii ) if the annual letting value thereof exceeds three hundred rupees but does not

exceed two thousand and five hundred rupees, at the rate of eleven per cent of

the annual letting value,

(iii ) if the annual letting value thereof exceeds two thousand and five hundred

rupees but does not exceed four thousand and five hundred rupees, at the rate

of fourteen per cent of the annual letting value;

(iv) if the annual letting value thereof exceeds four thousand and five hundred

rupees but does not exceed six thousand rupees, at the rate of sixteen per cent

of the annual letting value, and

(iv) if the annual letting value thereof exceeds six thousand rupees, at the rate of

twenty per cent of the annual letting value.

provided further that no tax shall be levied on such Land or building if

it is actually occupied by such widow or as the case may be, disabled person,

or if it is not let out.

(1) Where any building consists of more tenements than one, irrespective

of such tenements not being separately assessed to property tax, the tax

under this section shall be assessed on the annual letting value of each

such tenement as if it were a building.

(2) Where any land building, tenament or part of a building is separately

assessed to tax but is simultaneously used for two or more purposes

mentioned is sub-section (1), the tax under this section shall be levied

at the highest rate applicable in relation to any of the purposes for

which the land, building, tenament or part of the building is used.

2.8.8 EXEMPTIONS

The urban land tax is exempted in the following cases

(1) Building & Land vesting in the Central Government.

(2) Building & Lands vesting in the State Government, local authorities, local

board, cantonment board or Taluka/District Panchayat used solely for public

purposes and not used for earning profits.

(3) Any building or land or class of buildings or land, exempted by Government

by notification.

2.8.9 RESPONSIBILITY FOR PAYMENT

The liability for payment of the tax falls on occupier, lessor, superior lessor etc, in the

manner specified in the Act.

91

2.8.10 COLLECTION OF TAX

The tax is collected by the Collector of Ahmedabad in respect of Ahmedabad

cantonment. In other urban areas, the collection of tax is made by the respective local

authorities. The local authorities are entitled to a rebate allowed by Government

towards the cost of collection.

2.8.11 MANNER OF COLLECTION

The surcharge on agricultural and non-agricultural assessment is levied and collected

in the same manner as land revenue.

2.8.12 SUSPENSION OF AGRICULTURAL SURCHARGE

Whenever the payment of the whole land revenue in any years is suspended in any

area, the collection of agricultural surcharge also stands suspended for the same

period.

CITY SURVEYS

2.9.1 City Surveys are carried out under the provisions of the Land Revenue Code

which also provide for revision surveys where ever necessary. The objects of a city

survey are three-fold and may be described as administrative, financial and legal. The

administrative object is to provide an accurate map of topographical details and of

occupied houses, offices etc. for postal, municipal and other administrative purposes.

The fiscal object is to determine the revenue due from lands and to keep a watch over

the future development of revenue and to protect public land against encroachment or

furtive appropriation. Legal object is to clear all titles to existing holding support and

better define those which are good and to eliminate those which are bad; to prevent

vexatious litigation between owners and to remove doubts and similar possible

litigation between private claimants and local bodies or Government.

The introduction of a city survey can be at the instance of Government or on the

request of a municipality or other local body in charge of the administration. In the

later case, the municipality or the local body will be called upon by Government to

deposit in Government account the estimated cost of the survey operation. The

Municipality or the local body will be later on reimbursed by Government out of the

sanad fees that are recoverable on the completion of a city survey.

2.9.2 The provisions of a city survey apply to non-agricultural land. Frequently

lands still used for agriculture will be found interspersed between building sites in a

city survey area but the survey will have no effect upon the agricultural land.

However when such lands are converted form agriculture to other uses the individual

non-agricultural plots so formed in the banks or islands issued and sanad fees are

levied form time to time.

2.9.3 The procedure for introducing a city survey is that the Collector or the

municipality advances or endorses a proposal, which is accepted upon general ground,

and the Director of Land Records will frame an estimate of the probable cost of the

survey. Upon consideration of this estimate, the proposal for a city survey will be

sanctioned by the State Government. Expenditure incurred on a city survey is

92

budgeted for as a revenue advance and all recoveries by way of sanad fees etc.

effected on completion of the survey will be credited to the same head of account

until the advance is adjusted and may surplus or deficit is settled by order of

competent authority.

The actual operations of a survey fall into different parts. First comes the actual

measuring and mapping of the non-agricultural plots and the properties therein in the

city survey area. This is followed by an enquiry conducted by an Enquiry Officer

appointed for the purpose. The Enquiry Officer will determine the correct limits and

frontages of all properties and their ownership. During the course of an enquiry the

Enquiry Officers will open an Enquiry register in which entries relation to each

property are made. The detailed maps are printed on the conclusion of an enquiry and

the property register written up upon the final results of the enquiry. This is followed

by the issue of sanads and the recovery of sanad fees.

2.9.4 The sanad fees, recoverable from the owners of the properties included in the

survey map prepared as brought out above are determined by the Collector. While

determining the fees recoverable, Government properties for which no fees can be

charged, have to be excluded. Having regard to the number of the other properties

surveyed, their value and area as entered in the Enquiry register, the Collector works

out the fees recoverable from each property holder by apportioning the expenditure on

the survey over the number of properties surveyed.

2.9.5 In respect of the properties included in a city survey, the city survey staff or

the office of the Mamlatdars to which maintenance of survey work is transferred on

completion of a city survey, will keep village forms I to VII (except V) for the

portions of the villages within the city area, but excluding agricultural land. The

Talati will keep similar forms for the remaining portion of the villages and for the

agricultural land inside the city survey limits. There will thus be two volumes of each

of these forms in each village, one kept by the Talati and one by the city survey

office. The remaining village forms based upon both the volumes (VII, IX, X and XI)

will be maintained by the Talati who will remain also responsible for the collection of

revenue. The need for the specified forms being kept by the city survey staff arises

from the fact that in it the city survey staff which is kept in touch with constant

changes in the properties. In particular, the maintenance of form VF-IV would rest

with the city survey office because miscellaneous revenue within the city survey area

will, for the most part, relate to encroachments, lease and such other matters. It will be

seen that in a city survey office VF I, II and VI combine into the property register and

VF-VII is dispensed with.

SUSPENSION, REMISSION AND REFUND OF LAND REVENUE

2.10.1 SUSPENSION

Under administrative order NO.XXX when the Collector has ascertained by local

enquiries that owing to a partial or total failure or destruction of the crops throughout

any tract on account of drought or any other cause it will be necessary to suspend the

collection of land revenue assessed for agriculture in any area, he is authorized,

especially when the tract is already impoverished or other previous harvests have been

poor, to grant suspension according to the scale given below to all occupants,

93

agriculturists and non-agricultural alike and to superior holders of alienated land

without inquiry into the circumstances of individuals.

Classification of Crops Amount of assessment to suspended

4 annas and under The whole

Over 4 annas, under 6 annas Half

6 annas and over None

The normal crop, or average of satisfactory seasons is reckoned at 12 annas.

The detailed procedure for making the anna valuation is contained in the Land

Revenue Rules, according to which an annawari committee for each village is formed

consisting of the circle inspector as the chairman, talati and two representatives of

agriculturists. The committee meets in the month preceding the harvesting of the main

crop and records its proceedings as to what the anna valuation should be for each

village. The report of the committee is considered by the Mamlatdar and later by the

Collector. Final orders on the proper anna valuation are issued by the Collector.

2.10.2 REMISSION

Under administrative order No.XXXIII Remissions are granted to the occupants of

land in the manner explained below without any enquiry into the circumstances of

individuals. The grant of remission depends on the character of the three seasons

following that in which the assessment is suspended. The oldest arrears are remitted

first. Suspended revenue is collected to the extent permissible in the table, and all

suspended arrears which are more than three years old should ordinarily be remitted

by the Collector (G.R.R.D.No.L.R.R.1074-dt.17-7-74)

Anna classification Proportion of assessment of

the crops

Collection of which should

be justified

Current Suspended arrears

11 annas & over 1 1

8 annas & under 11

annas

1 ½

6 annas & under 8

annas

1 --

Over 4 annas & under

6 annas

½ --

4 annas & under -- --

(ii) The amount of suspended revenue to be collected with any particular

installment should be fixed by the Collector and announced before the

collection of installment begins.

(iii) Cases in which owing to the impoverishment of a tract by a succession of bad

seasons or for any special reasons it appears of the Collector desirable to remit

or to collect suspended revenue otherwise than in accordance with the ordinary

rule, should be reported for the orders of the Government.

94

LOCAL CALAMITY

Rules regarding suspension & remission referred to above are applicable to the

situation created by a general calamity. Relief to be given on the occasion of local

calamities, including loss by fire or flood of harvested crops or other property and loss

of crop by theft or mischief by unknown persons, should be determined by the

investigation of individual cases.

2.10.3 REFUND

Under section 180 of the Bombay Land Revenue Code, whenever the sale of any

property is not confirmed or is set aside, the purchaser shall be entitled to receive back

his deposit or his purchase-money as the case may be. Occasions for refund of land

revenue do not normally arise because amounts collected in excess in a revenue year

are treated in the revenue accounts as ‗over collection‘ and given set off in the

following year. However, refunds not claimed within the period of limitation (Art. 60,

62 and 96 of Schedule–I Act No. IX of 1908) will be legally barred. Claims for refund

of amounts barred by limitation are dealt with according to the provisions of

financials Rules of the State Government.

2.11 AUDIT CHECKS

The sampling technique and the audit checks to be adopted while conducting

integrated audit in respect of land revenue has been brought out in Annexure-2(A) and

Annexure-2(B) respectively.

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STAMP DUTY AND REGISTRATION FEES

3.1.1 LEGISLATIVE BACKGROUND-STAMP DUTY

Entry No.63 of List II-State list of the seventh schedule to Article 246 of the

Constitution enables the State Government to legislate on the rates of stamp duty in

respect of documents other than those specified in the provisions of List I. The

exclusion from entry 63 of the provisions of List with regard to rates of stamp duty is

for the purpose of securing uniformity in the rates of stamp duty through out the

country in respect of Bills of exchange, cheques, promissory notes, bills of lading,

letters of credit, polices of Insurance, transfer of shares, debentures, proxies and

receipts. In respect of these instruments the rates of stamp duty will be determined by

the Union Government under entry No.91 of List I Union List of the Seventh

Schedule of the Constitution. In addition, the subject of stamp duty (other than duties

collected by means of judicial stamp but not including rates of stamp duty) finds a

place in entry No.44 of List III (concurrent list) also. By virtue of these constitutional

provisions, the Bombay Stamp Act 1958 is in force in the State of Gujarat which has

been now renamed as the Gujarat Stamp Act, 1958.

3.1.2 THE STAMP ACT-A FISCAL STATUTE

The Stamp Act is a fiscal statute dealing with tax on transactions and the tax is levied

in the shape of stamps on instruments recording the transactions. The law is modeled

mostly on the English law on the subject and English decisions have furnished

valuable guidance in the matter of the administration of the law in India. The

collection of stamp duties unlike the collection of court fees cannot, in the nature of

things, be under the immediate scrunity and supervision of the Government Officers

at the stage when they fall due. The scrutiny comes in at a later stage when the

document is sought to be used before a Court or other Officer or when it is presented

for registration. It is possible that in many cases there may be no occasion to use the

document and this factor may tempt parties to make some illegal saving on stamps.

To discourage this, penalties are provided for non-payment of proper duty in the first

instance and, in glaring cases of evasion, the collector is authorised to launch

prosecutions. From the point of view of Government revenue, the statute imposes a

duty on judges and Officers of Courts to scrutinise every document presented before

them to see whether it is properly stamped. In respect of instruments which are

required to be registered compulsorily, this duty of protecting the revenue falls

primarily on the registering officers.

The basic principle of the Stamp Act is that it levies the duty on the instruments.

Hence the levy of stamp duty is on the instruments recording the transactions and not

on the transactions themselves.

The quantum of stamp duty on an instrument depends on the real nature or substance

CHAPTER 3

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of the transactions recorded in the instrument and not on any title or description or on

nomenclature given by the parities who execute the instruments. The description in

any deed given by the parties is thus, not decisive in classifying the documents but it

is only the actual character of the transactions and the true nature of the rights created

by the instrument that are decisive in such matters.

The third principle is that the sufficiency of stamp duty leviable on a document must

be determined by looking at the document and what is stated therein and not on any

other evidence. The valuation of properties for the purpose of stamp duty is also to be

based on the value on the date of execution of the instrument and not with reference to

subsequent changes.

The stamp duty chargeable on an instrument should be determined with reference to

the law in force on the date of the execution of the instrument but the levy of penalty

is to be determined by reference to the law in force at the time of presentation of the

instrument in evidence.

Schedules specifying the rates of duty form part of the statute and must be read

together with it for the purpose of construction. If there is inconsistency between the

schedules and the provisions in the Section, the latter shall prevail.

The instruments not mentioned in the schedule are not liable to stamp duty e.g. license

etc.

3.1.3 THE GUJARAT STAMP ACT, 1958

In the State of Gujarat, the Bombay Stamp Act, 1958, now renamed as the Gujarat

Stamp Act, 1958 is in force. Under the Act, Schedule-I is included which contains 59

different classes of instruments liable to stamp duty in the State. These items in the

schedule are referred to as Articles of the schedule. Every document of the nature

described in the schedule should be affixed with applicable stamp at the time it is

executed regardless of whether the document requires registration or not (Section 3).

ADDITIONAL DUTY (SECTION 3A)

The instruments viz certificate of sale (Article No.17), conveyance (Article No.20(a),

20(b) and 20(c)), exchange of property (Article No.26), further charges (Article

No.27), gift (Article No.28), lease (Article No.30), mortgage deed (Article No.36),

power of attorney when given for consideration and authorising the attorney to sell

any immovable property (Article No.45(f)), settlement (Article No.52) and transfer of

lease by way of assignment and not by way of under lease (Article No.57) chargeable

with duty in schedule I, when executed in an urban area shall in addition to such duty,

be chargeable with a duty at the rate of twenty five per cent of such duty with effect

from 10-8-1988 (Section 3A). Additional panchayat stamp duty was leviable under

Sections 207 and 209 of the Gujarat Panchayat Act, 1993 at different rates for

different panchayat area which was maximum 35 per cent.

AMENDMENT WITH EFFECT FROM 1.04.2003

By the amendment made by Gujarat Act No. 15 of 2003, the rate of additional stamp

duty of the instruments specified in Section 3A has been increased to forty per cent

including the rate of stamp duty to be increased as provided for in Section 207 and

209 of the Gujarat Panchayats Acts, 1993.

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INSTRUMENTS RELATING TO VACANT LAND (SECTION 3B)

Every instrument of vacant land, exchange of vacant land, gift of vacant land, lease of

vacant land, power of attorney when given for consideration and authorising attorney

to sell vacant land and transfer of lease of vacant land by way of assignment and not

by way of under lease chargeable with duty under Section 3 as mentioned in articles

No.20, 26, 28, 30, clause (f) of article 45 and article 57 respectively in Schedule-I

shall,

(i) when such vacant land is situated in an urban area be chargeable in addition to

duties chargeable under Section 3 and 3A with duty at the rate of fifty per cent of the

duty chargeable under Section 3, and

(ii) when such vacant land is situated in an area other than urban area and is non

agricultural lands, be chargeable in addition the duties chargeable under Section 3

with a duty at the rate of twenty-five per cent of the duty chargeable under Section 3.

Provided that nothing in this section shall apply to vacant land of an area not

exceeding one hundred square meters which is intended to be used for a residential

purposes.

(Section 3B deleted by Gujarat 15 of 2003).

3.1.4 MULTIPLE INSTRUMENTS (Section 4)

Under the Act when several instruments are employed for carrying out certain

transaction, highest duty applicable will be leviable only on one of the instruments to

be called the principal instrument and it being left to the parties themselves to decide

which of the instruments will be regarded as the principal instrument by them. On the

instruments other than principal instruments, a duty of ` 10 (now increased to `100

with effect from 1.04. 2006) shall be chargeable.

3.1.5 MULTIFARIOUS INSTRUMENTS (Section 5)

When an instrument deals with more than one distinct matter, it shall be charged to

duty at the aggregate of the stamp duty that would be payable on each of the matters

dealt with in the instrument. Distinct matter means matter of different kind such as an

agreement for service and a lease which cannot blend into one or at any rate are not so

intended or conceived by the parties that they can be regarded as merely parts of a

single aggregate. Comprising or relating to several distinct matter means transactions

which are distinct in their nature so as to be capable of being carried out by two or

more instruments instead of one. What has to be considered is not whether the

instrument embodies distinct contracts but whether it comprises distinct matter. The

provision is not applicable if it is not shown that a deed in question embodies two

separate and distinct matters. The provision would not also apply to a document,

which embodies different convenient relating to the same transaction. An instrument

must be read as a whole to find out its dominant object. It is not permissible to divide

it into several parts and look at it piecemeal and then to assign each one of such parts

to some of the other Article of the Schedule to the Stamp Act. The main test to find

out whether a document comprises of two or more distinct matters is to ascertain the

leading object of the instrument and to see whether the second matter is only auxiliary

to the main object or is independent of it.

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3.1.6 AMBIGUOUS INSTRUMENTS (Section 6)

When an instrument is so framed as to fall under more than one description of the

articles in the schedule I to the Stamp Act and where the duties chargeable there under

are different, the instrument will be charged to the highest of such duties.

In conclusion, it may be stated that Section 4 of the Stamp Act deals with multiple

instruments, Section 5 with multifarious instrument and Section 6 with ambiguous

instruments. The distinction between these three sections is to be clearly understood

for a proper examination in audit of the stamp duty on documents registered.

3.1.7 METHOD OF STAMPING INSTRUMENTS (Section 10)

Documents executed have to be affixed with either adhesive stamp or embossed

stamps as prescribed in the Act for different classes of documents. Like wise

documents are also to be written in accordance with the provisions of the Act and

Rules made there under in order that they may be regarded as duly stamped.

Documents requiring adhesive stamp will not be treated as duty stamped, if they have

been prepared on a paper with an embossed stamp and vice versa. In regard to the

question of the proper stamp duty payable on an instrument, it must be borne in mind

that stamp duty appropriate to a document will be at the rate in force on the date of the

execution of the document. For this purpose, execution means affixing of signature on

the document.

3.1.8 OF THE TIME OF STAMPING INSTRUMENTS EXECUTED IN

THE STATE AND OUTSIDE THE STATE (Section 17 & 18)

All instruments chargeable with duty and executed by any person in this State shall be

stamped before or at the time of execution or immediately thereafter on the next

working day following the day of execution. However, clearance list falling under

Article 18A, 18B, 18C, 18D or 18E of Schedule I may be stamped within two months

from the date of execution.

Every instrument chargeable with duty executed only out of this State may be

stamped within three months after it has been received in this State.

3.1.9 DOCUMENTS EXECUTED OUTSIDE THE STATE (Section 19)

When an instrument relating to property in the State of Gujarat is executed outside the

State, the first taxable event is its execution and the instrument must bear the Stamps

of the State of execution. If the instrument is brought into the Gujarat State, where

properties are situated for the purpose of registration or later on for enforcing it, no

other stamps would be required thereon unless the stamp duty payable in Gujarat

State on the instrument is higher. In the latter case, the difference of duty is payable to

Gujarat State.

3.1.10(i) INSTRUMENTS RESERVING INTEREST (Section 23)

When interest is expressly made payable by the terms of an instrument, such

instrument shall not be chargeable with stamp duty higher than that with which it

would have been chargeable, had no mention of interest been made therein. In other

words, mention of interest does not alter the character of an instrument. For instance,

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in deed of mortgage, it is the principal sum, which will be subject to stamp duty

without regard to the interest on such sum, which would be stipulated in the deed.

3.1.10(ii) DEDUCTION OF DUTY ALREADY PAID ON TRANSFER OF

MORTGAGE PROPERTY (Section 25)

Where any mortgage property subject to a mortgage is transferred to the mortgagee,

he shall be entitled to deduct from the duty payable on the transfer the amount of any

duty already paid in respect of the mortgage.

3.1.11(i) VALUATION IN CASE OF ANNUITY, ETC.(Section 26)

When an instrument is executed to secure the payment of an annuity or other sum

payable periodically or where the consideration for a conveyance is an annuity or

other sum payable periodically, the amount secured by such instrument or the

consideration for such conveyance, shall be deemed to be :-

(a) Where the sum is payable for a definite period so that the total amount to be paid

can be previously ascertained, such total amount;

(b)Where the sum is payable in perpetuity of for an indefinite time not terminable

with any life in being at the date of such instrument or conveyance, the total

amount which, according to the terms of such instrument or conveyance will or

may be payable during the period of twenty years calculated from the date on

which the first payment become due; and

(c) Where the sum is payable for an indefinite time terminable with any life in being

at the date of such instrument or conveyance the maximum amount which will or

may be payable as aforesaid during the period of twelve years calculated from the

date on which the first payment becomes due.

3.1.11(ii) STAMP WHERE VALUE OF SUBJECT MATTER IS

INDETERMINATE (Section 27)

In the case of mining lease in which royalty or a share of the produce is received as

the rent or part of the rent, it shall be sufficient to have estimated such royalty or the

value of such share for the purpose of stamp duty,

(i) When the lease has been granted by or on behalf of the Government at such

amount or value as the Collector may having regard to all the circumstances of

the case have estimated as likely to be payable by way of royalty or share to the

Government under the lease; or

(ii) When the lease has been granted by any other person at twenty thousand rupees a

year and the whole amount of such royalty or share whatever it may be shall be

claimable under such lease.

3.1.12 ADJUDICATION AS TO STAMPS (SECTION 31)

The Act makes provisions for adjudication by the Collector on the stamp required on

a document when such document is taken to him by an applicant on payment of

prescribed fees. This process is known as voluntary adjudication. Likewise, the

Collector is also empowered to decide finally subject only to the supervision of the

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Chief Controlling Revenue Authority (CCRA) all questions relating to the proper

stamp duty on an instrument referred to him by a registering officer or any public

officer. The Act requires that every registering officer or every public officer to whom

a document is presented will satisfy himself about the adequacy of the stamp on the

instrument and if he has any doubt in the matter, he would impound the document

under Section 33 of the Act and send it to the Collector for his adjudication (Section

31(3) and 32A). This instrument presented to the Collector is adjudicated under

section 32 of the Act by determining the duty with which the said instrument is

chargeable. The Chief Controlling Revenue Authority will refer cases of doubt to the

High Court for decision.

3.1.13 DETERMINATION OF MARKET VALUE OF PROPERTY (Section

32A)

(1) If any officer registering under the Registration Act, 1908 an instrument of

conveyance, exchange, gift, certificate of sale, partition, partnership or settlement or

power of attorney or to sell immovable property when given for consideration or

transfer of lease by way of assignment and any person referred to in Section 33 before

whom such instrument is produced or come in the performance of his functions has

reason to believe that the consideration set forth therein does not approximate to the

market value of the property which is the subject matter of such instrument or as the

case may be the market value of the property which is the subject matter of such

instrument has not been truly set forth therein, he may before registering the

instrument or as the case may be performing his functions in respect of such

instrument refer the instrument to the Collector of such district in which either the

whole or any part of the property is situated for determining of the true market value

of such property and the proper duty payable on the instrument.

(2) The Collector of the district shall after giving the parties concerned a reasonable

opportunity of being heard, and in accordance with the rules made by the State

Government in this behalf, determine the true market value of the property which is

the subject matter of the instrument and the proper duty payable thereon.

(3) Upon such determination, the Collector of the district shall require the party liable

to pay the duty to make payment of such amount as is required to make up the

difference between the amount of duty determined and the amount of duty already

paid by him and shall also requires such party to pay a penalty of two hundred and

fifty rupees or less and on such payment, return the instrument to the officer

concerned.

Provided that no such party shall be required to pay any amount to make up the

difference or to pay any penalty if the difference between the amount of the

consideration or as the case may be the market value as set forth in the instrument and

the market value as determined by the Collector of the district does not exceed ten per

cent of the market value determined by the Collector of the district. (This proviso

had been deleted with effect from 1.04.2004)

(4) The Collector of the district may suo moto or on receipt of information from any

source within six years from the date of registration of any instrument referred to in

sub-para (1) above call for and examine the instrument for the purpose of satisfying

himself as to the correctness of the consideration or of the market value of the

Substitued by ―Six‖ in place of ―two‖ by Gujarat Act 13 of 1994

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property which is the subject matter of such instrument and the duty payable thereon

and if on such examination he has reason to believe that the consideration does not

approximate to the market value of such property, has not been truly and fully set

forth in the instrument, he shall proceed as provided in sub-paras (2) and (3) above.

3.1.14 CONTROL OF AND STATEMENT OF CASE TO CCRA (Section 53)

(1) Any person aggrieved by an order of the Collector determining the market value

may after depositing with the Collector2 25 per cent of the amount of duty or as the

case may be, the amount of the difference of duty payable by him by application

presented within a period of ninety days from the date of such order refer it to the

Chief Controlling Revenue Authority for final decision.

(2) Such Authority shall consider the case and send a copy of its decision to the

Collector who shall proceed to assess and charge the duty (if any) in conformity with

such decision.

3.1.15 INSTRUMENT NOT DULY STAMPED

In regard to several classes of instruments duty is calculated on the amount of

consideration (if any) market value and all other facts and circumstances set forth in

the instrument, Revenue is protected by marking it obligatory on the party to set forth

fully and truly the facts and circumstance affecting duty and providing penalties for

infringement of the provisions. Likewise, the Act contains provisions for prosecution

of parties executing document without proper stamp thereon or defrauding revenue in

other way (Section 28 and 42, 59, 62 etc.).

3.1.16(i) RECOVERY OF DUTIES PENALTIES AND INTEREST

(1) Where any person required to pay any amount of duty, penalty or other sums does

not pay the same within the time prescribed for its payment, he shall be liable to pay

simple interest at the rate of twenty four per cent per annum (fifteen per cent with

effect from 1.04.2002) on such amount or on any less amount thereof for the period

for which such amount remains unpaid.

(2) All duties, penalties and other sums required to be paid under this Act may be

recovered by the Collector by distress and sale of the movable or immovable property

of the person from whom the same are due, or as an arrears of land revenue (Section

46 substituted by Gujarat 13 of 1994).

3.1.16(ii) FURNISHING OF STATEMENT, RETURN AND INFORMATION

(SECTION 46A)

(1) The Collector may require any trading member of any stock exchange or an

association as defined in clause (a) of Section 2 of the Forward Contract (Regulation)

Act, 1962 or any organization, institution, company or association or any person

liable to pay duty under any Article of Schedule I, to submit a statement or return or

to furnish any information in respect of any transaction within such period as may be

prescribed by rules.

2 Substitued by ―25‖ in place of ―75‖ by Gujarat Act 13 of 1994

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(2) The Collector may impose penalty of a sum not exceeding rupees five thousand if

any such person fails to submit a statement or return or information as required within

a prescribed time, after giving an opportunity of being heard, without prejudice to any

other action, which is liable to be taken against such person under any other

provisions of the Act.

3.1.17 REFUND OF STAMP DUTY PAID IN EXCESS

The Act contains provisions for refund of the value of stamp purchased but not used,

stamps spoiled, misused etc. in Section 47, 50, 51 and 52 of the Stamp Act.

3.1.18 THE INDIAN STAMP ACT TO APPLY TO CERTAIN

TRANSACTIONS

The rates of stamp duty in respect of bills of exchange, cheques, promissory notes,

bills of lading, letter of credits, policies of insurance, transfer of share, debentures,

proxies and receipts will be as laid down in the Indian Stamp Act, 1899.

3.1.19 REDUCTION OR REMISSION OF DUTY (SECTION 9)

The State Government may by rule or order published in the official gazette, reduce

or remit whether prospectively or retrospectively, in the whole or any part of the

State, the duties with which instruments or any particular class of instruments or any

of the instruments belonging to such class or any instruments when execution by or in

favour of any particular class of persons or by or in favour of any members of such

class are chargeable and provide for the composition or consolidation of duties in the

case of issues by any incorporated company or other body corporate of bonds or

marketable securities other than debentures.

3.1.20 ORGANISATION AND FUNCTIONS OF THE DEPARTMENT

The Inspector General of Registration is the organisational head of the Registration

Department. Matters relating to stamp duty and registration pertaining to various

offices are entrusted to officers of the rank of Sub-Registrar in his office. In each

District, the work of registration is under the supervision of a Head Quarter Sub-

Registrar and in places like Ahmedabad an area wise Sub-Registrars assist him in his

duties. In the Taluka places, a Sub-Registrar is in charge of this work. The district and

taluka offices are periodically inspected by the Inspectors of stamps and registration

and it is the duty of each Inspector to minutely examine every office of Head Quarter

Sub-Registrar and the Sub-Registrars under him in taluka places. The inspection also

includes the check of correctness of stamp duty and registration fees levied on

documents registered.

For the purpose of determining the stamp duty on documents presented for

adjudication under Section 31 of the Gujarat Stamp Act, the Assistant Superintendent

of Stamps acts as Collector in the State. All instruments executed or proposed to be

executed within or out side the state may be presented to him for his opinion. Within

the jurisdiction of each district however, the Collector of the district also acts in that

capacity. The proceedings of the Collector are also subject to the control of Chief

Controlling Revenue Authority. The instruments so executed can be registered in any

office of Sub-Registrar in the State.

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In Gujarat, the powers of Inspector General of Registration, Superintendent of Stamps

and chief Controlling Revenue Authority are vested in the same person.

GENRAL GUIDELINES FOR CLASSIFICATION OF INTSTRUMENTS FOR

PURPOSES OF STAMP DUTY

3.2.1 ARTICLES OF THE SCHEDULE TO THE GUJARAT STAMP ACT

As mentioned in the earlier Chapter that the Schedule to the Bombay Stamp Act as

applicable to Gujarat, renamed as the Gujarat Stamp Act contains 59 Articles under

which documents executed by parties would be classified. There is no residuary

Article in the schedule and accordingly every document has to be fitted into one or the

other of the Articles. These Articles which are arranged in alphabetical order in the

Schedule are generally self-explaining. However many of the Articles depend on

other related Acts, like Transfer of Property Act, Contract Act and knowledge of such

related laws is a sine-que-non for the examination of the stamp duty on a document.

Further, difficulty is likely to be experienced in understanding the distinction between

certain Articles. The usual confusion that would arise is whether a document is a

settlement or a partition, release or conveyance and so on. The following commentary

will be useful in addressing these issues:

3.2.2 PARTITION AND RELEASE DISTINGUISHED:

Certain decisions or case laws are given below:

(1) A deed by which co-owners divide property in severalty is deed of partition

and mereby because mutual release is an incident of the division the partition

deed does not become a release. Moreover a deed of release is a one sided

document and binds the executant alone while a partition is an agreement

between two or more persons who are all bound by it. The essence of a

partition is that assets in co-ownership as it were as in the case of a

coparcenery is split up into severality the process involving the destruction of

the co-ownership and conversion of the same into several interests which are

available for exclusive allotment to each harrier, such allotment of interests

may be wholly in favour of one of the erstwhile coparceners without the other

coparcener getting anything as and by way of share. That will be partition and

not a release. Release is not necessarily destruction of co-ownership.

(2) Under Section 2(15) it is enough if the parties purport to deal with the

properties as co-owners, though they may not be co-owners in the eye of law.

For this purpose, even if the description as co-owners is not actually found in a

document it is still open to the court to find on a proper construction of the

terms thereof whether the parties purport to be co-owners of the property or

not.

(3) Where of the two daughters who inherited certain property from their mother,

one dies, and her husband and the surviving daughter purporting to be co-

owner divided the property among themselves, and executed two documents

styled as release, it was held that they were really instruments of partition,

though styled as release. Following this decision, the Board of Revenue,

Madras ruled that a document styled a release, executed by five persons in

favour of one M.S.reciting that there were no ancestral property and that the

property then possessed by the family from the profits in trade and the

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exertion of M.S. was a partition deed, the executants being treated as co-

owners of the document.

(4) One of the undivided brothers agreed to take from the eldest brother as his

share in the family property, a certain amount in cash and certain outstanding

due to the family and executed a document in the form of release in favour of

the eldest brother. Subsequently, another brother also passed to the eldest

brother a document in the form of a release whereby he and the eldest brother

divided the remaining family property by the latter handing over to the former

securities for money. It was held that the effect of both the documents was to

divide the property of co-owning brothers in severality, and hence they were

instruments of partition within the meaning of the section 2(15).

(5) Where each of the two person‘s claims, as full and exclusive ownership of

certain property and where each of them afterwards agrees to release a portion

in favour of the other, such agreements are release deeds and not partition

deeds as the case is not of the co-owners agreeing to divide the property.

(6) A Hindu executed in favour of his father, as representing the interests of the

other members of the family, an instrument by which he relinquished his right

over the general property of family in consideration of certain lands being

allotted to him for life, and certain debt incurred by him being paid, It was

held that the instrument was not a deed of partition but a release, and should

be stamped accordingly.

(7) There is no difference in principle between such a document as between

members of a coparcenary and one as between co-owners.

(8) Where three out of seven brothers constituting an undivided Hindu family

executed documents whereby each acknowledged the receipt of certain

property, made over to him, ―a division of family property having being

effected‖, and acknowledged himself liable for one seventh of the debts of the

family, the documents were held to be instruments of partition.

(9) In Superintendent of Stamps V/s Chimanlal, instruments which were in fact

simple transfers of shares by the eldest brother in whose name they stood in

favour of his two younger brothers, were held to be instruments of partition as

they had the effect of dividing the property held by the co-owners. But this

decision can hardly be justified and is dissented from by Mulla himself, who

was one of the judges in the case, in his commentaries on the Act, on the

ground that Act taxes the instruments and not transactions.

(10) Where the partners in a partnership business by a deed, divide between

themselves certain debts of the firm to be collected and appropriated, but

remain joint regarding the other items of business, the deed must be

constructed as a partition deed and not as a deed for the dissolution of

partnership.

(11) Where two firms were jointly owned by five persons, of whom three were

undivided members of a family, the fourth their distant and separated

coparcener and the firth a stranger and an award was passed and embodied in a

document, assigning one firm to three undivided members as a group and the

other firm to the other two persons as a group, the document had been held to

be chargeable as an instrument of partition and not as dissolution of

partnership by reason of section 6. The fact that the allotments are not made to

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each individuals among the original co-owners but to groups does not make

any difference because the true antithesis in section 2(15) is between the

original common ownership and the subsequent cessation of the common

ownership. From the difficulty in applying the conception of co-ownership to

individual items of partnership assets it is not correct to say that partners are

not co-owners with regard to the net asset of the partnership on the dissolution

and a document embodying an arrangement dividing the assets between

themselves, though it may takes place as part of scheme of dissolution as well,

is ―an instrument of partition‖. In such a case the documents may be both an

instrument of partition and instrument for the dissolution of partnership. An

instrument so framed comes within two or more of the descriptions in

schedule 1 and the duties chargeable there under are being different; the

document is chargeable only with the higher of such duties under Section 6.

(12) A grant made by Zamindar to a junior member in lieu of his maintenance

claim is not an instrument of partition.

(13) A deed of partition necessarily presupposes that more than one person has a

joint share in the property and that joint share is divided between the parties.

Where the karta who is the father exercised the power to divide the joint

family properly, the documents bringing about the division is clearly an

instrument of partition within the meaning of section 2(15). The document

could be ‗settlement‘ within the meaning of section 2(24)(b) if the property

belonged to the settler alone, the documents by which such property is divided

cannot be described as a settlement.

3.2.3 CONVEYANCE AND RELEASE DISTINGUISHED

According to Explanation-I below clause (iv) Section 2(g) inserted with effect from 4-

4-1994 (by Gujarat13 of 1994) for the purpose of this clause, an instrument where by

a co-owner of any property transfers his interest to another co-owner of the property

and which is not an instrument of partition shall be deemed to be an instrument by

which property is transferred inter-vivos.

Thus instead of making physical division of such property if one co-owner purports to

abandon or relinquish his claim to the share in the family property in favour of

remaining co-owner or co-owners of the property such instrument termed as release

will be covered within the scope of Explanation-I as above for the purpose of

chargeability of stamps duty as "conveyance".

In the case of Kuppuswami v/s Arumugam AIR 1967 para-6 the Supreme Court

pointed out although a deed described as release deed can be usefully employed as a

form of conveyance by a person having some right or interest to another having a

limited estate e.g. by a remainder man to a tenement for life and release then operators

as an enlargement of limited estate, it can also be made by using words of sufficient

amplitude to transfer title to one having no title before the transfer.

Basically, a right or interest which is capable of being transferred in law by a one co-

owner as releaser to another co-owner or co-owners by an instrument termed as

release deed will not be chargeable as conveyance. At the same time a right or interest

which is not capable of being transferred in law, like the right to future maintenance,

or a mere right to sue can not be covered with the scope of Explanation-I.

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In accordance with Gujarat Government Gazette bearing No. RP/1/89/45/88/1483-

Research dated 20-1-1989, the benami transactions were prohibited to be dealt with as

per Section 3(b) by way person other than person stated in sub-section (2) ibid.

Further whoever entered in any benami transaction under Section 3 ibid was

punishable. Further under Section 4(i), no suit, claim or action to enforce any right in

respect of any property held benami against whose name the property is held shall be

by or on behalf of a person claiming to be the real owner of such property.

Under Section 5(i), all the properties held benami shall be subject to acquisition by

such authority as maybe prescribed by the Government.

Under Section 5(ii), the Government has to acquire such property without any

amounts of payments.

3.2.4 SETTLEMENT

In the English Act, a settlement is defined as any instrument whether voluntary or

upon any good or valuable consideration other than a bonafide pecuniary

consideration where by any definite and certain principal sum of money (whether

charged or chargeable on lands or other hereditaments or heritable subject or not or to

be laid out in the purchase of lands or other hereditaments or heritable subjects or not)

or any definite and or certain amount of stock or any security settled or agreed to be

settled in any manner whatsoever. There is no correspondence between this provision

in the English Act and the definition in the Indian Act except that agreement to settle

is included in both the provisions.

In the Indian Act of 1860 and 1869 also the definition was vague. In the Act of 1860,

settlements, marriage settlements etc. were defined as deeds or instruments whereby

any sum of money of any Government security or other property, real or personal was

settled or agreed to be settled upon or for the benefit of any person in any manner

whatsoever. In the Act of 1869, a settlement was defined or devolution of movable or

immovable property was settled or agreed to be settled.

The definition in the Act of 1879 is the same as in the present Act except for the

works "or for the purpose of providing for some person dependent on him" newly

introduced in clause (b) in the present Act. The use of the word "distributing" in that

clause conveys the idea of division among several persons. It was accordingly

observed by the Madras High Court that the definition suggested the creation of a

separate interest in favour of several persons who may have a legal or a moral claim

on the settler, or for whom he may desire to make provision and a document by which

a person out of natural affection bestowed upon his sister and her son certain lands,

was held liable to stamp duty as a gift and not as a settlement. In view of the decision

referred to above the definition has been amended in the present Act, by the addition

of the works ―or for the purpose of providing for some person dependent on him‖, so

as to prevent the exclusion from it of what is not an infrequent document a settlement

in favour of a single person. Thus a settlement includes not only a document which

has for its object the distribution of the property of the settler but of providing,

whether by distribution or otherwise, for some person dependent on him.

Even before this Act, this was the position according to some decisions. Thus an

instrument by which the executant made over his house to his sister in law for

occupation during her life was held to be a settlement, as being a non-testamentary

disposition in writing of immovable property for the purpose of distributing property

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of the settler among those for whom he desired to provide. Though the disposition of

the house was in favour of a single person it was held to be nonetheless, a settlement

within the definition.

Even the Madras High Court held that an instrument, by which a life interest in a

certain land was created in favour of the settler‘s sister with reversion to the settler

and his heirs after her life time, was a settlement and not a gift. The decision in

Reference 7 Mad. 349 was distinguished on the ground that there was an absolute and

unqualified disposition of property by way of gift while in this case there was a

provision merely for the life of the done.

3.2.5 SETTLEMENT AND WILL DISTINGUISHED

The definition excludes testamentary disposition. The test in distinguishing a

settlement from a will is whether the document is intended to have immediate

operation. The document would be a settlement if it was intended to have immediate

operation though there might be provisions as to the management and the ultimate

beneficial interest in the property showing that it was contemplated that its operation

might extend beyond the lifetime of the owner.

One of the invariable test in determining whether an instrument is testamentary

disposition or not is to see whether it is revocable. If it is not revocable, it is not a will.

The use of future tense is not a conclusive test when the intention is otherwise clear.

A reservation of life estate by the settlement would not render the instrument any the

less a settlement.

An instrument in the following terms: ―As I have become old, it is necessary that I

should make in a document the disposal of my property with the object of preventing

disputes here after about it. I therefore execute this document and direct that the

village M is to be enjoyed hereditarily, that my son has an independent right like that

which was exercised by me over the village, and the revenues thereof, and that

nobody else has any right; and my son is the owner of my other movable and

immovable property situated in G, I put him in possession of the same from this day.

He is therefore the owner of my own and my ancestral property of every description

―was held to be a settlement.

3.2.6 SETTLEMENT OR GIFT

For the application of the clause, it would appear that the object of the instrument

must be to make provision for the grantee. A ―gift‖ is the transfer or certain existing

movable or immovable property made voluntarily and without consideration, by one

person called the doner to another called the donee, and accepted by or on behalf of

the donee whereas a Settlement is a disposition of property generally couched in the

form of trust for a consideration of marriage, religion, charity or provision for family

or dependents or others. Thus for a settlement, it is essential that the object of the gift

should be to make some provision for the donee whereas gift is one which is made

voluntarily and without consideration.

While proceeding on pilgrimage and intending to devote himself to a religious life, A

made over all his properly to his minor son under the guardianship of his mother. The

Uttar Pradesh Revenue Board held that the deed was a settlement.

Two brothers executed deeds each in favour of the other. One was a deed of gift of all

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the property of the executant, and the other was a deed coming within no known

category, but it provided for the expenses during his life time of the executant of the

deed of gift, and hypothecated certain portion of the property comprised in the deed of

gift to secure payment thereof. It was held that the two documents were part of the

same transaction and amounted to a settlement.

A settlement deed is not taken outside the scope of this definition by the mere fact of

its including an agreement by the beneficiary to act in a particular way in

consideration of the settlement.

3.2.7 SETTLEMENT OR CONVEYANCE:

A transfer of land absolutely in pursuance of a compromise of a widow‘s suit for

maintenance, is neither a gift nor a settlement but must be stamped as a conveyance.

However, if a son transfers any property in settlement of widow‘s claim to

maintenance, it should be treated as a settlement as the son is under legal obligation to

maintain the widow out of his own property and consequently, the mother would be

regarded as his dependent.

In the matter of Mahraja of Dharbanga, a grant by the Maharaja of a pargana subject

to certain conditions along with a payment of a lump sum, to his younger brother in

consideration of the latter relinquishing his claim upon the former for maintenance,

was held not to be a settlement under the Act, of 1879. Even under the present Act, it

may not be a settlement as it would be difficult to regard the junior member entitled to

maintenance out of the family property as a person dependent on the Maharaja. But it

would be a conveyance as defined in the present Act.

Where a document in respect of lands, styled ‗dakhal‘ has been executed, partly due

to love and affection towards the vendees and partly for expenses incurred by the

vendees in respect of their archakatwam service and for ‗paditharamulu‘ such a

document is partly a sale deed and partly a settlement deed.

3.2.8 SETTLEMENT OR TRUST DEED:

Where there is a transfer of property to certain trustees who are to manage it on behalf

of the owner during his life time and in the event of his death, to make certain

arrangements, and certain directions as to disposal of the income are also given, and a

right of revocation is also reserved in the owner, the document is not a settlement.

A Trust is an expression of the desire by the author of the trust to vest to property in a

body may be singular in its feature, for that body to administer if for convenience and

for an equitable distribution of that estate of the author as per his directions contained

in the deed itself. For executing a trust, the property need not be distributed by the

author of the trust. But, in cases the declaration of a trust may be made only for

purpose of equitable administration of the same so as to preserve it without being

wasted as apprehended by the testator himself. This distinction therefore has to be

borne in mind while interpreting an instrument for purposes of imposition of stamp

duty while interpreting the word ―settlement‖. The emphasis should be on the

intention of the author of the trust to distribute the property among members of his

family or to those who are near and dear to him.

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3.2.9 CLAUSE (C) OF DEFINITION OF SETTLEMENT:

―Wakf” created by Mussalmans, should be treated as a settlement. A document which

purported to be wakf alalwladwal Khandan is a deed of settlement within Section

2(24).

‗R‘ constructed a Dharamshala for pilgrims and made certain restrictions as to its use

and also made provision for the maintenance of the building. The Uttarpradesh

Revenue Board held that as the document was a non-testamentary disposition of

property made for a charitable purpose and such disposition had not been made before

in any other instrument the document was chargeable as a settlement.

A person transferred certain properties to the Board of Trutees and recorded that he

would not be able to look after the trust personally. The Uttar Pradesh Revenue Board

held it to be a transfer of property for religious and charitable purposes and as such a

settlement.

A deed styled as a deed of release recorded that the executant had already created a

trust of his properties for charitable purposes and by virtue of this deed relinquished

all the claims to those properties. The Uttar Pradesh Revenue Board held that the

document was deed of settlement as recording the terms of the provision disposition.

An instrument prepared for declaring trusts of certain funds for establishing a

charitable institution, one of the sources the trustee got money from being public

contributions was held to be a settlement within section 2(24) as regards this portion

of the funds, there being no previous disposition in writing about this part of the

funds.

The Calcutta High Court held in one case that a document styled a settlement deed by

which all the executants properties were given to certain deities could not be regarded

as settlement or deed of trust but only as deed of gift. Mitter J.observed as follows:

―The word‖ ‗settlement‘ as it is generally understood refers to a disposition of

successive interest in immovable property and is generally couched in the form of a

trust and it is such a settlement which is in the nature of disposition of movable and

immovable property either in consideration of marriage or for one or more of the

objects specified namely, religion charity or provision for family dependants or

others, that is contemplated by clause (24) of Section 2. Underlying the idea of

settlement, there is the notion or conception of trust. It is difficult to say that when a

gift is made to deity, the deity is to be regarded as a trustee‘. This is also the view

taken by a Full Bench of the Nagpur High Court.

But this view is dissented from in a latter Calcutta case where it is held that a similar

document by which the executants‘ property was given to certain deities is a

settlement deed for the purpose of the Stamp Act notwithstanding that there is no trust

and no disposition of successive interest in the property. It is therefore remarked that

the express meaning given to the word ―Settlement‖ in the Act cannot be controlled

by reference to the meaning given to the word by the Specific Relief Act.

3.2.10 SETTLEMENT IN THE FORM OF A TRUST:

An instrument called a trust deed by the executant may be a settlement. According to

the terms of an instrument the future rental income of the two houses of the donor

from the date of execution of the deed was to be utilised by the trustee for the benefit

of the various beneficiaries who were all minor children of the donor. From the date

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of its execution the two houses would vest in the trustee and also would vest in him

the rental income excusing from the two houses. This rental income was to be divided

among the various beneficiaries who were all minor children of the donor. It was held

that the instrument was a settlement satisfying the requirements of Section 2(24) (b)

ibid was liable to stamp duty as an instrument of settlement under Article 58 amended

Article 52 and not under article 64 amended Article 58. Certain property was

purchased by four persons and they declared a trust of the property by a document

entitled ―Declaration of a Trust‖ and it was executed by the four settlers. The trustees

were authorised to recover the rates and profits of the property. The document also

provided for annuities to be paid to the unborn children of the two daughters of the

settlors and in a certain contingency for sale of the property and distribution of sale

proceeds among the children of two daughters in equal proportion. It was held, that

the document was a deed of settlement. The expression disposition includes any and

every property of the settlor. As long as there is a disposition of movable or

immovable property and it is for the purpose of distributing property of the settlor in

any shape or form the requirements of the section would be fulfilled. Further the word

used in the definition is ‗disposition‘ of property and not ‗transfer‘. A transaction may

amount to a disposition of property though it may not amount to a transfer of

property. Disposition is a word of much wider connotation than transfer. When a man

created a trust and constitutes himself a trustee, he undoubtedly deposes of his

property though he is not transferring it.

Certain properties were to be devoted for charitable purposes and the deed was to

have immediate effect. It was stipulated that the executant would manage the

properties during his lifetime as a trustee and not as a proprietor. The Uttar Pradesh

Revenue Board held that there was a disposition of property for charitable purposes

and the instrument was a settlement.

Conveyances in favour of trustees (a) for social and physical training and recreation

of the such persons resident in certain country boroughs as were members or likely to

become members of Methodist Church and being of insufficient means otherwise to

enjoy the advantages provided by the Trust: (b) for promotion and encouragement of

all forms of activities calculated to contribute to health and well being of such persons

were held not in favour of trust established for charitable proposes only.

3.2.11 DEED RECORDING DISPOSITION:

The last portion of the definition as to oral disposition was added by Act XV of 1904

to prevent evasion of stamp duty by the expedient of an oral disposition of the

property subsequently recorded in the form of a declaration of trust.

A document falling within the definition as recording by way of declaration or

otherwise the terms of an oral disposition was held chargeable to duty under Article

58, amended Article 52 although the oral disposition was made prior to the amending

Act (XV of 1904) which added the words as to oral settlement in this clause.

Where in a partition deed between four brothers, their father also joined with a view

to confirm the oral gift of the property made previously by him in favour of his sons

who divided the properties, it was held that it should be stamped also as a settlement

deed being an instrument recording the disposition. The expression recording ‗has a

more far-reaching significance than that of a mere narration and is intended to furnish

indubitable proof of a transaction. Though the document is not a settlement in the

sense that the owner of the property settled under the document upon certain other

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persons yet it becomes a settlement by reason of the artificial definition created by

section 2(24), that is to say it is a record of an earlier oral settlement. If the person

settling the interest does not join the instrument then the reference to the settlement

may be merely a narrative of the origin of the title and the document could not operate

of its own volition as a gift.

The document in this case contained also reference to a gift of some other items as

having been made in favour of the settlor‘s wife and daughters who were not parties

to it. It was held that settlement duty was not required in respect of these items. As

regards these items, the full effect of the document only indicates the setting apart of

certain items for the purpose of making a gift in favour of them by means of

documents to be executed in future. Even assuming that a gift had been made in

favour of them, in the absence of those persons joining him in the execution of the

document the recital in so far as they are concerned cannot be regarded as a record

within the scope of section 2(24) of the Act.

3.2.12 MORTGAGE AND DEPOSIT OF TITLE DEEDS: -

The distinction between a pledge and a mortgage is that while under a pledge for

which delivery of possession is essential, there is only a bailment, under mortgage;

there is transfer of right of property by way of security, which need not be

accompanied with delivery of possession. For a pawn or pledge, there must be

delivery of property either actual or constructive, mere agreement to give possession

cannot operate as a pledge. Hence, an agreement where in return of finance provided

by the financial distributor the producer agrees to deliver final prints of a film under

production when they are ready, the agreement cannot be called as pledge or pawn,

there being no actual transfer of property.

Where, however, there is a regular mortgage of movable property created but delivery

of possession is not given, it is called hypothecation and operates only as an equitable

charge. Article 6, would not apply to it and Article 40 of Indian Stamp Act (Article 36

in Gujarat Stamp Act, 1958) would apply where there is a regular mortgage of

movable property accompanied with delivery of possession. Duty is payable under

Article 40.

As regards immovable property, Article 6 applies to mortgage by deposit of title

deeds and Article 40 to regular mortgage, where a document evidencing the deposit of

title deeds contains also a condition enabling the lender to sell the property on default

in payment on the agreed date the power of sale creates an interest not only in the title

deeds but in the properties themselves and the document is chargeable as a regular

mortgage. Although a document may be a mortgage deed if it falls within the special

class of document referred to in Article 6, stamp duty payable will be under Article 6

and not under Article 40. In order that Article 6 may apply, the document should

merely contain the bargain between the parties with regard to the deposit of title deeds

and conditions subsidiary or ancillary to the deposit of the title deeds. But if a

document contains all the provisions, which one would normally find in a mortgage

deed, then the mere fact that the document also contains the bargain wirh regard to the

deposit of deeds will not make it an agreement for the deposit of title deeds. Where a

deed contains many provisions which are never found in an agreement with regard to

the deposit of title deeds such as a provision with regard to the acceleration of the due

date for the payment of the mortgage debt it was held that it was a provision which

has nothing whatever to do with the deposit of title deeds. The title deeds, having

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been deposited and that fact having been recorded this was an obligation which was

undertaken by the mortgager to pay the mortgagee, debt earlier than on the due date if

he did not carry out any one of the conditions mentioned in that clause. The document

therefore would fall under Article 40 and not under Article 6. Where a document

contains such terms as the properly shall remain as continuing security for the amount

due to the mortgagee‖ the expenses incurred by the mortgagee to keep the mortgaged

properties insured shall be secured upon the mortgaged properties‘. ‗the mortgagors

declared the properties belong absolutely to them, on default of payment of quarterly

interest the entire amount due under the mortgage hereby created shall become due

and immediately payable, such recitals in the document created by their own force a

mortgage in favour of the mortgagee quite from a deposit of title deeds or the terms of

the bargain of such deposits and the stamp duty for such a document is payable under

Article 40 and not under Article 6.

An equitable mortgage by memorandum and deposit of deeds, falls under Article 6

provided the memorandum amounts to an agreement and not if the memorandum

merely records the fact of the deposit. An instrument to fall under Article 6 must be

an agreement relating to deposit of title deeds. The Article takes in the most common

class of equitable mortgages by deposit of title deeds accompanied with a

memorandum of charge containing the terms of the mortgage.

3.2.13 PARTNERSHIP DOCUMENTS:

―Partnership‖ is the relation which outsists between persons who have agreed to

comline their property, latter or skill in some tuners, and to share the profits labour

between them.

Where the partners in a partnership business by a deed divide between themselves

certain debts of the firm to be collected and appropriated but remain joint regarding

the other items of business the deed must be considered as a partition deed and not a

deed for the dissolution of partnership. In a case in which two firms were jointly

owned by five persons, of whom three were undivided members of a family, the

fourth their distant and separated co-parcenes and the fifth a stranger and an award

was passed and embodied in a document assigning one firm to three undivided

members as a group and the other firm to other two persons as a group, the document

has been held to be chargeable as an instrument of partition and not as dissolution of

partnership by reason of Section 6. The fact that the allotments are not made to each

individual among the original co-owners but to groups does not make any difference

because the true anti these is Section 2(15) is between the original common ownership

and subsequent cessation of common ownership. From the difficulty in applying the

conception of co-ownership to individual item of partnership assets, it is not correct to

say that partners are not co-owners with regard to the net assets, of the partnership on

the dissolution and an instrument embodying an arrangement dividing the assets

between themselves, though it may take place as part of a scheme of dissolution as

well, is ‗an instrument of partition‘. In such a case the document may be both an

instrument of partition and an instrument for the dissolution of partnership. An

instrument so framed comes within two or more of the description is schedule I and

the duties chargeable there under being different, the document is chargeable only

with the higher of such duties under section 6.

An instrument coming into existence on dissolution of partnership would be

chargeable as an instrument of partition if it effects the division of the partnership

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assets among the partners. Where under an award, two of the four partners

relinquished their rights in the partnership for specified consideration; the award is

chargeable to stamp duty under article 13 and not as one directing partition.

3.2.14 PARTNER BRINGING IN ASSETS INTO PARTNERSHIP-

WHETHER A CONVEYANCE:

Under Section 14 of the partnership Act, it is always possible for a partner to bring

into the partnership, property belonging to him by the evidence of his intention to

make it part of the assets of the partnership. A partner can sell his property to a

partnership firm, which includes himself as a member. But the question whether there

was a sale would depend upon his intentions and on the language of the document.

Where an instrument of partition between the parties contains no words whatever of a

dispositive character which expressly or by implication amount to a transfer of

interest as between the owner and the other partners and there is only a clause which

can only be taken as a declaration of the rights of the partnership in the properties

consequent upon the fact that the properties were brought into the common stock, the

document in question is a deed of agreement of partnership.

3.2.15 WHEN A CONVEYANCE COMES INTO EXISTENCE:

A conveyance may be executed on the conversion of partnership into a limited

company. Thus a transfer of the properties belonging to a partnership to a company,

the shareholders of which consist exclusively of members of the partnership who

executed the transfer was held chargeable as a conveyance. On such a transfer, duty

was charged on the value of the property as evidenced by the books of the partnership.

The conveyance may come into existence on the dissolution of a partnership. Thus, an

instrument whereby a retiring partner to the continuing partnership retires for the

consideration of a certain sum of money is a conveyance. Such assignment would be a

conveyance even though the consideration is expressed to be allowed "in account and

appropriated out of the assets of the partnership‖. An instrument by which an

outgoing partner declared that he accepted a promissory note executed in his favour

by the continuing partner in full satisfaction of all his claims against the latter, in

respect of his share and interest in the partnership and the assets and properties thereof

should be charged to ad valorem conveyance duty. If the terms of the deed coming

into existence on dissolution of partnership are such that property actually passes by

the deed then the deed would be liable to conveyance duty even in respect of movable

which can be transferred by delivery. If, however, the retiring partner instead of

assigning his interest takes the amount due to him from the firm gives a receipt for the

money and acknowledges that he has no more claims on his co-partners they will

practically obtain all that they want, but such a transfer even if carried out by deed,

could hardly be held to be sale and no ad valorem stamp duty would be payable.

The Gujarat High Court has, relying on the Supreme Court decision in Commissioner

of Income tax versus Dewas Cine Corporations and dissenting from the decision of

the Mysore High Court in Venkatachalapati versus State, extended the view even to a

case where the retiring partner takes the amount on the footing of an actual or notional

sale of his interest. The interest of a partner in a partnership is not an interest in a

specific item of the partnership property but it is a right to obtain his share of profit

from time to time during the subsistence of the partnership and on dissolution of the

partnership or his retirement from the partnership to get the value of his share in net

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partnership assets which remain after satisfying the liability set our in section 48 of

the Partnership Act. When, therefore, a partner retires from partnership and the

amount of his share in the net partnership asset after deduction of liability and prior

charges is determined on taking account on the footing of a notional sale of the

partnership asset and given to him what he receives his share in the partnership and

not any price for sale of his interest in the partnership.

His share in the partnership is worked out by taking account in the manner prescribed

by relevant provisions of the partnership law and it is this and his only his share in the

partnership which he receives in terms of moneys. There is in this transaction no

element of sale, the retiring partner does not sell his interest in the partnership to the

continuing partner. He, on the contrary, carves out his interest and takes it away by

evaluating it.

Where long before the actual dissolution of a partnership, one of the partners had

received from the other partner, the capital contribution made by him a subsequent

deed of dissolution of partnership which recites that the outgoing partner shall have

no interest what-so-ever in any of the properties of the partnership and provides for

the ascertainment of the profits payable to such partner has been held to be properly

stamped as a deed of dissolution as the payment was made not under the deed and

cannot be construed to be consideration and there were no elements to render the deed

one of conveyance.

3.2.16 DISTRIBUTION OF PARTNERSHIP PROPERTY ON

DISSOLUTION- WHETHER PARTITION DEED REQUIRING

STAMP DUTY:

Where the assets of a firm are, on its dissolution, distributed between the partners, it is

not a partition and need not be stamped as deed of partition. Explaining the reasons in

the case of the Chief controlling Revenue Authority V. Chaturbhuj, the Gujarat High

Court said:

―In our opinion, what the legal position which ultimately emerges from Narayanappa

V. Bhaskara Krishnappa; Commissioner of Income Tax V. Dewas Cine Corporation;

Commissioner of Income Tax V. Bankey Lal Vaidya; and Velo Industries V.

Collector is that whatever a partner gets either in the shape of money or in the shape

of an immovable property which prior to the distribution was a property of the

partnership firm, is his share in the surplus of the assets of the firm which remained

after the liabilities and other outgoing of the firm are provided for. There is no

concept of co-ownership amongst partner during the subsistence of the partnership.

The partnership properties are not held by the partners as co-owners. The property

belongs to the firm and it merely vests in all the partners because the firm has no legal

entity. But such vesting does not mean that all the partners are co-owners of the

property. The distinction between co-ownership and partnership pointed out by the

Supreme Court in Champaram Cane Concern V. State of Bihar must be borne in mind

in this connection. Moreover, what happens at the time of dissolution is merely

handing over to each partner his share in the surplus of the partnership assets after all

the liabilities and outgoings are provided for and if any particular property which

prior to the dissolution was part of the partnership property is allotted to the partner it

is merely by way of adjustment of his share in the assets of the partnership. As the

Supreme Court pointed out in Dewas Cine Corporation case, the distribution of

surplus is for the purpose of adjustment of the shares of the partners in the assets and

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it is in the course of such adjustment that one or the other property may be movable

may be immovable-comes in the allotment to a particular partner. The concept of

partition or the concept of co-owners of the property dividing or agreeing to divide

such property in severally can never apply to what happens when a firm is dissolved

and one property or another is allotted to a partner. There are no elements to render

the deed one of conveyance.

3.2.17 DISTINCTION BETWEEN ANCESTRAL PROPERTY AND

SEPARATE PROPERTY

Property inherited by a Hindu from his father, father‘s father, or father‘s father‘s

father, is ancestral property. Property inherited by him from other relations is his

separate property. The essential feature of ancestral property is that if the person

inheriting it has sons, grandsons or great-grandsons, they become joint owners with

him. They become entitled to it by reason of their birth. Thus, if A, who has a son B,

inherits property from his father, it becomes ancestral property in his hands and

through. A as the head of the family is entailed to hold and manage the property, B is

entitled to an equal interest in the property with his father A and to enjoy it in

common with him. B can therefore restrain his father from alienating it except in the

special cases where such alienation is allowed by law and he can enforce partition of

it against his father. On his father‘s death, he takes the property by right of

survivorship and not by succession. It is otherwise, however to separate property. A

man is the absolute owner of property inherited by him from his brother, uncle etc.

His son does not acquire an interest in it by birth and on his death, it passes to the son

not by survivorship, but by succession. Thus, if A inherited property from his brother,

it is his separate property and it is absolutely at his disposal. His son B acquires no

interest in it by birth and he cannot claim any partition of it nor can he restrain A from

alienating it. The same rule apples to the self-acquired property of a Hindu. But it is of

the utmost importance to remember that separate of self-acquired property, once it

descends to the male issue who inherits it becomes ancestral property. Thus if A owns

separate or self acquired property, it will pass on his death to his son B as his heir. But

in the hands of B it is ancestral property as regards his sons. The result is that if B has

a son C, C takes an interest in it by reason of his birth and he can restrain B from

alienating it and can enforce a partition of it as against B.

Ancestral property is a species of coparcenary property. It was stated above that if a

Hindu inherits property from his father, it such a sace, it is said that the son becomes a

coparcner with the father as regards the property so inherited and the coparcenary

consists of the father and the son.

But this does not mean that a coparcenary can consist only of a father and his sons. It

is not only the sons but also the grand-sons and great-grandsons, who acquire an

interest by birth in the coparcenary property. Thus if A inherits property from his

father and he has 2 sons B and C, they both become coparcencers with him as regards

the ancestral property. A as the head of the family is entitled to hold the property and

manage it and hence he is called the manager of the property. If B has a son D, and C

has a son E, the coparcenary will consist of the father, sons and grandsons, namely A,

B,C,D and E. Further, if D has son F, and E has a son G the, conparcenary will consist

of 7 members. But if F has a son X, X does not become copacernear, for a coprcenary

is limited to the head of each stock and his sons, grandsons and great-grandsons. X

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being the great great-grandson, of A cannot be a member of the coparcenaty, so long

as A the holder of the joint property is alive.

(Principles of Hindu law by Mulla)

COPARCENERS AND COPARCENERY PROPERTY UNDER MITAKSHARA LAW

3.2.18 JOINT HINDU FAMILY:

A joint Hindu family consists of all persons lineally descended from a common

ancestor and includes their wives and unmarried daughters. A daughter ceases to be a

member of her father‘s family on marriage and becomes a member of her husband‘s

family. A joint or undivided Hindu family may consist of a single male member and

widows of deceased male members. The property of a joint family does not cease to

be a joint family property belonging to any such family merely because the family is

represented by a single male member (coparcener) who possesses rights which an

absolute owner of property may possess. Thus for instance, a joint Hindu family may

consist of a male Hindu, his wife and his unmarried daughter. It may similarly consist

of a male Hindu and widow of his deceased brother.

3.2.19 HINDU COPARCENARY:

A Hindu coparcenery is a much narrower body than a joint family. It includes only

those persons who acquire by birth an interest in the joint or coparcenary property.

These are the sons, grandsons, and great gransons of the holders of the joint property,

for the time-being in other words the three generations next to the holder, in unbroken

male descent.

3.2.20 FORMATION OF COPARCENARY :

The conception of a joint Hindu family constituting a coparcenary is that of a

common male ancestor with his lineal descendents in the male line within four

degrees counting from and inclusive of such ancestor. No coparcenary can commence

without a common male ancestor though after his death, it may consist of collaterals

such as brothers, uncles, nephews and cousin etc. No female can be a coparcener

although a female can be member of the joint Hindu family.

A coparcenery is created in such way as the following:

A Hindu male A, who has inherited no property at all from his father, grandfather or

great-grand father acquires property by his own exertions. A has a son B, B does not

take any vested interest in the self-acquired property of A during A‘s life time, but on

A‘s death he inherits the self acquired property of A. if B has a son C, C takes a

vested interest in the property by reason of his birth and the property inherited by B

from his father A becomes ancestral in B‘s hands and B and C are coparceners as

regards the property. If B and C continue joint family and a son D is born to C, he

enters the coparcenary by the mere fact of his birth and if a son E is subsequently born

to D, he also becomes a coparcencers.

3.2.21 UNDIVIDED COPARCENARY INTEREST

The coparcenery property is held in collective ownership by all the coparceners in a

quasi corporate capacity. The incidents of a coparcenary are first, the lineal male

descendents of a person upto the third generation acquire on birth ownership in the

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ancestral properties of such person, secondly that such descendants can at any time

work out their rights by asking for partition, thirdly that till partition, each member

has got ownership extending over the entire property conjointly with the rest, fourthly

that as result of such co-ownership, the possession and enjoyment of the properties, is

common, fifthly that no alienation of the property is possible unless it is for necessity

without the concurrence of the coparceners and sixthly, that the interest of a deceased

member passes on his death to the surviving coparcencers on the principle of

survivorship.

3.2.22 INCIDENTS OF SEPARATE OR SELF ACQUIRED PROPERTY:

A Hindu, even if he be joint, may possess separate property. Such property belongs

exclusively to him. No other member of the coparcenary, not even his male issues

acquires any interest in it by birth. He may sell it or he may make a gift of it or

bequeath it by will to any person he likes. It is not liable to partition and on his death,

intestate it passes by succession to his heirs and not by survivorship to the surviving

coparceners. Property acquired in any of the following ways is separate property of

the acquirer.

(1) Property inherited by a Hindu from a person other than his father, father‘s

father or father‘s father‘s father.

(2) Property obtained as a share on partition by a coparcener who has no male

issue.

(3) Property held by a sole surviving coparcener, when there is no widow in

existence who has power to adopt.

3.2.23 PERSONS ENTITLED TO SHARE IN COPARCENEY PROPERTY

UNDER MITAKSHARA LAW :

The only property that can be divided on a partition is coparcenary property. Separate

property cannot be the subject of partition. Every coparcener is entitled to a share

upon partition. Every adult coparcener is entitled to demand and sue for partition of

coparcenary property at a time. A son who was in his mother‘s womb at the time of

partition is entitled to a share though born after partition as if he was in existence at

the time of partition. If no share is reserved for him at the time of partition, he is

entitled to have the partition reopened and a share allotted to him.

A father separating from his sons may or may not reserve to himself a share on

partition. The rights of a son born as well as begotten after partition are different

according as the father has or has not reserved a share for himself. Where the father

has reserved a share for himself, a son who is begotten as well as born after partition

is not entitled to have the partition reopened. But in lieu there of, he is entitled after

the father‘s death to inherit not only the share allotted to the father on partition by the

whole of the separate property of the father, whether acquired by him before or after

partition. Where the father has not reserved a share to himself on a partition with his

sons, a son who is born as well as begotten after partition is entitled to have the

partition reopened to have a share allotted to him.

Where an adoption is made by a member of joint family governed by Mitakshara

Law, the adopted son becomes a member of the coparcenary from the moment of his

adoption and the adoptive father has no power either by deed or will to interfere with

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the rights of survivorship of the adopted son in the coparcenary property. The same

principle applies when adoption is made by sole surviving coparcener, however,

subject to any agreement binding the adopted son. Where a son is born after adoption

to the adoptive father the adopted son is entitled to the same share on partition as a

legitimate son.

3.2.24 SHARE OF A WIFE IN PARTITION

A wife cannot herself demand a partition but if a partition does take place between her

husband and his sons, she is entitled to receive a share equal to that of a son and to

hold and enjoy that share separately even from her husband. If the wife has

STRIDHANA given to her by her husband or father-in law, its value should be

deducted from her share by her husband. Wife in relation to sons includes the step-

mother. Likewise a widow mother cannot compel a partition so long as the sons

remain untied. But if a partition takes place between the sons, she is entitled to have a

share equal to that of a son in the coparcenary property. As in the case of a wife in the

case of a mother also STRIDHANA from her husband or father-in-law should be

deducted from her share. The term ‗mother‘ for this purpose includes stepmother. On

a partition between sons by different mothers when more than one mother is alive, the

rule is first to divide the property in to as many shares as there are sons and then allot

to each surviving mother a share equal to that of each of her sons in the aggregate

portion allotted to them.

3.2.25 MORTGAGE BY CONDITIONAL SALE AND SALE WITH A

CONDITION TO REPURCHASE

From the point of view of stamp duty, it is necessary to grasp the difference between

sale with a condition of retransfer and mortgage by conditional sale. In the former

case, when the property sold is retransferred to the vendor, the second transaction

would constitute only sale and attract stamp duty at conveyance rates, whereas in the

latter case, the retransfer of the property to the original owner would be a recoveyance

chargeable under Article 48 of the Schedule to the Gujarat Stamp Act. Further, the

distinction is also important from the point of view of Section 25 of the Stamp Act,

providing for rebate on stamp duty in respect of sale of mortgaged property. The

following commentary on the subject is relevant.

A sale with a condition of retransfer is not a mortgage for the relationship of debtor

and creditor does not subsist and there is no debt for which the transfer is a security. It

is not a partial transfer but a transfer of all right in the property reserving only a

nominal right in the property of repurchase or pre-emption which is lost if not

exercised within the stipulated time. ―The rule of law on this subject is one dictated by

common sense that prima facie an absolute conveyance containg nothing to show that

the relation of debtor and creditor is to exist between the parties does not cease to be

an absolute conveyance and become a mortgage merely because the vendor stipulates

that he shall have a right to repurchase. But although the difference in the legal effect

of a sale with a condition of repurchase and a mortgage by conditional sale is clear, it

is often a matter of extreme difficulty to decide which of these two transactions a

particular document or a set of documents discloses. The distinctions purely one of

intention namely whether it was intended that the relation have generally been applied

to find the intention of a document for the purpose stated above.

(1) The existence of a debt.

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(2) The period of repayment, a short period being indicative of a sale and a long

period of a mortgage. But the fact that time was made the essence of the

contract to repurchase is not decisive.

(3) A stipulation for the payment of interest indicates a mortgage.

(4) The continuance of the grantor in possession indicates a mortgage.

(5) A price below the true value indicates a mortgage a fair market value is

storage evidence that the transaction is a sale.

A mortgage by conditional sale is a mortgage in which the ostensible sale is

conditional and intended as security for the debt. In case of payment at the fixed time

the condition was that the sale became void or that the mortgagee executed a

reconveyance. In a mortgage the debt subsists and right to redeem rests with the

debtor. But a sale with a condition of repurchase is not a lending and borrowing

arrangement, No debt subsists and no right to redeem is reserved by the debtor but

only a personal right to redeem is reserved by the debtor but only a personal right to

repurchase. This personal right can only be enforced strictly according to the terms of

the deed and at the time agreed upon. But in a mortgage by conditional sale the right

of redemption subsists not with standing that the mortgage has failed to pay at the

time stated. This right arises from the fact that the properly is considered to be merely

a pledge for the loan.

A transaction cannot be a mortgage if the sale and the agreement to repurchase had

been embodied in separate documents because the provision of section 58(c) of the

transfer of property Act dealing with a mortgage by conditional sale makes a specific

provision that no transaction of ostensible sale shall be demand to be a mortgage

unless the condition referred to in section is embodied in the document which effects

or purports to effect the same. The effect of the proviso to clause ‗c‘ is that if the

condition for retransfer is not embodied in the document which affects or purports to

affect the same, the transaction will not be regarded as a mortgage.

It does not follow that if the stipulation for reconveyance is embodied in the same

document a transaction is necessarily a mortgage. The Legislature has made a clear

cut classification and excluded transactions embodied in more than one document

from the category of mortgages. Therefore, it is reasonable to suppose that persons

who after amendment choose not to use two documents do not intend the transaction

to be a sale unless they displace that presumption by clear and express works and if

the conditions of Section 58 (c) of the Transfer of Property Act are fulfilled then deed

should be construed as a mortgage.

In case of ambiguity, the courts lean to the construction of a mortgage. In this

connection reference is also invited to paragraph No.95 of the Book (Important

Government Orders under the Indian Stamp Act and the Court Fees Act Incorporating

G.R.R.D.No.678/24 dated 30th

January 1935 Code Order No.262).

3.2.26 GIFT-WHAT IS

Under section 122 of the Transfer of Property Act, Gift is the transfer of certain

existing moveable or immovable property made voluntarily and without consideration

by one person called the donor to another called the donee and accepted by or on

behalf of the donee. Such acceptance can be made during the lifetime of the donor and

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while he is still capable of giving if the donee dies before acceptance, the Gift is void.

The essential elements of a gift are:

1. The absence of consideration

2. The Donor

3. The Donee.

4. The Subject matter

5. The Transfer

6. The Acceptance

The essence of gift is that it is a gratuitous transfer. The word ―voluntarily‖ is used in

its popular sense denoting the exercise of unfettered will and in its technical sense of

―without consideration‖. On behalf of the donor, the essential ingredient is that he

should voluntarily and without consideration transfer the property to the donee and

giving away implies a complete divesting of the ownership in the property by the

donor. The word ‗consideration is used in the same sense as in the Indian Contract

Act and excludes natural love and affection. A transfer in consideration of an

expectation of spiritual and moral benefits or in consideration of natural love and

affection is a ‗gift‘ for such consideration is not that contemplated by the section. But

a gift in consideration of a donee undertaking the liability of the donor is not

gratutious, and is not a gift.

A doner is the person who gives. Any person who is sui juris (on his own right) can

make a gift of his property. Trustees cannot make a gift out of the trust property

unless authorised by the terms of trust.

Donee is the person who accepts the gift. The gift may be accepted by or on behalf of

a person who is not competent to contract. The donee must be alive at the date of the

gift and the representatives of person deceased at the date of the gift cannot take for

him. The donee must also be ascertainable person and so the public cannot be donee

under this section not can a gift be made to an unregistered society.

The subject matter of the gift must be certain existing movable or immovable

property. It may be land, goods or actionable claims, but it cannot be future property.

A gift of immovable property can only be made by a registered instrument. A deed

cannot be dispensed with even for a property of small value as in the case of sale and

as a further precaution attestation by 2 witnesses is required. The provision in section

123 of the Transfer of Property Act excludes every other mode of transfer and even if

the intended donee is put in possession a gift of immovable property is invalid without

a registered instrument. The deed must be signed by the donor.

The word ‗registered‘ in the section 123 does not mean registered in lifetime of the

donor. If the other conditions to the validity of a gift are complied with neither the

death of the doner nor his express revocation is the ground for refusing registration.

The donor cannot revoke gift after delivery of the deed of gift and before its

registration. While registration is necessary solemnity for enforcement of a gift of

immovable property it does not suspend the gift until registration actually takes place.

When the instrument of gift has been handed by the donor to the donee and accepted

by him the former has done everything in his power to complete the donation and to

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make it effective. Registrtion thus does not depend upon his consent, but is the act of

an officer appointed by the law for the purpose.

Where a gift has been affected by a registered document duly attested and the gift has

been acted upon by the donee, the title legally passes to the donee and cannot be

defeated by an intention of the donor to the contrary. Thus in a case where the gift

deed was deposited with the Registrar but was taken away by murdering the Registrar,

it was held that the gift was completed and could not be superseded by subsequent

registered deed.

The acceptance of gift by the donee need not be expressed. The acceptance may be

inferred and it may be proved by the donees possession of the property or even by the

donee's possession of the deed of gift. Acceptance has been inferred from the

acceptance of the right to collect rents in the case of a gift of tenanted property or

from the mutation in the register, provided the donee is in possession of the property

the donor's retention of the deed is not necessarily proof of the fact that there has been

no acceptance. Acceptances may be by donee who is not competent to contract for a

minor, may accept benefit although he cannot incur an obligation and a minor's

guardian may accept a gift for him. So also in the case of a deity this acceptance may

be by its agent. Acceptance must be in the lifetime of the donor and of course if the

donee dies before acceptance there is no gift. If the gift has been accepted but the

donor dies before the deed is registered the transfer can be completed by registration

after the donor's death

3.2.27 BENAMI SALES

Benami sales are fairly common in our country. The sale is in favour of the nominee

of the real purchaser and he holds it on his behalf and not for himself although

outwardly he appears as the owner.

The motives for this vary from sheer sentiment to evasion of the law. Needless to say,

if the real purchaser that is to say the person advancing the money for the purchase

was to permit the nominee to hold the property for himself, it would amount to a gift.

But the essence of the transaction is, as the name suggest, one holding a property only

in name but in reality for another.

In law the burden of proving that a sale is benami and that the apparent purchaser is

not the real owner rests on the person asserting it to be so. He may be the real owner

claming against the nominee with whom he has fallen out or it may be the State

charging that the benami sale is a breach of some law.

By itself, there is nothing illegal about a benami sale. But if the object is to evade a

law for example, one restricting land holdings or ownership to a particular category of

persons, the position is different. The law will not assist the real owner to acquire title

and possession from his benamidar because to do so is to assist a party to wrong.

Where no illegality is involved the Courts will help the real owner who proves his

claim.

No absolute formula or acid test can be laid down. However, the Supreme Court has

formulated six criteria to weigh the evidence.

They are: - (1) the source from which the purchase money came, (2) the nature and

possession of the property after the purchase, (3) motive, if any, for giving the

transaction a benami colour (4) the position of the parties and the relationship, if any,

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between the claimant and the alleged benamidar; (5) the custody of the title deed after

the sale; and (6) the conduct of the parties concerned in dealing with the property after

the sale.

The above indicia are not exhaustive and their efficacy varies according to the facts of

each case. Nevertheless, the first, namely, the source whence the purchase money

came, is by far the most important test for determining whether the sale standing in

the name of one person, is in reality for the benefits of another, the Supreme Court has

ruled.

In accordance with Gujarat Government Gazette bearing No.RP/1/89/45/88/1483-

Research dtd.20/1/1989, the benami transations were prohibited to be dealt with as per

Section 3(b) by way person other than person stated in sub-section (2) ibid. Further

whoever entered in any benami transaction under Section 3 ibid was punishable.

Further under Section 4(i), there of no suit, claim or action to enfore any right in

respect of any property held benami. Against whose name the property is held shall be

by or on behalf of a person claiming to be the real owner of such property.

Under Section 5(i), all the properties held benami shall be subject to acquisition by

such authority as may be prescribed by the Government.

Under Section 5(ii), the Government was to be acquired such property without any

amounts of payments.

3.2.28 DECLARATION OF TRUST:

Article 58 of the schedule I to the Gujarat Stamp Act deals with the declaration of a

trust. A declaration of trust is not defined. It implies declaration by an executant that

he holds certain property in trust. The article would thus apply only where the

executant of the instrument makes himself a trustee and not where the executant of the

instrument makes himself a trustee and not where he conveys property to others as

trustees. When a person transfers his property in favour of other trustees whether for a

charitable and religious purpose or not, the deed would be one of settlement and not

one of declaration of trust. However, where from the recital in the documents, it is

clear that executors were only making a declaration of a preexisting trust coupled with

transfer of its management and were not transferring their ownership in any specific

trust property nor were they creating the trust by executing the deed in favour of the

trustees such a document can not be treated as a conveyance and has to be stamped

only as declaration of trust.

3.3.1 LAW RELATING TO REGISTRATION :

The Indian Registration Act, 1908 (Act XVI of 1908) relating to the registration of

documents along with Rules framed there under by the State Government is in force

in the State. Under Section 17 of the Act, it is only certain documents which are

required to be registered compulsorily, namely the following:

(a) Instruments of gift of immovable property;

(b) Other non-testamentary instruments which purport or operate to create, declare,

assign, limit or extinguish, whether in present or in future any right title or

interest, whether vested or contingent, of the value of one hundred rupees and

upwards, to or in immovable property;

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(c) non-testamentary instruments, which acknowledge the receipt or payment of any

consideration on account of the creation, declaration, assignment, limitation or

extinction of any such right, title or interest;

(d) leases of immovable property from year to year or for any term exceeding one

year or reserving a yearly rent; and

(e) non-testamentary instruments transferring or assigning any decree or order of a

Court or any award when such decree or order or award purports or operates to

create, declare, assign limit or extinguish, whether in present or in future, any

right, title or interest whether vested or contingent, of the value of one hundred

rupees and upwards, to or in immovable property.

Provided that the State Government may, by order published in the Official Gazette,

exempt from the operation of this sub-section any leases executed in any district, or

part of a district, the terms granted by which do not exceed five years and the annual

rents reserved by which do not exceed fifty rupees.

The registration of any other document is optional.

3.3.2 OBJECT OF REGISTRATION:

The real purpose of registration is to secure that every person dealing with property,

where such dealings require registration, may rely with confidence upon the

statements contained in the register as a full and complete account of all transactions

by which his title may be affected. Registration thus protects a person against prior

transactions.

There are other purposes of the Registration Act; one of them is to give solemnity of

form and legal importance to certain classes of documents by directing that they shall

be registered. Another purpose is to perpetuate documents, which may afterwards be

of legal importance. Still another is to guard against fabrication of documents of title

from time to time and to check fraud and forgery.

3.3.3 TIME OF PRESENTATION :

Under section 23 of the Indian Registration Act, 1908 every document other than a

will should be presented for registration within four months from the date of its

execution. Under section 25, if a document is presented beyond this time limit, but

before the expiry of eight months of the date of execution, the registering officer may

accept the document for registration on payment by the party concerned of fine not

exceeding 10 times the amount of the proper registration fee. Further under Section 34

of the Act, the persons executing a document are required to appear before the

registering officer within the time limit for presentation of the document for

registration under Section 23 of the Act. As per proviso to Section 34, in case of delay

on the part of executing persons to appear before the Registrar within the time

allowed and where such delay in appearance does not exceed four months, the

registrar is again empowered to register the document on payment by the parties of

fine not exceeding 10 times the amount of the proper registration fee in addition to the

fine payable under Section 25. The result is that while the maximum period for

presenting an instrument for registration is eight months, that for appearance of

executions is twelve months. Under Rule 27 of the Registration Rules, the scale of

fines under Section 25 and 34 is laid down as follows:

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3.3.4 SCALE OF FINES UNDER SECTION 25 OR 34 :

The scale of fines to be imposed under Section 25 or 34 shall be as follows, namely

(1) if the delay does not exceed one month not exceeding 2 ½ times the proper

registration fee;

(2) if the delay exceeds one months but does not exceed two month not exceeding

5 times the proper registration fee;

(3) if the delay exceeds two months but does not exceed three months not

exceeding 7 ½ times the proper registration fee;

(4) if the delay exceeds three months but does not exceed four months not

exceeding 10 times the proper registration fee;

NOTE: This rule does not affect the Registrar‘s discretion to impose a smaller fine

that the above maximum under Section 25 or 34 in suitable cases.

3.3.5 PLACE OF REGISTRATION

Every document which is compulsorily registerable in so far as such document affect

immovable property shall be presented for registration in the office of the Sub-

Registrar within whose Sub-District the whole or some portion of the property to

which such documents relates is situated (Section 28).

3.3.6 PRESENTATION OF DOCUMENTS FOR REGISTRATION,

APPEARANCE OF PARTIES, ETC :

The Act provides for procedural requirements in regard to manner of presentation of

documents, the appearance of parties before the registering officer etc. in Section 32.

3.3.7 FEES FOR REGISTRATION, SEARCHES AND COPIES :

The State Government is empowered under Section 78 of the Registration Act to lay-

down a table of fees payable for the registration of documents, searching the registers,

granting copies of reasons, entries or documents, etc. In Resolution No.GM-

87/134/M-RGN/1086-381/HI dtd.3.8.1987, the State Government have modified the

fees chargeable for the purpose in the State effective from 10-8-1987.

Fees that are leviable are classified into the following four Articles.

(I) This article shall apply to those documents on which registration fee is leviable

on an ad valorem scale on the amount of value of the consideration or of the

property to which the documents relates.

The registration fee on the following document shall be levied on an ad valorem scale

on the amount or value of the consideration.

Acknowledgement (not being of the nature described in Article III), Agreement for

consideration, Annuity Bonds, Award, Bond, Bill of Exchange, Bill of Sale, Lease,

Instrument of Assignment, Conveyance, Mortgage, Release for consideration (not

being of the nature described in Article III) Sale, Transfer, any certified copy of a

decree or order of Court.

The registration fee on the following documents shall be levied on an advalorem scale

on the amount or value of the property.

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Composition Deed, Gift, Partition, Partnership Deed, Settlement, Declaration of trust,

Release than one falling under (2) above or Article III.

The ad valorem scale shall be: -

(a) if the amount or value of the consideration or of the property to which such

instrument relates, is wholly expressed therein.

`

When the amount or value does not exceed ` 200 10

When the amount or value exceeds

` 200 but does not exceed ` 400 15

-do- -do- 400 -do- 600 20

-do- -do- 600 -do- 800 25

-do- -do- 800 -do- 1000 30

-do- -do- 1000 -do- 1500 45

-do- -do- 1500 -do- 2000 60

-do- -do- 2000 -do- 2500 75

-do- -do- 2500 -do- 3000 90

-do- -do- 3000 -do- 3500 105

-do- -do- 3500 -do- 4000 120

-do- -do- 4000 -do- 4500 135

-do- -do- 4500 -do- 5000 150

For every ` 1,000 or part thereof in excess of ` 5000 15

Change of rate of registration fees on ad valorem

The rate of registration fees has been reduced vide Notification

No.GHM/2007/18/M/STP/102007/663/H 1 dated 30.03.2007. The ad valorem scale

shall be one rupee for every rupees one hundred or part thereof on the amount or

value of the consideration or of the property to which such instrument relates, if

the amount or the value of the consideration of the property to which such instrument

relates is wholly expressed therein.

(b) If such amount or value is only partly expressed the same advalorem fee as

above on the amount or value which is expressed and an additional fee of ` 30

(c) If such amount or value is not expressed at all, a fixed fee as under: -

(i) In respect of immovable properties situated in the City of Ahmedabad,

the City of Baroda, and the City of Surat as constituted under the

Bombay Provincial Municipal Corporation Act, 1949, and the

Cantonment of Ahmedabad ` 450

(ii) In respect of immovable properties situated within the limits of

Borough Municipalities` 300

(iii) In respect of all other properties `150

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II. For the registration of surrender of a lease the same fee as for the lease-surrendered

if the same does not exceed ` 30 otherwise ` 30.

III. This article shall apply to documents on which fee shall be calculated according to

the ad valorem scale in Article I subject to a certain maximum.

Registration fee calculated according to the ad valorem scale subject to a maximum of

` 30 shall be levied on the following documents: -

Document which acknowledges merely the payment of the consideration for some

document which is also registered Document which acknowledges the receipt of the

consideration expressed in a previous registered document but not paid at the time of

the execution of such document, where full advalorem fee has, under Article I, been

levied in respect of such previous document, Reconveyances and releases executed on

the extinction of loans on mortgage which are previously registered and on which full

advalorem fees have been levied. Documents acknowledging the receipts of

installments on account of mortgages which are registered and on which full

advalorem fee have been levied, Revocation of trust or settlement, duplicate or

duplicates presented for registration with the original document or documents on the

same day. Duplicate or duplicates not presented for registration with the original

document or documents on the same day but on which reference to registration of the

original document or documents is quoted, release executed in pursuance of some

other document on which full advalorem fee in Article I has been paid.

IV. This Article shall apply to documents on which fixed fee is to be levied.

A fixed registration fee of ` 30 shall be levied for the registration of the following

documents: - Power of attorney, writing of divorcement, a certificate of heirship,

guardianship, administratorship or executorship, a notice of pendency of suit or

proceeding referred to in Section 52 of the Transfer of Property Act, 1882, revocation

of trust or settlement dissolution of partnership, agreement of presumption in a

partition deed or in lease, apportionment of property, adoption deed, declaration,

agreements, easement where amount or value of consideration is not shown and

documents which do not fall within any other article of the Fee Table.

IV. A Fixed fee of `15 is to be levied on instruments which purport or operate to

effect any contract for transfer of immovable property irrespective of the amount of

consideration or value of the property shown in the said document.

In additional to the fees for registration indicated above, the following other fees are

also collected.

(1) Copying fees

(2) Search/Inspection fees

(3) Fees for attendance at private residence.

3.3.8 PROCEDURE IN REGISTERING OFFICES :

Documents received for registration are entered by the registering officers in day-

books, maintained for the purpose separately for each calendar year. If the registering

officer is satisfied on the eligibility of a document for registration, he would register

the document on payment by the party concerned of the necessary fees. The document

will then be copied by the registering officer in one or other of the books prescribed

under the Registration Act. The copy will indicate the stamp used on the original. The

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Act prescribes separate registers for recording documents relating to immovable

property, wills and testaments etc. Printed documents are filled by the registering

officers in separate volumes maintained for the purpose.

3.4.1 SELECTION OF DOCUMENTS FOR SCRUTINY

The audit party will call for the day book and the soft copy of the same from the

auditee. The documents should be selected in audit by way of sample selection

methodology approved by PAG and documented in Annexure-3(A) of this Chapter.

The audit party will prepare a list of the documents selected under each category and

earmark against each document the authority who had scrutinized the document

While scrutinizing the selected documents the audit checks mentioned in the

Annexure-3(B) of this chapter should be followed.

3.4.2 EXAMINATION OF DOCUMENTS:

The documents will then be taken up one after the other for examination. Every

document should be first read in its entirety and a conclusion reached on the proper

classification of the document under one or other of the Articles referred to in

Chapter– I.

It is not sufficient merely to go by the title given to a document.

Having determined the nature of a document, it should be seen whether proper stamp

duty as would be applicable to the case has been affixed on the document. In simple

documents, like agreements, or small sales no difficulty is likely to be encountered. It

is only in respect of documents involving complications regarding not only their

nature but also the amount therein that would be assessed to stamp duty that would

call for skillful audit examination.

It would be seen from the Articles in the Schedule to the Stamp Act that documents

are subject to stamp duty in one or other of the following alternatives.

1. Chargeable to fixed sum as duty;

2. Chargeable ad valoarem;

3. Chargeable ad valorem subject to a limit.

For example, acknowledgements, affidavits etc, are chargeable to fixed stamp duty. A

declaration of trust is liable to ad valorem stamp duty subject to a limit of ` 50. Deeds

as settlement, conveyance gift are chargeable to ad valorem duty without specification

of any limitation on the amount of stamp duty.

3.4.3 CONVEYANCE, GIFT, SETTLEMENTS AND PARTITION:

A conveyance is chargeable to duty on the consideration. It has been held that

consideration for this purpose would mean not the market value of the property sold

nor the consideration set forth in the documents but the real consideration for the sale.

Gifts, partitions, exchange and settlements are liable to duty on the market value of

the property in question. It should be seen in audit, whether the market value of the

properties stated in the documents really represent the values of the properties. Such

an examination can be conducted with reference to the index register maintained by

the registering officers showing therein for each village the property transactions that

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took place in the village during a year. Whenever it is seen that there has been any

gross under valuation, an examination of the value should be suggested upon which

action will be taken by the Collector under the provisions of the Gujarat Stamp Act

and Rules.

3.4.4 MISCELLANEOUS AUDIT INSTRUCTIONS:

(a) Whenever in a document of conveyance, if rebate of stamp duty is allowed on

the basis that stamp duty was paid on the earlier mortgage of the property sold, it

should be seen in audit that the property which is the subject of the sale, agrees in all

respects with the property sold in the earlier mortgage deed. For this purpose, the

description of the property given in the two documents should be compared diligently.

It should be borne in mind that in every document relating to immovable property

accurate description of the property is an essential requirement.

(b) In deeds of partition, it should be verified whether the value of the largest

share on which remission is given is worked out correctly.

(c) The method of charging lease documents to stamp duty, with reference to the

tenure of the lease and also taking into account the amount of premium or deposit

taken in advance should be studied and applied in audit.

(d) The distinction between a mortgage and a mortgage by deposit of title deed

should be clearly understood.

(e) Documents presented to the Assistant Superintendent of Stamps, Gandhinagar

or to the Collectors of the Districts for adjudication as to the proper stamp duty

leviable are scrutinised during audit and the observations are intimated to the

Secretary to the Government in the Revenue Department and the Chief Controlling

Revenue Authority, respectively. While communication the observations audit should

excercise restraint as to comments and conclusions thereon.

(f) Whether the fees realisable for the various services rendered by the

Registration Department have been correctly determined and collected and whether a

proper receipt granted for the fees realised.

(g) Whether fines and penalties leviable under the Act and the Rules have been

levied and collected wherever necessary.

(h) Whether proper account of receipt books has been kept.

(i) The reports of the Internal Audit, if any, and the Inspectors of Stamps and

Registration should also be seen in audit.

(j) While checking the correctness of the stamp duty on a document, it should be

seen side-by side whether the registration fees, copying fees etc, have been correctly

recovered.

(k) The receipts realised by the registering officers are entered in a Cash Book and

remitted into Treasury. The Treasury Officer records the certificate of receipt of the

money on the Cash Book itself. The Cash Book should accordingly be checked with

the counter-foils of receipts and the entry of the amount remitted with treasury cross

checked with the treasury records for a few months.

(l) Cases of exemption/remission of duty should be scrutinised in order to see

whether the exemption/remission granted is in accordance with the orders of the

Government on the subject and there is no attempt to abuse the exemption provisions.

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(m) Cases of refunds, if any, should be examined to see that the refunds are

admissible under the provision of the Act/Rules and are correctly made and recorded.

(n) In the audit of Stamp duty and Registration fees correlation with the records of

Wealth Tax and Gift Tax and Estate duty records is to be regarded as an essential

audit check. Discrepancies noticed between the wealth Tax, Gift Tax return and

registered document in respect of values of property are reported by the Income Tax

revenue Audit wing for scrutiny in State Receipt Audit. In a like manner, cases of

registration of records without production of forms as prescribed in Income Tax Rule

or without Income Tax clearance certificate where the value of sale etc, is above `30

lakh (earlier `5 lakh) can be brought to the notice of the Income Tax wing by the

State Receipt Audit wing.

EXEMPTION FROM PAYMENT OF STAMP DUTY

Under the provisions of the Bombay Stamp Act (now the Gujarat Stamp Act), 1958,

Government have granted exemptions in certain cases. Reference to some of the

important orders is given in the succeeding paragraphs:

1. In exercise of the powers conferred by clause (a) of Section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby remits stamp

duty chargeable under the said Act, in respect of instrument of mortgage executed by

a member of the panchayat service belonging to district and taluka caders for securing

repaying of an advance received by him from panchyats for the purpose of

constructing, purchasing or repairing a dwelling house for his own use.

(G.O.G R.D.No.GHM 75/123/M-STP-1474-9261-H dt.12/6/1975).

2. In exercise of the powers conferred by clause (a) of Section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby remits stamp

duty chargeable under the said Act, in respect of instruments executed by or on behalf

of or in favour of the Gujarat Rural Housing Board establishment under the Gujarat

Rural Housing Board Act, 1972 (Gujarat 22 of 1972) in respect of which the said

Board would be liable to pay the duty for the remission granted hereunder.

(G.O.G.R.D.No.GHM 76/32/M-STP-1475-136302-H dt.17/1/1977).

3. In exercise of the powers conferred by clause (a) of Section 9 of the Bombay

Stamp Act ,1958 (Bom.LX of 1958) the Government of Gujarat hereby remits in the

whole of the State of Gujarat the duty chargeable under the said Act, on instrument

whether attested or not in respect of transactions relating to loans and advances loans

and mortgages, cash credit or overdraft bond, agreements of pawn or pledge and letter

of hypothecation executed by small farmers, marginal farmers, rural artisans and

agricultural laborers for agricultural allied activities in favour of all commercial banks

including the State Bank of India and its subsidiaries and Co-operative Banks Co-

operative Societies Act,1961 (Guj.X of 1962).

Explanation: for the purpose of this order :- (a) the expression "Agricultural Allied

Activities" includes those activities which are mentioned in the definition of the word

"agriculture" in section 2(a) of the Gujarat Agricultural Credit (Provision of Facilities)

Act 1979 (b) the expression "small farmer" "marginal farmer""rural artisan" and

"rural laborers" shall have the meanings assigned to them in Section 2 of the Gujarat

Rural Debtors Relief Act, 1976. (GOG RD No. GHM/81/155/M-STP/1480/475/H dtd 17.8.1981)

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4. In exercise of the power conferred by clause (a) of section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958) (herein after referred to as "the said Act") and in

suppression of Government Order, Revenue Department No. GHM-75/212/M-

STP/1474/4868/H dated the 20th October 1975, the government of Gujarat hereby

reduces with effect on and from the 1st April 1987 in the whole of the State of Gujarat

the duty with which the instrument described in column-1 of the Table below are

chargeable under the said Act, to the duty at the rate specified in column 2 of the said

table.

TABLE

Description of Instruments Reduced rate of Stamp duty

Instrument executed by or on behalf of, or

in favour of the Gujarat Housing Board

established under the Gujarat Housing

Board Act,1961 (Guj.XXVIII of 1961)*

in respect of which the said Board would

be liable to pay the duty but for the

reduction granted hereunder.

T wo rupees for every sum of ` 100

secured or part thereof.

(G.O.R.D.No.GHM/-87/53/M-STP-1486/265-H-1; dt.28/3/1987)

* These words were appended vide G.O.R.D. No.GHM-87/94/M/-

STP/1486/265 H, dated 1st June 1987.

5. In exercise of the powers conferred by clause (a) of section 9 of the Bombay

Stamp Act.1958 (Bom.LX of 1958) (hereinafter referred to as ―the said Act‖) and in

supersession of Government orders, Revenue Department No.GHM-83-2 STP-1482-

TEC-7 (30)-3517-H.1, DATED THE 3rd

January, 1983; No. GHM-86-10/M-STP-

1482-TEC-7(30)-3517-H. dated the 30th

January, 1986; No. GHM-86-81-M-STP-

1482-TEC-7-(30)-3517-H.1 dated the 13th June, 1986; No.GHM-87/43/M/

STP/1482/TEC/7(30)/3517/H.1 dated the 27 February, 1987 and No.GHM-97-43-M-

STP-1486-265-H.1 dated the 28the March, 1987, the Government of Gujarat hereby

reduced with effect on and from the 1st April, 1992, in the whole of the State of

Gujarat, the duty with which instrument of mortgage deed as defined in clause (p) of

Section 2 of the said Act, executed by any person on behalf of any industrial

undertaking in favour of any of the financial institution specified in Annexure-I,

annexed hereto and executed by or on behalf of any of the said financial institution,

for securing repayment of any loan advanced or to be advanced to such industrial

undertaking, is chargeable under articles 36 of Schedule-I of the said Act, when the

possession of the property or any part thereof comprised in such deed is not given, at

the rate specified in Annexure-II annexed hereto.

ANNEXURE-I

1. The Industrial Development Bank of India.

2. The Industrial Credit and Investment Corporation of India.

3. The Industrial Finance Corporation of India.

4. The Life Insurance Corporation of India.

5. The General Insurance Corporation of India and its subsidiaries.

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6. The Unit Trust of India.

7. The Industrial Reconstruction Bank of India.

8. The National Small Industries Corporation.

9. The GujaratState Financial Corporation.

10. The Gujarat Industrial Development Corporation.

11. The Gujarat Small Industries Corporation.

12. The Gujarat State Textile Corporation.

13. The Gujarat Industrial Investment Corporation.

14. The State Bank of India and its subsidiaries.

15. The Nationalised Banks.

16. Any other Financial Institution in public sector.

17. International Financial Corporation, Washington.

18. Sugar Development Fund – Ministry of Food and Supply.

19. Small Industries Development Bank of India, Ahmedabad

20. Export Import Bank of India

21. Tourism Finance Corporation of India Ltd., New Delhi

22. Industrial Credit and Investment Corporation of India

Banking Corporation Ltd.

23. UTI Bank Limited

EXPLANATION-I

For the purpose of this order where any industrial undertaking has borrowed loan

from more than one such financial institution, total amount of loan so borrowed would

be considered for the assessment of stamp duty on such instrument.

EXPLANATION-II

―Nationalised Bank‖ means the Bank specified in column 2 of the First schedule to

the Banking companies (Acquisition and Transfer of Undertaking) Act, 1970.

EXPLANATION-III

―Industrial Undertaking‖ means and includes any undertaking by a person or group of

persons engaged in,

i. The manufacture, preservation or processing of goods.

ii. Mining or development of mines;

iii. The hotel industry;

iv. The transport of passengers or goods by road or by water or by air or by rope

way or by lift;

v. The generation or distribution of electricity or any other form of power;

vi. The maintenance, repair, testing or servicing of machinery or any description

or vehicles or vessels or motor boats or trailers or tractors;

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vii. Assembling repairing or packing any article with the aid of machinery or

power;

viii. The setting up or development of an industrial area or Industrial estate;

ix. fishing or providing shore facilities for fishing or maintenance thereof;

x. Providing special or technical knowledge or other services for the promotion

of industrial growth;

xi. Providing weigh bridge facilities;

xii. The research and development of any process or product in relation to any of

the matters aforesaid.

EXPLANATION-IV

The expression ―processing of goods‖ includes any art or process for producing

preparing or making any article by subjecting any material to a manual, mechanical,

chemical, electrical or any other like operation.

ANNEXURE-II

Sr.No. Description Rate

1 If the amount of loan or debt does not

exceeds `.1500000/-

1 per cent

2 (ii) If it exceeds `.15,00,000/- 2 per cent subject to a maximum

of `.2/- lakh.

3 If such loan or debt is to be repaid

within or up to the period of three

months.

Half of the amount of duty

payable under column (2) of item

No.1.

GOG RD NO.GHM-92-37-M-STP-1491-3226-H-1 dated 6-4-1992 superseded by

GOR

GOG RD. NO.GHM/2000/63/M/STP/1099/637/H-1 dated 27.7.2000

6 In exercise of the powers conferred by clause (a) of Section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958) (hereinafter referred to as the said Act) the

Government of Gujarat hereby; (i) remits the stamp duty chargeable under the said

Act on the instrument of EXCHANGE OF PROPERTY executed by one brother in

favour of another brother subject to the conditions specified in Appendix I below; and

(ii) reduces the duty with which the instruments described in column 1 of the

Appendix II below are chargeable under the said Act, to the duty at the rate specified

in column 2 of the said Appendix.

APPENDIX - I

(1) That the immovable properties specified in the instrument of exchange of property

owned by the father of the executives of the said instrument;

(2) That the interest in the said properties have been developed by survivorship in the

executants upon the death of their father.

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(3) That the executants shall give understanding in writing that they have not

exchanged before the said properties devolved by survivorship with his brother and

that the benefit of remission is availed of only once in their lifetime.

(4) That such exchange of property should be affected within the period of five years

from the death of the father or from the date they become owner of the said properties

by way of survivorship.

APPENDIX-II

Description of instrument Reduced Rate of stamp duty

(1) Instrument of partition executed by

agriculturists in case of their agriculture

land…….

(a) Where the amount of the value of the

separated share or shares of the property does

not exceed ` 10,000

(b) and every ` 10,000 and part thereof in

excess of `10,000

Subject to maximum of hundred

rupees, two rupees for every ` 100

or part thereof, of the amount of the

value of the separated share or

shares of the property.

Subject to maximum of five

hundred rupees, hundred rupees for

every ` 10,000 or part thereof, of

the amount of the value of the

separated shares or shares of the

property.

(2) Instrument of partition executed by

agriculturists in case of their dwelling

houses.

Subject to maximum of five

hundred rupees, hundred rupees for

every ` 10,000 or part thereof, of

the amount of the value of the

separated shares or shares of the

property.

G.O.R.D. NO.GHM-89/46/M-STP-1086-2322-H-1 dated 27-4-1989 (Article 26 and

43)

7. In exercise of the powers conferred by clause (a) of section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958) the Government of Gujarat hereby remits, with

effect on and from the 1`st April 1997 the duty on the instrument relating to security

for repayment of loan chargeable under Article 6(2) of Schedule-I to the said Act

executed by farmer, unemployed person and the beneficiary under a scheme

sponsored by the State Government or the Government of India

(Order No. GHM-97/14/M/STP/1097/365/H.1 dated 31.3.97 - Govt. of Guj Gazette

Exty.Pt.IV-B No.67 dtd.31.3.97 P.67-1)

8. In exercise of the power conferred by clause (a) of section 9 of the Bombay

Stamp Act 1958 (Bom.LX of 1958) the Government of Gujarat hereby reduces with

134

effect on and from the 1st April 1997 the duty with which the instrument described in

column 1 of the Table below is chargeable under the said Act to the duty at the rate

specified in column 2 of the said Table.

Table

Description of Instruments Reduced rate of Stamp duty

Investment of Conveyance executed by

the Gujarat Housing Board or

Corporation owned or controlled by the

Government or the Local Authority

relating to the residential houses

constructed by them where the price of

such house does not exceed ` 75,000.

One rupee for every hundred rupees or

part thereof.

(Order No. GHM-97/15/M/STP/1097/365/H.1 dt.31.3.97 - Guj. Govt. Gaz.

Exty.Pt.IV-B No.67 dt.31.3.97,P.67-2.)

9. In exercise of the powers conferred by clause (a) of section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958) the Government of Guajarat hereby remits the

duty chargeable under the said Act on an instrument of conveyance executed in

favour of any person whose land is acquired for the purpose of an irrigation project in

the State subject to the following conditions.

(1) the land so purchased shall not exceed twice the area of land acquired, or

(2) the market value of the land purchased shall not exceed the amount of

compensation received by him.

(3) the instrument of conveyance is executed within a period of three years from

the date of payment of compensation for land acquired.

(4) the person whose favour the instrument of conveyance is executed shall have

to produce -

(i) a certificate to the effect that the land has been acquired for the

irrigation project

(ii) a copy of the award of compensation received by him.

(Order No. GHM/97/129/M/STP/1097/198/H-1 dtd.28-10-97 - Guj.Govt.Exty. Pt.IV-

B No.260 dtd.4.11.97 P.260-1).

10. In exercise of the powers conferred by clause (a) of section 9 of the Bombay

Stamp Act 1958 (Bom.LX of 1958) and in suppression of Government Orders,

Revenue Department No.GHM/98/22/M/STP/1096/2527/H.1 dated 26.02.1998, the

Government of Gujarat hereby reduces from the date of publication of this order the

duty with which an instrument of securitization of loans or the Assignment of Debt

with underlying securities is chargeable under Article 20(a) of Schedule 1 to the said

Act, to seventy five paise for every rupees 1000 or part thereof the loan securitized or

debt assigned with underlying securities.

(Order No. GHM/2002/M/STP/102000/2749/H.1 dated 25.01.2002 – Guj. Govt. Exty.

Pt.IV-B, No.30 dt. 31.01.2002 p.30-1).

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11. In exercise of the power conferred by clause (a) of section 9 of the Bombay

Stamp Act, 1958 (Bom LX of 1958) the Government of Gujarat hereby reduces in the

whole of the State of Gujarat, the duty with instruments described in column-1 of the

Table below is chargeable under Article 34 of the Schedule-I of the said Act, to the

duty specified in Column-2 of the said Table.

Description of Instruments Reduced rate of Stamp duty

Instrument of Marriage Registration

executed under the scheme "Sat Fera

Samuh Lagna" formulated by the

Department vide their Resolution

No.PARACH1098/674/G dtd.29th April

1998.

Twenty rupees.

(Order No. GHM/98/58/M/STP/1098/1006/H.1 dtd. 15.9.98 -

Guj.Govt.Gaz.Exty.Pt.IV-B No.240 dtd.17.9.98 p.240-1)

12. In exercise of the power conferred by clause (a) of section 9 of the Bombay

Stamp Act, 1958 (Bom.LX of 1958) the Government of Gujarat hereby extents from

the duty with which the instruments of sales or leases executed or to be executed by

all "eligible new information technology " units located in the notified "Infocity"

chargeable under the said Act.

(Order No. GHM/99/37/M/STP/1099/uo/5/h.1 dtd. 10.6.99 - Guj.Govt.Gaz.

Exty.Pt.IV-B, No.113 dt.10.6.99 p.113-1).

13. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby remits with

effect from 10.02.2004, the duty of the instruments chargeable under Articles 6, 20,

27, 30, 36 & 51 of the Schedule I appended to the said Act, to the approved units in

the processing area of the zone and to the developer in the area of Special Economic

Zone declared as such by the Government of India under Sec.3 of the Gujarat Special

Economic Zone Act, 2004 (Gnj.11 of 2004)

(Order No. GHM/2004/101/M/STP/102004/1465/H.1 dt.18.12.2004.

Guj.Govt.Gaz.Exty. Pt.IV-B, No.277 dt.18.12.2004 p.277-1) = 2005 GSCS/II/

P.14/H.24

14. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby remits in the

whole of the State of Gujarat, the instruments of conveyance or lease executed by the

Developer of the Industrial Park for the purpose of land or acquired land on lease by

way of auction from Gujarat Industrial Development Corporation for setting up an

Industrial Park and reduces by 50% the stamp duty chargeable on the instruments of

conveyance or lease executed by the units of the Industrial Park.

This Order shall be deemed to have come into force on 10.06.2004.

(Order No. GHM/2010/56/M/STP/122009/2456/H.1 dt.23.08.2010 Guj. Govt. Gaz.

Exty Pt.IV-B, No.301 dated 06.09.2010 p.301-1)

14. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby reduces the

rate of stamp duty to one rupee for every one lakh or part thereof with which an

136

instrument belonging to forward contract chargeable under items (d), (e), (f) and (g)

of Article 5 and items (a), (b), (c) and (d) of Article 39 of Schedule I with effect from

07.06.2006 in the whole of the State of Gujarat.

(Order No. GHM/2006/45/M/102006/1863/H.1 dt.12.07.2006 – Guj. Govt. Gaz. Exty

Pt.IV-B, No.230 dt.13.07.2006, p.230-1)

15. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby reduces the

rate of stamp duty to twenty paise for every ten thousand rupees to part thereof with

which the instrument belonging to purchase or sale of securities (in case of non-

delivery and in future and option trading) are chargeable under item (c) of Article 5

and item (f) of Article 39 of Schedule I with effect from 30.08.2006 in the whole of

the State of Gujarat.

(Order No.GHM/2006/67/M/STP/102006/H.1 dt. 04.10.2006 – Guj. Govt. Gaz. Exty.,

Pt.IV-B, No.319 dt.04.10.2006 p.319-1) = 2006 GSCS/II/P. 568/H.375

16. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom. LX of 1958), the Government of Gujarat hereby with

retrospective effect from 1 April, 2004 up to 29th

August 2006 reduces the rate of

stamp duty to ten paise for every ten thousand rupees or part thereof with which the

instruments belonging to purchase or sale of securities (in case of non-delivery and in

future and option trading) are chargeable under item (c) of Article 5 and item (f) of

Article 39 of Schedule I of the said Act in whole of the State of Gujarat with the

condition that the person liable to pay has to make full payment of outstanding deficit

duty up to 31 May, 2007.

(Order No.GHM/2007/17/M/STP/102006/2642/H.1 dt.30.03.2007.)

17. In exercise of the powers conferred by clause (a) of Sec.9 of the Gujarat

Stamp Act, 1958 (Bom.LX of 1958), the Government of Gujarat hereby remits, in

whole of the State of Gujarat.

(i) The duty chargeable and interest payable on the instruments, particulars of

which are specified in column 2.

(ii) To the extent specified in column 3; and

(iii) Subject to the conditions specified in column 4 of the Schedule appended

hereto:

SCHEDULE

Particulars of

instruments

Extent of reduction Conditions

1 2 3

Instrument of conveyance

chargeable to duty under

clause (c) of Article 20 of

Schedule-I of the Bombay

Stamp Act, 1958 executed

by Gujarat Housing Board

in favour of a person other

Whole amount of duty

leviable on the amount of

difference between the

amount of consideration

shown in the instrument

and the amount of true

market value of the

(1) The instrument

executed by Gujarat

Housing Board up to

period of six months

from the date of this

Order.

(2) The person claiming

137

than original or first

allottee;

property which is the

subject matter of such

instruments;

remission has to

produce certificate

issued by the Gujarat

Housing Board that he

has made application

up to 31.07.2008 to the

Board for executing

conveyance deed.

Power of Attorney so far

as it related to the premises

of Gujarat Housing Board

chargeable to duty under

clause (f) of Article 45 of

Schedule-I of the said Act

executed by original or

first allottee in favour of

another person or by

another person to

subsequent person.

Whole amount required to

make up proper duty

leviable under clause (f) or

Article 45 of the said Act.

(1) The Power of Attorney

executed on or before

31.07.2008.

(2) The Power of Attorney

holder has to produce

Certificate issued by

Gujarat Housing

Board, that the Power

of Attorney holder has

paid transfer fee as

required by the Gujarat

Housing Board.

(Order No.GHM/2009/M/15/STP/102004/1131/H.1 dt.16.02.2009 - Guj. Govt. Gaz.

Exty., Pt.IV-B, No.59, dt.20.02.2009, p.59-1).

The following notifications for remission/reduction in stamp duty may also be

consulted.

(1) GHM/102002/M/STP/102000/2558/H.1 dated1.04.2002

(2) GHM/2004/101/M/STP/102004/1993/H.1 dated 20.12.2004

(3)GHM/2010/M/50/STP/122009/3041/H 1 dated 21.07.2010

(4)GHM/2006/26/M/STP/102006/922/H 1 dated 26.04.2006

(5) GHM/2006/67/M/STP/102006/H 1 dated 4.10.2006

(6)GHM/2007/2/M/STP/102006/UOR 13/H 1 dated 23.01.2007

138

TAXES ON MOTOR VEHICLES

HISTORICAL AND LEGISLATIVE BACKGROUND

4.1.1 Taxes on mechanically propelled vehicles is a "concurrent" subject (under

item 35 of List-III concurrent list of the seventh schedule to the Constitution) and as

such, there are both Central and State legislations on the subject. The Central Act

(The Motor Vehicle Act, 1988) is mainly regulatory in nature and does not levy any

tax as such though certain fees are prescribed for certain purpose covered by the Act.

The power to administer this Act and also to make rules under the Act for carrying out

the purposes of the Act within the jurisdiction of each State is vested in the concerned

State Government. The rules applicable to Gujarat are the Bombay Motor Vehicle

Rules, 1959 now Gujarat Motor vehicle Rules, 1959.

4.1.2 There are three State Acts in the State of Gujarat which provides for the

levy and collection of Motor Vehicle Tax (Road Tax), Goods Tax and Passenger Tax

respectively. These Acts also contain certain regulatory aspects besides providing for

levy and collection of tax. These Acts and the Rules framed thereunder are listed

below:-

1. The Gujarat Motor Vehicles Taxation Act, 1958.

2. The Gujarat Motor Vehicles Taxation Rules, 1959.

3 The Gujarat Motor Vehicles (Taxation of Passengers) Act, 1958.

4. The Gujarat Motors Vehicles (Taxation of Passengers) Rules 1958.

5. The Gujarat Carriage of Goods Taxation Act, 1962 (Repealed by Gujarat Act

13 of 1997 with effect from 1-4-1997).

6. The Gujarat Carriage of Goods Taxation Rules, 1962.

4.1.3 Further details are given in the subsequent paragraphs

ORGANISATION AND FUNCTIONS OF THE MOTOR VEHICLE

DEPARTMENT

4.2.1 The Commissioner of Transport functions as the head of the Motor Vehicles

Department of Gujarat State. The Joint Directors, Deputy Directors, Assistant

Directors, Accounts Officer and Research Officer assist him in his work.

4.2.2 At present the State is divided into fourteen regions each one being headed by

the Regional Transport Officer, (RTO) viz Ahmedabad, Mehsana, Rajkot, Bhavnagar,

Jamnagar, Surat, Vadodara, Nadiad, Bhuj, Valsad, Himatnagar, Junagadh, Godhra

and Palanpur. In addition to these officers, there are sixteen out regional officers, one

each at Gandhinagar, Patan, Surendranagar, Bharuch, Bhilad (C P), Porbandar,

Navsari, Dahod, Amreli, Bardoli, Rajpipla, Ahmedabad (East), Anand, Vyara, Pal,

Surat (West), Vadodara-2 each headed by an Assistant Regional Transport Officer

CHAPTER 4

139

(ARTO). In order to give more facilities to the motoring public, there are two motor

vehicles Inspectors offices one each at Modasa and Gandhidham. The State

Government have established check-posts at Bhilad, Amirgadh, Ambaji, Tharad,

Gundari, Shamlaji, Dahod, Zalod, Chhota-Udepur, Waghai, Samkhiyali and Songadh

in order to check payments of tax by owners of motor vehicles from the adjoining

State of Maharashtra, Rajasthan, Madhya Pradesh and Union Territory of Dadra and

Nagar Haveli. The following table indicates the Administrative set-up of the motor

vehicles department (Table-A).

Under third schedule (Rule 52(4)), the Government issued a notification dated

26.5.1989 to allot the District code to be used for registration mark of the vehicles

registered under their jurisdiction. The code numbers are 1 to 30 as detailed below:-

Ahmedabad-1, Mehsana-2, Rajkot-3, Bhavnagar-4, Surat-5, Vadodara-6, Nadiad-7,

Palanpur-8, Himatnagar-9, Jamnagar-10, Junagadh-11, Bhuj-12, Surendranagar-13,

Amreli-14, Valsad-15, Bharuch-16, Godhra-17, Gandhinagar-18, Bardoli-19, Dahod-

20, Navsari-21, Narmada-22, Anand-23, Patan-24, Porbandar-25, Vyara-26,

Ahmedabad (East)-27, Pal, Surat(West)-28, Vadodara-29 and Dang-30. The

temporary registration mark shall consist of letters "GJ" followed by district Code and

a number containing not more than `four' figures.

Figures and background colours of plate should be as prescribed by the Government

from time to time and are as given below:

Registering

Authority at

District Code

to be used by

it

Ahmedabad 1

Mehsana 2

Rajkot 3

Bhavnagar 4

Surat 5

Vadodara 6

Nadiad 7

Palanpur 8

Himatnagar 9

Jamnagar 10

Junagadh 11

Bhuj 12

Surendranagar 13

Amreli 14

Valsad 15

Bharuch 16

Godhra 17

Gandhinagar 18

Bardoli 19

Dahod 20

Navsari 21

Narmada 22

Anand 23

Patan 24

Porbandar 25

Vyara 26

Vastal Abad 27

Pal Surat 28

Vadodara-2 29

Dang 30

140

PORT AND TRANSPORT DEPARTMENT

(GUJARAT STATE)

COMMISSIONER OF TRANSPORT

JOINT DIRECTOR

DY.DIR.

(ADMN.)

DY.DIR.

(R&D)

DY.DIR.

(ENF.)

ASST.DIR.

(AMDN.)

ASST.DIR.

(R&D)

ASST.DIR.

(ENF.)

M.V.P. ADMN.

OFFR.

ACCT.

OFFR.

P.S. RESEARCH

OFFR.

REGIONAL TRANSPORT OFFICER

Cod.No.1

A‘bad

Cod.No.2

Mehsana

Cod.No.3

Rajkot

Cod.No.4

Bhavnagar

Cod.No.5

Surat

Cod.No.6

Vadodara

Cod.No.7

Nadiad

Cod.No.8

Palanpur

Cod.No.9

Himatnagar

Cod.No.10

Jamnagar

Cod.No.11

Junagadh

Cod.No.12

Bhuj

Cod.No.15

Valsad

Cod.No. 17

Godhra

141

ASST. REGIONAL TRANSPORT OFFICER

Cod.No.18

G‘nagar

Cod.No.24

Patan

Cod.No.13

S‘nagar

Cod.No.14

Amreli

Cod.No.19

Bardoli

Cod.No.16

Bharuch

Cod.22

Narmada

Cod.No.25

Porbander

Cod.No.21

Navsari

Cod.No.20

Dohad

Code 23

Anand

Code 24

Patan

Code 25

Porbander

Code 26

Vyara

Code 27

Vastral

Abad West

Code 28

Pal

surat(west)

Code 29

Vadodara-

2

Code 30

Dang

INSPECTOR OF MOTOR VEHICLE‟S OFFICE

Modasa Gandhidham

CHECK POSTS

Sonagadh Amirgadh Shamlaji Samkhiyali Bhilad Dohad

Waghai Ambaji Waghai Zalod

Chhota-

Udepur

Gundari

Tharad

142

4.2.3 STATE TRANSPORT AUTHORITY & REGIONAL TRANSPORT

AUTHORITIES

A State Transport Authority and 14 Regional Transport Authorities at Ahmedabad,

Mehsana, Rajkot, Bhavnagar, Surat, Vadodara, Nadiad, Junagadh, Valsad, Bhuj and

Jamnagar, Constituted under Section 68 of the Motor Vehicles Act 1988, function to

control road transport in the State Gujarat in respective regions and to regulate the

activities of the State as per the directions of the State Government under Section 67

of the Act, and to deal with the applications for permits for transport vehicles.

4.2.4 STATE TRANSPORT APPELLATE TRIBUNAL:-

Consequent to the amendment of Section 89 and 90 of the Motor Vehicles Act, the

powers to hear appeals against orders of the State Transport Authority and Regional

Transport Authorities in the State and the powers to hear revision applications against

the orders of the Regional Transport Authorities have now been vested in the State

Transport Appellate Tribunal.

4.2.5 PROCEDURE FOR REGISTRATION OF VEHICLES-ISSUE OF

LIECENCES ETC. IN THE REGIONAL TRANSPORT OFFICES

In the Regional Transport Offices, the general arrangement of sections/branches is as

follows:

REGISTRATION BRANCH

This branch deals with registration of new vehicles, assignment of fresh registration

numbers of vehicles got from other States, etc. For registration of a new vehicle under

Section 39 of the Motor Vehicles Act, an Application is filed by the owner in form 20

given in the first schedule to the Act alongwith the fees. The particulars contained in

the form are scrutinised by an Inspector of Motor Vehicles who also inspects the

vehicle brought for registration in order to see that the vehicle conforms to the

specifications contained in Chapter V of the Motor Vehicles Rules. The Inspector on

satisfying himself of the requirements recommends the registration of the vehicle. The

vehicle is accordingly registered and a suitable registration number is allotted to it.

The tax classification of the vehicle is also determined by the Regional Transport

Officer at the time of registration. To watch the regular payment of tax by the vehicle

a tax index card is simultaneously opened which will be maintained by the taxation

branch.

TAXATION BRANCH

(i) The taxation branch maintains tax-index cards registers in respect of all

vehicles under the tax jurisdiction of Regional Transport Officer. It is this

branch which determines and records the rate of tax appropriate to a vehicle

registered by the registration branch on form 20 referred to above.

(ii) Under rule 6 of the Motor Vehicles Tax Rules, every time payment of tax is

due, a declaration in form `AT' is to be filed by the owner. The tax due is

also tendered simultaneously. Such payment of tax is noted in the tax index

143

card register with reference to which tax not paid is ascertained and demand

notices issued.

(iii) Under the existing procedure payment of Motor Vehicles Tax can be made by

a registered owner not necessarily to the Regional Transport Officer with

whom his vehicle is registered but to any Regional Transport Officer in the

State. When a registered owner makes payment of Motor Vehicles Tax to a

Regional Transport Officer other than the one with whom his vehicle is

registered the Regional Transport Officer receiving the payment will forward

to the appropriate Regional Transport Officer the `AT' form alongwith the

duplicate receipt. The latter Regional Transport Officer will complete his tax

index cards/registers in respect of such vehicles on the basis of the documents

received by him.

LICENSING BRANCH

This branch is entrusted with the issue of Licenses to drivers and conductors under

chapter II of the Motor Vehicles Act and the corresponding Rules. Persons desirous of

obtaining such licenses are to file with Regional Transport Officer necessary

application alongwith appropriate fees therefor. The Regional Transport Officer will

examine the persons applying and on his finding that the applicants are suitable, will

issue to them the necessary License. For example an applicant for a Driving Licence

will be required to pass a test of competence. Likewise, the Act and the Rules provide

for qualification for performing the duties of a conductor of a stage carriage.

The Regional Transport Officer maintains a record of the driving licenses issued by

him in the form of cards.

CASH AND ACCOUNTS BRANCH

In the cash and accounts branch all money tendered in payment of fees and taxes are

received and receipts issued. The receipts are made out from triplicate receipt books.

One copy of the receipt is handed over to the remitter, another being filed with the

appropriate case file. The third copy remains in the receipt book. Each cashier

receiving money enters it in a columnar subsidiary cash book. At the end of the day

the totals of the subsidiary cash books are carried to a master cash book. A summary

register is also maintained in which the receipts forming part of the case files are

entered independently. The register is provided with separate columns for different

class of receipts, like Motor vehicle tax, registration fees etc. The total struck in the

summary register is agreed with the total of the master cash book before the cash

receipts are taken as proved.

Moneys received through cheques are watched through separate registers maintained

for the purpose. Similarly, moneys received through treasury challans are accounted

in a challan register.

DEPARTMENTAL ACTION SECTION

This Section deals with prosecution and departmental action against owners of Motor

Vehicles for offences committed against the Act/Rules. The cases are entered in

suitable registers as and when they arise and action there on is watched. Offences

committed against permit condition and offences like non-possession of documents in

a vehicle which are detected by the executive staff during road checks are reported by

144

them to this section through inspection memos prepared from a counter-foil

inspection book maintained by each executive staff entrusted with road checking.

GOODS & PASSENGER TAX BRANCH

This branch maintains accounts of payment of goods tax and passenger tax by

operators liable to such payment. The recovery of goods tax is watched by the

maintenance of registers in which a page is allotted for each registered vehicle liable

for the payment.

MOTOR VEHICLES ACT AND RULES

INTRODUCTION

4.3.1 More than 50 years ago the Motor Vehicles Act, 1939 was inscribed on the

statute book. The Act of 1939 has been amended several times to keep it up-to-date.

The need was however felt that this Act should now inter-alia, take into account also

changes in the Transport Technology, pattern of passenger and freight movements,

development of the road network in the country and particularly the improved

techniques in the Motor Vehicles management. The Motor Vehicles Act, 1939 had

become inadequate to deal with the present number of vehicles and higher number of

accidents.

With a view to updating, simplification and rationalisation of the law, a working

Group was constituted to review all the provisions of the Motor Vehicles Act, 1939

and to submit proposals for a comprehensive legislation to replace the existing Act.

Some of them are as under:

(a) Rationalization of certain definitions with addition of certain new definitions of

new types of vehicles.

(b) Strict procedures relating to grant of driving licenses and period of validity

thereof.

(c) Laying down of standards for the components and parts of motor vehicles.

(d) Standards for anti-pollution control devices

(e) Provision for issuing fitness certificates of vehicles also by the authorized testing

stations.

(f) Enabling provision for updating the system of registration work.

(g) liberalised schemes for grant of All India Tourist permits as also national permits

for goods carriages.

(h) Administration of the solatium fund by General Insurance Corporation.

(i) Maintenance of State registers for driving licenses and vehicle registrations

(j) Constitution of Road Safety Councils.

Thus, in a bid of simplifying and rational, the law the Motor Vehicles Act, 1988 and

Motor Vehicle Rules, 1989 came into force with effect from 1.7.1989.

Consequently, the Government of Gujarat also framed the Gujarat Motor Vehicle

Rules, 1989, which save as expressly provided otherwise apply to and in relation to all

motor vehicles in the state of Gujarat with effect from 1-7-1989.

145

This working Group took into account suggestions and recommendation of various

bodies and institutions and other transport organisations including the manufactures

and the general public. Besides obtaining comments of the State Governments on the

recommendations of the working group, these were discussed in a specially convened

meeting of Transport Ministers of all States and Union Territories. Some of the more

important modifications so suggested related for taking care of

(a) the fast increasing number of both commercial vehicles and personal vehicles

in the country;

(b) the need for encouraging adoption of higher technology in automotive sector;

(c) the greater flow of passenger and freight with the least impediments so that

islands of isolations are not created leading to regional or local imbalances;

(d) the road safety standards and pollution control measures, standards for

transportations of hazardous and explosive materials;

(e) need for effective ways of tracking down Traffic offenders;

(f) and laying down clear parameters where the private and the public sector can

co-exist and develop, in road transport field.

The legislation has been prepared in the light of the above background which inter-

alia includes some of the following important provisions, detailed in the succeeding

paragraphs.

4.3.2 PROVISION OF THE ACT

The arrangement of the sectors of Motor Vehicles Act, 1988 is dealt with briefly

chapter wise as under:-

4.3.3 CHAPTER 1 deals with definitions

4.3.4 LICENCING OF DRIVERS & CONDUCTORS

Chapter II and III dealt with issue of the licenses to Driver and Conductor. License to

Drivers falls under two categories viz. Learner's licence and Driver's licence. Section

4 provides that a person who has completed sixteen years of age may drives

motorcycle without gear. To drive a motor vehicle, other than a transport vehicle, the

person must have completed eighteen years of age and to drive a transport vehicle a

person must have completed twenty years of age. Section 14 lays down that a learner

licence shall be valid for six months. It also provides that in respect of persons who

has not attained 50 years of age, the issue and renewal of driving licence to drive non-

transport vehicle shall be for 20 years or until the date on which the holder attains 50

years of age whichever is earlier and in respect of persons who has attained age of 50

years, for every 5 years. The issue and renewal of driving licence to drive transport

vehicle will be for 3 years and the driving licence shall be deemed to be effective for

30 days after the date of its expiry.

The fees for license shall be charged as per the provisions of Rule 32 of the Central

Motor Vehicles Rules 1989. (see Appendix -I)

4.3.5 Applications for the issue of the licenses are made on prescribed form.

Learners' licenses are issued after knowledge test through computer (regarding rules

and regulation of traffic and traffic signals) of the candidates and a register of such

licence issued is maintained by the licensing branch of Regional Transport

Officer/Assistant Regional Transport Officer. In respect of regular driving licenses, a

146

test of competence to drive the vehicles in respect of which the licence is applied for

is conducted by the Inspector of Motor Vehicles who maintains a register of the test

conducted by him. To applicants who qualify the driving license is issued on payment

of fees. A driving licence card in respect of each driving licence issued is maintained

by the licensing branch.

4.3.6 MAINTENANCE OF STATE REGISTER OF DRIVING LICENCE

Every licensing authority is required to furnish a monthly report in duplicate,

containing particulars required by the form of State Register of Driving Licence

prescribed by the Central Government to the Commissioner of Transport within ten

days of the succeeding each month. The Commissioner of Transport shall forward a

quarterly compiled report in duplicate , of particulars received from all the licensing

authorities to the Secretary, Ports, Transport and Fisheries Department (at present

Home Department) within fifteen days of the succeeding month after the concerned

quarter. The State Government shall send to the Director (Transport Research),

Ministry of Surface Transport, New-Delhi a printed copy of the register referred to

above.

4.3.7 REGISTRATION OF MOTOR VEHICLES

Chapter IV deals with the registration of Motor Vehicles. The necessity for

registration of motor vehicles is explained in section 39 and where the registration is

to be made is stated in Section 40. Accordingly, no person is entitled to drive a motor

vehicle in any public place unless the vehicle is registered and it carries registration

mark in the prescribed manner. The registration of a vehicle has to be done by a

registering authority in the State in which the owner of the vehicle has his residence

or place of business where the vehicle is normally kept. It also empowers the State

Government to prescribe conditions subject to which the provisions of Section 39 will

not apply to the motor vehicles in possession of dealers.

4.3.8 "A vehicle running on fixed rails or Vehicles of a special type adapted for use

only in a factory or in any other enclosed premises" mentioned in Section 2(28) of the

Act are exempted from the above provisions. The word only therein confines the

operation of exemption to vehicles which are incapable of being used in any other

manner and in any other place as a goods vehicle, omnibus, stage carriage or such

other vehicles as defined in the Act. The test would be if the vehicles are reasonably

suitable for being used along with the public roads. The fact that manufacturers have

made or intended a particular vehicle for one purpose or the other or the dealers have

sold it for a particular purpose or that a particular vehicle is described by a particular

name or description is no criterion to decide whether the vehicle is adapted for use

upon the roads within the meaning of the definition given in Section 2(28) of the Act.

(Messrs Bolani Ores Ltd. & another V.State of Orissa AIR 1968 Orissa I).

[Dalmia Cements (Bharat) Ltd.V.R.T.O.Bellary A.I.R. 1970 Mys.49.]

In the second case, quoted above "dumpers" were used in the "mining area" and were

not registered as Motor Vehicles. It was held that the "dumper" in question can be

used for carrying loads even outside the "Mining area" or any other enclosed premises

like any other goods vehicle which is required to be registered under the Act. It may

be that it is not as convenient or advantageous as any other public carrier or goods

vehicle, which is commonly used for the transport of goods, when it is used for a

147

similar purpose outside a factory or an enclosed premises. This circumstance in itself

is not sufficient to bring the vehicle within the scope of the statutory exemption

mentioned in the definition of a motor vehicle.

4.3.9 SECTION 39 NOT CONFLICTING WITH SECTION 3 OF THE

GUJARAT MOTOR VEHICLE TAX ACT, 1958.

The Motor Vehicles Act is based on Entry 35 in list III of the Seventh Schedule to the

State on entry 57 in the list II of the said schedule and the objects of the two

enactments are entirely different and there is no conflict between them. Thus, when a

vehicle is driven along the road for the purpose of being registered, no offence would

be committed under the Motor Vehicles Act, but a tax will none the less be attracted

under the Tax Act.

(i) N.Sundareswaran Vs. State of Travancore Cochin-AIR-1956 T.C.85)

Supreme court judgement dated 25-11-71 in Automotive manufactures (P) Ltd.

Vs .Govt. of A.P.

4.3.10 METHOD OF REGISTRATION

Section 40 lays down that a motor vehicle should be registered by the registering

authority in whose jurisdiction the owner of the motor vehicle resides or where the

motor vehicle is normally kept Section 41 provides the form and fee for application

for registration of motor vehicle, the form in which the certificate of registration shall

be issued by the registering authorities, the form of records in which the particulars of

vehicles registered shall be kept by the registering authorities, the distinguishing

marks and manner in which such marks consisting of letters and figures shall be

exhibited in motor vehicle. It also lays down that the certificate of registration shall be

valid for a period of 15 years and shall be renewable for a period of 5 years and the

registering authority which is competent to issue duplicate certificate of registration is

the original registering authority. The details of registration are also entered in a

register of registration maintained by the Regional Transport Officer. The fees for

registration shall be charged as per the provision at Rule 81 of the central Motor

Vehicles Rules, 1989 (see Annexure-I).

4.3.11 TEMPORARY REGISTRATION

Section 43 confers power upon registration authorities to register a motor vehicle

temporarily. The temporary registration is valid only for a period not exceeding one

month and is not renewable, provided that where a motor vehicle so registered is a

chassis to which a body has not been attached and the same is detained in a workshop

beyond the period of one month for being fitted with a body, the period on payment of

such fees, if any, as may be prescribed be extended by such further period or periods

as the registering authority, as the case may be allow.

4.3.12 ASSIGNMENT OF NEW REGISTRATION MARK ON REMOVAL TO

ANOTHER STATE

Section 47 requires that a motor vehicle registered in one state and kept in another

state for a period exceeding 12 months shall be assigned a new registration mark in

the other state. It lays down the procedure in making the application for assignment of

new registration marks, the documents to be enclosed with the application and the

148

procedure to be followed by the registering authorities in assigning the new

registration marks. It also empowers the State Government to make rules to require

the owners of vehicles required to be registered in this State to furnish such

information as may be required.

4.3.13 MAINTENANCE OF STATE REGISTER OF MOTOR VEHICLES

1. Every registering authority shall furnish a monthly report in duplicate, containing

particulars required by the form of State Register of Motor Vehicle prescribed by the

Central Government to the Commissioner of Transport within 10 days of the

succeeding each month.

2.The Commissioner of Transport shall forward a quarterly, compiled report in

duplicate of particulars received from all the registering authorities to the Secretary to

the Government in Ports, Transport and Fisheries Department (now Home

Department) within ten days of the succeeding month after the concerned quarter.

3.The State Government may from time to time issue directions to the registering

authorities or to the Commissioner of Transport for the purpose of carrying into effect

the provisions of Section 63 of the Motor Vehicles Act, 1988.

4.The State Government shall send to the Director (Transport Research), Ministry of

Surface Transport, New-Delhi a printed copy of the register referred to above.

4.3.14 The other Section of chapter IV of the Act deal with assignment of fresh

registration marks, change of ownership, alteration of motor vehicle, suspension and

cancellation of registration and special provision in respect of transport vehicles,

certificate of fitness of transport vehicles etc.

4.3.15 Like-wise Chapter V onwards deal with subjects like control of transport

vehicle, provision relating to insurance, offences and penalties etc., which are

necessary for carrying out the general scheme of the Act. In the Chapter on Audit

checks reference has been made to provisions contained in these chapters in so far as

they are relevant to financial matters.

4.3.16 The fees chargeable under the various provisions of the Central Motor Vehicle

Rules, 1989 and the Gujarat Motor Vehicle Rules, 1989 and the periodicity of

grant/renewal of certificate of fitness in respect of Transport vehicles are as specified

in Appendix I.

THE GUJARAT MOTOR VEHICLE TAX ACT, 1958

BASIC FEATURES OF THE ACT AND RULES

4.4.1 GENERAL

The Bombay Motor Vehicle Tax Act, 1958 (LXV of 1958) as adopted by the Gujarat

Adaptation of Laws' (State and concurrent subjects) order 1960 and as amended from

time to time, now renamed as Gujarat Motor Vehicles Tax Act, 1958, governs the law

relating to the taxation of motor vehicles in the State of Gujarat.

4.4.2 LEVY OF TAX

The Act provides for the levy of Motor Vehicle Tax/Lump Sum Tax on all motor

vehicles used or kept for use in the State and the tax levied at rates fixed by the

149

Government but not exceeding the maximum rates specified in the First, Second,

Third, Fourth Fifth, Sixth Schedule to the Act. A registered owner of a vehicle shall

be deemed to use or keep such a vehicle for use in the State except during the period

for which the Taxation Authority has certified that the motor vehicle was not used or

kept for use in the State (Section-3).

Further, the Act also provides that tax shall be levied and collected on all omnibus

which are used or kept for use in the state exclusively as contract carriages a tax at the

rates specified separately by the Government (Sub-clause IV-AAA of First Schedule,

Section-3).

4.4.3 BASIS OF TAXATION

The basis for motor vehicle tax is unladen weight for motor cycles, tricycles etc

registered laden weight for goods vehicle, seating capacity for motor vehicles plying

for hire and used for carriage of passengers. In respect of trailers additional tax is

levied on the motor vehicles used for drawing them depending upon the use to which

they are put, and cost of the vehicles for light motor vehicles, tractors, trailers (from

1.8.1998).

4.4.4 PAYMENT OF TAX

The tax leviable under Section-3 in respect of motor vehicle specified in First

Schedule shall be paid in advance at the annual, quarterly or monthly rate and the tax

leviable in respect of motor vehicle specified in second, third, fourth, fifth, sixth

seventh, eighth and ninth schedule shall be paid in advance in lump sum, by every

registered owner or any person having possession or control of such motor vehicle.

The payment may be made into a Government treasury or to the Taxation Authority in

cash or by demand draft. The owner of a vehicle registered in the state of Gujarat or

elsewhere but brought for use in the State may pay the tax in any of the Regional

Transport offices in the State (Section 4).

4.4.5 CONCESSION TO OTHER STATES VEHICLES

Vehicles of other states enjoy the following concessions:

(1) Non-transport vehicles is not required to pay tax for the period not exceeding three

months, during which they arrive in the state, if such tax has been paid in any other

State or Union Territory [(Rule 16-A (4) Home Deptt's Notification dtd. 4.4.2000].

(2) For period of stay for less than 3 months in this State all transport vehicles not

being the designated omni buses of other States or Union Territory are liable to pay

tax at 4 per cent of the annual rate for each week or part thereof subject to a maximum

amount equal to the amount of tax leviable for a month (Section 4(1A)).

(3) In the case of motor vehicles kept by a dealer or manufacturer of such vehicles, for

the purpose of trade, tax is levied only on that motor vehicle which is permitted to be

used on the roads in the manner prescribed by rules made under the Motor Vehicles

Act, 1988.

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4.4.6 GENERAL EXEMPTIONS FROM PAYMENT OF TAX

All the motor vehicles designated and used solely for agricultural operations on farms

or farm lands are exempt from the payment of tax. Exemptions from tax are also

provided partially to tractor cum trailer belonging to agriculturist used for agricultural

purposes. Exemptions are provided by notifications in the official Gazette (Section 13

and notifications issued there under). However, Tractor (Agriculture use) and Tractor

(Non-agriculture use) are brought to tax by Government after 31.03.2003.

4.4.7 FLEET OWNERS

The tax Act provides for special provisions for fleet owners. Fleet owner is defined as

a person who is the registered owner of a fleet of one hundred or more transport

vehicles used or kept for use in the State. Before the commencement of the financial

year the fleet owner should give a declaration to the Taxation Authority

(Commissioner of transport in this State) stating the prescribed particulars in respect

of all transport vehicles used or kept for use by him in the State in February of the

year immediately preceding the year alongwith the certificate of final assessment of

tax for the previous year issued by the Taxation Authority and other prescribed

documents. Upon receipt of such preliminary declaration, the taxation authority will

assess provisionally the tax payable by the fleet owner. The final declaration has to be

delivered on or before the 30th April of the succeeding year and the adjustment of tax

paid short or in excess will be made by the Taxation Authority after the final

assessment (Section 10).

ASSESSMENT AND COLLECTION OF TAX UNDER GUJARAT MOTOR

VEHICLES TAX ACT, 1958

4.5.1 INTRODUCTION

Levy of motor vehicles tax is generally based on the unladen weight, registered laden

weight, seating capacity, percentage of cost of the vehicles or fuel used, of the motor

vehicles. Government is empowered to fix the rules by publishing the same in the

official gazette subject to not exceeding the maximum rates as specified in the first

schedule, second schedule, fourth schedule and sixth schedule to the Act. For the

purpose of levy of motor vehicles tax, motor vehicles are classified as under:-

(i) Motor vehicles (including tricycle) used for the carriage of goods or materials.

(ii) Motor vehicles (including tricycle) plying for hire and used for the carriage of

passengers other than designated omnibus.

(iii) Private service vehicles (by Guj.11 of 2000)

(IV) Sleeper designated omnibus vehicles (By Guj.6 of 2002)

(v) Designated omnibus vehicles

(vi) Break down vans used for towing disabled vehicle.

(vii) Motor vehicles other than those liable to tax under the foregoing provisions (i)

to (vi).

(viii) Additional tax payable in respect of motor vehicles used for drawing trailers.

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(ix) Motor vehicles falling under (ii) or (vii) manufactured out of India and

imported into India after 31.3.1957.

(x) Motor cycles and tricycles (including motor scooters and cycles) with

attachment for propelling the same by mechanical power.

(xi) Motor vehicle does not exceeding 250 kg. in weight, unladen adapted and used

for invalids.

(xii) Motor vehicles other than those liable to tax under the foregoing provisions of

(x) and (xi)

(xiii) Motor vehicles falling under (x) or (xii) and manufactured out of India and

imported into India after 31.3.1957.

(xiv) Motor vehicles including trailers to carry personal effects or a camping trailer

for private use.

(xv) Motor vehicles falling under (xiv) and manufactured out of India and imported

into India after the 31.7.1998.

(xvi) Motor vehicles registered in the State of Gujarat on or after the 1st April 1999,

and are plying for hire and are used for the carriage of passengers.

(xvii) Motor vehicles falling under (xvi) and manufactured out of India and imported

into India after the 31st March, 1999.

4.5.2 LEVY OF TAX

Under Section 3, a tax shall be levied and collected on all motor vehicles used or kept

for use in the State, at the rates fixed by the State Government by notifications in

official gazette but not exceeding the maximum rates specified in the first schedule,

second schedule, fourth schedule and sixth schedule to the Act. For this purpose, the

motor vehicles are divided into two parts viz.

Part-I : Motor vehicles using motor spirits

Part-II: Motor vehicles using fuel other than motor spirit compressed natural

gas or operated by electric battery or solar energy.

Motor vehicles are classified into groups mentioned above, based on the use to which

the motor vehicles are put and the rates of tax fixed according to the unladen weight

or registered laden weight of the vehicles, their carrying capacity (both sitting and

standing accommodations), or on cost of vehicles, depending upon the use to which

the vehicles are put.

The Government relevant notifications fixing the rates of motor vehicles tax/lump

sum tax/passenger tax are given in Appendix II to this manual.

4.5.3 LEVY OF ADDITIONAL TAX

Under Section-3-A, an additional tax is leviable with effect from 1.5.1982 on all

omnibus exclusively used or kept for use as contract carriage in the State. The rates

effective from 1.4.1989 and thereunder from time to time are given in Appendix-III

(Section-3A was deleted by Guj.9 of 2002 dtd.31.3.2002).

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4.5.4 PAYMENT OF TAX

Tax is payable in advance where it is at lump sum rate and in other cases in advance

either annually at annual rate, or quarterly for one or more quarters at the quarterly

rate which carries an element of surcharge at 10 per cent of one fourth of the annual

rate. In Gujarat, the procedure for payment of motor vehicle tax for all types of motor

vehicles is common. The owner is required to file a declaration form "AT" and

present with the Registration Certificate and Insurance certificate, along with the

amount of tax due in the office of the Regional Transport Officer/Assistant. Regional

Transport Officer. The booklet of Registration Certificate also contains Taxation

Certificate which indicates the amount of tax payable per year or for a quarter. The

amount of tax can be paid in cash or demand draft or cheque at the counter, along

with form "AT‖. The cashier issues a receipt for the amount paid either by cash or by

demand draft/cheque. He may also pay the amount in the Government Treasury by

challan under the specified head of account. In case the amount of tax is paid by

challan, he may specify the fact in the Form "AT" of having so remitted the amount.

The Regional Transport Officer, having satisfied himself that the correct amount of

tax is paid for a quarter or year issues a receipt for the said period and makes an entry

in the Registration Certificate and returns it to the owner along with the receipts. In

addition to the facilities for payment of tax in cash provided in the offices of the

Regional Transport Officer/Assistant Regional Transport Officer touring offices are

also opened at other important centers where the amount of tax is collected in cash on

specified dates and the receipts are issued on the spot. Tax index cards registers for

individual motor vehicles are maintained in the offices of the Regional Transport

Officer/Assistant Regional Transport Officer on which the entries of payment are

made, simultaneously with the entry made in the Registration Certificate. The

payment or non-payment of motor vehicles tax is watched on verification of the tax

index cards, tax registers.

4.5.5 Section 4(1A) of the Gujarat Motor Vehicles Tax Act, 1958 provides for

payment of motor vehicle tax in respect of a transport vehicle brought for use in the

State for a temporary period on monthly basis or on weekly basis for a period less

than a month at the rate of 4 per cent of the annual rate for each week or part there of

subject to a maximum of monthly tax. For this purpose, rule 21 prescribes that a

declaration in form (FT) is required to be presented by the vehicle owner, within

seven days of the entry of the motor vehicle into the State to the nearest taxation

authority. A transport vehicle, for which a temporary permit is issued by another

State, pays motor vehicle tax and goods tax by demand drafts through the transport

authority of the respective State and the demand drafts are addressed to the

Commissioner Transport, Gujarat State, Ahmedabad. Where no such procedure exists,

the other State vehicles entering Gujarat pay the tax at the Check posts, and the

returns along with particulars of cash remitted into Treasury/Sub-Treasury are sent to

Commissioner of Transport by the Motor Vehicle Inspectors, in charge of the check

posts.

4.5.6 ALTERATION OF VEHICLES

Where any motor vehicle specified in the first schedule, in respect of which a tax, for

any period has been paid, is altered during such period or proposed to be used during

such period in such manner, as to cause the vehicle to become a vehicle.

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(a) in respect of which a higher rate of tax is payable with reference to the rates fixed

by the State Government under Section 3, having regard to the maximum rates

specified in the First Schedule, the registered owner or persons who is in possession

or control, of such vehicle shall pay for the unexpired portion of such period since the

vehicle is altered or proposed to be used an additional tax of a sum equal to the

difference between the amount of tax payable for such unexpired portion at a higher

rate and the rate at which tax was paid before the alteration or use of the vehicle for

that portion

(b) In respect of which lump sum tax is payable with reference to the rates fixed by

the State Government under Section 3, having regard to the maximum rates specified

in third schedule, the registered owner or person who is in possession or control of

such vehicle shall pay such lump sum tax at the rates fixed by the State Government

under Section 3 having regard to the maximum rates specified in the third schedule.

(Section-7)

4.5.7 The owner of the vehicle should file an additional declaration in form BT

prescribed in the Rules, stating the alteration made to the vehicle or the manner in

which it is proposed to be used so as to cause it to become a vehicle in respect of

which a higher rate of tax is payable, within 14 days of such alteration or use, along

with the amount of additional tax payable.

(Rule 9)

4.5.8 NON USE OF VEHICLES

The registered owner or any person having possession or control of a motor vehicle of

which the certificate of registration is current, shall be deemed to use or keep such

vehicle for use in the State, except during such period where the Taxation Authority

has certified in the prescribed manner that the vehicle was not used or kept for use in

the State (Section-3(2)).

For this purpose, the owner has to make a declaration in form "NT" to the Taxation

Authority along with the certificate of Taxation. Such a declaration has to be made

before the expiry of the current period for which the tax has been paid for the vehicle

(Rule-5). Refund of tax, if any, will be permissible as per Section-9 of the Act.

4.5.9 TAX PAYABLE BY FLEET OWNER

A fleet owner who owns more than 100 transport vehicles is permitted to pay a

provisional tax in the beginning of the year based on the vehicles shown as used or

kept for use by him in a preliminary declaration. At the end of the year based on the

actual use a final declaration is filed and the particulars of the number of transport

vehicles shown therein are verified by the Commissioner of Transport and the final

tax determined. The differential amount of tax is recovered or refunded to him as the

case may be within fifteen days from the date of issue of the certificate of final

assessment of tax.

In Gujarat, Ahmedabad Municipal Transport Corporation Service (AMTS) and the

Gujarat State Road Transport Corporation (GSRTC) submit returns to the

Commissioner of Transport as fleet owners (Section 10).

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4.5.10 REFUND OF TAX

Refund of motor vehicles tax is regulated under the provisions by Section-9 of the

B.M.V.T Act for vehicle owners other than fleet owners and by Section (10)(6) for

the fleet owner. Where the tax has been paid in advance at the annual rate, then the

difference between the sum paid at the annual rate and the sum which would have

been payable at the quarterly rate for every quarter or part thereof which has expired

on the date of surrender of certificate of taxation at one twelfth of the annual rate for

each calendar month and at one day‘s tax of the monthly installments of tax paid for

each day which has not commenced on that date is refunded. Where a Taxation

Authority is satisfied that (a) for any reasons what-so-ever, a motor vehicle specified

in the second schedule or as the case may be the third schedule is removed to any

other state or the registration of such motor vehicle is cancelled or (b) such motor

vehicle is altered or proposed to be used in such manner as to cause such motor

vehicle to become the vehicle liable to payment of tax at a rate fixed by the State

Government under Section 3 having regard to the maximum rates specified in first

schedule, the person who has paid the lump sum tax in respect of such motor vehicle

shall on an application made in that behalf be entitled to a refund of such amount as

may be determined by the Taxation Authority having regard to the principles as may

be prescribed. For the fleet owner the provision is modified to the extent that a

proportionate reduction for one calendar month or more is allowed in the final tax

determined and levied for the period of non-use. The application for refund should be

made within six months of the expiry of the period for which refund is claimed.

4.5.11 PENALTY FOR NON PAYMENT OF TAX

Where the whole or any portion of the tax due in accordance with the provisions of

the Act in respect of any motor vehicle for any period or part thereof has not been

paid in time by the person liable for payment thereof, the Taxation Authority may

levy (1) in addition to the tax so due, a penalty @ 2 per cent per month not exceeding

25 per cent of the amount of tax so due, (2) if the vehicles are found under use or kept

for use during a period of non-use declared by him to the Taxation Authority, in

addition to the tax for the non-use period, a penalty equal to twice the amount of tax

so due is leviable. Where penalty is leviable under both (1) and (2) above, it shall be

levied under (2) and not under (1) (Inserted by Guj.9 of 2002 dtd.1.4.2002).

The amount of penalty so levied shall, unless it is paid within the prescribed time, be

recoverable in the same manner as arrears of land revenue.

4.5.12 INTEREST` FOR NON PAYMENT OF TAX

Where the whole or any portion of the tax due in accordance with the provisions of

the Act in respect of any motor vehicle for any period or part thereof has not been

paid in time by the person liable for payment thereof, the Taxation Authority may

levy, in addition to the tax so due, interest at the rate of two per cent per month or the

part of a month up to 31.3.2007 and thereafter at the rate of one and half per cent per

month or part thereof for the period of delay.

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THE GUJARAT CARRIAGE OF GOODS TAXATION ACT, 1962

4.6.1 INTRODUCTION

The Act which came into effect from 1962 provides for the levy and collection of a

tax on goods carried by road in motor vehicles in the State of Gujarat. Under the

powers conferred by Section 32 thereof, the Gujarat carriage of goods/Taxation Rules,

1962 have been framed by the Government.

4.6.2 LEVY OF TAX

Under the Scheme of the Act, goods tax is leviable on all goods carried by road in the

State when carried in a public goods vehicle at a rate of three per cent of the freight

charged or chargeable for their carriage and when carried in a private goods vehicle at

the rate of four tenths of a Naya paisa per metric tonne per kilometer. No such tax

shall be levied on goods that are the property of the Central Government including the

Indian Railways or are transported in departmental vehicles, not being public goods

vehicles, owned by either.

(Section 3)

4.6.3 COLLECTION AND PAYMENT OF TAX

Under the provisions of the Act and Rules the operator should collect and pay the tax

to the Government. The tax in respect of any month payable in accordance with the

returns submitted should be paid into the Treasury or to the Taxation Officer in cash,

cheque, demand draft etc., before the tenth of the succeeding month and the receipt in

token of such payment sent to the Taxation Officer.

(Section 4, 8 and Rule 10-B)

4.6.4 When goods are carried through the State or from or to any place outside the

State, the tax payable is only in respect of their carriage over the distance within the

State. If separate freight is charged or chargeable for such distance, the proportionate

freight is calculated on the freight charged or chargeable.

(Section 5)

4.6.5 RETURNS

A monthly return in Form I for every public goods vehicle and in form II for every

private goods vehicle is to be submitted by every operator to the Taxation Officer.

The returns show the details of goods carried their weight, kilometers covered, freight

charged and tax due.

(Section 6 and Rule 4)

4.6.6 LUMP SUM PAYMENT OF TAX

Every operator of a goods vehicle shall have an option of lump-sum payment of tax

by sending an application for the purpose to a taxation officer in a prescribed form.

The Government notification fixing the lump sum rates of tax is given in Appendix IV

to this manual.

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4.6.7 PENALTY FOR NON-PAYMENT OF TAX

Any operator failing, without reasonable cause, to pay tax within time under the

provisions of the Act shall be liable to pay in addition to the amount of the tax a sum

not exceeding 25 per cent thereof as penalty.

4.6.8 LIABILITY OF OPERATOR TO PAY INTEREST

Where the operator does not pay the tax on or before the date prescribed under

Section 8 or Section 12 as the case may be, there shall be paid by such operator for

the period commencing immediately after the prescribed date and ending on the date

of payment of the tax,simple interest at the rate of twenty four per cent per annum on

the amount of tax not so paid or any less amount thereof, remaining unpaid during

such period.

4.6.9 REFUNDS

The Act provides for refund of tax in the following cases:

(i) When the operator has paid the amount of tax penalty and interest (if any) in excess

of that due form time to time, the Taxation Officer shall refund the excess amount

to him or adjust it from the amount of tax, penalty and interest (if any) due for any

other period.

(ii)In the case of goods exported out of India, on production of satisfactory proof to the

Taxation Officer the refund of tax paid is permissible.

(iii)Refund of tax of any vehicle paying tax on lump sum rates, which has been

rendered incapable of use due to a breakdown, accident or causes beyond the

operator's control, on satisfaction by the Taxation Officer. (Section 12, 18, 30)

Other procedure for claiming the refund is laid down in Rule 14 of the Gujarat

Carriage of Goods Taxation Rules 1962 with effect from 1st April 1997 the Gujarat

carriage of Goods Taxation Act 1962 Stands replaced (By a Gujarat Act 13 of 1997

dt.26.3.1997). Thus the levy of goods tax was merged with Motor Vehicles Tax with

effect form 1-4-97.

THE GUJARAT MOTOR VEHICLES (TAXATION OF PASSENGERS) ACT, 1958

INTRODUCTION

4.7.1 The Bombay Motor Vehicles (Taxation of Passengers) Act, 1958 was adapted

and modified by the Gujarat Adoption of Laws (Sate and concurrent subject) order

1960 and amended from time to time, now renamed as Gujarat Motor Vehicles

(Taxation of Passengers) Act, 1958. The Act provides for the levy of a tax on

passengers carried in certain classes of public service vehicles in the State of Gujarat.

Under the powers conferred by Section 22 of the Act, the Gujarat Motor Vehicles

(Taxation of Passengers) Rules, 1958, have been framed by Government.

LEVY OF TAX

4.7.2 Under the Act, a tax on all passengers carried by a stage carriage is levied at

such rate as would yield an amount equal to seventeen and one-half per cent of the

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inclusive amount of fares payable to the operator of a stage carriage and paid to

Government. If the stage carriage plies exclusively within the new capital area or a

municipal area and also areas adjacent to the said areas or serving the new capital

area, municipal area and area between them as approved by the Government, the said

rate shall be such as would yield an amount not exceeding one per cent of the

inclusive amount of fares payable.

(Section 3)

PAYMENT OF TAX

4.7.3. The Tax for any month is payable in accordance with the returns submitted by

the operator. The payment may be made into the Government treasury and the

receipt thereof sent to the Taxation Officer not later than 10th of succeeding month.

In the case of a fleet owner, the receipt should reach before the last day of the

succeeding month. The payment may also be made to the Taxation Officer in case or

by means of cheque or demand draft.

PENALTY FOR NON-PAYMENT OF TAX

4.7.4. Where the whole or any portion of the tax payable to the State Government in

respect of any stage carriage for any month or portion thereof in pursuance of Section

5, 6 and 7 has not been paid in time, the Taxation Officer may, in his discretion, levy

in addition to the tax so payable, a penalty not exceeding 25 per cent of the maximum

tax which would have been payable to the State Government if the stage carriage had

carried its full complement of passengers during such month or portion thereof

(Section 8).

LIABILITY OF OPERATOR TO PAY INTEREST

4.7.5. Where the whole or portion of the tax payable to the State Government in

respect of any stage carriage in pursuance of Section 5, Section 6 or Section 7 has not

been paid in time the operator shall be liable to pay to the State Government simple

interest at twelve per cent per annum.

(Section 9-A)

4.7.6. RETURNS

A fleet owner has to submit a monthly return in Form I in respect of all the stage

carriages held by him under a permit to the Commissioner of Transport before the end

of the month succeeding the month to which it relates. Every other operator has to

submit to the Regional Transport Officer concerned a daily return in Form II in

respect of every stage carriage authorised to be used exclusively as contract carriages

a weekly return in Form II in respect of every other stage carriage and a monthly

return in Form IV in respect of all the stage carriages, held under a permit.

The time limit for delivery of returns in Forms II, III and IV is given in Rule 6. The

procedure when no returns are submitted is explained in Rule 6.

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REFUNDS

4.7.7 Under Section 9 A of the Act, the amount of tax, interest and penalty if any,

paid by an operator in excess of the amount due from him can be refunded by the Tax

officer either in cash or at his option by deduction from the amounts due form him.

RECORDS, REGISTERS AND RETURNS OF THE DEPARTMENT

4.8.1 The Motor Vehicles department is required to maintain certain forms,

registers, etc. which are peculiar to it. The special Motor Vehicles Forms can be

divided into three broad classes.

(1) Various application forms prescribed under the Acts and Rules.

(2) Forms in which documents specified in these Acts, and Rules are prepared and

which are issued against payment of fees (Money value forms).

(3) Other registers, returns etc. which are peculiar to the department.

4.8.2 Item No. (1)

Includes forms such as application for learner's licence, Application for trade

certificates, Application for temporary permits, etc. These are appended to the various

Acts and Rules and are not given in detail here.

Item No. (2)

Money value forms-A list of important Money value forms is given in Appendix V

Item No. (3)

A list of other important registers and returns is given in Appendix VI

4.8.3 The following more important registers are briefly dealt with below: -

4.8.4 REGISTRATION REGISTER

This is the primary record of registration of vehicles in Regional Transport

Offices/Assistant Regional Transport Offices.

Registration of motor vehicles as required under Section 39 of the Motor Vehicles

Act, 1988 is done making suitable entries about the vehicles in this register. The serial

number on the top is the registered number of the vehicle. Particulars of previous

registration, class of the vehicle, make and model, year of manufacture, brief and

detailed description of the vehicle, particulars of date of arrival, hire purchase

agreement. Registered laden weight, unladen weight, particulars of change of

ownership, seating/standing capacity, etc. are noted in this register. Entries in this

register are to be attested by an officer not below the rank of an Assistant Regional

Transport Officer.

4.8.5 BT REGISTER:

This register has been prescribed to note the alteration made to a vehicle. A notice in

B.T.I. under rules 65 (i) of Bombay Motor Vehicles Rules is required to be given by

the owner of the vehicle for any alterations proposed to be made to the vehicle. Along

with the B.T.I., the owner is required to file an additional declaration within 14 days

of alterations in form 'BT` under Rule 9 of Bombay Motor Vehicles Tax Rules, in

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case the alteration, made to the vehicles make him liable to pay additional tax in

respect of the altered vehicle. The Registering authority after satisfying himself that

the particulars in the additional declaration are correct and complete makes a note of

such alteration in this register and in the Registration register and determines the

additional tax payable, before issuing a tax token.

4.8.6 REGISTER OF REFUNDS

Separate registers are maintained by each Regional Transport Officer for refunds of

motor vehicles tax, goods tax, passenger tax, lump sum tax and refund applications

for all vehicles are noted in this register. Columns are provided for watching the

period within which such refunds are claimed, the proof of payment of tax etc. If the

taxation authority issuing the certificate of refunds is not the authority in whose

custody the records of the motor vehicles are maintained, it communicates the

particulars of the refund to such other authority, which also makes relevant entries in

the Tax index card.

4.8.7 REGISTER OF PERMITS

Permit registers are separately maintained according to the nature of permits and also

in respect of permits issued for and on behalf of other States. All the applications for

such permits are entered in this register and a court fee stamp register is also

maintained for `5 affixed as court fee in each application for a permit. The entries

provide for fresh permits, renewals, the fees levied, Receipt No & date, period for

which permits are issued/renewed etc.

4.8.8 REGISTER OF DRIVING LICENCES

A register is maintained for driving licenses granted to applicants and all such

applications for obtaining a driving licence for the type of vehicle, to which the

application refers, are noted in this register. The licensing authority before granting

the licence tests the person for the competence to drive and the applicant is required to

pay "testing fees" before the test is commenced. On renewal/issue of a licence, a

licence fee is also charged and reference to the receipt no. and date of payment of

such fees is indicated in the register.

4.8.9 REGISTER FOR THE ASSIGNMENT OF NEW REGISTRATION

MARK ON REMOVAL OF MOTOR VEHICLES TO ANOTHER

STATE.

For the vehicles of other States, entering Gujarat and kept for use therein for a period

of more than a year, the registration mark of Gujarat State is required to be assigned

under Section 47 of M V Act. All application for assignment of new registration mark

are entered in this register a fee as prescribed under Rule 81 for such assignment is

collected form the motor vehicle owner and the collection of fee is also noted in this

register. The registering authority intimates the original registering authority before

assigning new registration mark and on receipt of the particulars form the original

registering authority enters the particulars and notes the new registration mark

assigned to the vehicle.

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EXEMPTION, REMISSION AND REFUNDS OF TAXPART-AMOTOR

VEHICLES TAXES

4.9.1 RULE-16-A PRINCIPLES OF EXEMPTION:

Rule 16-A of the Gujarat Motor Vehicles Taxation Rules, 1959 lays down the

principles of exemption from payment of tax under section 13(2) of the Motor

Vehicles Tax Act.

The following exemption notifications are in force:

(I) GOVERNMENT OF BOMBAY NOTIFICATION NO.6882/3XV OF

24-6-36

(1)Mechanically propelled Road Rollers Fire

engine, fire escape Tenders

Totally exempted from

payment of tax.

(2) Conservancy cars and watering cars

maintained by the Local Authority or

maintained under contract for a Local

Authority and exclusively used for

conservancy or watering purposes.

(ii) GOVERNMENT OF BOMBAY NOTIFICATION NO.MTA. 1756-

1471 43557 XII.DATED 14-5-59.

Motor Vehicles other than transport vehicles

from payment of tax for the quarter in respect of

which a corresponding tax on those vehicles has

been paid in any other territory outside the State

of Bombay. This will come into force effect

from 1.4.59

Issued in Super session of

Government of Bombay

Noti.No.6122/4 dated 26-6-44

and Notification .No.9611.5

dated 5-1-50, Subject to

provisions of the B.M.V.Tax

Rules, 1959.

(iii) GOVERNMENT OF GUJARAT NOTIFICATION NO.MTD-1362-

5112-E DATED 13-2-63.

Totally exempted Transport Vehicles registered in any State other than the State of

Gujarat and Union Territory in India and chartered by tourists and carrying special

distinguishing mark specified by the Central Government under sub-section (6) of

Section 63 of the M V Act, 1939, from the payment of the tax provided that similar

reciprocal exemption is granted in such other State to transport vehicles registered in

the State of Gujarat, which are chartered by tourists and carrying special distinguishing

mark as aforesaid.

(iv) GOVERNMENT OF GUJARAT NOTIFICATION NO.MTD-1362-4242-

E DATED 14-11-63.

Exempted from payment of motor vehicles tax belonging to Gujarat State Road

Transport Corporation, which are under intimation of non-use but which are moved on

the road when such movement is exclusively between the garage and the workshop or

from one workshop to another, for the purpose of periodical checking, overhaul,

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repairs, painting or body building or for the purposes or road testing and such

movement is not for hire or reward.

(v) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/347 MTA-

1762-648-E DATED 10-2-65.

Totally exempted from payment of tax-Tractors for drawing trailers belonging to

Panjara poles and used by them for the transportation between the land cultivated by

them and their place of residence or godown or any market place, of agricultural

produce grown on such land or of materials required in connection with the cultivation

of such land.

(vi) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/920-MTA-

2062-400-E DATED 9-12-66.

Totally exempted from payment of tax-Motor vehicles owned by the Government of

Madhya Pradesh, other than those used for commercial purposes.(refer similar

notification of Government of Madhya Pradesh.)

(vii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/1077-

MTA-1765-10933-E OF 4-9-67.

Totally exempted from payment of tax-Motor Vehicles belonging to charitable

Institutions for the blind and used free of charge in furtherance of welfare of the blind

irrespective of their caste, creed or community.

(viii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/119-

MTA-1765-504-E DATED 11-10-67 :

Totally exempted from payment of tax-Motor Vehicles belonging to the United

Nations Agencies and Organisation.

(ix) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/1783-

MTA-1769-3765-E DATED 23-2-70:

Totally exempted from payment of tax-Motor Vehicles registered in the name of

CAREINC so far as the said Motor Vehicles are used exclusively for a philanthropic

object in the benefit of the public in general irrespective of their caste, creed or

community.

(x) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/1936-

MTA-78477-E DATED 7-8-70 :

Totally exempted from payment of tax-Motor Vehicles owned by the United States

Agency for International Development Mission. American Embassy, New Delhi and

used solely for the purposes of the work of the Gujarat Government, in connection

with the Agriculture Production Project.

162

(xi) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/

G/MTA.1766-21455-E DATED 5-4-71 :

Totally exempted from payment of tax- Wreckers (Break-down Vans) owned by the

Gujarat State Road Transport Corporation so long as the said vehicles are used

exclusively for State Transport purposes.

(xii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/

G/71/143/MTA-1771-56676-E DATED 9-8-71 :

Totally exempted from payment of tax-Motor Vehicles owned by the personnel of the

United States Agency for International Development Mission, so far as they remain

the employees of the said mission.

(xiii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/G/60

MTA/2564-1046-E DATED 18-4-64 :

Totally exempted from payment of tax-All Motor Vehicles intended to be used free of

charge as Mobile Dispensary or Mobile Vans or such other purposes and owned by

the Charitable Institutions and Hospitals, for welfare of the public in general

irrespective of their caste, creed or community".

(xiv) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/(G)

72/165/MTA/1769 (44043)E DATED 1-8-1972.

Totally exempted from payment of tax-All Motor Vehicles belonging to persons

physically handicapped if such vehicles are driven by them personally for use in

connection with their employment, trade or business.

(xv) GOVERNMENT OF GUJARAT HOME DEPARTMENT

NOTIFICATION NO. GH (G073/42/MTA/1773/1350-E DATED 15-2-

1973

Totally exempted from payment of tax-All Motor Vehicles belonging to any

organisation or Association or a Public body or an individual handed over to the State

Government for use for scarcity work so long as the vehicles remain with the State

Government for the said work. Such exemption shall be eligible to any vehicle on the

basis of a certificate issued by the Director of Relief that the said vehicle has been

handed over to the State Government for scarcity work.

(xvi) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/(B)

87/100/MTA-1782-1993 T DT.9-7-1987.

On supersession of Government Notification, Home Department

No.GH/G/76/212/MTA —1775-2913-E Dt.22-6-1976, the Government of Gujarat

exempted totally from the payment of motor vehicles tax, all motor ambulances

intended to be used solely for conveyance of the sick or injured irrespective of their

caste, creed or community, either free of charge or on payment of a charge of a

nominal rate not exceeding the following.

(i) `10 in lump sum or `2 per kilometer, whichever is more within municipal or

cantonment limits (including return journey)

163

(ii) `50 in lump sum or `3 per kilometer, which ever is more outside municipal or

cantonment limits (including return journey).

(xvii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/(B)

/87/116/MTA 2487/Mini/25/T dated 7-9-1987.

In supersession of Government Notification, Home Department No.GH/G/77/307-

MTA-1676-5742-E DATED 30-11-1977, the Government of Gujarat exempted

totally from payment of tax with effect on and from the 7th September,1987, the

tractors-cum-trailers belonging to agriculturists (being registered owners thereof )

and used by them for transportation between the land cultivated by them personally

and their place of residence or godown or any market place of agricultural produce

grown by them on such land or required by them in connection with the cultivation

of such and or of other material required for construction of farm houses or for

personal use or consumption but not for commercial or trade purposes.

(xviii) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/

(B)/88/25/MTA-2487/mini/25/T dtd.24-5-1988.

The Government of Gujarat amended the ports, Transport and Fisheries Department

Notification No.GH/B/87/116/MTA/2487/Mini/25-T dtd.7-9-1987 as follows,

namely:

For the words, figurers and letters ―from the 7th

September, 1987‖, the words, figures

and letters ―from the 1st April, 1987‖ shall be substituted.

(xix) GOVERNMENT OF GUJARAT NOTIFICATION NO.GH/B/

88/148/MTA-2487/Mini/25/T dtd.24-5-1988.

The Government of Gujarat exempted from the payment of the tax with effect on and

from the 1st June, 1988, the tractor-cum-trailers belonging to the Co-operative

societies of agriculturists (being registered owners thereof) and used by them or as the

case may be, members of such society solely for transportation of their own

agricultural produce grown by them on such land or required by them in connection

with the cultivation of such land or of other material required for construction of farm

houses or for personal use or consumption but not for commercial or trade purposes

and not given by them on hire or reward to other persons who are not members of

such society.

164

NOTIFICATION

Ports, Transport & Fisheres Department

Sachivalaya, Gandhinagar

Dated 9-7-1987

No.GH/B/87/100/MTA-1782-1993-T In exercise of the powers conferred by

sub-section (2) of section 13 of the Bombay Motor Vehicles Tax Act, 1958

(Bom.LXV of 1958), read with sub-rule (1) of rule 16A of the Bombay Motor

Vehicles Tax Rules, 1959 and in supersession of Govt. Notification, Home

Department no.GH/G/76/212 MTA-1775-2913-B dated the 22nd

June 1976, the

Government of Gujarat hereby exempts totally form the payment of motor vehicles

tax leviable under the said Act, all motor ambulances intended to be used solely for

the conveyance of the sick or injured irrespective of their casts, creed or community,

either free of charge or on payment of a charge at a nominal rate not exceeding the

following :-

1. `10/- in lump sum or `2/- per kilometer, whichever is more within

municipal or cantonment limits (including return journey);

2. `50/- in lump sum or `3/- per kilometer whichever is more outside

municipal and cantonment limits (including return journey)

Section Officer

Ports, Transport & Fisheries Deptt.

165

GUJARAT GOVERNMENT GAZETTE 22-7-1993

HOME DEPARTMENT

NOTIFICATION

Sachivalaya, Gandhinagar

Dated 5-7-1993

BOMBAY MOTOR VEHICLES TAX ACT, 1958

NO.GH/G/93/79/MTA/1592/69(II)KH- In exercise of the powers conferred by

clause (b) of sub-section (5) of section 3A of the B M V Tax Act, 1958 (Bom.LXV of

1958), the Government of Gujarat hereby authorises the Commissioner of Transport,

Gujarat State to be the officer to whom a registered owner or a person or a person

having possession or control of a designated omnibus, who has paid tax under section

3A has to prove to the satisfaction that the designated omnibus in respect of which the

tax has been paid, has for the reasons beyond the control of such owner or person not

been used or kept for the use for a continuous period of not less than one month but

exceeding three months in a year.

By order and in the name of the Governor of Gujarat

Joint Secretary to Govt.

166

4.9.2 SCRUTINY OF EXEMPTION ORDERS IN AUDIT:

Exemptions orders issued by the Government under Section 13(2) of the Tax Act

require careful scrutiny in audit from the point of view of competency, regularity and

propriety. These orders should be put up after scrutiny in receipt audit section to the

Sr.DAG for acceptance. The same principle would apply to remissions as well.

4.9.3 REFUNDS:

The grant of refunds of Motor Vehicles Tax paid in advance is regulated by Section 9

of the Tax Act and the corresponding Rules. Under the Rules and application in form

DT is to be submitted by an owner claiming refund. The Regional Transport Officer

after satisfying himself on the admissibility of a refund orders refund which is paid at

the treasury on a special form ET prescribed in the Motor Vehicles Tax Rules. The

refund bills are prepared on this from, a counterfoil bill book maintained by the

Regional Transport Officer with reference to the counter foil available in the book and

also register of refunds, maintained by the Regional Transport Officer refund

payments should be scrutinised in audit in order to see that the refunds are correctly

paid. In advance of the audit of a Regional Transport Office, the refund vouchers

should be arranged to be obtained from the Rajkot Office. It should be further ensured

in audit that a note of each refund is made by the Regional Transport Officer in the

appropriate pages of the Tax-index cards as well as the cash book as a safeguard

against double payment.

It should be ensured that the amount of refund has been correctly worked out against

the original entry and rules in respect of duplicate refund voucher and revalidation are

observed.

Write off: - In respect of orders of write off, of any taxes due to Govt. it should be

seen that the orders are issued by the competent authority. The circumstances leading

to the write off should be studied in detail in local audit so as to ensure that the write

off was not occasional be failure to take prompt action for recovery.

167

PART-B

BOMBAY MOTOR VEHICLES (TAXATION OF PASSENGERS ACT)

4.9.4 EXEMPTION: - The State Government may by notification in the

official gazette exempt totally or partially from payment of tax the passengers carried

in stage carriage on such inter-state routes as may be specified in the notification or

carried by stage carriages operating in furtherance of any educational, medical,

philanthropic or other object.

4.9.5 REFUNDS: - The Taxation officer is empowered to refund to an operator the

amount of tax, interest and the penalty, if any, paid by such operator in excess of the

amount payable under the Rules. The refund may be either by cash payment or at the

option of the operator by deduction of such excess period. Where, however, a demand

for tax against the operator has been issued, the tax officer should first apply the

access towards the demand and then refund the balance.

PART-C

CARRIAGE OF GOODS TAXATION ACT.

4.9.6 EXEMPTION: - The State Government may, subject to the provisions of

any Rules made in that behalf, by notification in the official gazette totally or partially

from payment of tax:-

(a) Any goods required to be so exempted in pursuance of any international

arrangement or obligation.

(b) Goods carried by or on behalf of any institution, recognised association or a

public body in furtherance of any educational, medical, philanthropic or

similar object.

(c) Tractor-cum-trailers owned by an agriculturist when used by him for or in

connection with agricultural operations or the carriage of his agricultural

produce to a market.

(d) Goods carried in such special or exceptional circumstances for such period

and on such terms and conditions as may be specified in the notification.

(e) Goods carried in any class of private goods vehicles or public goods vehicles,

other than those falling under clause (C) or goods carried in any goods

vehicles belonging to any class of persons.

Every notification issued shall be laid before the State Legislature as soon as may be

after it is issued any shall be subject to recession by the legislature or to such

modification as the legislature may make during the session in which it is so laid.

Any recession or modification so made by the State Legislature shall be published in

the official gazette and shall thereupon take effect.

4.9.7 REFUND: - The taxation officer can refund to an operator the amount of

tax, penalty and interest, if any, paid by such operator in excess of the amount due

from him from time to time. The refund may at the option of the operator be by

deduction of such excess from the amount of tax, penalty and interest, due from him

in respect of any other period. However the taxation officer shall before making any

168

such refund first apply such excess towards the recovery of any amount due in respect

of which a notice has been issued.

UNION TERRITORY OF DADRA & NAGAR HAVELI DAMAN AND DIU:

ACTS AND LAWS APPLICABLE TO:

4.10.1 GENERAL

The administration of the centrally Administered territory is carried out by an

Administrator, who is also the Lt. Governor of Goa, Daman and Diu. The Collector,

Daman, who is ex-officio Collector, Dadra & Nagar Haveli, looks after the day to day

affairs of this administration. He is assisted by the secretary to the Administrator.

4.10.2 The Bombay Motor Vehicles Tax Act, 1958, has been extended mutatis

mutandis to Union Territory of Dadra & Nagar Haveli with effect from 1-1-69. The

Motor Vehicles Department is under the charge of Chief of Police, who is the

licensing-cum-registering authority for Dadra & Nagar Haveli under the Motor

Vehicle Act.

(Annual Administrative Report of the Union Territory-73-74)

(Notification No.ADM/Law/223 dated 23-12-1968).

4. 10.3 RECIPROCAL AGREEMENT

Reciprocal Transport Agreement between Government of Gujarat and the

Administration of Union Territory of Dadra & Nagar Haveli has been entered into with

effect from 11-5-72, according to which the Gujarat State Road Transport Corporation

continues to run the Stage carriage services on the inter-State routes specified in the

agreement, as the Administration of Dadra & Nagar Haveli has no operators to run

stage carriage services on these routes.

4.10.4 In the Union Territory 40 Public carriers and 5 private carriers of Gujarat State

can operate under the permit countersigned by the Transport authority of Dadra

&Nagar Haveli and vice versa. Under this agreement, the vehicles of Gujarat State are

exempt from payment of Motor Vehicle tax to the Union Territory, whereas the

vehicles of Union Territory are liable to pay to the State of Gujarat the amount of

Motor Vehicle Tax equal to the difference between the amount of tax leviable by the

State of Gujarat and levied by the Union Territory of Dadra & Nagar Haveli. The

goods tax, if leviable, shall also be payable to the reciprocating State/Union Territory.

4.10.5 Temporary permits up to a limit of 20 private and public goods vehicles and

five contract carriages taxicabs per month can be issued by either State/Union

Territory Transport Authority to its vehicles, on the condition that the vehicles shall

be liable to pay the motor vehicle tax and goods tax due to the other State/Union

Territory, by demand drafts in advance through the permit issuing authority.

Provisions also exist to grant countersignature by either State/Union Transport

authority up to a limit of 4 taxicabs and 40 auto rickshas on payment of taxes due to

either State/Union Territory. This agreement is effective with effect from 1-4-73.

(Government of Gujarat Home Department Notification No.G/G/72/160/MVA-

7569.20193-E dated 26-7-72; Government of India, Gazette Part-III Section 3 dated

29-7-1972).

169

4.11.1 FLEET OWNERS (COMMISSIONER OF TRANSPORT OFFICE)

The Commissioner of Transport, Gandhinagar is the Administrative Head of the

Motor Vehicle Department. In addition, he is also declared as a taxation authority in

respect of fleet owners. In Gujarat, the Gujarat State Road Transport Corporation

(GSRTC) and Ahmedabad Municipal Transport Services (AMTS) are the only fleet

owners. Motor Vehicles Tax in respect of the vehicles operated by these bodies is

collected by the Commissioner of Transport. In view of the fact that a certain amount

of flexibility has to be allowed to such operators, in the matter of payment of tax by

these bodies depending upon the use or non-use of their vehicles and the limits within

which they operate during a year, the fleet owner procedure is contemplated in the

Tax Act and the Rules. In accordance with this procedure, the fleet owner has to

render to the Commissioner of Transport in February of each calendar year, a return

in form "HT" (Rule 16(1)) showing therein the vehicles in their possession which are

on the roads as on the date of the return. On the basis of this return, a provisional

assessment of the Motor Vehicle tax payable/on the vehicle is assessed by the

Commissioner of Transport in the form of an order issued by him in form "KT" (Rule

16(3)). During the course of the year, the GSRTC/AMTS go on intimating the

Commissioner of Transport of all changes to the vehicles, having a bearing on their

taxation. These mainly are non-use of vehicles, changes in limits of operation from

general to municipal area or vice versa and alteration in the vehicles (seating capacity

etc.). In the Commissioner's office a register of fleet owner's vehicles (FOVRegister)

is kept (At present the register is maintained in a different form JT) in which notings

are made of the intimations of charge received. In April of the subsequent year, the

GSRTC/AMTS shall send to the Commissioner a return in form IT/JT showing

manner of the vehicles operated during the year and the taxes payable thereon. These

returns are scrutinized by Commissioner's office with reference to the Register

maintained by them and final assessment of tax is made in an order of the

Commissioner of Transport in form "KT" (Rule 16(4)).

4.11.2 PAYMENT OF TAX BY VEHICLES BELONGING TO OTHER

STATES

Transport vehicles of other State entering in Gujarat requires permit issued by

Regional Transport Authority of the home State. At the time of issue of such a permit

the Regional Transport Authority of the home State will collect from the owner the

taxes due to Gujarat State for the period of intended stay of the vehicle concerned in

Gujarat and remit the amount collected to the Commissioner of Transport, Gujarat

State, by a demand draft. The Regional Transport Authority of different States send to

the Commissioner returns showing the details of the permit issued by them every

month and the particulars of demand drafts sent. These returns should be scrutinised

in audit to see that the demand drafts are in fact received and entered in the cash book

maintained by the Commissioner of Transport and credited to Government account,

without delay.

4.11.3 Details of such vehicles which enter in Gujarat State through one or other of

the check posts established by the State which are referred to in paragraph 4.2.2

which are maintained by inspectors of motor vehicles. The particulars of the vehicles

seeking entry are entered in a register maintained in the check post where such a

vehicles is one which carries the permit duly issued by a R.T.A. of another state with

proper endorsement thereon of demand draft particulars, the inspector would allow

170

entry to the vehicle after recording the particulars in his register. However, if the

vehicle does not carry a permit the inspector will collect from the owner permit fees

and appropriate taxes for the period of intended stay of the vehicle in Gujarat and

issue a receipt to the owner. The receipts are entered by the inspector in his cash book

and directly banked. The inspector will also make entry of such vehicle in his register.

From this register the inspector sends a return to the Commissioner of Transport every

month. These returns should be scrutinised in audit to see whether every vehicle

entering with a permit has paid taxes due to Government with reference to the demand

draft register. The cash realisation by the inspector and their banking will however

form a part of the check of the check post accounts in audit.

4.11.4 INTER-STATE RECIPROCAL AGREEMENT

The Government of Gujarat have entered in to Inter-State Reciprocal Transport

Agreements with the adjoining State of Maharashtra, Rajasthan, Madhya Pradesh, and

Union Territories of Goa, Diu, Dadra, Nagar Haveli and Delhi on the basis of single

point taxation. Under the terms of agreement, the permits of Public and Private goods

vehicles of one State are countersigned by the Reciprocating State and these vehicles

will be allowed to operate on inter-State routes without payment of tax for the

reciprocating State. For this a fixed number of vehicles of one State will be

recommended by the State Transport Authority of that State for counter signature by

the reciprocation State and vice versa.

The Government of Gujarat exempted with effect from 1st April 1997 the goods

vehicles plying between any other State and the state of Gujarat under Reciprocal

Transport Agreement and having counter signature of the State of Gujarat from the

payment of tax to the extent of amount exceeding `5,500 of motor vehicles tax liable

in the state of Gujarat for a period of each financial year irrespective of its gross

vehicle weight subject to the following conditions

(1) The said sum of `5,500 payable as tax is paid in full in advance for each

financial year.

(2) The tax shall be assessed on pro rata basis for quarter in which countersignature

has been granted and there after for other quarter. Quarter shall be taken as unit

and not in month and days.

(3) No refund on account of non-use or any other cause shall be permissible except

in a case where the replacement of vehicle has been granted. The tax paid in

respect of the vehicle covered by the countersignature permit shall be adjusted

towards the replaced vehicle.

(4) The tax leviable in respect of every such goods vehicles and any law relating to

tax on motor vehicles for the time being in force in Gujarat State has been paid in

full in relation to the financial year during which the vehicle is in use under the

authority of countersignature permit in the state of Gujarat and the holder of such

countersignature permit has obtained an endorsement there on that the tax has

been paid and produced it on demand for the inspection by any officer dully

authorisd or empowered by the State Government in this behalf.

(HOME DEPARTMENT NOTIFICATION NO.G/G/97/48/MTA/1097/947/KH

dated 31-3-1997. Effective from 1-4-1997).

171

4.11.5 A National Permit Scheme has also been implemented in the state. In

suppression of Government Notification Home Department No.GH/G

193/112/MTA/2093 3115/KH dated 1st September 1993, the Government of Gujarat

partially exempted goods carriages owned by public carriers National permits in

respect thereof issued by the appropriate authority of any of the States (other than the

State of Gujarat ) or Union Territories in India and who have chosen to operate their

goods carriages in the State of Gujarat, from payment of so much of the amount of tax

in excess of `5500 irrespective of the laden weight of the vehicle for a period of

twelve months, from the date of issue of authorisation, subject to the following

conditions namely :

(1) The said sum of `5,500 payable as tax is paid in full in advance for a period of

one year (herein after referred to as "composite tax) from the date of validity

of the national permit or authorisation.

(2) No refund on account of any circumstances shall be allowed.

(3) Where the said amount of tax remains unpaid on or before 15 days of the

period of validity of authorisation there shall be levied an additional sum of

`100 per month or part thereof for each of the States or Union Territories as

penalty for delay in the payment;

(4) The tax leviable in respect of every such goods carriage under any law relating

to tax on motor vehicles for the time being in force in any such State or Union

Territories has been paid in full in relation to the year so reckoned during

which the vehicle is in use under authority of such national permit in the State

of Gujarat and the holder of such national permit has obtained an endorsement

thereon that the Tax has been paid, produce it on demand for inspection by

any Officer duly authorised by the Sate Government in this behalf.

Explanation : For the purpose of this notification expression `national permit' means

a permit granted under sub-section (14) of section 88 of the Motor Vehicles Act,

1988.(59 of 1988)

(Amended vide Home Department Notification No.G/G/97/46/MTA 2093/3115/KH

dated 27-3-1997.

4.11.6 PAYMENT OF GOODS TAX BY INTER-STATE VEHICLES:

The accounts of goods tax now merged with Motor Vehicles Tax (1-4-97) payment by

vehicles covered under the agreements referred to above are maintained by the

Commissioner in the form of index cards. The assessment and collection of goods tax

in respect of inter-State vehicles should be scrutinised in audit with reference to the

declarations filed by the operators-under rule 4 of the Good Tax Rules, the index

cards and the receipts issued in order to see that the assessments are correctly made

and the collections properly accounted and remitted to the Treasury.

4.11.7 REGISTRATION PROCEDURE:

To begin with, application forms received during the year of audit for registration of

new vehicles should be taken up for audit. It should be seen whether the vehicles

registered have been correctly classified under the appropriate tax classification given

in the notification issued by Government under Section 3 of the Tax Act, special

172

attention being paid to goods and passenger vehicles in respect of which the rate of

tax is comparatively high.

4.11.8 In pursuance of the provisions of Section 58(1) of the Motor Vehicles Act,

1988, the Central Government has specified effective form 1-7-1989 that in relation to

the transport vehicles of all makes and models except motor cab, the maximum safe

laden weight of motor vehicles and maximum safe axle weight of each axle of such

vehicles shall be as follows, namely:

(1) The maximum safe laden weight and maximum safe axle weight of each in

relation to each make and model of such transport vehicle shall be as per the

rating of the maximum axle weight of each axle fixed by the manufacturer.

(2) The maximum safe axle weight determined in para (1) above shall be further

restricted to the maximum safe axle weight given in the `TABLE' below;

(3) The maximum safe laden weight in respect of all such transport vehicles shall

not be more than the sum total of all the maximum safe axle weight put

together.

TABLE

The maximum safe axle weight shall be as follows:

Tonnes

(i) Single axle (single wheel) fitted with 1 tyre 3.0

(ii) Single axle fitted with 2 tyres 6.0

(iii) Single axle fitted with 4 tyres 10.2

(iv) Tandem axle fitted with 8 tyres 19.0

4.11.9 REVIEW OF TAX INDEX CARDS/TAX REGISTERS

The tax index cards/tax registers should be reviewed to the extent prescribed to see

that owners pay tax regularly, penalty is levied according to rules for delay in

payment and recovery action is energetic.

4. 11.10 ALTERATION OF VEHICLES

The procedure for alterations of vehicles is set out in Section 52 of the Motor

Vehicles Act. Under Section 7 of the Tax Act when a vehicle in respect of which tax

is paid for a period is altered or used/ during such period in such a way as to make it

liable to a higher rate of tax than that at which tax was paid, the owner should pay to

Government difference of tax equal to the sum payable for the unexpired portion at

the higher rate less the sum paid already for that period. Under the tax rule, applicants

file declaration in form `BT' for such alteration. These declarations should be

scrutinised in audit and it should be seen whether the difference of tax has been

recovered correctly in all cases.

4.11.11 LICENSES

The audit scrutiny on licenses consists in checking whether for each service rendered

on applications, proper fees have been recovered.

173

4. 11.12 FITNESS CERTIFICATE FOR TRANSPORT VEHICLES

Under Section 56 of the Motor Vehicles Act every transport vehicle is required to be

in possession of a certificate of fitness. It should be seen in audit with reference to the

fitness cards maintained by the Regional Transport Officer whether transport vehicles

are inspected at required periodicity & whether fees for inspection and issue of

certificates are levied correctly (See Appendix-I).

4. 11.13 PERMIT

Transport vehicles need permits under Section 66 of Chapter V of the Motor Vehicles

Act. The fees for grant of different kinds of permits are prescribed in Motor Vehicles

Rules. Applications for permit received on paper affixed with appropriate court fee

stamp are entertained by the R.T.O.s. The applications are first entered in a register of

applications through which their final disposal is watched. The details of permit

issued are entered in suitable permit registers. These documents should be scrutinised

in audit with the view to seeing generally that the permits are issued after following

the prescribed procedure and appropriate fees are collected and credited to

Government.

4.11.14 PAYMENT OF GOODS AND PASSENGER TAX

The entries relating to pay load of vehicles on which lump sum payment of goods tax

is based which is noted by the Regional Transport Officer on the top of the Goods Tax

Register, it should be scrutinised with reference to the registration register which

records the registered laden weight of vehicles. It should also be seen that the

recovery of goods tax now merged with Motor Vehicle Tax (1-4-97) at periodic

interval is watched zealously, appropriate penalties levied for belated payment and

proceedings instituted against defaulters. Likewise the assessment and recovery of

passenger tax by the Regional Transport Officer should be scrutinised with reference

to the returns submitted by the operator.

4.11.15 DEPARTMENTAL ACTION CASES

These cases should be scrutinised in audit to see that fines and penalties levied for

offences are according to the law and competent executive orders.

4.11.16 In respect of offences against permit conditions the Regional Transport

Authority have laid down schedule of penalty to be imposed for different categories

of offences. It should be generally seen that fines are levied in accordance with such

directions, care being taken not to call in question discretionary exercise of powers by

executive excepting cases in which decisions are grossly wrong or mala fide. In such

cases no point should be included in the L.A.R. as a matter of routine but a note sent

confidentially for orders of the Accountant General. Any instruction issued by the

Government to finalise the D.A. cases may also be reviewed accordingly.

4.11.17 CHECK POSTS

In the audit of check posts it should be seen that the Inspector of Motor Vehicles

maintains the register of vehicles which enter Gujarat with proper details and the

prescribed returns are sent by him to the Commissioner of Transport. The cash book

174

and receipt book should be throughly scrutinised to ensure that all moneys collected

are remitted into Government Treasury and challans are on record. The correctness of

the amount fees/taxes collected should be scrutinised with reference to schedules as

prescribed.

4 11.18 CORELATION OF GOODS/PASSENGER TAX RETURNS WITH

TAX INDEX CARD.

Under the Motor Vehicle Tax Act non-use declaration can be filed and the concession

of not paying tax for such period availed of. The interlinking in audit of the goods

now merged with MVT passenger tax record with the motor vehicles tax index

card/non-use declaration can indicate cases in which non-use concessions were

incorrectly availed of. Similarly in respect of a new goods vehicle passenger vehicle

registered it should be seen in audit that corresponding entry is made by the Regional

Transport Office in the goods/passenger tax record so that the recovery of the latter

taxes is not lost sight of.

4.11.19 RECOVERY OF TAX:

In respect of Motor Vehicle Tax, the tax index card/tax register serves as the record of

payment of tax. On the expiry of the tax payment period the tax index cards/tax

registers are reviewed by the department and the position of payment of tax in respect

of each registered vehicle noted in a position register. From this register, cases of non-

payment of tax are entered in a demand notice register. Where however tax is paid by

an owner in some other region, an enquiry letter is issued to the tax officer of the

other region. The demand notice register serves as the basis for further action for

recovery through the Recovery Mamlatdar. It should be seen in audit that each one of

the above stages is correctly followed by the tax officer and there is no avoidable

delay in the review of the card register the posting of the position register, and the

issue of demand notices/enquiry letter. It must be ensured that in respect of each

defaulting vehicle the process of recovery is carried to its completion and cases of

write off of revenue are reduced to the minimum.

In regard to payment of goods tax a similar procedure is followed. In these cases on

review of the register after each quarter demand notices are issued to owners of

vehicles in default.

It should be seen in audit that the review action is efficiently done and demands are

issued without any avoidable delay.

The bulk of the revenue on passenger tax is received from the Gujarat State Road

Transport Corporation which is a statutory corporation, Revenue on this account is

also received to a lessor extent from the transport service operated by the Ahmedabad

Municipal Corporation. The returns of passenger fares collected and the passenger tax

paid to Government are received from the undertaking in the office of the

Commissioner of Transport, where the returns are scrutinised in audit. The

Commissioner of Transport has accepted the suggestion of audit that the returns

submitted by these main operators may be got certified by statutory auditors so that

there may be an independent verification of the correctness of the particulars

furnished in the return. In the audit of these returns it should be mainly seen whether

the passenger tax payable to Government is correctly worked out on the basis of the

figures of fare collections shown therein.

175

In regard to contract carriage operation the passenger tax is usually collected by the

Regional Transport Officer at the time the permit for the contract operation is given.

Where contract operation is under taken by the Gujarat State Road Transport or the

Municipal Transport Services fares collected are according to tariff prescribed by

them. In respect of such operation no difficulty is encountered in checking the

passenger tax collected with reference to the particulars of the journey furnished and

the mileages given in the standard Road Map.

4.11.20 RECONCILIATION WITH TREASURY ACCOUNTS:

In RTO and ARTO, heavy cash collections are made in the tax collection period. The

procedure for the receipt of money the issue of receipts therefor and the entry of the

moneys received in the cash book was referred to in Chapter-2. In this paragraph,

reference was also made to maintenance of summary register in the RTO/ARTO for

the purpose of affording the head of office an effective control over the moneys

received as reported by the Cashier (Cash-book) and as reported by the accounts

branch. The proper maintenance of this register is to receive careful attention in audit.

Under Rule 98(2) of the Bombay Treasury Rules it is the duty of the head of office to

call for from the treasury officer at the end of each month a consolidated receipt for

all remittances made during the month which should be compared by him with the

postings in the cash-book. It should be ensured in audit that this important

reconciliation is properly observed by the RTO/ARTO/check posts. The statements of

the treasury should be called for in audit for the months selected and it should be

verified that all moneys entered in the cash-book as paid into the treasury have been

acknowledged by the treasury officer and there is no scope for embezzlement.

In the absence of the proper maintenance of the summary register and the independent

scrutiny by the accounts branch it is easily possible for an unscrupulous cashier to

defalcate Government money by the simple device of entering the correct amount

received in the copies of the receipt meant for the tax payer and for record with the

vehicle file and entering a lesser amount in the last copy of the receipt which remains

with the receipt book. In such an event the check of the triplicate receipt book. In such

an event the check of the triplicate receipt book with the cash-book will not serve to

expose the defalcation. The verification with the treasury record would not also

indicate any irregularity. A fraud of this nature will not come to light in the scrutiny

of the tax index card or other record kept for noting payment, since these records are

posted with reference to the copy of the receipt containing the correct amount. On his

part the tax payer will have no reason to complain because he is in possession of the

receipt for correct amount paid and there is no occasion what-so ever for the

department to issue any demand notice on him.

In order that such a fraud is not practiced, audit should not rest content with the

scrutiny of the summary register and Cash-book posted by the departmental staff. To

the extent prescribed in the Comptroller and Auditor General of India‘s instructions

audit should verify independently the receipt recorded in the tax index

card/vehicle/other relevant file with the cash-book posting instead of checking the

cash book with the triplicate copy of the receipt alone.

The scrutiny of independent verification to the prescribed extent should be conducted

by the receipt audit party while the tracing of triplicate receipts into the cash-book,

striking the totals of the cash-book, reconciliation with treasury statement etc. will

form part of expenditure audit.

176

OFFENCES AND PENALTIES

PART-A

MOTOR VEHICLE TAX ACT 1958 AND RULES FRAMED THEREUNDER.

4.12.1 INCOMPLETE AND UNTRUE DECLARATION

Whoever delivers a declaration or additional declaration, wherein the particulars

required by the Act to be set forth are not fully and truly stated or obstructs any

officer in the exercise of powers conferred upon him under the Act to enter any

premises where a motor vehicle is kept or require the driver of any motor vehicle at

any public place to stop the vehicle for the purpose of ascertaining whether taxes due

under the Act has been paid shall on conviction be punished with fine not less than the

quarterly tax and extending to a sum equal to the annual tax on the vehicle concerned.

In the event of such a conviction after the first offence the fine shall be not less than

the tax due for two quarters and will extend to twice the annual tax in the respect of

the vehicle.

4.12.2 NON PAYMENT OF TAX

Where the tax or any portion of the tax due for any period is not paid the taxation

authority can levy in addition to the tax due a penalty not exceeding 25 per cent of the

amount of tax payable for such period in respect of that motor vehicle.

4.12.3 PENALTY FOR CONTRAVENTION OF RULES.

In respect of contravention of the following Motor Vehicle Tax Rule, conviction and

fine which may extend to two hundred rupees are provided for.

(i) Rule 6 manner of filling in form AT.

(ii) Rule 7 manner of delivery of AT declaration.

(iii) Rule 8 relating to period within which declaration is to be made.

(iv) Rule 9 governing additional declaration in form BT.

(v) Rule 16 declaration by a fleet owner.

(vi) Rule 17 application for exemption in form MT.

(vii) Rule 21 declaration in Form FT of other State vehicle.

(viii) Rule 24 manner of exhibition of Tax Token on the vehicle.

4.12.4 OTHER PENALTIES

Whoever contravenes any of the provisions of the Act shall on conviction be punished

with fine extending to `100/- in the case of the 1st offence and to `.200/- in respect of

subsequent offences. This provision applies if no other penalty is provided elsewhere

for such a contravention.

177

PART-B

The Gujarat Motor Vehicle (Passenger Taxation) Act, 1958 and the Rules famed

thereunder

4.12.5 OFFENCES AND PENALTIES AND COMPETENT COURT.

(1) Any person who: -

(a) being an operator, submits or allows to be submitted an incorrect or

incomplete return under section 4 or fails to submit a return as required under

that section, or

(b) being an operator, fraudulently evades or allows to be evaded, the payment of

any tax due from him, or,

(c) being an operator, fraudulently makes or allow to be made any wrong entry in,

or fraudulently omits or allow to be omitted any entry from, any statement

submitted, or any accounts or register maintained by him, or,

(d) willfully acts in contravention of any of the provision of this Act or any Rules

made there under or any lawful orders passed in accordance therewith.

Shall, on conviction, be punished with fine which may extend to one thousand

rupees, and if the Magistrate so directs in his order, the person convicted shall

pay in addition, as if it were a fine, such specified amount as the Magistrate

may determine to be the amount which the person convicted had evaded to

pay.

No offence punishable under this Act shall be inquired into or tried by any

court inferior to that of a Magistrate of the second class.

4.12.6 OFFENCES BY COMPANIES

(1) Where an offence under this Act has been committed by a company, every

person who at the time the offence was committed, was in charge of and was

responsible to the company for the conduct of the business of the company, as

well as the company shall be deemed to be guilty of the offence and shall be

liable to be proceeded against and punished accordingly.

Provided that nothing contained here in shall render any such person liable to

any punishment provided without his knowledge or that he exercised all due

diligence to present the commission of such offence.

(2) Where an offence under this Act has been committed by a company that the

offence has been committed with the consent or connivance of or is attributable

to an neglect on the part of, any director, manager, secretary, or other officer

such office shall also be deemed to be guilty of that offence and shall be liable

to be proceeded against and punished accordingly.

EXPLANATION: -

(a) ―company‖ means a body corporate, and includes a firm or other association

of individuals, and

(b) ―director in relation to a firm means a partner in the firm,

178

COMPOSITION OF OFFENCES

4.12.7 The Tax Officer may, either before or after the institution proceedings for any

offence punishable under Section 15, accept from any person charged with such

offence by way of composition of the offence, where the offence charged consists of

the evasion of the tax, a sum of money not exceeding double the amount of the tax

recoverable, in addition to the amount of tax so recoverable, and in other cases, a sum

of money not exceeding two hundred and fifty rupees.

PART-C

The Gujarat Carriage of Goods Taxation Act, 1962 and Rules made there under

4.12.8 PENALTY FOR NON-PAYMENT OF TAX

Any operator failing, without reasonable cause, to pay tax within time under the

provisions of the Act shall be liable to pay in addition to the amount of the tax a sum

not exceeding 25 per cent, thereof as penalty.

4.12.9 OFFENCES & PENALTIES & COMPETENT COURT

(1) ANY PERSON WHO

(a) Being an operator

(i) submits or allows to be submitted an incorrect or incomplete return or fails to

submit a return as required by or under any provisions of this Act, or

(ii) fraudulently evades or allows to be evaded, the payment of any tax due form

him, or

(iii) fraudulently makes or causes or allows to be made any wrong entry in, or

fraudulently omits or causes or allows to be omitted any entry from, any

statement submitted, or any accounts or register, or

(b) willfully acts in contravention of any of the provisions of the Act or the Rules or

any lawful orders passed in accordance therewith, shall, on conviction, be

punished with fine which may extend to one thousand rupees, and if the

Magistrate so directs in his order shall be liable to pay in addition as if it were at

fine, such specified amount as the Magistrate may determine to be the amount

the payment of which he had evaded.

(2) No offence punishable under the Act shall be inquired into or tried by any

court inferior to that of a Magistrate of first class and except on complaints made by

the Taxation Officer or by any other officer, authorized in that behalf by the State

Government by a general or special order.

4.12.10 OFFENCES BY COMPANIES

(1) Where an offense under this Act has been committed by a company every

person who at the time the offense was committed, was incharge of, and was

responsible to the company for the conduct of the business of the company, as well as

the company shall be deemed to be guilty of the offence and shall be liable to be

prosecuted against and be punished accordingly.

179

Provided that, nothing contained here in shall render any such person liable to any

punishment provided in the Act if he proves that the offence was committed with out

his knowledge or that he exercised all due diligence to prevent the commission of

such offence.

(2) Where an offence under the Act has been committed by a company and it is

proved that the offence has been committed with the consent or connivance of or is

attributable to any neglect on the part of any director, manager, secretary or other

officer of the company, such director, manager, secretary or other officer shall also be

deemed to be guilty of that offence and shall be liable to be prosecuted against and

punished accordingly.

Explanation : (a) "Company" means a body corporate and includes a firm or other

association of individuals and

(b) ―Director‖ in relation to a firm means a partner in the firm.

4.12.11 COMPOUNDING OF OFFENCES

(1) The Taxation Officer may either before or after the institution of proceedings

for any offence punishable under Section 23 accept from any person charged with

such offense by way of composition of the offence where the offence charged consists

of the evasion of payment of tax, a sum of money not exceeding double the amount of

the tax recoverable, in addition to the amount of tax so recoverable, and in any other

case, a sum of money not exceeding two hundred and fifty rupees.

(2) On the payment of such sum as may be determined by the Taxation Officer

under sub-section (1), if any criminal proceeding have been instituted against such

person in respect of the offence, the composition shall be deemed to amount to an

acquittal, and no further proceedings shall be taken against such person in respect of

the same offence.

4.13 AUDIT CHECKS

The sampling technique and the audit checks to be adopted while conducting audit in

respect of Motor Vehicle Tax has been brought out in Annexure-4(A) and Annexure-

4(B) respectively.

180

APPENDIX-I

(as referred to in paragraph 4.3.4 & 4.3.16)

Fees to be levied under the Central Motor Vehicles Rules 1989.

LICENSING OF DRIVERS OF MOTOR VEHICLES

Rule-32 :- Amount

1 In respect of issue or renewal of

learner's licence for each class of

vehicle `30

2 In respect of issue or renewal of a

driving licence in Form 6 (Card Board

type) `40

2A In respect of international Driving

Permit in Form 6A `500

3. In respect of issue of a driving

license in Form 7 (laminated card type) `250

4. For test of competence to drive `50

5. In respect of addition of another

class of vehicle to driving licence

in Form 6 `30

6. In respect of renewal of a driving

license in Form 6 to drive a motor vehicle `50

7. In respect of renewal of a driving

license in Form 6 to drive a motor

vehicle for which application is

made after the grace period.

Additional fee at the rate of `100

for a period of delay of one year

or part thereof reckoned from the

date of expiry of the grace period

8. In respect of renewal, addition of

another class of motor vehicle to the

driving licence in Form-7. `200

8A In respect of renewal of driving

license in form 7 `250

8B In respect of renewal of driving

181

license in Form 7 for which application

is made after the grace period `200 and additional fee

of `50 for each year or

part thereof

9. In respect of issue and renewal of

licence to a school or establishment `2,500

for imparting institution in driving.

10 In respect of issue of duplicate licence

to the school or establishment

imparting institution in driving `2,500

11 In respect of an appeal against the

orders of licensing authority referred

to in Rule 30 `100

Rule 81 :-

1. Grant and renewal of trade certificate

in respect of each vehicle

Motor Cycle `50

Invalid Carriage `50

Others `200

2. Duplicate trade certificate

Motor Cycle `30

Invalid Carriage `30

Others `100

3. Appeal under Rule-16 `100

4. Issue, renewal of certificate of

registration and assignment of new

registration mark.

Invalid Carriage `20

Motor Cycle `60

Light Motor Vehicle (non-transport) `200

Light Motor Vehicle (Light Commercial) `300

Medium Goods vehicle `400

Heavy Goods Vehicles `600

Medium Passenger Motor Vehicle `400

Heavy Passenger Motor Vehicle `600

182

Imported Motor Vehicle `800

Imported Motor Cycle `200

Any other vehicle not mentioned above `300

5. Issue of duplicate certificate of Half of the fee

registration mentioned in Sr.No.4

6. Transfer of ownership Half of the fees as

mentioned

in Sr.No.4

7. Change of residence `20

8. Recording alteration in certificate

of registration `50

9. Endorsing hire-purchased/lease/

hypothecation agreement `100

10 Cancellation of hire-purchase/

lease/hypothecation agreement or

issue of fresh certificate of registration `100

11 Grant and renewal of certificateof fitness

(i) Two/three wheeled vehicles `100

(ii)Light Motor Vehicle `200

(iii)Medium motor vehicle `300

(iv)Heavy Motor Vehicle `400

12. Grant or renewal of certificate of

fitness for motor vehicle `100

13 Grant or renewal of letter of authority `500

14 Issue of duplicate letter of authority `500

15 Appeal under Rule 70 `400

Note:- For the removal of doubts, it is hereby declared that Medium passenger motor

vehicle, heavy goods vehicle, imported motor vehicle and any other vehicles not

mentioned in Serial No. 4 of this table include both transport and non transport

vehicles.

Provided that in case for any purpose referred to in Serial Nos. 4,5,6,7,8,9 and 10 of

this table is issued on any smart card, an additional amount of fee of rupees two

hundred shall be charged for each such card.

Rule-83

Fees for the grant of authorization of

tourist permit per annum `500 per annum

183

VALIDITY OF CERTIFICATE OF FITNESS

Rule-62

(a) New transport vehicle Two years

(b) renewal of certificate of fitness

in respect of vehicles mentioned

in (A) above One year

(c) renewal of certificate of fitness

in respect of vehicles covered under

rule 82 of these rules One year

(d) fresh registration of imported vehicles Same period in the

case of vehicles

manufactured in

India having regard

to the date of

manufacture

FEES PAYABLE UNDER GUJARAT MOTOR VEHICLES RULES, 1989.

New Delhi Nootn GSR 933(E) dtd.28-10-1989 (Rates were revised vide New Delhi

RT-11028/3/97-MVL dtd.11-10-1999 effective from 22-10-1999) for imported

vehicles

Same period in the case of vehicles manufactured in India having regard to the date of

manufacture.

FEES PAYABLE UNDER GUJARAT MOTOR VEHICLES RULES, 1989.

Sr.No

Clause Description Rule Fees-`.

Rule 6 Fees payable under Chapter II

1. (i) A test for grant of learner‘s

Licence

4 25

2. (ii) Replacement of Photograph on a

licence

12 25

3. (iii) Duplicate Driving Licence 13 Smart Card 200

Book Type 50

4. (iv) Test for Grant of Authorisation 18 50

5. (v) Appeal 20 20

6. (vi) Each copy of document 20 10

7. (vii) Every copy of particulars of

Driving licence

21 5

184

Rule 26 Fees Payable under Chapter III

8. (i) Test for grant of conductors

licence

30 30

9. (ii) Replacement of Photograph on

conductor‘s licence

34 20

10. (iii) Duplicate conductors Licence 35 30

11. (iv) Appeal 37 10

12. (v) Copy of any document

37 10

Rule 43 Fees payable under chapter IV

13. (i) Appeal 41(I) 50

14. (ii) Copy of any documents 58(2)&(3) 10

15. (iii) Facilities to depute IMV per

vehicle

46 10

16. (iv) Extention of validity of CF. 51(2) 20

17. (v) Certificate of registration or each

extention thereof

52(1) 100

18. (vi) Duplicate copy of certificate of

temp-Registration

100

19. (vii) Duplicate copy of certificate of

fitness

Half the fees mentioned in

Sr.No.II or Rule-81 of Central

M. V.Rules 1989

20. (viii) Each copy of particulars of

Registration

59 10

Rule 71 Fees payable under chapter V

21. (i) Appeal or revision 108 60

22. (ii) Each copy of any document

connected with appeal or

revision

10

23. (iii) Temporary permit or a special

permit for each calender month

or part thereof

100

24. (iv) Any other permit 350

25. (v) Countersignature of permit 300

26. (vi) Variation of condition of permit 300

27. (vii) Agents license with respect to

public service vehicles

150

185

28. (viii) Agents license (Principal or

supplimentry) with regards to

goods carriage.

250

29 (ix) Renewal of any permit or

countersignature

200

30 (x) Renewal of agents license (PSV) 100

31 (xi) Renewal of agents license

(Principal or supplementary)

with regards to goods carriage

150

32 (xii) Duplicate copy of temporary or

special permit

125

33 (xiii) Duplicate copy of any other

permit or counter signature

150

34 (xiv) Duplicate copy of an agents

license

150

35 (xv) Replacement of motor Vehicle

covered by permit

10

36 (xvi) Transfer of any permit or

counter signature of a permit

30

37 (xvii) Recording change of Address of

the holder of permit

150

38 (xviii) Application for approval of taxi

Motor

100

186

APPENDIX-II

(As referred to in paragraph 4.5.2)

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 31st July,1990

BOMBAY MOTOR VEHICLES TAX ACT, 1958

NO.GH/G/90/65/MTA/1590-1845-KH.-In exercise of the powers conferred by sub-

section (1) of section 3 of the Bombay Motor Vehicles Tax Act, 1958 (Bom.LXV of

1958) and in supersession of Government Notification. Home Department

No.GH/G/86/84/MTA/2685/2425/E-2, dated the 31st March, 1986, the Government of

Gujarat hereby directs that on and from the 1st day of August, 1990, there shall be

levied and collected a tax at the annual rate specified in column 2 of the Schedule

appended hereto on the motor vehicles specified in the corresponding entry in column

1 of the said Schedule used or kept for use in the State of Gujarat.

SCHEDULE

Motor Vehicles

1

Annual rate of tax

2

Part-I Motor Vehicles using motor spirit.

A. Motor Vehicles fitted solely with pneumatic tyres.

I. Motor Vehicles (including tricycles)

used for the carriage of goods or materials.

(a) Vehicles the registered laden weight of which

does not exceed 750 KG.

`.253

(b) Vehicles the registered laden weight of which

exceeds 750 KG. but does not exceed 1500 KG.

`.471

(c) Vehicles the registered laden weight of which

exceeds 1500Kg.but does not exceed 3000 Kg.

`.718

(d) Vehicles the registered laden weight of which

exceeds 3000 Kg.but does not exceed 4500 Kg.

`.1,035

(e) Vehicles the registered laden weight of which

exceeds 4500 Kg. But does not exceeds 6000 Kg.

`.1,380

(f)Vehicles the registered laden weight of which

exceeds 6000 Kg. But does not exceed 7500 Kg.

`.1,495

(g) Vehicles the registered laden weight of which

exceeds 7500 Kg.

`.1,495 plus `.115/- every

250 Kg.or part thereof in

excess of 7500 Kg.

Provided that where a tax on motor vehicles is levied (i) In case where such

187

by any local authority the annual rates of tax for

motor vehicles registered for use solely within the

limits of such local authority shall;

motor Vehicles are wholly

or partially exempted by

such local authority from

the tax levied by such

local authority, be the

rates specified in this

clause;

(ii) in any other case,

be two- thirds of the rates

so specified.

II. Motor Vehicles (including tricycles ) plying for

hire and used for the carriage of passengers:-

(a) Vehicles licensed to carry in all not more than

three passengers

(b) Vehicles licensed to carry in all four

passengers.

(i) More than 4 passengers but not more than 9

passengers.

(ii) more than nine passengers

`.200

`.540

`.540/- plus `.60/- for

every passenger in addition

to four passengers in which

the vehicle is so licensed to

carry –

`. 840/- plus an amount

calculated at the following

rate in respect of every

passenger which the

vehicle is license to carry

in addition to nine namely

(b) `.72/- per seating

accommodation for

every such passenger

and;

(b) `.36/- per standing

accommodation for

every such passenger.

Provided that where a tax on motor vehicles is levied

by any local authority the annual rates of tax for

motor vehicles registered for use solely within the

limits of such local authority shall;

(i) in case where such motor vehicles are wholly

or partially exempted by such local authority form

the tax levied by such local authority, be the rates

specified in this clause;

(ii) in any other case, be two-thirds of the rates so

specified.

188

III. Breakdown vans used for towing disabled

vehicles.

`.250

IV. Motor Vehicles other than those liable to tax

under the foregoing provisions of this Schedule,

(i) Owned by an individual, a local authority, a

public trust, a University or an educational or social

welfare institution.

(a)Vehicles exceeding 2250 Kg.in weight, unladen, in

which the total number of seats (including that of the

driver) and of the standing persons permitted to be

carried in accordance with the condition of permit

granted to the owner of the vehicle does not exceed

twenty.

(b) Vehicles exceeding 2250 Kg.in weight,

unladen, in which the total number of seats

(including that of the driver) and of the standing

persons permitted to be carried in accordance with

the conditions of permit granted to the owner of the

vehicle exceeds twenty;

(ii) Owned by a person other than an individual, a

local authority, a public trust, a University, or an

educational or social welfare institution.

`.540

`.540/- plus `.20/- for each

such number in excess of

twenty.

Twice the rates specified

above.

V. Additional tax payable in respect of motor

vehicles used for drawing trailers

(i) for each trailer when the trailer is used for the

carriage of goods.

(ii) For each trailer when the trailer is used for the

carriage of passengers.

(iii) For each trailers when the trailer is used for

any other purpose.

The rates specified in

clause I in respect of Motor

Vehicles used for the

carriage of goods or

materials.

The rates specified in

clause II in respect of

motor vehicles plying for

hire and used for the

carriage of passengers.

`.50

Provided that two or more vehicles shall not be

chargeable under the clause in respect of same trailer.

189

VI. Motor Vehicles falling under Twice the rates

specified clause II or Clause IV in clause II or as the

case manufactured out of India may be clause IV and

imported into India after the 31st March,1957.

Explanation-I: For the purpose of Clause IV,

(1) ―educational institution‖ shall mean such

educational institution is recognised by the State

Government by order notified in the Office Gazette in

this behalf;

(2) ―local authority‖ shall mean any Municipal

Corporation, Municipality Cantonment Board or

Panchayat constituted under any law for the time

being in force in the State of Gujarat;

(3) ―public trust‖ shall mean a public trust

registered under the Bombay Public Trust Act, 1950

(Bom.XXIX of Gujarat.

(4) ―Social Welfare Institution‖ shall mean any

institution engaged in any activity conducive to the

welfare of the general public and recognised by the

State Government by order notified in the Official

Gazette, for the purposes of those clauses;

(5) ―University‖ shall mean a university

established by or under any law for the time being in

force in the State of Gujarat.

Explanation II- If a motor vehicle is jointly owned

by more persons than one, then not with standing

anything contained in the provisions to sub section(1)

of Section 41 of the Motor Vehicles Act, 1988, such

motor vehicles shall for purposes of clause IV, be

deemed to be owned by person other than an

individual.

B. Motor Vehicles other than those fitted solely with

pneumatic tyres.

Part-II. Motor Vehicles using fuel other than motor

spirit.

190

The rates shown in class A

plus fifty per centum.

The rates shown in part-I

plus a surcharge of fifty per

centum on all or any class

of motor vehicles

mentioned therein provided

the such surcharge shall

not exceed.

(i) `.636 in case of

motor vehicles mentioned

at item (ii)of sub-clause II

or part-I, and (ii) `.900/-in

any other case.

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar,31st July,1990

BOMBAY MOTOR VEHICLES TAX ACT, 1958.

No.GH/G/90/66/MTA/1590/1845/KH-In exercise

of the powers conferred by sub-section (1) of section

3 of the Bombay Motor Vehicles Tax Act, 1958

(Bom.LXV o 1958) and in supersession of

Government Notification, Ports, Transport and

Fisheries Department

No.GH/B/87/38/MVA/1685/4853-T, dated the 3rd

April, 1987,the Government of Gujarat hereby directs

that on and form the 1st day of August, 1990, there

shall be levied and collected a tax at the rates

specified in column 2 of the Schedule appended

hereto on the motor vehicles specified in the

corresponding entry in column 1 of the said Schedule,

used or kept for use in the State of Gujarat.

Schedule

Motor vehicles (other than transport vehicles)

registered in the State of Gujarat on or after the 1st

August, 1990.

Part-I Motor Vehicles using motor spirit.

Rate of lump sum tax.

191

A. Motor Vehicles fitted solely with pneumatic

tyres.

I. Motor cycles and tricycles (including motor –

scooters and cycles with attachment for propelling

the same by mechanical power)

(i) Owned by an individual, a local authority, a

public trust, a University or an educational or

social welfare institution.

(a) Cycles not exceeding 50 Kg in weight

unladen

(b) Cycles exceeding 50 Kg in weight, unladen

but not exceeding 100 Kg.weight, unladen

(c) Cycles exceeding 100 Kg in weight, unladen

(d) Tricycles

(e) Cycles or tricycles used for drawing a trailer

or side-car

(ii) Owned by a person other than an individual

a local authority a public trust, a University or

an educational or social welfare institution.

II. Motor Vehicles not exceeding 250 Kg in

weight, unladen adopted and used for invalids.

III. Motor Vehicles other than those liable to tax

under the forgoing provisions of this Schedule

(i) owned by an individual, a local authority, a

public trust, a University or an educational or

social welfare institution.

(a) Vehicles not exceeding 750 Kg in weight,

unladen.

(b) Vehicles exceeding 750 Kg in weight,

unladen but not exceeding 1500 Kg in

weight, unladen.

(c) Vehicles exceeding 1500 Kg in weight,

unladen, but not exceeding 2250 Kg in

weight, unladen.

(ii) owned by a person other than an individual, a

local authority, a public trust, a University or an

educational or social welfare institution..

IV. Motor Vehicles falling under clause I or

Clause II and manufactured out of India after the

31st March 1957.

`.190

`.480

`.720

`.720

`.300 in addition to the

rates specified above.

Twice the rates specified

above

`.80

192

`. 1,800

`.3,000

`.3,900

Twice the rates specified

above.

Twice the rates specified in

clause I, or as the case may

be clause-III.

Explanation-I For the purpose of clause I and

Clause III

(1) ―educational institution‖ shall mean such

educational institution as is recognised by the

State Government by order notified in the Official

Gazette in this behalf.

(2) ―local authority‖ shall mean any municipal

corporation, municipality, cantonment board or

panchayat constitued under any law for the time

being in force in the State of Gujarat.

(3) ―public trust‖ shall mean a public trust registered

under the Bombay Public Trust Act, 1950 (BOM-

XXIX of 1950) as in force in the State of Gujarat.

(4) ―social welfare institution‖ shall mean any

institution engaged in any activity conducive to

the welfare of the general public and recognised

by the State Government by order notified in the

Official Gazette, for the purpose of these clauses.

(5) ―University‖ shall mean a University, established

by or under any law for the time being in force in

the State of Gujarat.

193

Explanation II – If a motor vehicle is jointly

owned by more persons than one, then not

withstanding anything contained in the provision to

sub-section (1) of section 41 of the Motor Vehicle

Act, 1988, such motor, vehicle shall, for purposes of

clause I and clause III, be deemed to be owned by a

person other than an individual.

B. Motor vehicles other than those fitted soley with

pneumatic tyres.

Part-II Motor Vehicles using fuel other than motor

spirit.

The rates shown in class A

plus fifty per centum.

The rates shown in Part I

plus a surcharge of fifty per

centum on all or any class

of motor vehicles

mentioned therein.

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 31st July,1990

BOMBAY MOTOR VEHICLES TAX ACT, 1958.

No.GH/G/90/67/MTA/1590/1845/KH. In exercise

of the power conferred by sub-section (1) of section 3

of the Bombay Motor Vehicles Tax Act, 1958

(Bom.LXV of 1958) and in supersession of

Government Notification. Ports, Transport and

Fisheries Department

No.GH/B/87/39/MVA/1685/4853/T, dated the 3rd

April, 1987, the Government of Gujarat hereby

directs that on and form the 1st day of August, 1990,

there shall be levied and collected a tax at the rate

specified in column 2 of the Schedule appended

hereto on the motor vehicles specified in the

corresponding entry in column 1 of the said Schedule,

used or kept for use in the State of Gujarat.

194

SCHEDULE

(Rate of lump sum tax)

Motor Vehicle (other

than transport vehicles)

registered in any other

State before or on or

after the 1st August,

1990

Cycles not

exceeding

50 KG in

weight

unladen

Cycles

exceeding

50 KG in

weight,

unladen

but not

exceeding

100 KG in

weight

unladen

Cycles

exceedin

g 100 Kg

in weight

unladen

Tricylces Cycles and

Tricycles

used for

drawing

trailor or

side car.

(1) (a) (b) (c) (d) (e)

`. `. `. `. `.

Part-I Motor Vehicles

using motor spirit,

A. Motor Vehicles fitted

solely with

Pneumatic tyres.

1. Motor Cycles and

tricycles (including

motor-scooters and

cycles with attachment

for propelling the same

by mechanical power)

(i) Owned by an

individual, a local

authority, a public trust, a

University or an

educational or social

welfare institution. If the

Vehicle is already

registered and its age

form the month of

registration

In addition

to the rates

specified in

column (a)

(b) (c) or

(d)

(i) not more than 2 years 168 444 672 672 276

195

(ii) more than 2 years but

not more than 3 years

144 408 624 624 252

(iii) More than 3 years

but not more than 4 years

120 372 576 576 228

(iv) more than 4 years

but not more than 5 years

96 336 528 528 204

(v) more than 5 years but

not than 6 years

72 300 480 480 180

(vi) more than 6 years

but not more than 7 years

48 264 432 432 156

(vii) more than 7 years

but not more than 8 years

24 228 384 384 132

(viii) more than 8 years

but not more than 9 years

24 192 336 336 108

(ix) more than 9 years

but not more than 10

years

24 156 288 288 84

(x) more than 10 years

but not more than 11

years

24 120 240 240 60

(xi) more than 11 years

but not more than 12

years

24 84 192 192 36

196

(xii) more than 12 years

but not more than 13

years

24 48 144 144 24

(xiii) more than 13 years

but not more than 14

years

24 48 96 96 24

(xiv) more than 14 years

24 48 48 48 24

(iii) Owned by a person

other than an individual,

a local authority a public

trust, a University or an

educational or social

Welfare institution.

Twice the rates specified above.

II. Motor Vehicles not

exceeding 250 KG in

weight, unladen adapted

and used for invalids. If

the Vehicle is already

registered and its age

from the month of

registration is

Rate of

lump sum

tax

(i) more than 2 years

70.00

(ii) more than 2 years but

not more than 3 years

60.00

(iii) more than 3 years

but not more than 4 years

50.00

(iv) more than 4 years 40.00

197

but not more than 5 years

(v) more than 5 years but

not more than 6 years

30.00

(vi) more than 6 years

but not more than 7 years

20.00

(vii) more than 7 years 0.00

III. Motor Vehicles other than those

liable to tax under the foregoing

provisions of this Schedule.

(i) Owned by an individual a local

authority a public trust, a University or

an educational or Social Welfare

Institutions.

1

Rate of

lump sum

tax.

2

Vehicles not

exceeding

750 KG in

weight

unladen.

Vehicles exceeding

750 KG in weight

unladen but not

exceeding 1500 KG

in weight unladen

Vehicles

exceeding

1500 KG in

weight

unladen but

not more

than 2250

Kg.in

weight

unladen

198

(a)

`.

(b)

`.

(c)

`.

If the vehicle is already registered and

its age on the month of registration is

(i) not more than 2 years

1,686 2,814 3,654

(ii) more than 3 years but not more than

4 years

1,572 2,628 3,408

(iii) more than 4 years but not more

than 4 years

1,458 2,442 3,162

(iv) more than 4 years but not more

than 5 years

1,344 2,256 2,916

(v) more than 5 years but not more than

6 years

1,230 2,070 2,670

(vi) more than 6 years but not more

than 7 years

1,116 1,884 2,424

(vii) more than 7 years but not more

than 9 years

1,002 1,698 2,178

(viii) more than 8 years but not more

than 9 years

888 1,512 1,932

(ix) more than 9 years but not more

than 10 years

774 1,326 1,686

(x) more than 10 years but not more

than 11 years

660 1,140 1,446

(xi) more than 11 years but not more

than 12 years

540 930 1,182

(xii) more than 12 years but not more

than 13 years

420 720 918

(xiii) more than 13 years but not more

than 14 years

300 510 654

(xiv) more than 14 years 180 300 390

199

(ii) Owned by a person other than an

individual local authority a public trust,

a University or an educational or Social

Welfare institution.

Twice the rates specified above.

IV. Motor Vehicles falling under

clause-I or clause-III and manufactured

out of India and imported into India

after 31st March, 1957.

Twice the rates specified in clause

I, or as the case may be clause III.

Explanation-I: For the purpose of

clause I and clause III.

(1) ―educational Institution‖ shall mean

such educational institution as is

recognised by the State

Government by order notified in the

Official Gazette, in this behalf.

(2) ―Local authority‖ shall mean any

municipal corporation, municipality,

cantonment board or panchayat

constituted under any law of the time

being in force in the State of Gujarat.

(3)―Public Trust‖ shall mean a public

trust registered under the Bombay

Public Trust Act, 1950 as in force in

the State of Gujarat

200

(4)―Social Welfare Institution‖ shall

mean any institution engaged in any

activity conductive to the welfare of the

general public and recognised by the

State Government by order notified in

the Official Gazette, for the purposes of

those clauses;

(5)―University‖ shall mean University

established by or under any law for the

time being in force in the State of

Gujarat.

Explanation II : If a motor vehicle

is jointly owned by more persons than

one, then not withstanding anything

contained in the proviso to sub-section

(1) of section 41 of the Motor Vehicles

Act, 1988 such motor vehicles shall,

for purpose of clause I and clause III,

be deemed to be owned by a person

other than an individual.

B. Motor vehicles other than those

fitted solely with pneumatic tyres.

The rates shown in class A plus 50

per centum.

Part-II Motor Vehicles using fuel

other than motor spirit.

The rates shown in Part I plus a

surcharge of 50 per centum on all

or any class of motor vehicles

mentioned therein.

201

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 2nd

April, 1992

Bombay Motor Vehicles Tax Act, 1958.

No.GH/G/92/54/MTA/1592/991-(i) KH- In exercise of the powers conferred by

sub-section (1) of section 3 of the Bombay Motor Vehicle Tax Act, 1958

(Bom.LXV of 1958) and in supersession of Government Notification, Home

Department No.GH/G/90/66/MTA/1590/1845/

KH, dated the 31st July, 1990, the Government of Gujarat hereby directs that on and

from 3rd

April, 1992, there shall be levied and collected a tax at the rates specified in

column 2 of the Schedule appended hereto on the motor vehicles specified in the

corresponding entry in column 1 of the said schedule, used or kept for use in the State

of Gujarat.

202

SCHEDULE

Motor Vehicles (other than transport vehicles)

registered in the State of Gujarat on or after the

1st 1992

1

Rate of lump sum tax

2

Part-I Motor Vehicles using motor spirit

A. Motor Vehicles fitted with pneumatic tyres.

I. Motor cycles and tricycles (including motor

scooters and cycles with attachment for propelling

the same by mechanical power)

(i) Owned by an individual a local authority, a

public trust, a University or an educational or social

welfare institution.

(a) Cycles not exceeding 50 KG in weight unladen `.500

(b) Cycles exceeding 50 KG in weight unladen but

not exceeding 100 KG weight unladen

`1,000

(c) Cycles exceeding 100 KG in weight unladen `.1,450

(d) Tricycles `.1,450

(e) Cycles or tricycles used for drawing trailer or

side car

`.600 in addition to the

rates specified above.

(ii) Owned by a person other than an individual, a

local authority, a public trust a University or an

educational or social welfare institution.

Twice the rates specified

above.

II. Motor Vehicles not exceeding 250 KG in weight

unladen adopted and used for invalids

`.80

III. Motor Vehicles other than those liable to tax

under the foregoing provisions of this schedule.

(i) Owned by an individual, a local authority, a

public trust, a University or an educational or social

Welfare institution.

(a) Vehicles not exceeding 900-KG in weight,

unladen

`.4,000

203

(b) Vehicles exceeding 900 KG in weight unladen

but not exceeding 1500 KG in weight, unladen.

`.5,000

(c) Vehicles exceeding 1500 KG in weight unladen

but not exceeding 2250 KG in weight, unladen.

`.6,000

(ii) Owned by a person other than an educational or

social welfare institution.

Twice the rates specified

above.

IV. Motor Vehicles falling under clause I or clause

III and manufactured out of India and imported into

India after the 31st March. 1957.

Twice the rates specified

in clause I, or as the case

may be, clause III.

Explanation-I : For the purpose of clause I or

clause III

(1) ―educational institution‖ shall mean such

educational institution as is recognised by the

State Government by order notified in the

Official Gazette, in this behalf.

(2) ―local authority‖ shall mean any municipal

corporation, municipality, cantonment board or

panchayat constituted under any law for the time

being in force in the State of Gujarat;

(3) ―public trust‘ shall mean a public trust,

registered under the Bombay Public Trust Act,

1950 as in force in the State of Gujarat;

(4) ―Social Welfare Institution‘ shall mean any

institution engaged in any activity conducive to

the welfare of the general public and recognised

by the State Government by order notified in the

official gazette, for the purposes of those

clauses.

(5) ―University‖ shall mean a University established

by or under any law for the time being in force

in the State of Gujarat.

204

Explanation II – If a motor vehicle is Jointly owned

by more persons than one, then not withstanding

anything contained in the proviso to sub-section 41

of the Motor Vehicles Act, 1988 such motor vehicle

for purpose of clause I and clause III, be deemed to

be owned by a person other than an individual.

B. Motor Vehicles other than those fitted solely with

pneumatic tyres.

The rates showed in

clause A plus 50 per

centum.

Part-II Motor Vehicles using fuel other than motor

spirit.

The rates shown in Part I

plus a Surcharge of 50

per centum on all or any

class of motor vehicle

mentioned therein.

205

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 2nd

April, 1992.

BOMBAY MOTOR VEHICLES TAX ACT, 1958

NO.GH/92/55/MTA/1592/991-(II)-KH. In exercise of the powers conferred by sub-

section (1) of Section 3 of the Bombay Motor Vehicles Tax Act, 1958 (Bom.LXV of

1958) and in supersession of Government Notification, Home Department

No.GH/G/90/67/MTA/1590/1845/KH, dated 31st July, 1990, the Government of

Gujarat hereby directs that on and from the 3rd

April, 1992, there shall be levied and

collected a tax at the rates specified in column 2 of the Schedule appended hereto on

the motor vehicle specified in the corresponding entry in column 1 of the Schedule,

used or kept for use in the State of Gujarat.

206

SCHEDULE

(Rate of lump sum tax)

Motor Vehicles (other

than transport

vehicles ) registered

in any other State

before on or after the

1st 1992.

Cycles not

exceeding

50 KG in

weight

unladen

Cycles

exceeding 50

KG in weight,

unladen but

not exceeding

100 KG in

weight

unladen

Cycles

exceeding

100 KG in

weight

unladen

Tricycles Cycles

and

Tricycles

used for

drawing

trailer or

side car .

`. `. `. `. `.

(1) (2)

(a) (b) (c) (d) (e)

Part-I Motor Vehicles

using motor spirit.

A. Motor Vehicles

fitted solely with

Pneumatic tyres.

I. Motor Cycles and

tricycles including

motor-scooters and

cycles with

attachment for

propelling the same

by mechanical power

(i) Owned by an

individual, a local

authority, a public

trust, a University or

an educational or

social welfare

institution. If the

Vehicle is already

registered and its age

form the month of

In

addition

to the

rates

specified

in

column

(a) (b) (c)

or (d)

207

registration is

(i) not more than 2

years

440 925 1,350 1,350 550

(ii) more than 2 years

but not more than 3

years

380 850 1,250 1,250 500

(iii) more than 3 years

but not more than 4

years

320 775 1,150 1,150 450

(iv) more than 4 years

but not more than 5

years

260 700 1,050 1,050 400

(v) more than 5 years

but not more than 6

years

200 625 950 950 350

(vi) more than 6 years

but not more than 7

years

140 550 850 850 300

(vii) more than 7

years but not more

than 8 years

80 475 750 750 250

(viii) more than 8

years but not more 9

years

80 400 650 650 200

(ix) more than 9 years 80 325 550 550 150

208

but not more than 10

years

(x) more than 10

years but not more

than 11 years

80 250 450 450 100

(xi) more than 11

years but not more

than 12 years

80 175 350 350 50

(xii) more than 12

years but not more

than 13 years

80 100 250 250 50

(xiii) more than 13

years but not more

than 14 years

80 100 150 150 50

(xiv) more than 14

years

80 100 100 100 50

(ii) Owned by a

person other than an

individual, a local

authority a public

trust, a University or

an educational or

Social Welfare

Institution

Twice the rates specified above

209

II. Motor Vehicles

not exceeding 250

KG in weight,

unladen adapted and

used for invalids. If

the Vehicle is already

registered and its age

from the month of

registration is

Rate of lump sum tax

(in `)

(i) not more than 2

years

70

(ii) more than 2 years

but not more than 3

years

60

(iii) more than 3 years

but not more than 4

years

50

(iv) more than 4 years

but not more than 5

years

40

(v) more than 5 years

but not more than 6

years

30

(vi) more than 6 years

but not more than 7

years

20

(vii) more than 7

years

10

210

II. Motor Vehicles

other than liable to

tax under the

foregoing provisions

of this Schedule.

(i) Owned by an

individual a local

authority a public

rust, a University or

an educational or

Social Welfare

Institution

Rate of lump sum tax

1 2

Vehicles not

exceeding 900

KG in weight

unladen

Vehicles exceeding

900 KG in weight

unladen but not

exceeding 1500 KG in

weight unladen

Vehicles

exceedin

g 1500

KG in

weight

unladen

but not

exceedin

g 2250

Kg. In

weight

unladen

`.

(a)

`.

(b)

`.

(c)

If the vehicle is

already registered and

its age form the

month of registration

is

211

(i) not more than 2

years

3,750 4,690 5,625

(ii) more than 2 years

but not more than 3

years

3,500 4,380 5,250

(iii) more than 3 years

but not more than 4

years

3,250 4,070 4,875

(iv) more than 4 years

but not more than 5

years

3,000 3,760 4,500

(v) more than 5 years

but not more than 6

years

2,750 3,450 4,125

(vi) more than 6 years

but not more than 7

years

2,500 3,140 3,750

(vii) more than 7

years but not more

than 8 years

2,250 2,830 3,375

(viii) more than 8

years but not more

than 9 years

2,000 2,520 3,000

(ix) more than 9 years

but not more than 10

years

1,750 2,210 2,625

(x) more than 10

years but not more

than 11 years

1,500 1,900 2,250

(xi) more than 11

years but not more

than 12 years

1,250 1,590 1,875

212

(xii) more than 12

years but not more

than 14 years

1,000 1,280 1,500

(xiii) more than 13

years but not more

than 14 years

750 970 1,125

(xiv) more than 14

years

500 660 750

(ii) Owned by a

person other than an

individual, a local

authority a public

trust, a University or

an educational or

Social Welfare

Institution

Twice the

rates specified

above.

IV. Motor Vehicles

falling under clause-I

or clause-III and

manufactured out of

India and imported

into India after the

31st March, 1987.

Explanation-I : For the purpose of clause I and clause III.

(1) ―Educational Institution‖ shall mean such educational institution as is recognised by

the State Government by order notified in the Official Gazette, in this behalf.

(2) ―Local authority‖ shall mean any municipal corporation, municipality, cantonment

board or panchayat constituted under any law for the time being in force in the State of

Gujarat

(3) ―Public trust‖ shall mean a public trust registered under the Bombay Public Trust

Act, 1950 as in force in the State of Gujarat.

213

(4) ―Social Welfare Institution‖ shall mean any institution engaged in any activity

conductive to the welfare of the general public and recognised by the State Government

by order notified in the Official Gazette, for the purposes of those clauses;

(5) ―University‖ shall mean a University established by or under any law for the time

being in force in the State of Gujarat.

Explanation II – If a motor vehicle is jointly owned by more persons than one, then not

withstanding anything contained in the proviso to sub-section(1) of section 41 of the

Motor Vehicles Act, 1988, such motor vehicle shall, for purposes of clause I and clause

III, be deemed to be owned by a person other than an individual.

B. Motor Vehicles other

than those fitted solely

with pneumatic tyres.

The rates shown in clause A plus 50 per centum.

Part-II Motor Vehicles

using fuel other than

motor spirit.

The rates shown in Part I plus a Surcharge of 50 per

centum on all any class of motor vehicles

mentioned therein.

214

APPENDIX-III

(As referred to in paragraph No.4.5.3)

PORTS, TRANSPORT AND FISHERIES DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 29th

March, 1989

BOMBAY MOTOR VEHICLES TAX ACT, 1958

No.GH/B/89/66/MTA/1784-8285-T.-In exercise of the powers conferred by sub-

section (1) of section 3-A of the Bombay Motor Vehicles Tax Act, 1958, (Bom.LXV

of 1958) and in supersession of Government Notification Ports, Transport and

Fisheries Department No.GH/B/87/117-MTA-1784-8285-T, dated the 8th

September

1987, the Government of Gujarat hereby fixes with effect from 1st April, 1989 in

respect of all omnibuses which are used or kept for use in the State exclusively as

contract carriages (herein after referred to as the ‗omnibus‘) specified in column 1 of

the table below, the rate of additional tax payable as specified in column 2 of the said

table below:-

TABLE

Description of an omnibus

1

Rate of additional tax

2

A. Ordinary Omnibuses (i) Monthly rate of `.200 per passenger

permitted to be carried.

(ii) Weekly rate of `.65 per passenger

permitted to be carried.

(iii) Daily rate of `.12 per passenger permitted

to be carried.

B. Luxury or Tourist Omnibuses (i) Monthly rate of `.300 per passenger

permitted to be carried.

(ii) Weekly rate of `.100 per passenger

permitted to be carried.

(iii) Daily rate of `.18 per passenger permitted

to be carried.

EXPLANATION :

(i) ‗Month‘ means a calendar month.

(ii) ‗Week‘ means a period of seen consecutive days.

(iii) ‗day‘ means a calendar day.

(iv) Amendment to section 3A by the Bombay Motor Vehicles Tax (Gujarat

Amendment) Act,1991 Gujarat Act.No.10 of 1991 effective from 1-4-1991.

215

4. In the principal Act, for section 3A, the following section shall be substituted,

namely :-

―3 A(I) on and from the 1st day of April, 1991, there shall be levied and collected on

all omnibuses which are used or kept for use in the State exclusively as contract

carriages (hereinafter in this section and subsection (IA) of section 4 referred to as

―the designated omnibuses‖ ) a tax at the rates specified in the table below:-

TABLE

Description of an omnibus

1

Rate of additional tax

2

A. Ordinary Omnibuses Annual rate of `.1,800 per passenger permitted

to be carried.

B. Luxury or Tourist Omnibuses Annual rate of `.2,700 per passenger permitted

to be carried.

Provided that in the case of the designated omnibuses used solely for the purpose of

transporting students of educational institutions in the State in connection with any of

the activities of such educational institution a tax shall be levied and collected under

sub-section (1) of Section 3, and not under this sub-section.

(2) (a) The tax leviable under sub-section (1) shall be paid in advance by every

registered owner or any person having possession or control of the

designated omnibuses either annually at the annual rate specified in the

Table appearing in sub-section (1) or in monthly installment of one-twelfth

of the annual rate.

(b) (i ) The payment of monthly installment of tax shall be made before the beginning

of the year to which the tax relates.

(ii) The payment of monthly installment of tax shall be made before the beginning of

each month to which the monthly installment of the tax relates.

(3) Notwithstanding anything contained in sub-section (1).

(a) the amount of tax leviable in respect of the designated omnibus brought for use

in the State for a temporary period not exceeding seven days shall be `.72 per

passenger permitted to be carried if it is an ordinary designated omnibus and

`.108 per passenger permitted to be carried if it is a luxury or tourist designated

omnibus;

(b) where such designated omnibus is to used or kept for use in the State for a period

exceeding seven days but not exceeding one year, the tax shall be leviable on

216

such vehicle at the rate of one-twelfth of the annual rate of tax for each month or

part thereof;

(c) the tax leviable under this sub-section shall be paid within such period and in

such manner as may be prescribed.

(4) In calculating the amount of tax due under this section the fraction of a rupee

less than fifty paisa shall be taken as fifty paisa, and the fraction of a rupee

exceeding fifty paisa shall be taken as a rupee.

(5) Where the registered owner or any person having possession or control of an

omnibus who has paid tax under this section proves to the satisfaction of the

Taxation Authority that the designated omnibus in respect of which the tax

has been paid, has not been used for a continuous period of not less than two

months, he shall be entitled to the refund of an amount equal to one-twelfth

of the annual rate of the tax paid in respect of such omnibus for each

complete month of the period for which the tax has been paid.

(6) Except as otherwise provided in sub-section (2), (3), (4) and (5), the

provisions of this Act and the Rules made there under shall, so far as may be,

apply in relation to the tax leviable under sub-section (1) as they apply in

relation to the tax leviable under sub-section(1) of Section 3‖.

(iii) Further Amendment to Section 3A by (Gujarat Act No.3 of 1992).

It shall come into force at once.

In the Bombay Motor Vehicles Tax Act, 1958 (hereinafter referred to as ―to

principal Act‖) in section 3A –

(1) in sub-section (1), in the Table, in entry 1, in column 2, for the figures

―1,800‖, the figures ―1,500‖ shall be substituted;

(2) in sub-section (2), for clause (b), the following clause shall be substituted,

namely :-

(b) ―The annual payment of tax or the payment of monthly installment of

tax shall be made within such period and in such manner as may be

prescribed‖;

(3) for sub-section (5), the following sub-section shall be substituted, namely;

―(a) Where the registered owner or any person having possession or control of a

designated omnibus who has paid tax under this section proves to the satisfaction of

the Taxation Authority that the satisfaction of the Taxation Authority that the

designated omnibus in respect of which the tax has been paid, has not been used or

217

kept for use for a continuous period of not less than one month, he shall be entitled to

the refund of an amount equal to one-twelfth of the annual rate of tax paid in respect

of such omnibus for each complete month of the period for which the tax has been

paid so however that, except as otherwise provided in clause (b) the total amount of a

refund in a year shall not exceed

(i) three hundred seventy five rupees per passenger permitted to be carried in the

case of an ordinary designated omnibus.

(ii) six hundred seventy-five rupees per passenger permitted to be carried in the

case of a luxury or tourist designated omnibus :

(b) Where a registered owner or a person having possession or control of a

designated omnibus, who has paid tax under this section proves to the

satisfaction of the State Government or such officer not below the rank of the

Director of Transport, Gujarat State, as may, by notification in the official

gazette, be authorised in this behalf by the State Government that the

designated omnibus in respect of which the tax has been paid has for reasons

beyond the control of such owner or person not been used or kept for the use

for a continuous period of not less than one month but exceeding three

months in a year, he shall be entitled to the refund of an amount equal to one-

twelfth of the annual rate of the tax paid in respect of such omnibus for each

complete month of the period of which the tax has been paid:

Provided that for the purpose of determining the amount of refund under this

clause only such of the period in which a designated omnibus has not been used

or kept for use shall be taken into account as comprises of complete months.”

218

APPENDIX IV

(As referred to in paragraph No.4.6.6)

(2) PORTS, TRANSPORT AND FISHERIES DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 29th

March, 1989

Gujarat Carriage of Goods Taxation Act, 1962.

No.GH/B/89/67/MTA-1589-436-T. In exercise of the powers conferred by sub-

section (2) of Section 12 of the Gujarat Carriage of Goods Taxation Act, 1962

(Guj.XXXIII of 1962) and in supersession of Government Notification. Home

Department No. GH/G/85/209/GTA-1085-2497-E 2, dated the 1st August 1985, the

Government of Gujarat hereby fixes with effect from 1st April 1989. In respect of

each of the class of goods vehicles specified in column 1 of the Schedule appended

hereto, the amount specified against it in column 2 of the said Schedule as the amount

of sump sum payment of tax payable per month per vehicle.

219

SCHEDULE

Class of goods vehicles

1

Amount of lump sum payment of

tax payable per month per

vehicle.

2

1. Public goods vehicles other than those

falling in entry 3, having payload.

(i) not exceeding 2 metric tonnes `. 30 or the product obtained by

multiplying the payload in metric

tonnes by `.30 whichever is less.

(ii) exceeding 2 metric tonnes but not

exceeding 3 metric tonnes.

`.60

(iii) exceeding 3 metric tonnes but ot exceeding

4 metric tonnes.

`.90

(iv) exceeding 4 metric tonnes but not

exceeding 5 metric tonnes

`.120

(v) exceeding 5 metric tonnes but not exceeding

6 metric tonnes

`.150

(vi) exceeding 6 metric tonnes `.170 plus `.15 per metric tonnes

or part thereof, in excess of 6

metric tonnes.

2. Private goods vehicles :-

(i) of which the payload does not exceed 2

metric tonnes.

`.30 or the product obtained by

multiplying the payload in metric

tonnes by `.15, whichever is less.

(ii) of which the payload exceeds 2 metric

tonnes but does not exceed 6 metric tonnes.

`.30 plus `.15 per metric tonne or

part thereof of the payload in

excess of 2 metric tonnes.

(iii) of which the payload exceeds 6 metric

tones

`.90 plus `.15 per metric tonne or

part thereof, of the payload in

excess of 6 metric tonnes.

3. Tractor cum-trailors owned by agriculturists

used by them for or in connection with

agricultural operations or the carriage of their

agricultural produce a market and also for

commercial or trade purpose.

`.20

220

HOME DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 29th

March, 1989

GUJARAT CARRIAGE OF GOODS TAXATION ACT, 1962.

No.GH/B/89/67/MTA-1589-436-T. In exercise of the powers conferred by sub-

section (2) of Section 12 of the Gujarat Carriage of Goods Taxation Act, 1962

(Guj.XXXIII of 1962), the Government of Gujarat hereby exempts totally from the

payment of tax with erect form the date of publication of this notification in the

official Gazette, the tractor-cum trailors owned by an agriculturist when used by him

for or in connection with agricultural operation or the carriage of his agricultural

produce to a market.

On and from the 1st April 1997, the Gujarat Carriage of Goods Taxation Act 1962

shall stand repealed. (By Guj.Act No.13 of 1997 dated 26-3-1997)

221

APPENDIX V

(As referred to in paragraph No.4.8.2)

List of Money Value Forms

1. Receipt Books

2. Certificate of Fitness

3. Registration Certificate

4. Certificate of Registration (Diplomatic and Consular officers motor vehicles)

5. International Certificate of motor vehicles

6. Trade Certificates

7. Motor Driving Licences

8. International Driving Permits

9. L.Con.(Conductor‘s Licences)

10. P.Temp.(Temporary Permit)

11. P.Co.P.(Contract Carriage Permit)

12. P.St.S.(stage Carriage Permit)

13. P.Co.S.(Permit in respect of a reserve stage carriage to be used as a contract

carriage)

14. P.Pr.S.(Private Service Vehicles Permit)

15. P.Pu.C.(Goods Carriage Permit)

16. P.Tr.V.(Tourist Vehicle Permit)

17. P.Co.Sp.(Special Permit)

18. P.C.S.(Countersignature of the permit)

19. L.Ag.(Agent‘s Licence for sale of tickets)

20. Form 3 (Learner‘s Licence)

21. Other money value forms

222

APPENDIX-VI

(As referred to in paragraph No.4.8.2)

List of Registers etc.

1. Stock and Issue register of Motor Vehicles Forms.

2. Motor Vehicles Forms Consumption Register.

3. Register for recording amounts received by insured post, ordinary post etc.

4. Deposit account (receipts)

5. Stock account of receipts books

6. Summary Register

7. Register for refund orders

8. Register of refunds under Motor Vehicles Act

9. Cheque Deposit Register

10. Register of Waived accounts

11. Register of Dishonoured Cheques

12. Cash Book

13. Receipts Books Consumption Register

14. Subsidiary Register for new registrations

15. Subsidiary Register for transfers, duplicate registration certificates, hire

purchase endorsements, and information fees

16. Subsidiary Register for fitness certificates and inspection fees

17. Subsidiary Register for motor driving licenses new and renewals

18. Subsidiary Register for permit authorisation for public service vehicle,

conductor‘s licenses and badges

19. Subsidiary Register for temporary licenses and test fees

20. Subsidiary Register for trade Certificates

21. Road Check Memo Disposal Register

22. D.A. notice issue Register

23. D.A notice disposal Register

24. Pending prosecution case Register

25. Ex-part orders Register

26. Tax case intimation Register

27. Inspection Register

223

28. R.M.A. Register

29. New registration Register

30. B.T. Register

31. Registration Suspense Register

32. Accident inspection Register

33. C.F. cancellation Register

34. Driving test Register

35. P.S.V.A. Register

36. F.T. Register

37. L.Con. Register

224

RATES OF GMV TAX ON VEHICLES (wef 1 April 2007)

Sr

No

Type of vehicle Rate of GMV TAX

A-1 GMV TAX: Lump sum tax %age of sale price

1 Private car/St.Wgn, Tractor( Commercial

use up to 2,000 kg

Six

2 Jeep Six

3 Two wheeler-Scooter, Motor cycle,

Moped

Six

4 Taxi Six

5 Auto rikshaw

5.1 Seating capacity up to 3 2.5

5.2 S/C exceeding 3 and up to six Six

6 LGVup to 3,000 kgs-Three wheeler

and four wheeler,goods vehicles

Six

7 Tractor(Agri.) 3.5

A-2 GMV TAX: Lump sum (optional)

1 Maxi cab 12

2 Ordinary Omni Bus (s/c up to 12) 12

3 LGV (3,000 to 7,500 kg GVW) 8

4 MGV(7,500 to 12,000 kg GVW) 8

5 HGV(exceeding 12,000 kg GVW) 12

B GMV TAX : Contract Carriage Annual rate per seat

1 ORDINARY OMNI BUS `

1.1 Seating capacity up to 12 1,200

1.2 s/c exceeding 12 and up to 20 3,000

1.3 s/c exceeding 20 3,600

2 LUXURY OMNI BUS

2.1 s/c up to 20 4,620

2.2 s/c exceeding 20 6,000

225

3 SLEEPER OMNI BUS

3.1 s/c up to 20 9,000

3.2 s/c exceeding 20 12,000

4 Maxi cab 1,200

C GMV TAX- RECURRING Annual rate(`)

1 Goods vehicles-Truck/Trailer, articulated

Vehicles

1.1 LGV(3,000 to 7,500 kg GVW)

1.2 MGV(7,500 to 12,000 kg GVW)

1.3 HGV(exceeding 12,000 kg GVW)

2,000+ 650 per every 1,000

or

Part thereof exceeding

3,000 kg

2 Tractor Horse etc. 2,000+ 400 per every 1,000

kg or

Part thereof exceeding

3,000 kg

3 Construction equipment vehicle- crane,

Rig loader, Fork lift,Backhoe etc.

4 Break down Van- Toe Truck

5 Special purpose vehicle

6 Private service vehicle 500 per passenger

6.1 Education purpose 200 per passenger

7 Stage carriage- passenger vehicle

7.1 s/c up to nine 1,200

7.2 s/c exceeding nine 1,200 + 80 per seating + 40

per standing

8 Out state vehicle entering Gujarat state

8.1 LGV(up to 3,000 kg) 3,000

8.2 Auto Rikshaw(s/c up to 3), Motorcycle

Taxi

300

8.3 Taxi Cab

(a) s/c up to 4 1,200

(b)s/c exceeding 4 but up to 6 1,200 + 150 per passenger

exceeding 4

226

RATES OF GMV TAX ON VEHICLES (wef 1-8-2014)

1 Motor vehicles (including tricycles) used for the

carriage or goods or materials :

Vehicles the gross vehicle weight of which exceed

7500 kg

` 850 for every 1000

kg or part thereof

2 Sleeper designated omnibuses :

(i)Sleeper designated omnibuses licensed to carry

more than twenty passengers

(ii) Sleeper Super luxury designated omnibuses

licensed to carry more than twenty passenger

`13200 per passenger

which the vehicle is

licensed to carry

` 15000 per passenger

which the vehicle is

licensed to carry

4 Omnibuses which are used or kept for use

exclusively as contract carriages(hereinafter in this

clause referred to as ‗designated omnibuses‘)

(i) Ordinary designated ominubuses licenced to

carry not more than twelve passengers

(ii) Ordinary designated ominubuses licenced to

carry more than twelve passengers but not more

than twenty passengers

(iii) Ordinary designated omnibuses licensed to

carry more than twenty passengers

(iv-a) Luxury or tourist designated omnibuses

licensed to carry not more than twelve passengers

(iv-b) Luxury or tourist designated omnibuses

licensed to carry more than twelve passengers but

not more than twenty passengers

(v)Luxury or tourist designated omnibus licensed to

carry more than twenty passengers

(vi) Super Luxury or tourist designated omnibuses

licensed to carry more than twenty passenger

Explanation : ―Super Luxury designated omnibus

means a luxury omnibus having engine capacity

exceeding 200 hp

―Sleeper super Luxury designated omnibus‖ means

a Super Luxury designated omnibus constructed or

adapted to provide berths to the passengers‖

`1500 for every

passenger which the

vehicle is so licensed

to carry

`4500 for every

passenger which the

vehicle is so licensed

to carry

` 4500 for every

passenger which the

vehicle is so licensed

to carry

` 3000 for every

passenger which the

vehicle is to licensed

to carry

` 4500 for every

passenger which the

vehicle is to licensed

to carry

`.7800 for every

passenger which the

vehicle is so licensed

to carry

`.9000 per passenger

which the vehicle is

licensed to carry

227

MINING RECEIPTS

5.1 LEGISLATIVE BACKGROUND

Under entry 54 of Union list in the seventh schedule to the Constitution of India, the

mines and minerals are regulated; their regulation and development are under the

control of the Union Legislation. For regulation of mines and development of

minerals, the Mines and Minerals (Regulation and Development) Act, 1948 (53 of

1948) was introduced. The said Act was first amended vide Act 67 of 1957 and

effective from 1st June, 1957. Subsequently it was amended vide Act 56 of 1972, Act

37 of 1986, Act 16 of 1987 and Act 25 of 1994. By Section 3 of Act 38 of 1999, the

nomenclature had been amended and now it stands as The Mines and Minerals

(Development and Regulation) Act, 1957 (67 of 1957).

The differentiation made between petroleum and other minerals in item No.53 and 54

of the Union list has rendered separate enactments. At present, both are dealt with

under the Act 53 of 1948.

Minerals are of two types, Major minerals and Minor minerals. As per Section 3(c) of

the Mine and Minerals (Development and Regulation) Act,1957 minor minerals are

building stones gravel, ordinary sand other than sand for prescribed purposes and any

other minerals which the Central Government may, by a notification in the Official

Gazette declared to be a minor minerals. The rest of the minerals are major minerals.

The extraction of minerals except mineral oil and natural gas is governed by the

―Mines and Minerals (Development and Regulation) Act, 1957‖ and the ―Mineral

concession Rules 1960‖, the Mineral Conservation and Development Rules, 1988, the

Granite Conservation and Development Rules, 1999, the Marble Development and

Conservation Rules, 2002 and the Colliery Control Rules, 2004 issued there under.

The quarry leases for minor minerals are governed by the ―Gujarat Minor Mineral

Rules, 1966‖ now the Gujarat Minor Mineral Concession Rules, 2010. Mining of

mineral oil and natural gas is regulated by the ―Oil Field (Regulation and

Development) Act, 1948‖ and the ―Petroleum and Natural Gas Rules 1959‖.

CHAPTER 5

228

COMMISSIONERATE OF GEIOLOGY AND MINING AS ON 31-3-2000

Sr.Geo.

Min.& Admn.

Addn.Dir.

(Dev)

Addn.Dir. (Expl.) Addn. Dir. (Appeal

& Flying Squad)

Statics

Officer

Chief

Chemist

Sr.Geo. Lib.

Museum

Report Cell

Geo.

Pet-lab

AO/Geo

A/G plan

Sr.Geo Rem

Sen Lab

Geo

Tech

Sr.Geo

Stores

Dy.Dir.

G‘nagar

Asstt. Dir.

Vadodara

Asstt. Dir.

Rajkot

Min.Expl.Circle

Sr.Geo

Ahmedabad

Sr.Geo

Bhuj

Sr.Geo

Rajkot

Sr.Geo

Vadodara

229

Geologist

Amreli

Geologist

Jamnagar

Geologist

Junagadh

Geologist

Porbandar

Geologist

Ahmedabad

Geologist

Gir Somnath

Asstt. Geo.

Morbi

Asst. Geo.

Palanpur

(BK)

Asstt. Geo.

Bharuch.

Asstt. Geo.

Bhavnagar

Asstt. Geo.

Gandhinagar

Asstt. Geo.

Nadiad.

Geologist

Kutch

Geologist

Himatnagar

Geologist

Vadodara

Geologist

Surat

Geologist

Chhotudepur

Asstt. Geo.

Valsad,

Asstt. Geo.

Godhra (PM)

Asstt. Geo

Rajkot

Asstt. Geo

Surendranag

ar

Asstt. Geo.

Dangs

Asstt. Geo.

Morbi

Asstt. Geo.

Anand

Asstt. Geo.

Dahod

Asstt. Geo.

Narmada

(Rajpipla)

Asstt. Geo.

Navsari,

Asstt. Geo.

Valsad.

Asstt. Geo.

Mahisagar

(Kheda)

Asstt. Geo.

Botad

Asstt. Geo.

Patan

Asstt. Geo.,

Vyara (Tapi)

Asstt. Geo.,

Modasa

`

1- Commissioner

3- Addn. Director

1- Dy.Director

2- Asstt. Director

11-Geologist

22- Asstt. Geologist

Min = Mining

Admn = Administration

Pet Lab = Petroleum Laboratory

Dev = Development

Expl = Exploration

Tech = Technical

Geo = Geologist

Asst. Geo = Assistant Geologist

Lib = Library

230

ORGANISATIONAL SET-UP

5.2.1 In the State of Gujarat under Industries & Mines Department, the mineral

administration is entrusted to the Commissioner of Geology and Mining who is

assisted by three Additional Directors, one Deputy Director, two Assistant Directors,

eight Geologists and eleven Assistant Geologists at District Offices.

Under the Energy and Petrochemicals Department, the work in respect of oil and

natural gas is entrusted to the Director of Petroleum assisted by two Geologists.

District level Geologist Office has to continue the work related to the oil and natural

gas.

5.2.2 APPELLATE AUTHORITIES AND REVISION

Under the provisions of the Act/Rules, the Additional Directors (Appeal and Flying

Squad) are designated as appellate authorities for hearing appeals made by aggrieved

persons against the orders passed by the competent officers. The State Government,

in the Industries and Mines Department is the appellate authority for hearing appeals

against the orders of the Additional Directors (Appeal & Flying Squad).

After giving an opportunity of stating his case, the State Government may pass such

orders thereon as it may deem fit; it may issue a stay order (i) to stop working of

excavation of minerals (ii) to hand over the possession of the area in dispute also.

5.2.3 RECORDS MAINTAINED BY THE DEPARTMENT

The following records and registers are to be maintained by the Department at the

district level offices.

1. Lease agreement duly executed and registered in respect of lease sanctioned

for

Major minerals

Minor minerals

Oil and Natural Gas.

2. Prospecting license for respective minerals.

3. Register of Mining lease.

4. Register of Quarrying permits (Minor minerals)

5. Register of Quarrying parvana (Minor minerals)

6. Register of Analysis

7. Demand and Collection Register(DCR)

8. Register of Security deposits

9 Register of Refunds, Register of renewal of quarry lease/ permit/parvana

(Minor minerals)

10 Monthly Returns (Major, Minor minerals and Oil & Natural Gas)

11 Annual Returns

12 Receipted challans from Treasury Accounts

231

14 Subsidiary cash book in respect of cash received by departmental officers and

challans for the same credited in Government Accounts.

15 Register of issue of receipt books

16 Register of issue of triplicate pass book

17 Register of illegal excavation and transportation detected.

18 Any other records maintained by the department to regulate the Act/Rules.

LAW RELATING TO LICENSING/LEASING OF MINES

5.3.1 LICENSING/LEASING OF AREA FOR MINING

The prospecting or mining operations are to be under license or lease. No person

shall undertake any reconnaissance, prospecting or mining operations in any area,

except under and in accordance with the terms and conditions of a reconnaissance

permit or of a prospecting license or as the case may be, of a mining lease granted

under this Act and Rules made there under (Section 4(1)).

No person shall transport or store or cause to be transported or stored any mineral

otherwise than in accordance with the provision of the Act and the Rules made there

under (Section 4(1A)).

State Government may after prior consultation the Central Government, and in

accordance with the rules made under Section 18, undertake reconnaissance,

prospecting or mining operations with respect to any mineral specified in the first

schedule in any area within the State (Section 4(3)).

Where the holders of the mining lease fail to undertake mining operations for a

period of two years after date of execution of the lease deed or having commenced

mining operation discontinued the same for a period of two years, lease shall lapse

after two years from its date of execution of lease deed or discontinuance of

operation (Section 4A (3)).

5.3.2 GRANT OF MAXIMUM AREA FOR A PROSPECTING LICENCE

OR MINING LEASE

Sr.No. License/Permits Area

1 One or more reconnaissance

permits

Covering total area of 10,000 Sq.Kms.

(single permit-not to exceed 5000 Sq. Kms)

2 One or more prospecting

licenses

Covering total area of not more than 25

Sq.Kms.

3 One or more mining lease Covering a total area of not more than 10

Sq.Kms

Provided that if the Central Government is of the opinion that in the interests of the

development of any mineral, it is necessary to do so, it may, for reasons to be

recorded in writing, permit any person to acquire one or more prospecting licences

or mining leases covering an area in excess of the aforesaid total area.

No person shall acquire in respect of any mineral in a State any reconnaissance

permit, mining lease or prospecting license in respect of any area which is not

compact or contiguous.

232

Provided that if the State government is of the opinion that in the interests of the

development of any mineral, it is necessary to do so, it may, for reasons to be

recorded in writing, permit any person to acquire reconnaissance permit, prospecting

licenses or mining leases in relation to any area which is not compact or contiguous.

{Section 6(1) (a to c)}.

5.3.3 GRANT OF PERIODS AND RENEWAL

Sr.No. Licence/Lease Periods Renewals

1 Reconnaissance Permit

or Prospecting License

Not exceeding three

years

Not exceeding five years

in case of prospecting

license only

2 Mining lease Not exceeding thirty

years (and not less than

twenty years)

Not exceeding twenty

years.

Minerals as specified in Part-A or Part-B of the First schedule shall be renewed with

previous approval of the Central Government.

5.3.4 LEVY OF LICENCE/PERMITS/LEASE FEES AND SECURITY

DEPOSIT

To grant license/permit/lease for mining operation, the levy of such fees prescribed

under the Act/Rules is given in Table-A.

Security deposit to safeguard the revenue of Government is to be taken from lease

holder as prescribed under Table-A.

Table-A

Sr.

No

License/Pe

rmit/Lease

Applicati

on

Renewal

Forms

Fees Deed to be

executed

Security

Deposit Register in forms

For

applicatio

n

For permit

granted

1. Reconnaiss

ance

permit

Form-A Not less than

` 5 and not

more than ` 25

per sq.

kilometer each

year or part

thereof

Form F-1 within

90 days from the

date of

communication of

the order for grant

` 20 per sq.

kilometer or

part thereof for

which permit

is granted

Form

G-1

Form-H-1

2. Prospectin

g Licenses

Form-B

Form-D

Not less than

` 0.50 and not

more than `.5/-

per hectare for

each year or

Form-F within

three months from

the date of order

for grant Transfer

in Form-P

` 500 per sq.

kilometer or

part thereof for

which license

is granted

Form-G Form-H

233

part there for

grant or

renewal.

3. Mining

Lease

Form-I

Form-J

` 500 Form-K within six

months from the

date of order for

grant.

` 10,000 Form-L Form-M

THE MINES AND MINERALS (DEVELOPMENT AND REGULATION)

ACT, 1957

5.4.1 The Mine and Minerals (Development and Regulation) Act, 1957 and the

Mineral Concession Rules, 1960 framed there under constitute the basis for the levy

and collection of royalty, dead rent & surface rent in the state of Gujarat.

Under the provisions of the Act, reconnaissance or prospecting or mining operations

are defined and for such operation, the area is granted for mining to the applicant

under license/permit/lease and known as the holder of mining lease is liable to pay

royalty in respect of any mineral removed or consumed by him or by his agent,

manager, employee, contractor or sub-lessee from the leased area at the rate as

specified in second schedule. The holder of mining lease is liable to pay every year

dead rent as specified in the third schedule for all the areas included in the

instrument of lease.

Provided that the holder of such mining lease, (Section 9 & 9A of the Act) shall be

liable to pay either such royalty or the dead rent in respect of that area which ever is

greater.

The Government has decided to recover the royalty in advance from January 2001 as

per circular instructions dated 22.12.2000.

The First, Second and Third schedules are given below (Second and third schedule

were substituted by GSR 713 (E) dated 12th

September, 2000 [with effect from

12.9.2000].

234

THE FIRST SCHEDULE2

(See section 4(3), 5(1), 7(2) and 8(2))

SPECIFIED MINERALS

PART-A

Hydro carbons/energy minerals

1. Coal and Lignite

PART-B

ATOMIC MINERALS

1. Beryl and other beryllium bearing minerals

2. Lithium- bearing minerals

3. Minerals of the ―rare earths‖ group containing Uranium and Thorium

4. Niobium- bearing minerals.

5. Phosphorites and other Phosphatic ores containing Uranium.

6. Pitchblende and other uranium ores.

7. 3Titanium- bearing minerals and ores (Ilmenite, rutile and leucoxene).

8. Tantallium- bearing minerals

9. Urainferous allanite, monazite and other Thorium minerals

10. Uranium-bearing tailings left over from ores after extraction of copper and gold,

ilmentie and other titanium ores

114.Zirconium-bearing minerals and ores including Zircon

PART-C

Metallic and non-metallic minerals

1. Asbestos

2. Bauxite

3. Chrome ore

4. Copper ore

5. Gold

6. Iron ore

7. Lead

85. ***

2Subs. By Act 25 of 1994 (w.e.f. 25-1-1994)

3Subs. By Act 38 of 1999 (w.e.f. 20.12.1999)

4Subs. By Act 38 of 1999 (w.e.f. 20.12.1999)

5Subs. By Act 38 of 1999 (deleted) (w.e.f. 20.12.1999)

235

9 Manganese ore

10 Precious Stones

11 Zinc

The Second Schedule

(See Section 9)

Rates of Royalty

RATES OF ROYALTY IN RESPCET OF MINERALS AT ITEM 1 TO 10, 12 TO

38 AND 40 TO 51 APPLICABLE IN ALL STATES AND UNION TERRITORIES

EXCEPT THE STATE OF WEST BENGAL

1. AGATE Ten per cent of sale price on ad valorem basis.

2.(I) APATITE

(II) ROCK PHOSPHATE

Five per cent of sale price on ad valorem basis.

(a) above 25 per cent P2 O5 Eleven per cent of sale price on ad valorem basis.

(b) Upto 25 per cent P2 O5 Five per cent of sale price on ad valorem basis.

3. ASBESTOS :

(a) CHRYSOLITE Seven hundred and twenty six rupees per tonne.

(b) AMPHIBOLE Thirty five rupees per tonne.

4. BARYTES Five and half per cent of sale price on ad valorem

basis

5. BAUXITE, LATERITE Zero point three five per cent of London Metal

Exchange Aluminum metal price chargeable on the

contained aluminum metal in ore produced.

6. BROWN ILMENITE

(LEUCOXENE), ILMENITE,

RUTILE AND ZIRCON

Two per cent of sale price on ad valorem basis.

7. CADMIUM Ten per cent of sale price on ad valorem basis.

8. CALCITE Fifteen per cent of sale price on ad valorem basis.

9. CHINA CLAY/KAOLIN:

(Including ballclay, white

shale and white clay)

Fifteen per cent of sale price on ad valorem basis

(a) Crude Twenty one rupees per tonne.

(b) Processed

(including washed)

Seventy five rupees per tonne.

10. CHROMITE Seven and half per cent of sale price on ad valorem

basis.

11. COAL INCLUDING

LIGNITE

*

12. COPPER Three point two per cent of London Metal Exchange

copper metal price chargeable on the contained

copper metal in ore produced.

13. CORUNDUM Ten per cent of sale price on ad valorem basis.

14. DIAMOND Ten per cent of sale price on ad valorem basis

15. DOLOMITE Forty rupees per tone

236

16.FELSPAR Ten per cent of sale price on ad valorem basis

17. FIRE CLAY (including

plastic, pipe, lithomargic and

natural pozzolanic clay)

Twelve per cent of sale price on ad valorem basis

18. FLUORSPAR (also called

fluorite)

Five per cent of sale price on ad valorem basis.

19. GARNET :

(a) Abrasive Three per cent of sale price on ad valorem basis

(b) Gem Ten per cent of sale price on ad valorem basis

20. GOLD

(a) Primary One and half per cent of London Bullion Market

Association price (commonly referred to as ―London

Price‖) chargeable on the contained gold metal in ore

produced.

(b) By-product gold Two and half per cent of London Bullion Market

Association price (commonly referred to as ―London

Price‖) chargeable on by-product gold metal actually

produced.

21. GRAPHITE

(a) With 80 per cent or more

fixed carbon.

Two hundred and thirty rupees per tonne.

(b) With 40 per cent or more

but less than 80 per cent

fixed carbon.

One hundred and thirty rupees per tonne.

(c) With less than 40 per cent

fixed carbon.

Fifty rupees per tonne.

22. GYPSUM Twenty per cent of sale price on ad valorem basis.

23.IRON ORE:

(i) LUMPS

(a)With 65 per cent Fe

content or more.

Twenty four rupees and fifty paise per tonne.

(b)With 62 per cent Fe

content or more but less

than 65 per cent Fe.

Fourteen rupees and fifty paise per tonne.

(c)With 60 per cent Fe

content or more but less

than 62 per cent Fe.

Ten rupees per tonne.

(d) Less than 60 per cent Fe

content.

Seven rupees per tonne.

(ii) FINES

(including inter alia

natural fines produced

incidental to mining and

sizing of lumpy ore)

(a)With 65 per cent Fe

content or more.

Seventeen rupees per tone

(b)With 62 per cent Fe

content or more but less

than 65 per cent Fe.

Ten rupees per tonne.

237

(c) With less than 62 per cent

Fe content.

Seven rupees per tonne.

(iii) Concentrates prepared by

beneficiation and / or

concentration of low grade

ore containing 40 per cent

Fe or less.

Three rupees per tonne.

24. KYANITE Ten per cent of sale price on ad valorem basis.

25. LEAD Five per cent of London Metal Exchange lead metal

price chargeable on the contained lead metal in ore

produced.

26. LIMESTONE:

(a) L.D.grade (less than one

and half per cent silica

content)

Fifty rupees per tonne.

(b) Others Forty rupees per tone

27. LIME KANKAR Forty rupees per tone

28. LIMESHELL Forty rupees per tone

29. MAGNESITE Three per cent of sale price on ad valorem basis

30. MANGANESE ORE :

(a) Ore of all grades Three per cent of sale price on ad valorem basis

(b) Concentrates One per cent of sale price on ad valorem basis.

31.CRUDE MICA, WASTE

AND SCRAP MICA

Four per cent of sale price on ad valorem basis.

32. MONAZITE One hundred and twenty five rupees per tonne.

33. NICKEL Zero point one two per cent of London Metal

Exchanged nickel metal price chargeable on the

contained nickel metal in ore produced.

34. OCHRE Twelve rupees per tonne.

35. PYRITES Two per cent of sale price on ad valorem basis.

36. PYROPHYLLITE Fifteen per cent of sale price on ad valorem basis.

37.QUARTZ, SILICA SAND,

MOULDING SAND

AND QUARTZITE.

Fifteen rupees per tonne.

38. RUBY Ten per cent of sale price on ad valorem basis.

39. SAN D FOR STOWING @

40. SELENITE Ten per cent of sale price on ad valorem basis

41. SILLIMANITE Two and half per cent of sale price on ad valorem

basis.

42. SILVER

(a) By-product Five per cent of London Metal Exchange price

chargeable only product silver metal actually

produced.

(b) Primary silver Five per cent of London Metal Exchange silver metal

price chargeable on the contained silver metal in ore

produced.

@

Rates of royalty in respect of item 39 relating to Sand for Stowing as revised vide notification

number G.S.R.214(E) dated the 11th

April, 1997 will remain in force until revised through a separate

notification by the Ministry of Coal.

238

43. SLATE Forty rupees per tonne.

44.TALC/STEATITE/

SOAPSTONE

Fifteen per cent of sale price on ad valorem basis.

45. TIN Five per cent of London Metal Exchange tin metal

price chargeable on the contained tin metal in ore

produced.

46. TUNGSTEN Twenty rupees per unit per cent of contained WO3

per tonne of ore and on pro rata basis.

47.URANIUM Five rupees for dry ore with U3O8 content of zero

point zero five per cent with pro rata

increase/decrease at the rate of one rupee and fifty

paise per metric tonne of ore for zero point zero one

per cent increase/decrease.

48. VERMICULITE Three per cent of sale price on ad valorem basis.

49. WOLLASTONITE Ten per cent of sale price on ad valorem basis

50. ZINC Six point six per cent of London Metal Exchange

zinc metal price chargeable on contained zinc metal

in ore produced.

51.All other minerals not

herein before specified

Ten per cent of sale price on ad valorem basis

Rate of royalty in respect of item 11 relating to Coal Including Lignite as

revised vide notification number G.S.R.748(E), dated the 11th

October, 1994

and notification number G.S.R.27 (E), dated the 13th

January, 1995 of

Government of India, Ministry of Coal will remain in force until revised

through a separate notification by the Ministry of Coal.

Note: The rates of royalty for the State of West Bengal in respect of the minerals

except the mineral specified against item No.11 shall remain the same as

specified in the notification of the Government of India in the Ministry of

Steel and Mines (Department of Mines) number G.S.R.458(E) , dated the 5th

May, 1987‖.

239

The Second Schedule

(See Section 9)

Rates of Royalty

Rates of royalty as amended vide GSR 677(E) dated 14 October 2009 (w.e.f.

14.10.2004) in respect of minerals at item 1 to 9, 11 to 37, 39 to 45 and 47 to 51

1.(I) APATITE

(II) ROCK PHOSPHATE

Five per cent of sale price on ad valorem basis.

(a) above 25 per cent P2 O5 Eleven per cent of sale price on ad valorem basis.

(b) Up to 25 per cent P2 O5 Six per cent of sale price on ad valorem basis.

2. ASBESTOS :

(a) Chrysotile Eight hundred and eighty rupees per tonne.

(b) Amphibole Fifteen per cent of sale price on ad valorem basis.

3. BARYTES Five and half per cent of sale price on ad valorem

basis

4. BAUXITE, LATERITE (a)Zero point five zero per cent of London Metal

Exchange Aluminum metal price chargeable on the

contained aluminum metal in ore produced for those

dispatched for use in alumina and aluminium metal

extraction.

(b)Twenty five per cent of sale price on ad valorem

basis for those dispatched for use other than alumina

and for export.

5.BROWN ILMENITE

(LEUCOXENE), ILMENITE,

RUTILE AND ZIRCON

Two per cent of sale price on ad valorem basis.

6.CADMIUM Fifteen per cent of sale price on ad valorem basis.

7.CALCITE Fifteen per cent of sale price on ad valorem basis.

8.CHINA CLAY/KAOLIN:

(Including ball clay, white

shale and white clay)

(a) Crude Eight per cent of sale price on ad valorem basis.

(b) Processed

(including washed)

Ten per cent of sale price on ad valorem basis.

240

9. CHROMITE Ten per cent of sale price on ad valorem basis.

10. COAL INCLUDING

LIGNITE

*

11. Columbine-tantalite Ten per cent of sale price on ad valorem basis.

12. COPPER Four point two per cent of London Metal Exchange

copper metal price chargeable on the contained

copper metal in ore produced.

13. DIAMOND Eleven point five per cent of sale price on ad valorem

basis

14. DOLOMITE Sixty three rupees per tone

15.FELSPAR Twelve per cent of sale price on ad valorem basis

16. FIRE CLAY (including

plastic, pipe, lithomargic and

natural pozzolanic clay)

Twelve per cent of sale price on ad valorem basis

17 FLUORSPAR (also called

fluorite)

Six point five per cent of sale price on ad valorem

basis.

18. GARNET :

(a) Abrasive Three per cent of sale price on ad valorem basis

(b) Gem Ten per cent of sale price on ad valorem basis

19. GOLD

(a) Primary Two per cent of London Bullion Market Association

price (commonly referred to as ―London Price‖)

chargeable on the contained gold metal in ore

produced.

(b) By-product gold Three point three per cent of London Bullion Market

Association price (commonly referred to as ―London

Price‖) chargeable on by-product gold metal actually

produced.

20. GRAPHITE

(a) With 40 per cent or more

fixed carbon.

Two per cent of sale price on ad valorem basis.

(b) With less than 40 per cent

fixed carbon.

Twelve per cent of sale price on ad valorem basis.

241

21. GYPSUM Twenty per cent of sale price on ad valorem basis.

22.Iron ore: Lumps Fines and

concentrates all grade:

Ten per cent of sale price on ad valorem basis.

23. LEAD Seven per cent of London Metal Exchange lead metal

price chargeable on the contained lead metal in ore

produced.

Twelve point seven per cent of London Metal

Exchange lead metal price chargeable on the

contained lead metal in concentrate produced.

24. LIMESTONE:

(a) L.D.Grade (less than one

and half per cent silica

content)

Seventy two rupees per tonne.

(b) Others Sixty-three rupees per tonne

25. LIME KANKAR Sixty-three rupees per tonne

26. LIMESHELL Sixty-three rupees per tonne

27. MAGNESITE Three per cent of sale price on ad valorem basis

28. MANGANESE ORE :

(a) Ore of all grades Four point two per cent of sale price on ad valorem

basis

(b) Concentrates One point four per cent of sale price on ad valorem

basis.

29. CRUDE MICA, WASTE

AND SCRAP MICA

Four per cent of sale price on ad valorem basis.

30. MONAZITE One hundred and twenty five rupees per tonne.

31. NICKEL Zero point one two per cent of London Metal

Exchange nickel metal price chargeable on the

contained nickel metal in ore produced.

32. OCHRE Twenty rupees per tonne.

33. PYRITES Two per cent of sale price on ad valorem basis.

34. PYROPHYLLITE Twenty per cent of sale price on ad valorem basis.

35.QUARTZ Fifteen per cent of sale price on ad valorem basis.

242

36. RUBY Ten per cent of sale price on ad valorem basis.

37.Silica sand, Moulding sand

and Quartzite

Eight per cent of sale price on ad valorem basis

38. SAN D FOR STOWING @

39. SELENITE Ten per cent of sale price on ad valorem basis

40. SILLIMANITE Two and half per cent of sale price on ad valorem

basis.

41. SILVER

(a) By-product Seven per cent of London Metal Exchange price

chargeable only product silver metal actually

produced.

(b) Primary silver Five per cent of London Metal Exchange silver metal

price chargeable on the contained silver metal in ore

produced.

42. SLATE Forty five rupees per tonne.

43.TALC/STEATITE/

SOAPSTONE

Eighteen per cent of sale price on ad valorem basis.

44. TIN Seven point five per cent of London Metal Exchange

tin metal price chargeable on the contained tin metal

in ore produced.

46. TUNGSTEN Twenty rupees per unit per cent of contained WO3

per tonne of ore and on pro rata basis.

46.URANIUM *** 1

47 Vanadium Twenty per cent of sale price on ad valorem basis

48. VERMICULITE Three per cent of sale price on ad valorem basis.

49. WOLLASTONITE Twelve per cent of sale price on ad valorem basis

50. ZINC Eight per cent of London Metal Exchange zinc metal

price on ad valorem basis chargeable on contained

zinc metal in ore produced.

@

Rates of royalty in respect of item 38 relating to Sand for Stowing as revised vide notification

number G.S.R.214(E) dated the 11th

April, 1997 will remain in force until revised through a separate

notification by the Ministry of Coal.

1 Rates of royalty in respect of item No. 46 relating to uranium as revised vide notification No. G.S.R.

96 (E) dated 13 February 2009 will remain in force until revised.

243

Eight point four per cent of London Metal Exchange

zinc metal price on ad valorem basis chargeable on

contained zinc metal in concentrate produced

51. All other minerals not

herein before specified[Agate,

Clay (others),Chalk,

Corundum, Diaspore, Dunite,

Felsite, Fuschite, Kyanite,

Quartzite, Jasper, Perlite,

Rock Salt, Shale, Pyroxenite,

etc.]

Ten per cent of sale price on ad valorem basis

Rate of royalty in respect of item 10 relating to Coal Including Lignite) as

revised vide notification number G.S.R.522 (E), dated the 1st August, 2007 of

Government of India, Ministry of Coal will remain in force until revised

through a separate notification by the Ministry of Coal.

Note: The rates of royalty for the State of West Bengal in respect of the minerals

except the mineral specified against item No.10 shall remain the same as

specified in the notification of the Government of India in the Ministry of

Steel and Mines (Department of Mines) number G.S.R.458(E) , dated the 5th

May, 1987‖ till the outcome of the litigation pending in the Supreme Court of

India.

244

THE THIRD SCHEDULE

(See Section 9 A)

RATES OF DEAD RENT

(APPLICABLE FOR ALL STATES AND UNION TERRITORIES EXCEPT

THE STATE OF WEST BENGAL)

1). The rates of dead rent applicable to the leases other than those obtained for

supply of raw material to the industry owned by the concerned lessee:

(Rates of Dead Rent in Rupees per hectare per annum)

Item

Number

Category

of the

mining

lease

1st year of the

lease

5.5.87

11.4.97

2nd

to 5th

year

of the lease

12.9.00

5.5.87

6th

to 10th

year

of the lease

11.4.97

12.9.00

11th year of the

lease and onwards

5.5.87 11.4.97

12.9.00

(a) Lease

area upto

50

hectares

Nil 30 60 70 60 120 140 90 180 200

(b). Lease

area

above 50

hectares

but not

exceedin

g 100

hectares

Nil 40 80 100 80 160 200 120 240 280

(c). Lease

area

above

100

hectares

Nil 60 120 140 100 200 230 150 300 350

2) In the case of lease obtained for the supply of raw material for the industry

owned by the concerned lessee, the rates of dead rent would be applicable as

given in respect of item number (a) above, irrespective of the lease area and

the value of mineral.

3) One and half times the rates specified in item numbers (a), (b) and (c) above

in case of leases granted for medium value mineral(s).

4) Two times the rates specified in item numbers (a), (b) and (c) above in case

of leases granted for high value mineral(s).

Note : For the purpose of this notification

245

(1) (a) ―High value minerals‖ means gold, silver, diamond, ruby, sapphire,

emerald and all other gem stones (precious, semi-precious stones), copper, lead,

zinc, asbestos (chrysolite variety), corundum, mica.

(b) ―Medium value minerals‖ means agate, chromite, manganese ore, sillimanite,

vermiculite, magnesite, wollastonite, perlite, diaspore, apatite and rock phosphate,

fluorspar (or fluorite), barytes.

(c) ―Low value minerals‖ means minerals other than high value minerals and

medium value minerals.

(2) The rates of dead rent for the State of West Bengal shall remain the same as

specified in the notification of the Government of India in the Ministry of

Steel and Mines (Department of Mines) No.G.S.R.458(E), dated the 5th

May,

1987‖.

Rates of dead rent as per G.S.R. 678(E) dated 14 October 2004

Third Schedule

(See Section 9 A)

RATES OF DEAD RENT

(APPLICABLE FOR ALL STATES AND UNION TERRITORIES EXCEPT

THE STATE OF WEST BENGAL)

1). The rates of dead rent applicable to the leases for low value minerals are as

under:

Rates of Dead Rent in Rupees per hectare per annum

First two years of the lease Third year onwards

100 400

(2) Two times the rate specified under (1) above in case of lease granted for

medium value minerals.

(3) Three times the rates specified under (1) above in case of lease granted for

high value minerals.

(4) Four times the rates specified under (1) above in case of lease granted for

precious metals and stones.

Note : For the purpose of this notification

(a) ―Precious metal and stone‖ means gold, silver, diamond,, ruby, sapphire and

emerald

(b) ―High value minerals‖ means semi precious stones(agate, gem, garnet),

corundum, copper, lead, zinc, asbestos (chrysolite variety), corundum, mica.

(c) ―Medium value minerals‖ means chromite, manganese ore, kyanite,

sillimanite, vermiculite, magnesite, wollastonite, perlite, diaspore, apatite and

rock phosphate, fluorspar (or fluorite), barytes.

(d) ―Low value minerals‖ means minerals other than precious metals and stones,

high value minerals and medium value minerals.

246

(2) The rates of dead rent for the State of West Bengal shall remain the same as

specified in the notification of the Government of India in the Ministry of

Steel and Mines (Department of Mines) No.G.S.R.458(E), dated the 5th

May,

1987‖.

RATES OF DEAD RENT AS PER G.S.R. 575(E) DATED 13 AUGUST 2009

Third Schedule

(See Section 9 A)

RATES OF DEAD RENT

(APPLICABLE FOR ALL STATES AND UNION TERRITORIES EXCEPT

THE STATE OF WEST BENGAL)

1). The rates of dead rent applicable to the leases for low value minerals are as

under:

Rates of dead rent in rupees per hectare per annum

From second year of lease Third year and fourth year Fifth year onwards

200 500 1,000

(2) Two times the rate specified in paragraph 1 in case of lease granted for

medium value minerals.

(3) Three times the rates specified in paragraph 1 in case of lease granted for

high value minerals.

(4) Four times the rates specified in paragraph 1 in case of lease granted for

precious metals and stones.

Note : For the purpose of this notification

(a) ―Precious metal and stone‖ means gold, silver, diamond,, ruby, sapphire and

emerald

(b) ―High value minerals‖ means semi precious stones(agate, gem, garnet),

corundum, copper, lead, zinc, asbestos (chrysolite variety), corundum, mica.

(c) ―Medium value minerals‖ means chromite, manganese ore, kyanite,

sillimanite, vermiculite, magnesite, wollastonite, perlite, diaspore, apatite and

rock phosphate, fluorspar (or fluorite), barytes.

(d) ―Low value minerals‖ means minerals other than precious metals and stones,

high value minerals and medium value minerals.

(2) The rates of dead rent for the State of West Bengal shall remain the same as

specified in the notification of the Government of India in the Ministry of

Steel and Mines (Department of Mines) No.G.S.R.458(E), dated the 5th

May,

1987‖.

5.4.2 LEVY OF SURFACE RENT

The lessee shall also pay, for the surface area used by him for the purpose of mining

operations, surface rent and water rate at such rate, not exceeding the land revenue,

247

water and cesses assessable on the land, as may be specified by the State

Government in the lease.

(Rules 27(d) of MCR 1960)

5.4.3 LEVY OF PENALTY

(1) Whoever contravenes of the provisions of the Act shall be punished with

imprisonment for a term which may extend to two years, or with fine which

may extend to twenty five thousand rupees or with both.

(2) Contravention of the Rules made under any provision of the Act, shall be

punishable with imprisonment for a term which may extend to one year or

with fine which may extend to five thousand rupees, or with both and in the

case of continuing contravention with an additional fine which may extend to

five thousand rupees for every day during which such contravention continue

after conviction for first such contravention. (Section 21(1) & (2)) [(1) was

sub. By Act 38 of 1999 (with effect from 18.12.99)]

5.4.4 LEVY OF INTEREST FOR BELATED PAYMENT

The simple interest at the rate of twenty four per cent per annum is chargeable on

any rent, royalty or fee (other than under sub-rule (1) of rule 54) or other sums due to

the Government from the sixtieth day of the expiry of the date fixed by the

Government for payment of such royalty, rent, fee or other sum and until payment of

such royalty, rent, fee or other sum is made (Rule 64A).

Prior to 1st January 2001, the royalty was leviable at quarterly rates i.e. 1

st January,

1st April,1

st July,1

st October and accordingly the dead rent was also leviable

quarterly. (Industry& Mines Deptt. Resolution No.MMR-1097-2787-CHH dated 7th

July 1999).

With effect from 1st January 2001 the royalty is leviable in advance and accordingly

the dead rent is also leviable.

5.4.5 PAYMENT MADE INTO GOVERNMENT ACCOUNTS

Payment in respect of royalty, dead rent and surface rent and fees etc. is required to

be remitted into Treasury/Sub-treasury office under the Head of Accounts “0853-

Non-ferrous Mining and Metallurgical Industries-102-Mineral Concession fees,

Rents and Royalties”

5.4.6 RECONCILIATION WITH TREASURY RECORDS

It should be ensured that all the remittances made into Treasury/Sub-treasury

accounts every month, all the amounts remitted in to Treasury/Sub-treasury should

be reconciled with their records to ensure that the amounts have actually been

realized in Government Accounts. For the purpose, for one or two months figures

have to be verified personally by the Departmental Officer to ensure the same.

5.4.7 RETURNS AND ASSESSMENTS

The holder of a prospecting license or a mining lease shall furnish to the State

Government such returns and statement and within such period as may be specified

248

by it. As the royalty is payable quarterly the returns also required to be submitted

quarterly.

No provision is provided in the Act as regards the assessment of returns

(Rule 51).

5.4.8 INSPECTION OF ACCOUNTS AND SEARCH OF PREMISES

For the purpose of ascertaining the position of the working, actual or prospective, of

any mine or abandoned mine or for any other purpose the person authorised by the

Government in this behalf may enter and inspect any mine, examine records and

documents, examine any persons having control or connected with any mine and

examination as per Act and Rules.

Further, if the authorized officer in this behalf by general or special order has reasons

to believe that any mineral has been raised in contravention of the Act/Rules or any

document or things in relation to such mineral is secreted in any place or vehicle, he

may search for such mineral document or thing and the provision of Section 100 of

the Code of criminal procedure 1973 (2 of 1974) shall apply to every such search.

(Section 23(B) &24).

5.4.9 RECOVERY OF CERTAIN SUMS AS ARREARS OF LAND

REVENUE

The prescribed officer can issue a certificate of recovery of sums due to the

Government as an arrears of land revenue along with the interest due thereon and

issue of such certificate of recovery on the assets of the holder of the reconnaissance

permit, prospecting license or mining lease, the first charge will be created of the

Government on such assets (Section 25).

OFFENCES, PENALTIES, FINES AND COMPOUNDING OF OFFENCES

5.5.1 CONVICTION FOR CONTRAVENTION

When any holder of lease contravention of the provision of the Act, he, on

conviction will be punished with imprisonment for a term which may extend to two

years or with fine which may extend to twenty five thousand rupees or with the both.

Where as for contravention of the provision of the Rules, he on conviction will be

punished with imprisonment for a term which may extend to one year or with fine

which may extend to five thousand rupees or with both and in the case of continuing

contravention with an additional fine which may extend to five hundred rupees for

every day during which such contravention continues after conviction for the such

contravention.

(Section 21)

5.5.2 OFFENCE BY COMPANY

When an offence under this Act has been committed by a company every person

who at the time the offence was committed was in the charge of and was responsible

to the company for the conduct of the business of the company as well as the

249

company shall be deemed to be guilty of the offence and shall be liable to be

proceeded against and punished accordingly.

Provided that nothing contained in this sub-section shall render any such person

liable to any punishment provided in this Act, if he proves that the offences was

committed without his knowledge or that he exercised all due diligence to prevent

the commission of such offence.

Where an offence under this Act has been committed by a company and it is proved

that the offence has been committed with the consent or convaince of or is

attributable to any neglect on the part of any director, manager, secretary or other

officer of the company such director, manager, secretary or other officer shall also be

deemed to be guilty of that offence and shall be liable to be proceeded against and

punished accordingly.

EXPLANATION : (a) ―Company‖ means any body corporate and includes a firm

or other Association of individual.

(b) ―Director‖ in relation of a firm means a person in the firm.

(Section 23)

5.5.3 COMPOUNDING OF OFFENCE

The State Government can by a general or special order in writing authorise any

officer to compound offences punishable under the Act or the Rules. Such officer

may either before or after the institution or the prosecution, make a complaint to the

court with respect to that offence on payment to that person, for credit to the

Government of such sum as that person may specify.

Provided that in the case of an offence punishable with fine only, no such sum shall

exceed the maximum amount of fine which may be imposed for that offence where

an offence is compounded, no proceedings or further proceedings, as the case may

be, taken against the offender in respect of the offence so compounded, and the

offender, if in custody, shall be released forthwith (Section 23A).

MINOR MINERALS

5.6.1 GUJARAT MINOR MINERAL CONCESSION RULES 2010

Under the provisions of Section 15 of the Mines and Minerals (Development and

Regulations) Act,1957 (67 of 1977), the Government of Gujarat made the Rules and

regulations for grant of the mining lease in respect of minor minerals under ―The

Gujarat Minor Mineral Rules 1966‖ effective from the 1st April 1966. Government

of Gujarat vide Notification No. GU-2010-(37)-MCR-1097-MM-15-CHH dated 26

August 2010 repealed these rules and framed the Gujarat Minor Mineral Concession

Rules 2010 effective from 27 August 2010.

5.6.2 LAW RELATING TO QUARRY PERMITS/PARWANA/LEASE

Quarrying permits/parwana/lease is well defined in Rule 2 (vi) (vi-A) and (vii), lease

means a kind of mining lease, parwana means to extract and remove any minor

mineral from specified land area and permit means to extract and remove any

specified quantity of mineral.

250

Grant of quarrying permit/parwana/lease shall be in accordance with the Act and

Rules made there under.

5.6.3 GRANT OF QUARRY LEASE

FEES AND AREA

1. Application in Form-A `250 for area less than five hectares.

`500/- for area more than five hectares.

The rates have been revised with effect from 27 August 2010 as under:

(A) For quarrying sand, kankar, gravel and ordinary clay

(i) rupees five haundred for an area of less than five hectares

(ii) rupees one thousand for an area of five hectares or more

(B) For quarrying minor minerals other than sand, kankar, gravel and ordinary clay

(i) rupees two thousand five hundred for an area less than five hectares

(ii) rupees five thousand for an area of five hectares or more

2. Acknowledgement of application in Form-B for grant of lease and

priority

3. Register for application to be maintain in Form-C

4. Lease deed in Form-D to be executed within three months

from

the date of sanction order.

5.Register of quarry lease to be maintained in Form-E

6. Restriction of area of quarry lease(a) does not exceeds 10 hectares in the

case of ordinary sand.

(b) does not exceeds 10 hectares in the

case of specified minerals.

(c) does not exceeds 20 hectares in the

case of other minerals.

The area in excess of the above is to be granted under approval of the Government

(Rule 7 to 15).

Rule 14: Restriction on area of quarry lease (with effect from 27 August 2010)

(1) No quarry lease shall be granted for an area exceeding twenty hectares and for

area less than one hectare.

Provided that in case of case of sand, kankar and gravel, the quarry lease shall be

granted for the maximum area not exceeding 10 hectares and minimum area not be

less than 0.25 hectare.

Provided further that the Government may in special case and under special

circumstances, for the reasons to be recorded in writing, relax the provisions of this

rule.

251

(2) No lessee by himself or jointly with any person shall hold in the aggregate more

than one square kilometer of area under one or more quarry leases in respect of

one or more minor minerals within the State.

Provided that if the Government is of the opinion that in the interest of mineral

development or industrial development of the State, it is necessary to do so, it may,

for reasons to be recorded in writing, permit any industrial unit or co-operative

society to hold one or more quarry leases covering an area in excess of the aforesaid

aggregate area.

(3) The area under any quarry lease shall be in a compact block unless the

competent authority specifically directs otherwise for special reasons to be

recorded in writing.

7. PERIOD OF LEASE RENEWALS

Period of grant Renewal Maximum

Extention

1 Sand, Kankar,

Murrum and

Gravel

Not exceeds 10

years

One or more period

but at one time not

exceeds 10 years.

Total period should

not exceed 20 yrs. in

aggregate.

2 Mineral based

industries

Not exceeds 20

years

Not exceeds 20 years

3 Ordinary sand,

Kankar, Murrum

and Gravel

Not exceeds 3

years

One or more period

but at one time not

exceeds 3 years.

Total period should

not exceed 12 yrs

The position for renewals of quarry lease after 26 August 2010 is as under:

Period of grant Renewal

1 Ordinary sand,

Kankar, Gravel or

ordinary clay or

brick earth

Not exceeds 10

years

One or more period but at one time not

exceeds 10 years.

2 All other minor

minerals

Not exceeds 20

years

Not exceeds 20 years

8 SECURITY DEPOSITS

Before execution of lease deed, the holder of quarry lease deposit as security, for due

observance observance of terms and conditions of the lease,

(a) For quarrying sand, kankar, gravel and ordinary clay, a sum of `1000/- per

hectare or part thereof subject to maximum of `10,000/-and;

(b) For other minor minerals, a sum of rupees two thousand and five hundred per

hectare or part thereof subject to maximum of ` 25,000

252

On expiry and non renewal of the lease deed, the security deposit is to be refunded

and if not refunded in stipulated time, simple interest at the rate of nine per cent is

payable by the Government (Rule 19).

5.6.4 RATE OF ROYALTY, DEAD RENT AND SURFACE RENT

The holder of a quarry lease or any other mineral concession granted under the Rules

shall pay royalty in respect of minor minerals specified in column 2 of schedule-I

removed or consumed by him or by his agent, manager, employees, contractor or

sub-lessee from the leased area at the rate respectively specified against them in

column 3 of schedule-I .

The holder of a quarry lease or any other minor mineral concession granted under

this Rules shall pay yearly dead rent in respect of minor minerals specified in

column-2 of Schedule-II at the rates specified against each minor mineral in column-

3 of the said Schedule-II.

The Government in Industries, Mines and Power Department under notification

No.GU/85/42/MCR-2185(15)/1292-CHH dated 3rd

July, 1985 prescribed the rate of

surface rent at `100/- per hectare or part thereof per annum with effect from 1st

August, 1985.

(As amended Rule (21) (1) and (2) of the Gujarat Minor Mineral (Amendment)

Rules 1992)

The rates as revised with effect from 1.4.1992, 1.1.1999 and 26.8.2010 are given

below:

INDUSTRIES, MINES AND ENERGY DEPARTMENT

Notification

Sachivalaya, Gandhinagar, 1st April, 1992

Mines and Minerals (Regulations and Development) Act, 1957.

No./GU/92(20)/MCR/2190/(69)/1986/CH II. In exercise of the powers conferred by

section 15 of the Mines and Minerals (Regulation and Development ) Act, 1957 (67

of 1957), the Government of Gujarat hereby makes the following Rules further to

amend the Gujarat Minor Mineral Rules,1966 namely :-

(1) This rules may be called the Gujarat Minor Mineral (Amendment) Rules, 1992.

(2) They shall come into force at once.

(2) In the Gujarat Minor Mineral Rules, 1966 (here in after referred to as ― the

said rules‖ for rule 21 the following rule shall be substituted namely:

(21) (1) Rates of Royalty and Dead Rent. The holder of a quarry lease or any other

minor mineral concession granted under these rules shall pay royalty in

respect of minor minerals specified in column 2 of schedule-I, removed or

consumed by him or by his agent, manager, employee, Contractor or sub-

lessee from the leased area at the rates respectively specified against each

of them in column 3 of the said schedule-I.

(2) The holder of a quarry lease of any other minor mineral concession grated

under these rules shall pay yearly dead rent in respect of minor minerals

specified in column 2 of Schedule-II at the rates respectively specified

253

against each minor mineral in column 3 of the said Schedule-II : provided

that

(i) Where the royalty paid during a year under sub rule (1) in respect of a minor

mineral is greater than the dead rent payable under sub rule (2), no dead rent

shall become payable.

(ii) Where the royalty paid during a year under sub rule (I), in respect of a minor

mineral is less than the dead rent the dead rent payable under sub rule (2),

only the difference between the two amounts shall be payable as dead rent.

(iii) The holder of a quarrying parwana granted under these rules shall pay

royalty or dead rent, as the case may be, at the rate of 50 per cent of the rates

specified in schedules-I and II.

(iv) The holder of a quarry lease for an area of one hectare or less for minor

minerals specified in Schedule II, other than marble and bentonite, shall pay

dead rent at the rate of 50% per cent of the rate specified in Schedule II.

(v) No royalty shall be charged from Nimbhadas of village potters who

manufacture bricks with the help of family members and labourers and their

annual production of bricks do not exceed five lakh bricks per year.

(vi) (a) Those Chimney Bhattas which are producing up to 30 lakh bricks per

annum shall be charged lump sum royalty of `22,500/- per annum.

(b) Those Chimney Bhattas which are producing more than 30 lakhs bricks

per annum shall be charged lump sum royalty of `27,500/- per annum.

(vii) If in the same lease hold area, more than one minor mineral is permitted

to be mined, the lessee shall be liable to pay royalty or as the case may be

dead rent for every such minor mineral separately.

(viii) Royalty shall be recoverable in whole rupees, fractions of fifty paise and

above to be rounded upwards to a whole rupee and fractions below fifty paise

shall be ignored.

1. In Rule 22, after clause (I), the following clause shall be inserted namely:

―The lessee shall pay to Government for every year of the lease, the yearly dead rent

specified in Schedule II and if the lease permits the working of more than one Mines

and Mineral in the same area, separated dead rent in respect of each such minor

mineral.

Provided that the lessee shall be liable to pay dead rent or royalty in respect of each

such minor mineral which ever is higher but not both.

1. In the said Rules, for the Schedule, the following Schedules shall be

substituted namely

―SCHEDULE-I”

(See Rule 21)

Sr.No.

(1)

Names of minor minerals

(2)

Rate of royalty per

tonne in Rupees

(3)

1. Black Trap & Hard murrum 12

2. Limest 12

254

3. Sandstones 12

4. Marble : Block

Rubble

75

20

5. Bentonite/Fullers earth 40

6. Ordinary Clay/Ordinary earth 3

7. Ordinary sand, Kankar, gravel, murrum 3

8. Granite, building stone, quarrzite 12

9. Slate, Phyllite 8

10. Red clay used in manufacture of roofing tiles has

to pay lump sum royalty per annum as under :-

(i) Those roofing tiles manufacture unit

producing roofing tiles with Five Dye Revolving

Press shall be charged lump sum royalty of

`8000/- and Single Dye press shall be charged

lump sum royalty of `2000/- per annum per press

11. Carbonaceous Shale 7

12. Any other minor minerals not mentioned above 12

“SCHEDULE-II”

RATE OF DEAD RENT

(See rule 21)

IN RESPECT OF QUARRY LEASE

Sr.No. Minor Minerals Rate per hectare or

part thereof in rupees

1. Black trap and hard murrum 15,000

2. Limestone 10,000

3. Sand Stone 8,000

4. Marble : Block/Rubble 20,000

5. Bentonite 10,000

6. Granite, building stone, quartzite, phyllite, slate,

trachyte, gabbro and dolerite

8,000

INDUSTRIES AND MINES DEPARTMENT

NOTIFICATION

Sachivalaya, Gandhinagar, 1st January, 1999

MINES AND MINERALS (REGULATION AND DEVELOPMENT) ACT,

1957

No. GU/99/1/MMR/1097/2767/Chh.-In exercise of the powers conferred by section

15 of the Mines and Minerals (Regulation and Development) act, 1957 (67 of 1957),

the Government of Gujarat hereby makes the following rules further to amend the

Gujarat Minor Mineral Rules, 1966, namely :-

1(1) These rules may be called the Gujarat Minor Mineral (Amendment) Rules,

1999.

(2) They shall come into force at once.

255

2. In the Gujarat Mines Mineral Rules, 1966, (herein after referred to as ―the

said rules‖) in rule 21, in sub-rule (2) for clause (iv) the following shall be

substituted namely :-

(iv) the lease holders who have obtained lease in private land shall pay

Seventy five per cent of the dead rent as specified in SCHEDULE-II.

3. In the said rules, the Schedules I and II, the following schedules shall be

substituted, namely:

SCHEDULE-I

(See rule 21)

Sr.No.

1

Name of minor minerals

2

Rate of royalty per

tonne (in rupees)

3

1. Cuartzite 15

2. Sand stone 18

3. (i) Granite/Dolerite (in Block)

(ii) Granite/Dolerite (in Rubble)

40

18

4. Other building stone i.e.

Slate, Phyllite, Trachyte, Gabbro and others.

18

5. Limestone 18

6. (i) Blacktrap

(ii) Hard Murrum

15

12

7. Bentonite/Fuller‘s earth 50

8. (i) Marble (in Block)

(ii) Marble (in Rubble)

90

30

9. Carbonaceous shale 20

10. Gravel 5

11. Murrum 5

12. Ordinary Clay 5

13. Ordinary sand/kankar 5

14. Red clay

Red clay used in manufacture of roofing tiles, the

royalty in lump sum per annum shall be charged as

under:

(i) Those units producing roofing tiles with

five Dyes Revolving Press

(ii) Those units producing roofing tiles with

single Dye Press.

10,000 (per press)

3,000 (per press)

15. Brick Clay :

Brick clay used in manufacture of Bricks, the

royalty shall be charged as under :

Those brick manufacture units producing bricks

(i) less than 5 lakh

(ii) 5 lakh to 15 lakh

(iii) Above 15 lakh to 30 lakh

(iv) Above 30 lakh

Nil

22,500

30,000

50,000

16. Quartzite pebbles 15

17. Any other minor minerals not mentioned above. 18

256

SCHEDULE-II

Rate of Dead Rent

(See rule 21)

Sr.No.

In respect of Quarry Lease Name of minor minerals

Rate of dead rent per

hectare or part thereof

(in rupees)

1. Quartzite 20,000

2. Sand stone 20,000

3. Granite/Dolerite 30,000

4. Other Building stone i.e. Slate, phyllite, Trachyte,

Gabbro and Otrers

20,000

5. Limestone 20,000

6. Blacktrap/hard murrum 30,000

7. Bentonite/Fullen‘s earth 25,000

8. Marble 60,000

9. Carbonaceous Shale 15,000

10. Gravel 5,000

11. Murrum Nil

12. Ordinary Clay Nil

13. Ordinary sand /Kankar 5,000

14. Red Clay Nil

15. Brick Clay Nil

16. Quartzite pebbles 15,000

17. Any other minor minerals not mentioned above 10,000

257

INDUSTRIES AND MINES DEPARTMENT

NOTIFICATION

Sachivalaya, Gandhinagar, 16 June, 1999

MINES AND MINERALS (REGULATION AND DEVELOPMENT), ACT,

1957

No. GU/99/22/MMR/1097/2767/Chh.-In exercise of the powers conferred by

Section 15 of the Mines and Minerals (Regulation and Development) act, 1957 (67

of 1957), the Government of Gujarat hereby makes the following rules further to

amend the Gujarat Minor Mineral Rules, 1966, namely :-

1 (1) This rules may be called the Gujarat Minor Mineral (1st Amendment) Rules,

1999.

(2) They shall come into force with immediate effect

2. In the Gujarat Minor Mineral Rules, 1966, in Schedule-I for entry at Serial

Number 15, the following shall be substituted namely:

Sr.No.

Name of Minor Minerals Rate of royalty per

tonne (in rupees)

15.

(a)

(b)

Brick Clay:

Brick Clay used in manufacture of Bricks, the

royalty shall be charged as under:

Those brick manufacturers who manufacture

bricks by way of Chimany Bhatha

(i) less than 5 lakh

(ii) 5 lakh to 15 lakh

(iii) Above 15 lakh to 30 lakh

(iv) Above 30 lakh

Those brick manufacturers who manufacture

bricks by way of Nimbhada

(i) less than 5 lakh

(ii) 5 lakh to 10 lakh

(iii) 10 lakh to 15 lakh

(iv) 15 lakh to 30 lakh

(v) above 30 lakh

Nil

22,500

30,000

50,000

Nil

6,000

10,000

30,000

50,000

Rates of royalty and dead rent under Rule 21 (1) and (2) of the Gujarat Minor

Mineral Concession Rules, 2010

258

SCHEDULE-I

[See rule 21(1)]

Sr.No.

1

Name of minor minerals

2

Rate of royalty per

tonne (in rupees)

3

1. Quartzite 20

2. Sand stone 30

3. (iii) Granite/Dolerite (in Block)

(iv) Granite/Dolerite (in Rubble)

160

30

4. Building stone including

Slate, phyllite, Trachyte, Gabbro and others.

30

5. Limestone 30

6. (iii) Blacktrap

(iv) Hard Murrum

25

20

7. Bentonite/Fuller‘s earth 70

8. (iii) Marble (in Block)

(iv) Marble (in Rubble)

300

60

9. Gravel 15

10. Soft Murrum 12

11. Ordinary Clay 12

12. Ordinary sand/ kankar 12

13. Red clay 30

16. Chalcedony pebbles/Quartzite pebbles 30

17. Any other minor minerals not mentioned above. 30

Note: In case of bricks clay earth minerals used in manufacturing bricks, the rate of

royalty shall be `3600/- per one lakh bricks or part thereof.

Note above has been deleted with effect from 4.6.2012 and new schedule IA

inserted by amending rule 21(1) of the Gujarat Minor Mineral Concessions

Rules, 2010.

Sr. No. Bricks manufacturing

Capacity(in lakh)

Bricks kiln with

Chimany(in rupees)

Bricks without chimany

(Nimbhada, Hand made

Bricks(in rupees)

1 Up to five Nil Nil

2 More than 5 and up to 10 25,000 10,000

3 More than 10 and up to 15 30,000 20,000

4 More than 15 and up to 30 40,000 40,000

5 More than 30 65,000 65,000

259

SCHEDULE-II

Rate of Dead Rent

[See rule 21 (5)]

Sr.No.

1

In respect of Quarry Lease Name of minor minerals

2

Rate of dead rent per Sq.

mtr (in rupees)

3

1. Quartzite 3.30

2. Sand stone 3.00

3. Granite/Dolerite 6.00

4. Building stone including Slate, phyllite, Trachyte,

Gabbro and others

3.00

5. Limestone 3.00

6. (a) Blacktrap

(b) Hard murrum

8.50

5.30

7. Bentonite /Fuller‘s earth 7.00

8. Marble Block / Rubble 7.50

9. Gravel 1.50

10. Soft Murrum 2.00

11. Ordinary Clay 2.00

12. Ordinary sand /Kankar 2.00

13. Chalcedoni pebbles /Quartzite pebbles 2.50

14. Red Clay 3.00

17. Any other minor minerals not mentioned above 3.00

5.6.5 SURFACE RENT

The lessee shall also pay the yearly surface rant to the Government for the surface

area leased to him, at the rate of rupees one hundred per hectare or part thereof or at

the non-agriculture rate prescribed by the Revenue Department, whichever is higher

(revised rate effective from 27 August 2010).

5.6.6 MONTHLY RETURNS

The lessee of a quarry lease shall submit to the competent officer every month a

monthly return in Form-II before the eight day of the succeeding month (Rule 34).

5.6.7 LEASE LIABLE TO CANCEL IF NO QUARRY FOR ONE YEAR

The lease is liable to cancel if the lessee ceases to work the quarry for a continuous

period of one year.

Provided lease shall not be cancelled if the lessee is prevented from operating the

quarry owing to some reasonable cause and if the lessee obtains the prior permission

of the competent authority for not operating the quarry.

260

5.6.8 CONDITION FOR GRANT OF QUARRYING PARWANAS

1. Grant in Form Form -HH

2. Period for grant One year (ending 31st

December)

3. Payment of fees

(a) An area up to 1,000 Sq. mtrs. `50/-

(b) Above 1,000 Sq. mtrs. `100/-

4. Renewable up to 3 years

(i) An area up to 1,000 Sq. mtrs. `50/- each year

(ii) Above 1,000 & up to 2000 Sq. mtrs `100/- each year

5. Security Deposit `50/- per parwana

6. Refund of security deposit For late refund interest

@ 9%.

{Rule 33(B) (C) (F)}

Amendment with effect from 26 August, 2010.

1. Grant in Form Form -K

2. Period for grant One year (ending 31st

March each year)

3. Payment of fees (non refundable fees)

(a) An area up to 1,000 Sq. mtrs. `100/-

(b) Above 1,000 Sq. mtrs. `200/-

4. Renewable not exceeding 3 years (non refundable fees)

(i) An area up to 1,000 Sq. mtrs. `100/- each year

(ii) Above 1,000 Sq. mtrs `200/- each year

5. Security Deposit As may be determinedby

the commissioner

6. Royalty 50 per cent of the rate of

the mineral in advance

7. Dead rent 25 paisa per sq.mtr yealy

in advance

8. Surface rent 50 paisa per hundred

sq. mtr or part thereof

annually

(Rule 58)

261

5.6.9 CONDITION FOR GRANT OF QUARRYING PERMITS

1. Application in Form-I along with the application fees of `50/- for every 500

tonnes duly paid by challans.

2. Grant of permit subject to Rule 34A for any minor mineral not exceeding

4000 tonnes under any one permit and also subject to payment of royalty.

3. In case of breach of conditions subject to which the permit is granted, the

competent officer may cancel it and mineral so excavated become the

property of the Government.

4. A Register of quarrying permit shall be maintained by the competent officer

in Form-K.

(Rule 34, 35 & 36)

AMENDMENT WITH EFFECT FROM 26 AUGUST, 2010

1. Application in Form-L along with the non refundable application fees of `100/-

for every 500 tonnes or part thereof

2. Grant of permit in Form M for any minor mineral not exceeding 4,000 tonnes

under any one permit for period not exceeding 90 days and also subject to

payment of royalty at rate specified in schedule I.

3. In case of breach of conditions subject to which the permit is granted, the

competent officer may cancel it and mineral so excavated become the property

of the Government.

4. A Register of quarrying permit shall be maintained by the competent officer in

Form-N.

(Rule 61, 62 & 64)

5.6.10 APPEAL AND REVISION

Under the provision of Rule 38 of the said Rules, 1966, action is as appended in

Chapter-2 para 9.2.2. (Rule 38 & 41 A)

PROVISIONS OF THE GUJARAT MINOR MINERAL CONCESSION

RULES 2010

1. Any person aggrieved by any order made by the competent authority may

within two months of the date of communication of the order to him, apply to

the Government in Form O for the revision of the order.

2. In every application against the order of competent authority refusing grant

quarry lease/permit/parvana, any person to whom such a concession was

granted in respect of the same area shall be impleaded as party.

3. After considering the revision application, the communication containing

representation and counter representation, Government may confirm, modify or

set aside the order after giving hearing to the aggrieved party.

4. Every revision application shall be accompanied by a treasury challan of Rupees

five hundred paid as non refundable fee for such application.

(Rule 65 and 66)

262

5.6.11 OFFENCES AND PROSECUTION

Any contravention of Rule 5 i.e. no person shall quarry; mine, remove or carry away

any minor minerals, except as provided under this rule, shall be punishable with

imprisonment for a term which may extend to six months, or with fine which may

extend to rupees one thousand or with both, and in case of a continuing

contravention, with an additional fine which may extend to rupees one hundred for

every day during which the contravention continues after conviction for the first

such contravention. (Rule 42)

Similar provisions contained in Rule 68 of the Gujarat Minor Mineral Concession

Rules 2010.

5.6.12 PENALTY FOR FAILURE TO FURNISH RETURNS

If any lessee or his transferee or assignee or private person granting a quarry lease

fails to furnish a document information or return as specified in rule 28, 29 and 31

submit incorrect information or return or refuses entry or inspection by any officer

authorised by the competent authority he shall be punishable with imprisonment for

a term which may extend to one month or with a fine which may amount to rupees

five hundred or with both.

(Rule 33)

Provisions for fine and penalties under the Gujarat Minor Mineral Concession

Rules 2010

Sr.

No.

Under which

rule

Cause for fine or penalty Amount

1 Rule 25 Encroachment upon an area

not included in the lease

after issue of notice to

vacate the area

Fine which may extend up to

100% of the royalty and

amount equal to the mineral

value for the mineral

excavated

2 Rule 36 Failure to carry out the

reasonable direction of the

Inspecting authority to

prevent wasteful extraction

or ensure safety and

conservation of the minor

minerals within the period

specified

Competent authority may

cancel the lease or impose a

penalty not exceeding twice

the amount of dead rent

3 Rule 47 Breach of any of the

condition of the lease, by

the lessee, his transferee or

assignee other than those

referred to in Rule 22

The competent authority may

cancel the lease and take

possession of the premises or

impose fine not exceeding `

5,000

263

5.6.13 INTEREST CHARGEABLE ON BELATED PAYMENT

Interest is recoverable at the rate of twenty four per cent per annum on any rent

royalty or other sums due and not paid within 30 days of date fixed by the

Government (Rule 44C of Gujarat Minor Mineral Rules, 1966).

Provision for charging interest under the Gujarat Minor Mineral Concession

Rules, 2010

Government shall without prejudice to the provisions contained in these rules charge

simple interest at the rate of eighteen per cent per annum on any rent, royalty or

other sum due to the Government under these rules or under the terms and conditions

of any quarry lease or quarry parvana from the date fixed by the government or the

competent authority or the commissioner for payment of such royalty, rent or other

sum and until payment of such royalty, rent or other sum.

(Rule 72)

5.6.14 PROHIBITION TO TRANSPORT SAND BEYOND BORDER

No movement of sand shall be allowed beyond the border of the State. In case any

vehicle is found transporting sand to the neighboring State even with authorized

royalty pass or delivery challan, it shall be treated as violation of Act and rules made

there under and the penal provisions, except compounding as specified therein shall

be applicable.

(Rule 71)

OIL & NATURAL GAS

THE OILFIELD (REGULATION & DEVELOPMENT) ACT, 1948

5.7.1 VALIDITY OF MINING LEASE

(1) No mining lease shall be granted after the commencement of this Act,

otherwise than in accordance with the rules made under this Act.

(2) Any mining lease granted contrary to the provisions of sub-section (1) shall

be void and of no effect. This governs the validity of a mining lease.

5.7.2 ROYALTIES IN RESPECT OF MINERAL OILS

(1) The holder of a mining lease granted before the commencement of the

Oilfields (Regulation and Development) Amendment Act, 1969, shall

notwithstanding anything contained in the instrument of lease or in any law in force

at such commencement, pay royalty in respect of any mineral oil mined, quarried,

excavated or collected by him from the leased area after such commencement at the

rate for the time being specified in the schedule in respect of that mineral oil.

(2) The holder of a mining lease granted on or after the commencement of the

Oilfield (Regulation and Development) Amendment Act, 1969, shall pay royalty in

respect of any mineral oil mined, quarried, excavated or collected by him from the

leased area at the rate for the time being specified in the schedule in respect of the

mineral oil.

264

(3) No royalty shall be payable in respect of any crude oil, casing head

condensate or natural gas which unavoidably lost or is returned to the reservoir or is

used for drilling or other operations relating to the production of petroleum or natural

gas or both.

(4) The Central Government may by notification in the Official Gazette, amend

the Schedule so as to enhance or reduce the rate at which royalty shall be payable in

respect of any mineral oil with effect from such date as may be specified in the

notification:

Provided that the Central Government shall not:

(a) fix the rate of royalty in respect of any mineral oil so as to exceed twenty per

cent of the sale price of the mineral oil at the oilfields or the oil well-head as

the case may be or

(b) enhance the rate of royalty in respect of any mineral oil more than once

during any period of four years.

THE SCHEDULE

RATES OF ROYALTY

1. Crude oil ` 481 per metric tonne

2. Casing-head condensate ` 481 per metric tonne

3. Natural Gas Ten per cent of the value of natural gas

obtained at well-head.

5.7.3 PENALTY

(1) Any rule made under any of the provisions of this Act may provide that any

contravention thereof shall be punishable with imprisonment which may

extend to six months or with fine which may extend to one thousand rupees

or with both.

(2) Whoever after having been convicted of any offence referred to in sub-

section (2), continue to commit such offence shall be punishable for each day

after the date of first conviction during which he continues so to offend with

fine which may extend to one hundred rupees.

PETROLEUM & NATURAL GAS RULES 1959

For regulating the grant of exploration licenses and mining leases in respect of

petroleum and natural gas, the Central Government under Section 5 and 6 of the Oil

Field (Regulation and Development) Act, 1948 framed the above rules effective

from 25th

November 1959.

5.8.1 GRANT OF LIECENSE OR LEASE

Any land or mineral underlying the ocean with the in territorial waters or continental

shelf of India vested in the Union, shall be granted by the Central Government and

any land vested in a State Government shall be granted by the State Government

265

with the approval of the Central Government. Fees for license and lease are

prescribed as below:

(a) License fee `10,000/-

(b) Lease fee `25,000/-

The fees shall be paid to the Central or State Government as the case may be the

licenses or leases prior to the formal grant of license or lease and shall be effective

from the date specified in this behalf in the license or lease (Rule 5 & 6).

5.8.2 PETROLEUM EXPLORATION LICENSE AND PETROLEUM

MINING LEASE AREA AND TERM OF LICENSE

The area covered by a license shall be specified therein and the term of a license

shall in the first instant be valid for a period of four years which may be extended for

two further periods of one year each (Rule 10).

5.8.3 SECURITY DEPOSIT

The applicant for a license shall before the license is granted to him, deposit with the

Central Government or where the license is to be or has been granted by the State

Government, the State Government as security deposit of `50,000/- (Rule 11(1)).

5.8.4 PAYMENT OF LICENCE FEES

The licensee shall pay yearly in advance by way of license fee in respect of his

license, a sum calculated for each square kilometer or part thereof covered by the

license at the following rates:

(i) `8/- for first year of the license

(ii) `40/- for the second year of the license

(iii) `200/- for the third year of the license.

(iv) `400/- for the fourth year of the license.

(v) `600/- for the first and second year of the renewal (Rule 11(2)).

5.8.5 AREA AND TERMS OF A LEASE

(i) The area covered by a lease shall ordinarily be 250 square kilometers

(ii) The term of a lease shall ordinarily be 20 years.

In the public interest, Central Government can relax the above condition in relation

to application of lease (Rule 12).

5.8.6 MINING LEASE FEE/ RENT

(1) The applicant for a lease shall, before the lease is granted to him. (a) Deposit

`1,00,000/- Security Deposit, (b) `10,000/- meeting the preliminary expenses

to the Central Government, or as the case may be to the State Govt.

266

(2) On the grant of a lease, the lessee shall pay Dead rent (a) `12.50 per hectare

or part thereof for the first 100 sq.kms. (b) `25/- per hectare or part thereof

above the first 100 sq.kms. If the lessee shall be liable to pay or royalty

whichever is higher (c) shall pay surface rent for the surface area of the land

actually used by him for the purpose of the operation at such rate not

exceeding the land revenue and cess assessed or assessable on the land (Rule

13).

5.8.7 ROYALTY ON PETROLEUM

Notwithstanding anything in any agreement a lessee shall, (a) where the lease has

been granted by the Central Government pay to that Government (b) where the lease

has been granted by the State Government, pay to that Government, royalty @

`481/- per metric tons of crude oil and casing head condensate and at ten per cent of

the value of at well head of natural gas obtained by the lease (Period 1.4.90 to

31.3.93).

The rates of royalty have been revised from time to time. As the rates were

revised very frequently for short or long period, the schedule of rates may be

obtained for the period of audit for audit purposes.

5.8.8 RETURN AND ASSESSMENT

The lessee shall within the first seven days of every month or within such further

time as the Central or State Government, may allow, furnish or cause to be furnished

a full and proper return showing the complete details of the preceding month and in

the forms as prescribed in the schedule under rules.

On receipt of such report the State Government if it is of the opinion that the

quantity of any crude oil casing head condensate or natural gas declared in the return

furnished in accordance with the rule is too low, may determine the quantity of such

crude oil casing head condensate or natural gas and royalty shall be paid on the

quantity so assessed [Rule 14(2) & (3)].

5.8.9 SURVEY FEES

If at the time of the grant or at any time during the term of the lease, the State

Government is of the opinion that survey or re-survey of the land covered by such

lease or any part of such land is necessary, such land or part thereof shall be

surveyed by a qualified surveyor and the lessee shall with in the period of specified

by the State Government pay to the state Government for such survey or re-survey

such fee as the State Government may with the approval of the Central Government

determined. (Rule 15)

5.8.10 GENERAL PROVISION

The licensee or the lessee shall (a) maintain in good repair and conditions all

apparatus, appliances and wells capable of producing petroleum, on the land covered

by the licensee or the lessee (b) execute all prospecting or mining operations on such

land in a proper and workman like manner in accordance with such methods and

practice as are customarily used in ,modern oilfield practice and abide by all

instructions, directions and orders that may be given pursuant to any rules under

267

Chapter IV, and (c) upon the determination of the license or the lease or upon the

relinquishment of any area covered by it shall furnish to the Central Government

where a license or lease is granted by that Government and to the Central

Government through the State Government where a license or lease is granted by the

State Government confidentially complete records of all the data such as surface

geological maps and sections, magnetic and gravity measurements and anomaly

maps seismic profiles sections and structure contour maps electrical and telluric

current survey data and other information which have a direct or indirect bearing on

the petroleum and mineral possibilities in the area, collected by the licensee or the

lessee or his agents or contractors.

5.8.11 SUSPENSION AND CANCELLATION

(1) Upon written application being made by the licensee or the lessee, or where

are two or more of them, by not less than one half of their number, the

Central Government where the license or the lease has been granted by it or

the State Government with the prior approval of the Central Government

where the license or the lease has been granted by the State Government

may, from time to time, if it considers that adequate reasons have been

furnished, authorise for periods not on any occasions exceeding six months,

suspension of any or all of the terms, convenants or conditions relating to the

working of the land covered by the license or the lease.

(2) The Central Government or the State Government as the case may be may if

it authorise suspension as aforesaid impose such conditions as it may think fit

for the protections of any bore-holes, equipment or works on such lands or

for the protection of any petroleum deposits water or minerals in such land or

in any adjacent land or for any other purpose whatsoever and the licensee or

the lessee shall comply with such conditions as if they are incorporated in the

license or the lease.

(3) If the license or the lessee or his executor, administrator or assignee at any

time during the term of the license or the lease (a) fails to fulfill, or

contravenes, any of the terms, convenants and conditions contained therein or

(b) fails of use the land covered by it bonafide for the purposes for which it

has been granted or (c) uses such land for a purpose other than that for which

it has been granted, the Central Government or as the case may be the State

Government with the prior approval of the Central Government may where it

is satisfied that the failure contravention or use is such as cannot be remedied

on giving thirty days notice to such person and after considering the

representation if any made buy him forfeit the whole or any part of the

security deposit made under rule 11(1) or rule 13(1)(a) and may cancel the

license or the lease. Such cancellation shall be published in the official

gazette and shall take effect from the date of such publication. If the failure

contravention or use is considered to be of a remediable nature the Central

Government or the State Government as the case may be shall give notice to

such person requiring him to remedy the same within sixty days from the

date of receipt of the notice and informing him that the penalty as aforesaid

may be imposed if such remedy is not provided within such period. The State

Government may after considering the representation, if any, made by such

268

person impose the penalty aforesaid if such person fails to do such remedy

within such period.

Provided that the failure on the part of such a person to fulfill any of the

terms convenants and conditions of the license or lease shall not give the

State Government any power to impose the penalty as aforesaid in so far as

such failure arises from the force major and if through force-major the

fulfillment of any of the terms convenants and conditions of the license or the

lease is delayed, the period of such delay shall be added to the period fixed

by the license or the lease for the performance of any act. ―Force major‖

includes an act of God, war, insurrection, riot, civil commotion, tide, storm,

tidal wave, flood, lighting explosion, fire, earthquake and any other

happening which the licensee or the lessee could not reasonably prevent or

control.

(4) A license or a lease may be cancelled either wholly or part by the Central

Government where such license or lease has been granted by it and by the

State Government after the approval of the Central Government where such

license or the lease has been granted by it upon the written request of the

licensee or lessee or where there are two or more of them of not less than one

half of their number and such cancellation shall be published in the Official

Gazette and shall take effect from the date of such publication.

Provided that in the case of a request for cancellation in part of a license or a

lease if the State Government is of the opinion that survey or re-survey is

necessary such survey or re-survey shall be carried out by mining surveyor

and license or the lessee shall within the period specified by the State

Government pay to the State Government for such survey or re-survey such

fee as the Government determine.

(5) If during the term of a license or a lease any part of land covered by it is

required for any public purpose the Central Government or as the case may

be the State Government after approval of the Central Government may upon

one month‘s notice and after considering the representation if any made by

the person concerned cancel such license or lease in so far as it relates to the

said part of the land subject to such restrictions and conditions as it may

impose and such cancellation shall be published in the Official Gazette and

shall take effect from the date of such publication.

5.8.12 FEES ETC. PAYABLE BY DUE DATE

(1) All license fees, lease royalties and other payments under the Rules shall if

not paid to the Central or State Government as the case may be within the

time specified for such payment be increased by ten per cent for each month

or portion of a month during which such fees, royalties or other payments

remain unpaid.

(2) Subject to the Rules if any license fee, lease fee, royalty or other payment

due in respect of a license or lease is in arrears for more than three months

the Central or State Government with approval of the Central Government

may cancel such licence or lease and shall take effect from the date of such

publication.

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5.8.13 PRESERVATION OF CORES AND SAMPLES FOR

EXAMINATIONS ETC.

(1) Every licensee or lessee shall- (a) so far as reasonable practicable collect

label and preserve for reference for a period of at least twelve months all bore

cores and characteristic samples of the strata encountered in all bore-hole on

the land covered by the license or the lease and samples of any petroleum or

water discovered in any bore-hole on such land and (b) furnish to the Central

Government detailed reports of all examinations made of such cores and

samples.

(2) Cores and samples preserved as aforesaid shall at all times be made available

for examination to the agent authorised by the Central Government and may

be taken for the purpose of analysis or other examination but no information

obtained of a result of such analysis or examination shall be published

without the consent of the licensee or the lessee unless the Central

Government deems fit to direct otherwise.

5.8.14 AGENCY FOR SUPERVISION

(1) For the purpose of ascertaining whether the provisions contained in rule 24 to

28 and 30 and any orders, instructions and directions issued there under have

been or are being complied with by the licensee or the lessee and whether the

prospecting or mining operations are being carried on by him in accordance

with these rules, the Central Government may, by notification in the Official

Gazette, constitute a suitable agency consisting of such number of persons as

the Central Government thinks fit.

(2) It shall be the duty of such agency for the purpose aforesaid to supervise

from time to time any oil well or gas well or any drilled hole or information

well in the process of drilling and submit its report to the Central

Government accordingly.

(3) The agency may, in order to carry out its functions under these rules depute

any person authorised by it in this behalf to enter into and inspect any oil well

or gas well or any drilled hole or information well in the process of drilling.

5.8.15 PENALTIES

(1) If the holder of a petroleum exploration license or mining lease or his

transferee or assignee fails, without sufficient cause to furnish the

information or returns or acts in any manner in contravention of sub-rule (2)

of rule 14, rule 19 and rule 24 or to allow any authorised person as provided

in rule 32 to enter into and inspect any oil well or gas well or any drilled hole

or information well in the process of drilling he shall be punishable with

imprisonment for a term which may extend to six months or with fine which

may extend to one thousand rupees or with both.

(2) Whoever after having been convicted of any offence referred to

the sub-rule (1) continues to commit such offence shall be punishable for

each day after the date of the first conviction during which he continues so to

offend, with fine which may extend to one hundred rupees.

270

5.8.16 ARBITRATION OF DISPUTE

Every license or lease shall be subject to the following terms namely:

Any dispute (including a dispute regarding the market price referred to in rule (18)

between the Government and the licensee or the lessee regarding -

(a) Any right claimed by the licensee or the lessee under the license or lease or

(b) Any breach alleged to have been committed by the licensee or lessee or any

of the term, covenants of the license or lease or any penalty proposed to be

inflicted thereof or

(c) the fees, royalty or rents payable under the license or the lease or

(d) any other matter or thing connected with the license or the lease shall be

settled by two arbitrators, one to be nominated by the Central Government

and the other by the license or lessee or in case of disagreement between the

arbitrators by an umpire appointed by the arbitrators by writing under their

hands before proceeding with arbitration. The arbitrator or the umpire shall

also determine which –party shall bear the expenses of the arbitration or

whether such expenditure shall be divided between the two parties and if so

in what proportion.

The arbitrators or the umpire, as the case may be from time to time with the

consent of all the parties to the contract enlarge the time for making the

award. Subject to the aforesaid, the provisions of the arbitration act 1940 and

the Rules there under for the time being in force, shall apply to the

Arbitration proceedings under this clause.

Notwithstanding the suppression of Petroleum Concession Rules, 1949 all

licenses and leases granted there under which are still in force on the

commencement of these rules, shall subject to the provisions contained in

sub-rule 1(a) of Rule 14, continue to be in force and such suppression shall

not affect:

(a) any right, privilege, obligation or liability acquired accrued or incurred under

the said Petroleum Concession Rules, 1949 or

(b) any penalty, forfeiture or punishment incurred in respect of any contravention

of the provisions of the said Petroleum Concession Rules, 1949 by the said

licenses and leases.

Provided that any such license or lease may be modified by mutual

agreement between the Central Government and the licensee or the lessee

where such license or lease has been granted by the Central Government or

between the State Government and the licensee or the lessee with the

approval of the Central Government where such license or lease has been

granted by the State Government.

Amendment to the Petroleum and Natural Gas Rules, 1959

1. These rules may be called the Petroleum and Natural Gas (Amendment) Rules,

1959 and shall come into force on the 1st day of April 2003.

2. Initial license or lease fee (Rule 6)

(i) ` 25,000 in case of a license)

271

(ii) ` 50,000 in case of a lease

3. Security deposit, annual license fee(Rule 11)

(a)Deposit as security for due observance of terms, covenants and conditions:

`.1,00,000 (Rupees one lakh)

(b) License fee yearly in advance, a sum calculated for each square kilometer or part

thereof at the following rates:

(i) ` 50 for the first year of license,

(ii) ` 100 for the second year of the license,

(iii) ` 500 for the third year of the license,

(iv) ` 700 for the fourth year of license,

(v) ` 1,000 for each subsequent year of renewal

4. Mining lease fees, rent (Rule 13)

(a) Deposit as security, a sum of ` 2,00,00 (rupees two lakh) for due observance of

the terms and conditions of the lease

(b) also deposit for meeting the preliminary expenses such sum not exceeding `

30,000 (rupees thirty thousand)

(c) pay every year a fixed yearly dead rent at the following rates:

` 25 per hectare or part thereof for the first 100 square kilometer and

` 50.00 per hectare or part thereof for the area exceeding the first

100 square kilometers, provided the lessee shall be liable to pay only dead rent or

the royalty whichever is higher.

(d) Pay to the State Government for the surface area of the land actually used by

lessee for the purpose of operations conducted under the lease, surface rent at

such rate not exceeding the land revenue assessed or assessable on the land

5. Increased by penal rate for fees etc. not paid by due date

All license fees, lease fees, royalty or other payment not paid within the time

specified for such payment be increased by a penal rate of 200 basis points over

prime lending rate of SBI for the delayed period.

Amendment to the Petroleum and Natural Gas Rules, 1959

1. These rules may be called the Petroleum and Natural Gas (Amendment) Rules,

2009 and shall come into force with effect from the date of their publication in the

official gazette i.e. with effect from 16 December 2009.

1. Rule 6 Sub-rule (1)

(i) ` 1,00,000 (rupees one lakh) substituted for ` 25,000 (rupees twenty five

thousand).

(ii) ` 2,00,000 (rupees two lakh) substituted for ` 50,000 (rupees fifty thousand).

2. Rule 11 Sub-Rule (1) and (2)

(a) ` 4,00,000 (rupees four lakh) substituted for ` 1,00,000 (rupees one lakh)

272

(b) Clauses (i) to (v) shall be substituted for the following:

(i) `200 ( rupees two hundred) for the first year license,

(ii) ` 400 (rupees four hundred) for the second year license,

(iii) ` 2,000(rupees two thousand) for third year license,

(iv) ` 2,800(rupees two thousand eight hundred) for fourth year license,

(v) ` 4,000 (rupees four thousand) for each subsequent year renewal.

3. Rule 13

(a) In Sub-rule (1)

(i) In clause (a), ` 8,00,000 (rupees eight lakh) substituted for

` 2,00,000(rupees two lakh)

(ii) In clause (b), ` 1,20,000 (rupees one lakh twenty thousand) substituted for `

30,000 (rupees thirty thousand)

(b) In sub-rule (2),clause (a)

(i) ` 100 (rupees one hundred) substituted for ` 25 (rupees twenty five)

(ii) ` 200.00 (rupees two hundred) substituted for ` 50.00 ( rupees fifty)

(c) In sub-rule (2) after clause (a),the following proviso shall be inserted.

―Provided that the lessee shall pay within thirty days dead rent of the grant of

petroleum mining lease and yearly dead rent in advance for every subsequent year‖.

Notification No G.S.R.814E dated 16 December 2004

In exercise of power conferred by sub-section (4) of section 6A of the Oil

Fields(Regulation and Development) Act, 1948, the Central Government hereby

modifies the rates at which royalties shall be payable in respect of mineral oils,

namely, crude oil, casing head condensate and natural gas and makes the further

amendments in the said Act, namely:-

In the Oil Fields (Regulation and Development) Act,1948, for the schedule, the

following shall be substituted and entries therein shall be deemed to have been

substituted with effect from the dates specified hereunder, namely,

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SCHEDULE

(See section 6 A)

Rate of royalty

1. CRUDE OIL

(1) PRODUCTION FROM AREAS OUTSIDE NEW EXPLORATION

LICENSEING POLICY (NELP) REGIME

A NOMINATION BLOCKS

(i) from 1.4.1993 to 31.3.1996 : @ ` 539.20 per Metric Tonne

(ii) from 1.4.1996 to 31.3.1998 ;@ ` 603.95 per Metric Tonne

B PRODUCTION FROM AREAS AWARDED ON NOMINATION BASIS

TO NATIONAL OIL COMPANIES (NOCs), EXPLORATION BLOCKS

AWARED TO PRIVATE/JOINT VENTURE CONTRACTORS PRIOR

TO NEW EXPLORATION LICENSING POLICY (NELP) AND

ONLAND DISCOVERED FIELDS AWARDED TO PRIVATE/JOINT

VENTURE CONTRACTORS:

(i) from 1.4.1998 to 31.3.2002 : Monthly average rate per Metric Tonne as per

statement appended;

(ii) with effect from 1.4.2002:

(a) onland areas: @ 20 % of well head price

(b) shallow water offshore areas( upto 400 mtr water depth): @ 10% of well

head price

(c) Deep water off shore areas(>400 mtr water depth) : @ 5 % of well head

price during first 7 years after commercial production and normal rates as

applicable to shallow water areas (upto 400 mtr water depth) during the

other periods

(d) Heavier crude oils of 25o API and less : 25 % lesser than the rate applicable

above

(e) Reduced rates of royalty, as the case may be notified by the Government

from time to time, will be levied on production from fields under Enhanced

Oil Recovery (EOR)/Improved Oil Recovery (IOR)

C. PRODUCTION FROM OFFSHORE DISCOVERED FIELDS AWARDED

TO PRIVATE /JOINT VENTURE CONTRACTORS:

At the rates as specified in respective Production Sharing Contractors (PSCs)

(2) PRODUCTION FROM AREAS UNDER NELP REGIME:

At the rates determined in accordance with the provisions under respective

Production Sharing Contracts (PSCs)

2. CASING HEAD CONDENSATE

(1) PRODUCTION FROM AREAS OUTSIDE NEW EXPLORATION

LICENSING POLICY(NELP) REGIME

274

A. NOMINATION BLOCKS

(i) from 1.4.1993 to 31.3.1996: @ ` 539.20 Per Metric tone

(ii) from 1.4.1996 to 31.3.1998:@ `603.95 per Metric Tonne

B. PRODUCTION FROM AREAS AWARDED ON NOMINATION BASIS TO

NATIONAL OIL COMPANIES(NOCs), EXPLORATION BLOCKS

AWARDED TO PRIVATE JOINT VENTURE CONTRACTORS PRIOR TO

NELP AND ONLAND DISCOVERED FIELDS AWARDED TO

PRIVATE/JOINT VENTURE CONTRACTORS:

(i) From 1.4.1998 to 31.3.2002: Monthly average rate per Metric Tonne as per

statement appended.

(ii) With effect from 1.4.2002:

(a) Onland areas :@ 20 % of well head price

(b) shallow water offshore areas( upto 400 mtr water depth): @ 10% of

well head price

(c) Deep water off shore areas(>400 mtr water depth) : @ 5 % of well head

price during first 7 years after commercial production and normal rates as

applicable to shallow water areas (upto 400 mtr water depth) during the other

periods

(d) Reduced rates of royalty, as the case may be notified by the Government

from time to time, will be levied on production from fields under Enhanced Oil

Recovery (EOR)/Improved Oil Recovery (IOR)

C. PRODUCTION FROM OFFSHORE DISCOVERED FIELDS AWARDED TO

PRIVATE/JOINT VENTURE CONTRACTORS

At the rates specified in accordance with the provisions under respective Production

Sharing Contracts (PSCs)

(2) PRODUCTION FROM AREAS UNDER NELP REGIME:

At the rates determined in accordance with the provisions under respective

Production Sharing Contracts (PSCs)

3. NATURAL GAS: Ten per cent of the value of the natural gas obtained at the

well head

Note 1: Well Head Price of crude oil and casing head condensate for areas covered

under 1.(1) B and 2.(1)B above will be determined by deducting 7.5% and 10% of

the crude oil and casing head condensate price considered for onland and offshore

production respectively.

Royalty will be calculated on cum royalty basis as under:

Royalty amount = well head price x royalty rate

100 + royalty rate

Note 2: Since consultations with the concerned State Government took some

time, it has become necessary to revise the rate of royalty with retrospective

effect. The oil producing States stand to benefit and other State are not likely

to be adversely affected.

275

STATEMENT OF MONTHLY AVERAGE RATES OF ROYALTY

PAYABLE PER METRIC TONNE ON CRUDE OIL & CASING HEAD

CONDENSATE AS MENTIONED AT 1(1)B (i) AND 2(1)B(i) ABOVE

DETAILS OF MONTHLY ROYALTY RATES

Month Royalty

rates

Month Royalty rates

`./MT `./MT

Apr.98 411.31 Apr.00 1,055.88

May.98 409.46 May.00 1,037.69

Jun.98 414.09 Jun.00 915.75

Jul.98 431.35 Jul.00 1,100.28

Aug.98 415.32 Aug.00 1,165.03

Sept.98 450.01 Sep.00 1,126.65

Oct.98 431.35 Oct.00 1,180.45

Nov.98 483.15 Nov.00 1,331.09

Dec.98 462.80 Dec.00 1,279.89

Jan.99 406.53 Jan.01 1,298.23

Feb.99 368.45 Feb.01 973.71

Mar.99 398.67 Mar.01 1,009.02

Apr.99 374.77 Apr.01 1,104.29

May.99 511.06 May 01 1,040.62

Jun.99 569.64 Jun. 01 1,091.19

01 Jul. to 14 Jul.

99

569.64 Jul. 01 1,165.50

15 Jul. to 31 Jul.

99

580.74 Aug.01 1,171.05

Aug.99 602.17 Sep.01 1,066.21

Sep.99 706.54 Oct.01 1,113.39

Oct.99 769.29 Nov.01 1,106.76

276

Nov.99 858.70 Dec.01 904.03

Dec.99 846.99 Jan.02 808.29

Jan. 2000 942.11 Feb.02 815.23

Feb.00 958.91 Mar. 02 851.77

Mar. 00 965.39

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DETAILED AUDIT PROCEDURE

5.9.1 SANCTION AND RENEWAL OF LEASE DEEDS

Lease deed, executed after 17th

January, 2000 in respect of major minerals, are

required to be registered compulsorily under Rule 31(2) of Mineral Concession

Rules 1960. However, as per Registration Act, 1908 every lease deed for a period

extending more than a year are required to be registered compulsorily.

In the light of above, it is to be seen

(a) That whether estimation of royalty; dead rent payable by lease as worked out

for levy of stamp duty for the period of lease is correct with reference to

mining plan estimates for excavation of minerals and prevailing rates of

royalty is correctly adopted at the time of execution of lease deed.

(b) Whether all the lease deed for a period exceeding one year have been duly

executed on proper stamp duty and registration thereof have been made

properly.

(c) Whether at the time of renewals of lease deed, all dues to Government have

been paid and no recovery is outstanding and ―no due certificates‖ have been

granted.

While in the case of renewal of the lease, it is to be seen that the royalty and dead

rent are properly worked out for the purpose of stamp duty and accordingly, and the

lease deed is properly executed and registered.

5.9.2 REGISTER OF MINING LEASE & REGISTER OF RENEWAL OF

QUARRY LEASE

It is to be seen whether any lease deemed to be extended cancelled with retrospective

effect and whether there is an inordinate delay in granting of renewal of lease.

5.9.3 DEMAND & COLLECTION REGISTERS

This register is to be scrutinised minutely to see:

(a) Whether monthly accounts duly scrutinised in respect of each lease is posted

for production, clearance and closing balances of mineral excavated and the

royalty payable worked out at the prevailing rates of royalty and such royalty

is paid within time prescribed.

(b) Mode of payment is to be checked with reference to lease deed executed with

effect from 1st January 2001 i.e. royalty is to be paid in advance.

(c) In case of belated payment of tax, interest @ 24% worked out for the period

of delay and notices issued for the same and amounts have been recovered

without any delay.

(d) If the royalty or dead rent which ever higher is to be recovered. It may be

seen whether the difference there have been worked out properly and

recovered the same in time.

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(e) Whether the surface rent is prescribed in lease deed of major mineral and

rates prescribed in notification by the Government in case of minor mineral

have been worked out and recovered in time from the lease holder.

(f) Whether at the end of each year, for each mineral, accounts have been closed

properly showing outstanding amounts if any in respect of royalty, dead rent

and surface rent. Each of the entry as made in respective column are to be

attested by prescribed officer.

Non closing or improper closure of ledger accounts in respect of each lease may be

commented upon.

5.9.4 PERMITS/PARWANA

During the scrutiny of permits or parwana, it is to be seen that:

(a) Whether the permits granted is in accordance with the quantity so prescribed

under rules.

(b) Whether the parwana granted is in accordance with the area so prescribed

under rules.

(c) In case of major minerals; the quantities to be excavated and lifting thereof

within time limit is subject to approval of the Government i.e. for a specified

major minerals of the first schedule to the Act, 1957 from the Central

Government and for other major mineral from State Government is required.

It is to be seen whether such approval have been taken and excavation of minerals

and lifting etc. are in accordance with provisions.

5.9.5 REMITTANCES/ RECONCILIATION WITH TREASURY ACCOUNTS

(a) Monthly receipts of royalty, dead rent, surface rent and composition account

in respect of illegal excavation and transportation of minerals are duly

reconciled with Treasury accounts and whether then only the credit have

been afforded in Demand and Collection register against the clearance of

mineral.

(b) The composition amounts are to be recovered by issue of cash receipts to the

offender for finalization of their cases of compounding of offences viz.

Illegal excavation, unauthorized transportation of mineral etc. In addition it is

to be seen whether the amount required to be credited into Treasury has been

done within reasonable time.

It is to be seen whether the remittances have been made into the treasury in time or

not. Delay and non-remittances may be brought out in audit.

5.9.6 SURRENDER OF LEASE

In case of surrender or part surrender accepted in case of quarry leases, it is to be

seen whether such surrender has been accepted after the payment of Government

dues and possession of Government land has been taken over before payment of

Government dues.

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5.9.7 ARREARS TO BE RECOVERED AS ARREARS OF LAND

REVENUE

(a) A lessee wise outstanding of revenue statement at the end of each year is to be

submitted to the Commissioner of Geology and Mining. Whether appropriate

actions to recover old outstanding dues, such as issue of ―Revenue Recovery

Certificate‖ to the Land Revenue Authority and its pursuance for final recovery

of dues are taken or not is to be ascertained.

(b) Revenue Recovery Certificate issued should contained break-up of outstanding

dues, correct address of the lessee and interest worked out up to the preceding

month of issue of such certificate. While reviewing recovery through revenue

authorities, it is to be seen whether certificate contains detailed break-up i.e.

month wise outstanding amount and interest calculated up to preceding month.

5.9.8 RETURNS AND LEDGERS

It is to be seen that monthly returns as submitted by the lease holder are in time and

the minerals as excavated from mines, their clearance and balances are agreed with

as entered in the ledgers. Royalty or dead rent as applicable has been correctly

worked out and paid to the Government account. Total in ledger is agreed with the

totals of returns and there is no discrepancy therein.

5.9.9 OIL AND NATURAL GAS

(a) In case of oil and natural gas, the lessee has to pay royalty, fees and other

payments within seven days of next month except in case of Oil & Natural

Gas Commission (ONGC), the time of 45 days has been fixed by

Government. If the payment are not made within specified date, such

payments be increased by ten per cent for each month or part of amount

during which royalty, fees remain unpaid under Rule 23 of the PNG Rules,

1959.

(b) It is to be seen from returns submitted by the lease holders that the rates

applied are correct and not at pre-revised rate. The rates may be ascertained

as per revision made from time to time.

(c) The wastage of flared up gas as mentioned in returns is in accordance with

rules and regulations.

5.9.10 REMITTANCES IN TO TREASURY

It is to be ensured periodically with reference to the challans for payment of royalty,

dead rent, surface rent, fees etc. on record with the prescribed officer and the

Treasury/Sub-treasury subsidiaries registers that the amount represented by the

challans have really entered the treasury account and discrepancies, if any, are

promptly investigated and reconciled.

5.9.11 AUDIT CHECKS

The sampling technique and the audit checks to be adopted while conducting audit in

respect of Mining receipts has been brought out in Annexure-5(A) and Annexure-

5(B) respectively.

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ELECTRICITY DUTY AND FEES

6.1.1 LEGISLATIVE BACK-GROUND

Entry No. 53 and Entry No. 66 of List- II (State List) of the 7th

Schedule to Article

246 of the Constitution of the India confer power on the State Government to

legislate on taxes on the consumption or sale of electricity and the levy of fees.

Similar power is also vested in the Union Government by Entry No. 38 and Entry

No. 47 of list- III of the aforesaid schedule. Under these provisions, the Indian

Electricity Act, 1910, the Rules made there under as adopted and the Bombay

Electricity Duty Act, 1958 now Gujarat Electricity Duty Act, 1958 and the

corresponding rules constitute the legal basis for the levy and collection of duty and

fees on consumption of energy and testing and inspection of electrical installations.

The Indian Electricity Act, 1910 deals with the grant of licenses for generation and

supply of electric energy and the method and manner of revoking and amending the

licenses. Licenses under the Act are required to be issued by the State Government

The Act empowers the licensee to break open within his area of supply the soil and

pavement in street, railway or any sewer etc. for the purpose of laying the cables or

for repairing them. The Act deals with the question of supply of power, the

licensee‘s legal objections to supply electricity within his area of supply to whoever

applies for it at a rate which would give the licensee a reasonable return on the

capital expenditure to theft of energy and prescribes licensee for legal or defective

supply to procedure for intention of prosecution. There are supplementary provisions

for arbitration and service of notice, under the documents.

6.1.2 LEVY OF FEES FOR INSPECTION TEST AND SERVICES-

POWERS OF INSPECTORS

Under the Act, Inspectors are appointed by the State Government, who has many

important duties to perform. The following are some of the important powers and

functions of Electrical Inspectors appointed under the provisions of the Indian

Electricity Act.

1. Power of entry, inspection and examination of any place where he has

reasons to believe that electrical apparatus or appliances are kept and to test

the same.

2. Power to serve an order upon any supplier, consumer, owner and occupant to

comply with any specified rules.

3. Power to require an owner to submit for his examinations records of the test

made by him.

4. Powers to require a list of consumers to be submitted to him.

CHAPTER 6

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5. Powers to direct disconnection of supply on default in payment of fee for

periodical inspection and testing.

6. Powers to approve the form in which the result of test made by a supplier is

to be recorded.

7. Powers to direct discontinuation of supply where facilities of testing are

denied or leakages of power exceed prescribed maximum.

8. Power to approve suitable apparatus for examination, testing and regulation

of energy meter.

9. Power to authorise commencement of supply at high or extra voltage on

satisfactory compliance of specified provisions.

10. Other miscellaneous powers under the various provisions of the Act and the

Rules, to settle disputes between a supplier and a consumer, to grant

competitions, relax the provisions of certain rules etc.

The Government of Gujarat in Industries, Mines and Power Department Order No.

GH/85/20/IEA/1076/9184/K dated. 25-3-85 and order No.GH/89/31/IEA/1076/

9184-K dated 15.6.89 have made rules relating to testing and inspection of electrical

installation under the Indian Electricity Act which are included in Appendix-I.

6.1.3 Under Art 287 of the constitution, no law of a State shall impose or authorize

the imposition of a tax on the consumption or sale of electricity which is consumed

by the Government of India or sold to Government of India for consumption by that

Government or consumed in the construction, maintenance or operation of any

railway by the Government of India or a railway company operating that Railway, or

sold to that Government or any such railway company for consumption in

construction, maintenance or operation of any railway.

ORGANISATION AND FUNCTIONS OF THE DEPARTMENT

6.2 The Chief Electrical Engineer of the State Government also acts as the Chief

Electrical Inspector to Government. He is the Head of the Department and works

under the Department of Industries, Mines and Power (now the Deptt.of Energy and

Petro-chemicals). In the discharge of his duties, the Chief Electrical Inspector is

aided by four Deputy Chief Electrical Inspectors in the four zones:

1. Head Office and Central zone(Gandhinagar,Ahmedabad,Nadiad,Anand,

Panchmahal and Dahod)

2. South Zone (Vadodara, Bharuch, Narmada, Surat, Valsad, Navsari and Dang)

3. North Zone (Mehsana, Patan, Banaskantha, Sabarkantha and Kutch)

4. Saurashtra Zone (Rajkot, Junagadh, Porbandar, Bhavnagar, Amreli,

Jamnagar and Surendranagar.

The following Electrical Inspectors and Assistant Electrical Inspectors have

been appointed by the State Government

(i) Electrical Inspectors at Ahmedabad, Nadiad, Vadodara, Surat,

Valsad,Mehsana,Kutch, Rajkot and Bhavnagar.

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(ii) Assistant Electrical Inspector at Ahmedabad,Gandhinagar,Nadiad,Godhra,

Vadodara,Bharuch,Surat, Valsad,Navsari,Mehsana, Palanpur, Himatnagar,

Bhuj, Rajkot, Junagadh, Jamnagar, Bhavnagar and Surendranagar

It is the function of the Deputy Chief Electrical Inspectors, Electrical Inspectors

assisted by the Assistant Electrical Inspector to carry out the provisions of the Indian

Electricity Act, 1910 and the rules framed there under and the Gujarat Electricity

Duty Act, 1958. Inspections of Electrical installations, testing of equipments etc, are

conducted by these executive officers.

In addition to these executive officers of the department, a Collector of Electricity

Duty has been appointed by the State Government to ensure the prompt collection of

electricity duty from the different licensees. In the cities of Ahmedabad and Surat,

the Ahmedabad Electricity Company (now torrent powers Ltd) is an important

private licensee, licensed by the State Government under the Indian Electricity Act.

In the districts, generation and supply of power are mainly undertaken by the

different divisions of the Gujarat Electricity Board (now Gujarat Urja Vikas Nigam

and its six subsidiary companies). These GUNVLand also the Torrent powers Ltd

submit their monthly returns to the Collector of Electricity Duty along with challans

indicating payment of electricity duty made by them into the treasury. With

reference to these returns and the maintenance of suitable registers for watching the

receipt of these returns from the licensees, the Collector of Electricity duty exercises

control over the collection of Electrical Duty.2

LEVY OF DUTY UNDER THE GUJARAT ELECTRICITY DUTY ACT, 1958

6.3.1 Electricity duty is levied on the units of energy consumed (excluding losses

of energy sustained in transmission and transformation by a licensee before supply to

a consumer). For this purpose, a consumer means, any person who is supplied with

energy on payment of charges or otherwise by a licensee or by any other person who

generates energy and includes a licensee in relation to energy either generated by

himself or supplied by any other licensee, and any other person in relation to energy

generated by himself, and used by such licensee or person for any purpose excluding

that of construction, maintenance or operation of his generating, transmitting or

distributing system, but including his commercial office or residential purpose

connected with such system.

Electricity duty is not chargeable on the units of energy consumed:

(i) by the Government of Gujarat (save in respect of premises used for residential

purposes);

(ii) by or in respect of any municipal corporation, municipality, local board, notified

area committee, cantonment board or panchayat constituted under any law for

the time being in force in the State for the purpose of, or in respect of public

street lighting, public water works (including hand works and other auxiliary

2 Gujarat Urja Vikas Nigam Ltd. – Holding Company Gujarat State Electricity Corporation Ltd(GSECL) - -Generation

Gujarat Energy Transmission Corporation Ltd (GETCO) – Transmission

UttarGujarat Vij Co.Ltd (UGVCL) – Distribution Daxin Gujarat Vij Co.Ltd(DGVCL) – Distribution

Madhya Gujarat Vij Co Ltd (MGVCL) – Distribution

Paschim Gujarat Vij Co.Ltd (PGVCL) - Distribution

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water supply works and pumps used for the purpose). Public gardens including

Zoos, public museums or system of public sewers or drains;

(iii) in respect of a hospital or dispensary which is not maintained for private gain;

(save in respect of premises used for residential purposes)

(iv) where the energy is generated by any person for the purpose of supplying it for

the use of vessels.

(v) where the energy is generated at a voltage not exceeding 100 volts.

(v-a) where the energy is generated by any person by solar, wind or biogas

energy:

(vi) Save as provided in clause (vii), in respect of such industrial or agriculture

purpose in such areas and subject to such terms and conditions and for such

period as the State Government may, having regard to the need and conditions

of industrial and agricultural development in the areas by general or special

order specify in that behalf.

(vii) for motive powers and lighting in respect of premises used by an industrial

undertaking for industrial purpose, until the expiry of the following period, that

is to say :-

(a) In the case of an industrial undertaking which generates energy either singly or

jointly with any other industrial undertaking for its own use or as the case may

be, for the use of industrial undertakings which are jointly generating the

energy.

(i) fifteen years from the date of commencement of the Bombay Electricity Duty

(Gujarat Amendment) Act, 1983 (hereinafter in this sub-section and sub-

sections (2A) and (2AA) referred to as the commencement date) or the date of

starting the generation of energy whichever is later, if such generation of energy

is obtained by co-generation.

(ii) ten years from the commencement date or the date of starting the generation of

such energy whichever is later, if such generation of energy is based on any

other process;

(b) in the case of new industrial undertaking established on or after the

commencement date, which does not generate energy for its own use, five years

from the commencement date or the date on which industrial undertakings

commences for the first time manufacture or production of goods, whichever is

later.

Provided that no industrial undertaking shall be entitled to exemption from payment

of electricity duty under this clause, unless it has obtained a certificate regarding

eligibility for such exemption in prescribed form by making an application therefore

in prescribed form and within prescribed period to such officer as the State

Government may, by notification in the Official Gazette, specify.

Explanation 1. For the purposes of clause (vii) of sub-section (2) and sub-

section (2A) “a new industrial undertaking‖ means any such industrial undertaking

which.

(a) is not formed by the splitting up or the reconstruction of a business or

undertaking already in existence in the State; or

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(b) is not formed by transfer to a new business or undertaking of a building,

machinery or plant previously used in the state for any industrial purpose, of

such value in relation to total investments, as the State Government may, by

notification in the Official Gazette, specify or;

(c) is not an expansion of the existing business or undertaking in the state.

For the purpose of item (vii) above, an industrialist is required to make an

application to the Electrical Inspector in form ―E‖ within 180 days from the date of

starting generation of energy in the case of an industrial undertaking specified in

sub-clause (a) of clause vii. In the case of (b) of clause vii also the application

should be made within 180- days from the date of such industrial undertaking

commencing for the first time manufacture or production of goods. Any consumer

making an application after the expiry of the period mentioned here, shall not be

entitled for exemption from payment of Electricity Duty for the period lapsing

between the date of application and the date of manufacture or production of goods,

or generation of energy as the case may be. The total period of exemption shall be

reduced to that extent.

(viii) (a) where an industrial undertaking has by installing an additional generating

set started generation of additional energy for its own use of any time during ten

years before the commencement of the Bombay Electricity Duty (Gujarat

Amendment) Act, 1979, (herein after referred to as ―the commencement‖) electricity

duty shall not be leviable on such units of additional energy so generated as are

consumed for motive power and lighting in respect of premises used by the

industrial undertaking for industrial purpose, until the expiry of such period after the

commencement as would together with the period from the date of starting the

generation not exceed ten years.

(b) where an industrial undertaking by installing an additional generating set

starts generation of additional energy either singly or jointly with any other industrial

undertaking for its own use or, as the case may be, for the use of industrial

undertakings which are jointly generating additional energy, at any time on or after

the commencement date, electricity duty shall not be leviable on such units of

additional energy so generated as are consumed for motive power and lighting in

respect of premises used by the industrial undertaking for industrial purpose until the

expiry of-

(i) Fifteen years from the commencement date or the date of starting the

generation of such additional energy whichever is later if such generation of

additional energy is by back pressure turbine or if such generation of additional

energy is obtained by co-generation.

(ii) Ten years from the commencement date or the date of starting the generation

of such energy whichever is later if such generation is based on any other process;

Provided that, no industrial undertaking shall be entitled to exemption from payment

of electricity duty under the above unless it has obtained a certificate regarding

eligibility for such exemptions in prescribed form by making an application therefore

in prescribed form and within prescribed period to such officer as the state

government may, by notification in the official Gazette, specify.

Explanation- For the purpose of this provision

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(a) Where any generating set existing at the time of installation of the additional

generating set is at any time not operated either wholly or partly, the total units of

energy which the existing generating set is capable of generating shall be excluded

from the units of the additional energy generated and consumed.

(b) where any generating set existing at the time of installation of the additional

generating set is disposed of, the total units of energy which the existing generating

set so disposed off was capable of generating shall be excluded from the units of the

additional energy generated and consumed.

6.3.2 Rates of duty: The rates of electricity duty in force are given in Appendix-II.

The Audit parties should check the prevailing rates.

6.3.3 Exemption: The state government is empowered by notification in the

official Gazette to reduce the rate of duty or remit duty in respect of:-

(a) electro-chemical, electro-lytical, electro-metallurgical process carried on by

an industrial undertaking or

(b) such class of consumers or such class or premises in such area and for such

period as the state government may specify in the notification.

6.3.4 PAYMENT OF DUTY

Every licensee is required to collect and pay to the State Government, the Electricity

duty payable under the Act on the units supplied by him to the consumers.The

licensee should include the electricity duty leviable under the Act as a separate item

in the bill of charges for the energy supplied by him and collect the same from the

consumer along with his own charges for the supply of energy. The licensee should

pay the duty collected by him within 40 days after the expiry of the calendar month

for which the duty was collected.

The Government may extend the period of payment by a period not exceeding 15

days where the meter reading continues beyond 25th

of a calendar month subject to

the condition that 80 per cent of payment on the basis of duty paid in the previous

month is paid by the licensee within a period of 40 days.

The non-preparation of the bill of charges including electricity duty and non-delivery

thereof to the consumer will not relieve the licensee from payment of electricity duty

to the Government within the period prescribed.

Every person not being a licensee, who generated energy and supplies it to another

person free of charge shall collect and pay to the state government electricity duty

within 10 days after the expiry of the month for which duty is collected. Every such

person who intends to generate energy for his own use and every person not being a

licensee who generates and supplies it to another person free of charge should make

an application to the Collector of electricity Duty for registration in form ―C‖.

6.3.5 PROVISION OF SEPARATE METERS.

It will be seen from the rates of electricity duty chargeable that the rates of duty differ

according as the consumption is for a residential purpose, whether the energy is of

low tension or high tension, etc. When the electricity duty in respect of energy

consumed by a consumer is leviable under different clauses of the Rate Schedule, the

consumer is required to install separate meter for indicating the consumption of

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electrical energy for different purposes separately in order to facilitate the correct

calculation of duty payable by him. Where, however, meters for indicating

consumption of electrical energy for different purposes are not provided by the

consumer, the levy of electricity duty will be reckoned as if the energy consumed is

for that single purpose for which the highest rate of duty is leviable under the Rate

Schedule and duty shall be charged accordingly on the entire energy consumed for

combined purposes by a consumer. The Collector of Electricity Duty can grant

exemptions from this provision in consultation with the Chief Electrical Inspector to

Government.

6.3.6 RECOVERIES

Any sum due on account of electricity duty if not paid in time and in the manner

prescribed under the rules would be deemed to be in arrears. Such amounts in arrear

will carry interest at 24 per cent and the sum together with any interest thereon shall

be recoverable either through a civil court or as arrears of land revenue. The recovery

will be affected from the consumer or the licensee, the consumer or the person

supplying energy free of charge, from the consumer or the person who generates

energy for his own use as the case may be. Further, where any consumer fails or

neglects to pay the electricity duty due from him the licensee or other person

supplying energy free of charge may recover the amount due from the deposit placed

by the consumer with the licensee or such other person.

6.3.7 SUBMISSION OF RETURNS

(1) The following monthly returns should be submitted by a licensee under

Section 5 in duplicate:-

(A) A return in Form A containing the following particulars, namely,

(1) Number of units generated or purchased by the licensee or received by the

Distributing centers of the Electricity Board and the number of units

consumed in construction, maintenance or operation for generation,

transmission, or distribution systems and the loss of energy sustained in

transmission and transformation.

(2) Number of units of energy supplied to the various consumers specified under

sub-section (2) of section (3) of the Act.

(3) Number of units of energy supplied in respect of the premises used for

residential purposes or educational purposes:-

(a) in rural areas:

(b) in urban areas:

(4) Number of units of energy supplied in respect of premises used for the Hostel

for students -

(a) in rural areas:

(b) in urban areas:

(5) Number of units supplied to an industrial undertaking engaged predominantly

in manufacturing or producing goods other than energy consumed in respect

of any of its premises used for residential purpose -

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(a) where an industrial undertaking consumes high tension energy;

(b) where an industrial undertaking consumes exclusively low tension

energy

(6) Number of units supplied in respect of any premises not falling under any of

the items (1) to (3) in Schedule I to the Act.

(7) Number of units supplied to the consumers specified in notification issued

under sub section (3) of Section 3 of the Act.

(8) Amount of consumption charges and the amount of electricity duty charged

and recovered

(a) where an industrial undertaking consumes high tension energy:

(b) where an industrial undertaking consumes exclusively low tension

energy.

(9) Number of units supplied in respect of pumping water for irrigation purposes.

(B) (1) A return in form ‗B‘ containing the following particulars, namely:

(i) names and addresses of consumers who have made defaults in payment of

electricity duty;

(ii) the amount of electricity duty found irrecoverable from such consumers.

(2) A copy of every Return under sub-rule (I) shall be forwarded to the Collector

of Electricity Duty and to the Electricity Duty Inspector within 40 days of the expiry

of the calendar month to which the return pertains.

7. Inspection of books of account and checking of returns: An inspector shall inspect

the books of account and kept under Section 5 at least once in every month. The

returns submitted by a licensee under rule 6 shall be subjected by an Inspector to a

detailed test of individual entries to the content prescribed by the Collector of

Electricity Duty for verifying the particulars noted by the licensee, in so far as they are

connected with the levy of electricity duty. The inspector shall also verify all the

entries relating to exemption from electricity duty.

6.3.8 PROCEDURE FOR REFUND

No consumer will be entitled to a refund of any electricity duty paid by him in

excess of the duty leviable under the Act unless the consumer makes an application

for the refund supported by the original energy bill and receipt of payment granted

by the licensee within a period of 12 months from the date of payment of such

excess duty to the Collector of Electricity Duty. On being satisfied that excess

payment of duty had in fact been made, the Collector of Electricity Duty will arrange

to make a refund to the consumer of the amount of electricity duty paid during the

period of one year prior to the date of the receipt of the application from the

consumer.

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6.3.9 PROCEDURE FOR GETTING EXEMPTION UNDER SECTION 3(2)

AND 3(2A):-

Any industrial undertaking desiring to get exemption under sub-clause (vii) of sub-

section (2) of Section 3 or sub-section (2-A) of Section 3, may made an application

to the Collector of Electricity Duty, Gandhinagar in Form ‗E‘ within 90 days

(a) from the date on which such additional units of industrial undertaking begins

to manufacture or produce goods for the first time, or

(b) from the commencement of the Gujarat Electricity Duty (Amendment) Rules,

2014 for the additional unit of the industrial undertaking which has begun

manufacturing or production prior to the commencement of these rules.

(2) On receipt of an application under sub-rule (1), the Collector of Electricity

Duty may make such inquiries and call for such further information as he may think

fit and if he is satisfied that the applicant is entitled to exemption he may grant the

certificate regarding eligibility for such exemption in Form ―F‖ for the units covered

under Clause (vii) of sub section 2 of section 3 or Form under clause (viii) of sub-

section (2) of section 3, ―G‖ for the units coveredas the case may be.

(3) Any new industrial undertaking or additional unit of the undertaking making

an application after the expiry of the period mentioned in sub-rule (1) shall not be

entitled for exemption from payment of electricity duty for the period lapsed

between the date of the application and the date of manufacture or production of

goods or generation of energy as the case may be and the total period of exemption

shall be reduced to that extent, provided that where the State Government, after

making such inquiry as it thinks fit, is satisfied that the applicant could not make the

application within the period specified in sub-rule (1) for reasons beyond his control,

the State Government may condone the delay in making the application and in that

event the total period of exemption shall not be reduced.

Provided further that the units eligible under clause (viii) of sub section (2) of

section 3 shall be entitled for the exemption from the date of sealing the metering

system to record consumption of additional unit of the industrial undertaking, if it is

adjacent to the existing premises either by the licensee or by any Laboratory

established and operating in the Gujarat State and accredited by National

Accreditation Board for testing and Calibration Laboratories, Department of Science

and Technology, Government of India subject to the condition that sealing of

metering system at site by such Accredited Laboratory is done within 60 days of

Laboratory testing of meter or accreditation period, whichever is earlier. The unit

shall not be entitled to exemption for the period lapsed, if any, between the date of

production and date of sealing the metering system.

OFFNCES, PENALTIES AND FINES.

6.4 Offences: Under the Indian Electricity Act, 1910, the dishonest abstraction,

consumption or use of energy is deemed to be theft within the meaning of the Indian

Penal Code. In addition, the following offences are explicitly mentioned in the Act.

(1) the malicious wasting of energy or injury to electrical works

(2) the unauthorized supply of energy by a non- licensee

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(3) illegal or defective supply of energy by the licensee or non-compliance with

order

(4) illegal transmission or use of energy

(5) interference with energy meter, licensees work and improper use of energy

(6) extinguishing public lamps

In respect of offences mentioned above, the Act provides for conviction and the

payment of fine in all cases without prejudice to the liability in respect of payment of

compensation and in the case of a licensee, the revocation of his license.

Where a person committing an offence is a company, every person who at the time

the offence was committed, was in charge of or was responsible to the company for

the conduct of the business of the company as well as the company will be held

guilty of the offence.

Under the Gujarat Electricity Duty Act, any person who fails to keep books of

accounts to submit returns as required under the provisions of the Act or the Rules,

or willfully obstructs an Inspector in the exercise of the powers conferred upon him,

shall on conviction be punished with fine which may extend to 1,000 Rupees (By

Gujarat Act No.8 of 1999).

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APPENDIX-1

(As referred to in paragraph No.6.1.2)

INDUSTRIES, MINES AND POWER DEPARTMENT.

Order

Sachiyalava, Gandhinagar, 25th March, 1985.

INDIAN ELECTRICITY RULES, 1990.

No. GU/85/20)/IEA/1076/9184/K - In exercise of the powers conferred by sub-rule

(2) of rule 7 and clause (a) of sub rule (2) of rule 46 read with rule 8 of the Indian

Electricity Rules, 1956 and in supersession of all the previous orders issued in this

behalf, the Government of Gujarat hereby makes the following order namely:-

1. Short title and commencement:-

(1) This order may be called the Indian Electricity (Fees for

inspection, testing and the services of Inspectors) Order, 1985.

(2) It shall come into force on and from 1st April 1985.

2. Definitions :-

(1) In this Order, unless the context otherwise requires,

(a) "the Act‖ ' means the Indian Electricity Act, 1910.

(b) "Owner‖ includes an occupier of any building. place, premises carriage

or vessel in which energy is or is about to be generated, received or

used and also includes the supplier and consumer .

(c) "the Rules" means the Indian Electricity Rules, 1956.

(d) "Schedule" means the Schedule appended to this Order.

(2) All other words and expressions used but not defined in this Order shall

have the meanings respectively assigned to them in the Act and the

Rules.

3. Levy of Fees:-

(1) Fees for inspections examinations or tests of an installation made under the

provisions of the Act and the rules shall be levied in accordance with the rates

specified in Scales "A" to "D" in the Schedule. from the persons specified

therein:

Provided that in the case of second or subsequent inspection., examination or

test made within a period of twelve months from the date of the first

inspection', examination or test necessitated in the opinion of the Inspector or

of any officer appointed to assist the Inspector due to the neglect or failure of

the supplier or the owner to carry-out, within the stipulated time, any work

specified in any written order of the Inspector or any officer appointed to assist

the Inspector or by a breach of any of the provisions of the Act or the rules.

fees at one half of the rates of the fees specified in the said Scales A to D. shall

be levied;

Provided further that no fees shall be levied for such second or subsequent

inspection examination or test, if the same has not been so necessitated.

291

Explanation:- The Inspector or any officer appointed to assist the Inspector

may enter any premises for inspection and examination of any installation as

provided in sub- rule (1) of rule 5 of the rules for any number of times but the

fee for such inspection and examination shall be levied only once in a period of

twelve months commencing from 1st April, of every year and ending on 31st

March of the next year

(2) Fees for initial inspection. examination or test of an installation made under the

provisions of the Act and the rules shall be levied, in accordance with the rates

specified in Scales "E" to "G" and as expressly provided in the Scale "C" in the

Schedule, from the persons specified therein ,

Provided that, if in the opinion of the Inspector or any officer appointed to

assist the Inspector a second or subsequent inspection, examination or test of

the installation is necessitated by the neglect or failure of the supplier the

telephone authority or the owner, as the case may be, to carry, out within the

stipulated time, any work specified in any written order of the Inspector or any

officer appointed to assist the Inspector or by, a breach of any of the provisions

of the Act on of the rules the rate of fees for such second or subsequent

inspection examination of test be one half of the rate of fees proscribed in the

said Scales "E" to "G":

Provided further that if an extension to or any alteration in the installation

made since the date of the initial or periodical inspection, examination or test

of the installation is inspected examined or tested within twelve months of the

said date separate fees shall be levied in respect of such extension or alteration

in accordance with the rates specified in the Scales "A" to "D" in the Schedule,

from the persons specified therein.

(3) Fees for the services of any Inspector or any office appointed to assist the

Inspector requisitioned by a consumer or a member of the public shall be

levied in accordance with the rates specified in the Scales "H‖ to "N" in the

Schedule from the persons specified therein.

(4) Fees for inspection and examination of all low voltage installations including

sub-meters not being low voltage installations in factory premises and in

places of public entertainment including Cinema theatres and not covered by

Scales "A" to ―N‖ in the Schedule shall be levied in accordance with the

rates specified in scale ―0" in the Schedule.

"Provided further that the supplier shall include the fees leviable under this

order as a separate item in the bill of charges for the energy supplied by him to

the agricultural consumers and shall collect the same from such consumers

along with his own charges for the supply of energy on receiving the

information from the inspector or the officer appointed to assist him. The

supplier shall pay such fee into the Government Treasury by a challan within

40 days after the expiry of the Calendar month for which it is levied."

4. Payment of Fees

(1) The fees payable under this Order shall be paid prior to, or at the time of the

inspection/examination or test either

(a) Into the Government Treasury or the Reserve Bank of India to the credit of the

Electrical Inspectorate under "043 Taxes and Duties on Electricity 102B Fees

292

under the Indian Electricity Rules 103C Fees for the Electrical Inspection of

Cinemas" by challan in triplicate, the receipted duplicate being forwarded to

the concerned Inspector or the concerned Officer appointed to assist the

Inspector by the Treasury Officer direct or

(b) at the office of the Inspector or the Officer appointed to assist the Inspector in

cash. by money order/cheque or demand draft. Provided that in case of every

outstation cheque the amounts of commission to be deducted by the respective

Bank shall be added to the amount of fee payable under the order.

(2) If for any reasons, the fee is not paid either prior to, or at the time of

inspection, examination or test, such fees shall be paid within ten days from

the date of such inspection, examination or test.

(3) If for any reason the fees is not paid within ten days, of the time of inspection,

examination or test, as provided in sub-clause (2) the Inspector may direct the

supplier to recover the same along -with the energy bills and pay is in the

Inspector or the Officer appointed to assist the Inspector.

SCHEDULE"A"

(1) Rate of fees for an inspection, examination or test made in pursuance of rules

51 to 53 and 65 to 68 of the rules, where energy is or is about to be supplied or

of high, medium and low voltage (except in those cases to which Scales "B" to

"N‖ of this Schedule specifically refer) shall be as under:

Capacity Fees (`.)

Not exceeding 5 Kilowatts. 10-00

Exceeding 5 Kilowatts but not exceeding 10 Kilowatts. 15-00

Exceeding 10 Kilowatts but not exceeding 20 Kilowatts. 25-00

Exceeding 20 Kilowatts but not exceeding 50 Kilowatts. 50-00

Exceeding 50 Kilowatts but not exceeding 100 Kilowatts. 75-00

Exceeding 100 Kilowatts but not exceeding 250 Kilowatts. 200-00

Exceeding 250 Kilowatts but not exceeding 500 Kilowatts. 350-00

(vide government of Gujarat D, M & E Department Order No. G4-89-40-

RIF(AGR)-1187-12000-K-dtd. 19-7-1989).

Exceeding 500 Kilowatts but not exceeding 750 Kilowatts. 500-00

Exceeding 750 Kilowatts but not exceeding 1000 Kilowatts. 600-00

Exceeding 1000 Kilowatts but not exceeding1500 Kilowatts 750-00

Exceeding 1500 Kilowatts but not exceeding 2000 Kilowatts 800-00

Exceeding 2000 Kilowatts but not exceeding 3000 Kilowatts 900-00

Exceeding 3000 Kilowatts 1,000-00

(2) The fees shall be paid by the owner to whom energy is or about to be

supplied.

293

Scale-B (Part-1)

(1) Rates of fees for an inspection examination or test of any generating station

receiving station, distributing station or other place in which energy is

generated transformed or distributed at a pressure of 100 volts or more shall

be as under.

Capacity Fees (`.)

(i) Up to and including 10 Kilowatts. 25-00

(ii) Exceeding 10 Kilowatts but not exceeding 25 Kilowatts. 75-00

(iii) Exceeding 25Kilowatts but not exceeding 100 Kilowatts. 200-00

(iv) Exceeding 100 Kilowatts but not exceeding 500 Kilowatts . 500-00

(v) Exceeding 500 Kilowatts but not exceeding 1000 Kilowatts. 700-00

(vi) Exceeding 1000 Kilowatts but not exceeding 2000 Kilowatts. 800-00

(vii) Exceeding 2000 Kilowatts but not exceeding 5000 Kilowatts. 900-00

(viii) Exceeding 5000 Kilowatts. 1000-00

(2) In the case of generating station, receiving station distributing station owned

by the supplier or other place in which energy is generated transformed or

distributed by the supplier the fees shall be paid by the supplier. In any other

case, the fee shall be paid by the owner.

(3) In the case of inspection of H.T. Switch gears controlling the transformers or

generates not along with the transformers or generators the capacity of

transformers or generators as the case may be shall be taken for the purpose

of levy of fees.

(4)

Scale-“B” (Part-11)

(1) Rates of fees for an Inspection or examination or test of an electrical

installation connected with the Neion Sign and X-Ray machine in pursuance

or the provisions of rules 71, 72 and 73 of the rules shall be as under: -

Fees (`)

(i) Neon Sign 50-00

(ii) X-Ray machine 50-00

(2) The fees shall be paid by the owner.

Scale-"C" (Part 1)

(1) Rates of fees for an inspection, examination or test of any electrical

installation, appliance or apparatus in any public place where entertainment as

defined in section 2 of the Gujarat Entertainments Tax Act, 1977 is provided

shall be as under: -

Fees (`)

For the initial inspection examination or test of any electrical installation, appliance

or apparatus in a Cinema or a Theatre other than a Touring Cinema or other

temporary place of public entertainment referred to in clause (iv).

294

300-00

(ii) For every subsequent inspection, Examination or test of the installation,

appliance or apparatus in such Cinema or Theatre as isreferred to in clause (i)

100-00

(iii) For an inspection examination or test of any authorized addition or alteration to

the electrical installation in a Cinema or a Theatre.

40-00

(iv) (a) For an inspection, examination or test of any electrical installation, appliance

or apparatus in a travelling Cinema or other temporary place of public

entertainment.

75-00

(b) For every subsequent Inspection examination or test of any electrical installation

appliance or apparatus in such Cinema or place of public entertainment

necessitated on account of a changed place premises.

40-00

(v) For an inspection. examination or test of any electrical installation. appliance or

apparatus in a travelling or temporary Cinema or other temporary place of

public entertainment necessitated on account of a change of installation

appliance or apparatus so as to confirm to the rules and regulations governing

permanent places of public entertainment.

75-00

(2) The fee shall be paid by the owner.

Scale - "C" (Part-11)

(1) Rate of fee for an inspection examination or test of any electrical installation,

appliance or apparatus Perected temporarily in any place or premises. where

entertainment and defined in section 2 of the Gujarat Entertainment Tax Act,

1977 is not provided.

75-00

(2) The fee shall be paid by the owner.

Scale - "D"

(1) Rates of fees for in inspection, examination or test of any electrical installation

appliance or apparatus (other than generating station or a receiving station for

which a separate fee will be charged under Scale-"B") in a factory within the

meaning of the Factories Act, . 1948 (LXII of 1948), to which energy is

supplied by a supplier or in which energy is generated shall be as under:-

(i) For lighting or for the purposes other than power provided that no fees under

this item shall be charged in respect of an electrical installation; appliance or

apparatus in any factory where not more than 9 workers are emploved..

295

Capacity Fees

(a) Up to and including 10 Kilowatts. ` 20.00 per Kilowatts or

part thereof

(b) Exceeding 10 Kilowatts but not ` 200.00

exceeding 15 Kilowatts. first 10 Kilowatts plus `

20.00 for every

Kilowatts or part

thereof in excess of 10

Kilowatts.

(c)Exceeding 15 Kilowatts

but not exceeding 50 Kilowatts. ` 350.00

(d)Exceeding 50 Kilowatts but not exceeding

500 Kilowatts. ` 400.00

(e)Exceeding 500 Kilowatts. ` 500-00

(ii) For Power. Fees according to the rates specified in Scale "A".

(iii) In any factory to which energy is supplied by a supplier or in which energy is

generated both for lighting and for power,, separate fees under items (i) and (ii)

shall be charged provided the combined fees shall not exceed.

` 1500.00

(2) The Fee shall be paid by the owner.

Scale - "E"

Rates of fees for inspection or examination in pursuance of rules 29, 30, 31 and 92 of

the rules shall be as under:-

Fees `

For inspection or examination of a new medium or high

voltage service.

25-00

For inspection or examination of a new medium high

voltage tapping as sub-service tapped from the main

service cut outs.

10-00

Rates of fees for inspection or examination in pursuance of rules 29, 30. 31, 63 to 67

and 92 of the rules shall be as under:-

Fees `

For inspection or examination of a new high voltage

service

25-00

296

For inspection or examination of a new high or extra high

voltage switch gear connected in service or distributor not

covered under Scale - "B".

50-00

(1) The fees shall be paid by the supplier.

Scale - 'F"

(1) Rates of fees for an inspection or examination in pursuance of rule

87 of the rules shall be as under:-

(a) For inspection or Examination of

Every new aerial line including a service line crossing either above or below

a telegraph, telephone or other aerial line at one or more spans,. places or

points:-

25-00

(1) Provided that where more than one crossing situated within a distance of one

Kilometer of each other are inspected at the same time,. the fee shall be as

follows:-

Fees `

For inspection of first of crossing 25-00

For inspection of every additional crossing. 10-00

(2) The fee leviable under this scale shall not be charged when the inspection has been

carried out in conjunction with an inspection for which a fee is levied under Scale

"E" or "G".

(3) The fee shall be paid by the person whose line was last erected.

SCALE-"G"

Fees

(1) (a) Rates of Fees an inspection or A minimum charge of or

examination of a new high ` 150/- for a distance

aerial line, in up to 10 kilometers

pursuance of rule 91 of and beyond that distance

the rules. Rs.20. 00 for every Kilometer

or part thereof.

(b) Rites of fees for an inspection, Rs. 15.00 per

examination or test of a medium or Kilometer or part thereof

low pressure arial distributing subject to a

main, in pursuance of rule 91 of maximum of ` 300/-.

the rules.

297

(2) The fee shall be paid by the supplier.

SCALE-"H"

(1) Rates of fees for either inspection or issue of a certificate or for both under

rule 82 (3) of the rules.

Rs. 100.00

(2) The fees shall be paid by the person who proposes either to erect a new

building or structure or to make any temporary addition or alteration in or

upon any building or a structure.

SCALE-“I”

Fees `

(1) Rates of fees for an 200.00 per day or part

inspection or examination thereof subject to a

of any electric traction maximum of Rs.800. 00

system, including trolley wires and

overhead equipment and test of bonding

and leakage currents.

(2) The fee shall be paid by, the supplier or the owner electric traction system as

the case may be.

SCALE - "J"

Fees `

Rates of fees for the testing of energy meters shall be as under

(a) For testing in the Laboratory, a single meter of any description.

(i) of a capacity not exceeding 50 amperes. 30.00

(ii) of a capacity exceeding 50 - 50.00

amperes but not exceeding 200 amperes.

(iii) of a capacity exceeding 200 60.00

amperes but not exceeding 300 amperes.

(iv) of a capacity, exceeding 300 100.00

amperes. but not exceeding 500 amperes.

(v) of a capacity exceeding 500 amperes. 150.00

Explanation- In case of meters in use or intended to be used with Current

Transformers, the capacity for the purpose of levying fees. is to be taken as the

capacity of Current Transformers on their primary side.

298

(b) If a meter is to be tested on the Consumer's premises, the fees set out in clause

(a) shall be increased by ` 20.00 per meter.

(a) The fee shall be paid by the owner of the meter.

SCALE - "K"

Fees

(1) Rates of fees for an `75.00 for the first

inspection, examination hour or part thereof

or test of any main and thereafter

distributing main, or service `30 per hour or

part thereof

line for the existance of subject to a maximum

leakage therein which may of ` 420.00

result in electrolysis or other

injury to any water, gas or other

pipe or to any- appliance connected

there with.

(2) If any, leakage is discovered in any such main distributing main or service line.

the fees shall be paid by the supplier or the owner of the main distributing main.

or service line. as the case may be. If no leakage is discovered, the fees shall be

paid by the owner of the water. gas or other pipe or the appliance connected there

with.

SCALE - "L" (PART-1)

` Fees `

Rates of fees for the testing of an installation for the existence of leakage to earth.

30.00

(1) The fee shall be paid by the party making the application

SCALE-"L" (PART-II)

(1) Rates of fees for inspection and test of any installation in pursuance of rule 52

and leviable under rule 53 (3) of the rules shall be as under:-

Capacity Fees `

(a) Low Voltage installation 30.00

(b) Medium Voltage installation. 50.00

(c) High or extra high voltage instillation. 75.00

(2) The fee shall be paid by the party making the application.

299

SCALE - "M"

Fees

(1) Rates of fees for the ` 30.00 for the first

localising of leakage to each hour or part

thereof

in any installation. and thereafter ` 20.00

per hour or part thereof

subject to a maximum of

` 200.00

(2) The fee shall be paid by the party making the application.

SCALE - "N"

Fees

For deciding any case of ` 100. 00 for each case.

difference or dispute arising under

section 21 (4), 26 (4) or 26 (6) of or clause V (2)

or clause VI (3) of the Schedule to the

Act and under rule 82 (2) (b) of the

rules, referred to the Inspector.

Provided that in the case of a difference or dispute referred to the Inspector for being

decided under section 26 (6) of the Act. an additional fee for the testing of a meter as

accordance with Scale "J" shall be recoverable.

SCALE - "O"

Rates of fees for inspection and examination of all low voltage installations

including sub-meters (not being low voltage installations in factory premises and in

places of public entertainment including Cinema or Theatre and not covered by

Scales "A" to "N" of this Schedule) shall be as under: -

For inspection or examination of installation.

Fees `

(i) having meters or sub-meters with 10.00

capacity not exceeding 20 amperes.

(ii) having meters or sub-meters of a 20.00

capacity exceeding 20 amperes but

not exceeding 50amperes.

(iii) having meters or sub-meters of a 40.00

capacity exceeding 50 amperes but not

exceeding 100 amperes.

300

(iv) having meters or sub-meters of a 50.00

capacity exceeding 100 amperes.

The fee shall be paid by the consumers to whom the energy is supplied.

INDUSTRIES, MINES AND ENERGY DEPARTMENT

Order

Schivalaya, Gandhinagar, 15th June, 1989.

Indian Electricity Rules, 1956.

No. GU-89-3 I-IEA-1076-9184-K.-ln exercise of the powers conferred by sub-rule

(2) of rule 7 and clause (a) of sub-rule (2) of rule 46 read with rule 8 of the Indian

Electricity Rules. 1956 the Government of Gujarat hereby makes the following order

further to amend the Indian Electricity (Fees for inspection, testing and the services

of Inspectors) Order, 1985. as follows namely: -

1. (i) This order may be called the Indian Electricity (Fees for inspection.. testing

and the services of Inspectors) (Amendment) Order, 1989.

(ii) It shall come into force on and from 1st July, 1989.

2. In the Indian Electricity (Fees for inspection, testing and the services of

Inspectors) Order. 1985 (herein after referred to as "the said Order")-

In clause (3), in sub-clause (1) after the second proviso, the following proviso

shall be inserted, namely: -

Provided also that the fees for initial inspection shall be levied at the rate which

shall be fifty percent more than the rates prescribed by this Order in case of (a)

new high voltage and extra high voltage installation. and (b) installation where

entertainment as defined in Section 2 of the Gujarat Entertainments Tax Act,

1977, is provided.

3. In the said order in schedule appended to the said order, for the Scale "A‖,

Scale "B" (Part-1), Scale "C" (Part-1), Scale "C" (Part-II), Scale "D‖, . Scale

"G" and Scale "N‖, the following scales shall be substituted, namely: -

“SCALE “A”

(1) Rates of fees for an inspection, examination or test made in pursuance of

rules 51, 60 to 64 and 65 to 68 of the rules, where energy is or is about to be supplied

or used at high, medium and low voltage (except in those cases to which Scales "B"

to "M' of this Schedule specifically refer) shall be as under: -

Capacity Fees `

(i) Not exceeding 5 Kilowatts 15.00

(ii) Exceeding 5 kilowatts but not

exceeding 10 Kilowatts 25.00

(iii) Exceeding 10 Kilowatts but not

exceeding 20 Kilowatts. 40.00

(iv) Exceeding 20 Kilowatts but not

301

exceeding 50 Kilowatts. 75.00

(v) Exceeding 50 Kilowatts but not

exceeding 100 Kilowatts. 100.00

(vi) Exceeding 100 Kilowatts but not

exceeding 250 Kilowatts. 300.00

(vii) Exceeding 250 Kilowatts but not

exceeding 500 Kilowatts. 500.00

(viii) Exceeding 500 Kilowatts but not

exceeding 750 Kilowatts. 700.00

(ix) Exceeding 750 Kilowatts but not

exceeding 1000 Kilowatts. 800.00

(x) Exceeding 1000 Kilowatts but not

exceeding 1500 Kilowatts. 1000.00

(xi) Exceeding 1500 Kilowatts but not

exceeding 2000 Kilowatts. 1200.00

(xii) Exceeding 2000 Killowatts but not

exceeding 3000 Killowatts. 1400.00

(xiii) Exceeding 3000 Killowatts. 1500.00

(2) The fees shall be paid by the owner to whom energy is or is out to be supplied.

SCAILE "B" (PART-I)"

(1) Rates of fees for an inspection, examination or test of any generating station,

receiving station, distributing station or other place in which energy, is

generated, transformed or distributed at a pressure of voltages or more shall

be as under. –

Capacity Fees `

(i) Up to and including 10 kilowatts 50.00

(ii) Exceeding 10 Kilowatts but not

exceeding 25 Kilowatts. 100.00

(iii) Exceeding 25 Kilowatts but not

exceeding 100 Kilowatts. 300.00

(iv) Exceeding 100 Kilowatts but not

exceeding 500 Kilowatts. 700.00

(v) Exceeding 500 Kilowatts but not

exceeding 1000 Kilowatts. 900.00

302

(vi) Exceeding 1000 Kilowatts but not

exceeding 2000 Kilowatts. 1000.00

(vii) Exceeding 2000 Kilowatts but not

exceeding 5000 Kilowatts. 1200.00

(viii) Exceeding 5000 Kilowatts. 1500.00

(2) In the case of generating station, receiving station, distributing station owned

by the supplier or other place in which energy is generated, transformed or

distributed by the supplier; the fees shall be paid by the supplier. In any other

case, the fees shall be paid by the owner.

(3) In the case of inspection of H. T. switch gears controlling the transformers or

generators not along with the transformers or generators the capacity of

transformers or generators, as the case may be, shall be taken, for the purpose

of levy of fees.

SCALE "C" (Part-1)

(1) Rates of fees for an inspection, examination or test of any electrical installation,

appliance or apparatus in any public place where entertainment as defined in

Section 2 of the 'Gujarat Entertainments Tax Act, 1977‘. is provided shall be as

under:

Fees `

(i) For the initial inspection, examination or test of any electrical installation.

appliance or apparatus in a Cinema or a Theatre other than a touring Cinema or

other temporary place of public entertainment referred to in clause (iv).

450.00

(ii) For every subsequent inspection examination or test of the installation, appliance

or apparatus in such Cinema or Theatre as is referred to in clause (i).

150.00

(iii) For an inspection, examination or test of any authorized addition or alteration to

the electrical installation in a Cinema or a Theatre.

60.00

(iv) (a) For an inspection, examination or test of any electrical installation appliance

or apparatus in a traveling Cinema or other temporary place of public

entertainment.

100.00

(b) For every subsequent inspection examination or test of any electrical installation

appliance or apparatus in such Cinema or place of public entertainment

necessitated on account of a change of place or premises.

60.00

(v) For an inspection, examination or test of any electrical installation, appliance or

apparatus in a traveling or temporary Cinema or other temporary place of public

entertainment necessitated on account of a change of installation, appliance or

303

apparatus, so as to confirm to the rules and regulations governing permanent

places of public entertainment.

100.00

(1) The fees shall be paid by the owner.

SCALE "C" (Part-II)

(1) Rates of fees for an inspection, examination or test of any electrical installation,

appliance or apparatus erected temporarily in any place or premises, where

entertainment as defined in Section 2 of the Gujarat Entertainments Tax Act,

1977 is not provided.

Fees `

(i) Installation having the duration of one day. 75.00

(ii) Installation having the duration of more

than one day but not exceeding 15 days 100.00

(iii) Installation having the duration of more than 15 days. 200.00

(2) The fees shall be paid by the owner.

SCALE "D"

(1) Rates of fees for an inspection. Examination, or test any electrical installation.

appliance or apparatus (other than a generating station or a receiving station for

which a separate fee will be charged under Scale "B" (Part-1) in a factory within

the meaning of the Factories Act. 1948 (LXII of 1948). to which energy is

supplied by a supplier or in which energy is generated shall be as under: -

(i) For lighting or for the purposes other than power provided that no fees

tinder this item shall be charged in respect of an electrical installation

appliance or apparatus in any factor, where riot more than 9 workers are

employed.

Capacity Fees

(a) Up to and including 10 ` 30. 00 per Kilowatts

Killowatts. or part thereof

(b) Exceeding 10 Kilowatts ` 300.00 for first 10

but not exceeding Kilowatts plus

15 Kilowatts. ` 30/- for every Kilowatts or part

thereof in excess of 10 Kilowatts.

(c) Exceeding 15 Kilowatts ` 500.00

but not exceeding 50 Kilowatts.

(d) Exceeding 50 Kilowatts ` 600.00

but not exceeding 500 Kilowatts.

(e) Exceeding 500 Kilowatts ` 800.00

(ii) For Power. (ii) For Power Fees according to the rates specified in Scale-"A".

304

(iii) In any factory to which energy is supplied by a supplier or in which energy is

generated both for lighting and for power. separate fees under items (i) and (ii)

shill be charged provided the combined fees shall not exceed.

` 2300.00

(2) The fees shall be paid by the owner.

SCALE "G"

Fees

(1) (a) Rates of fees for an inspection A minimum charge of

or examination of new high pressure ` 200/- for a distance up to 10

line, in pursuance of Kilometers and aerial beyond that

rule 91 of the rules. distance ` 30/- for every Kilometer or

part thereof.

(b) Rates of fees for an ` 20.00 per Kilometre or part there

inspection examination test of of subject to a maximum of ` 450/-.

a medium or low pressure

aerial distributing mains, in

pursuance rule 91 of the rules.

(2)The fees shall be paid by the supplier.

SCALE "N"

For deciding any case of difference or dispute arising under section 21(4), 26(4) or

26(6) of or clause V(2) or Clause VI(3) of the Schedule to the Act and under rule

82(2)

(b) of the rules, referred to the Inspector.

Capacity Fees `

(a) Low or medium Voltage 150.00 for each case.

installation

(b) High or extra high Voltage 200. 00 for each case.

installation.

Provided that in the case of a difference or dispute referred to the Inspector for bring

decided under Section 26(6) of the Act. an additional fee for the testing of a meter in

accordance with Scale "J" shall be recoverable.

305

INDUSTRIES, MINES AND ENERGY

DEPARTMENT

Order

Sachivalaya, Gandhinagar, 4th

October, 1994

Indian Electricity Rules, 1956

No. GU-94-18JEA-1094-2848 K:- In exercise of the powers conferred by sub-rule

(2) of rule 7 and clause (a) of sub-rule (2) of rule 46 the Government of Gujarat

hereby makes the following order further to amend the Indian Electricity (Fees for

inspection, testing and the services of Inspectors) Order, 1985, as follows namely:-

1. (I) This order may be called the Indian Electricity (Fees for inspection, testing

and the services of Inspectors) (Amendment) Order, 1994.

(ii) It shall come into force on and from 17th

October, 1994.

2. In the Indian Electricity (Fees for inspection, testing and the services of

Inspectors) Order, 1985 (herein after referred to as ―the said Order‖):-

In clause (3), after sub-clause (4) the following New sub-clause (5) shall be

inserted, namely:-

(5)The inspection fees as prescribed under scale‖P‖ shall be levied from a

person as prescribed in schedule for services of Inspector or the following any

officer for help of Inspector called for from a owner or public member covered

under Rule 50-A of the Rules.

3. In the said order in schedule appended to the said order, for the Scale ―A‖,

Scale ―B‖(Part-1), Scale‖C‖ (Part-1), Scale ―C‖ (Part-II), Scale‖D‖, Scale‖J‖

and Scale‖N‖, the following scales shall be substituted, namely:-

“SCALE”A”

(1) The rates of fees for an inspection, examination or test made in pursuance of

rules 51, 60 to 64 and 65 to 68 of the rules, where energy is or is about to be

supplied or used at high, medium and low voltage (except in those cases to

which Scales ―B‖ to ―N‖ of this Schedule specifically refer) shall be as

under:-

Capacity Fees `

(i) Not exceeding 10 kilowatts. - 25.00

(ii)Exceeding 5 Kilowatts but not

exceeding 10 Kilowatts. 50.00

(iii)Exceeding 10 Kilowatts but not

exceeding 20 Kilowatts. 75.00

(iv)Exceeding 20 Kilowatts but not

exceeding 50 Kilowatts. 100.00

(v)Exceeding 50 Kilowatts but not

exceeding 100 Kilowatts. 150.00

(vi)Exceeding 100 Kilowatts but not

exceeding 250 Kilowatts. 400.00

(vii)Exceeding 250 Kilowatts but not

exceeding 500 Kilowatts. 600.00

306

(viii) Exceeding 500 Kilowatts. but not 800.00

exceeding 750 Kilowatts

(ix) Exceeding 750 Kilowatts but not 1000.00

exceeding 1000 Kilowatts

(x) Exceeding 1000 Kilowatts but not 1200.00

exceeding 1500 Kilowatts

(xi) Exceeding 1500 Kilowatts but not 1500.00

exceeding 2000 Kilowatts

(xii) Exceeding 2000 Kilowatts Rs.1500 + ` 250

of each 250 Kilowattsor part

thereof subject to maximum of

`5000/-.

(2) The fees shall be paid by the owner to whom energy is or is out to be

supplied.

SCALE “B” (PART-1)

(1) Rates of fees for an inspection, examination or test of any generating

station, receiving station, distributing station or other place in which energy is

generated, transformed or distributed at a pressure of 100 voltages or more

shall be as under:-

Capacity Fees `

(i)Upto and including 25 Kilowatts 100.00

(ii) Exceeding 25 Kilowatts but not 300.00

exceeding 100 Kilowatts

(iii)Exceeding 100 Kilowatts but not

exceeding 500 Kilowatts. 1000.00

(iv)Exceeding 500 Kilowatts but not

exceeding 1000 Kilowatts. 1500.00

(v)Exceeding 1000 Kilowatts but not

exceeding 2000 Kilowatts. 2000.00

(vi)Exceeding 2000 Kilowatts. 2000 + 1000 for each

0 Kilowatt or part

here of subject to

maximum of ` 7500/-.

(2) In the case of generating station, receiving station, distributing station owned

by the supplier or other place in which energy is generated, transformed or

distributed by the supplier; the fees shall be paid by the supplier. In any

other case, the fees shall be paid by the owner.

(3) In the case of inspection of H.T switch gears controlling the transformers or

generators not along with the transformers or generators, the capacity of

transformers or generators, as the case may be, shall be taken, for the purpose

of levy of fees.

SCALE “C” (PART-1)

(1) Rates of fees for an inspection, examination or test of any electrical

installation, applicance or apparatus in any public place where entertainment

as defined in section 2 of the Gujarat Entertainments Tax Act, 1977, is

provided shall be as under:-

307

Fees(`)

(i) For the initial inspection, examination or

test of any electrical installation, appliance or

apparatus in a Cinema or a Theatre other than

a touring cinema or other temporary place of

public Entertainment referred to in clause (iv).

1,000.00

(ii) For every subsequent inspection,

examination or test of the installation,

appliance or apparatus in such cinema or

theatre as is referred to in clause (I).

300.00

(iii)For an inspection, examination or test of any

authorised addition or alteration to the electrical

installation in a Cinema or a Theatre

100.00

(iv)(a) For an inspection, examination or test of

any electrical installation appliance or apparatus

in Traveling Cinema or other temporary place of

public entertainment

200.00

(b) For every subsequent inspection,

examination or test of any electrical installation,

appliance or apparatus in such Cinema or place

of public entertainment necessitated on account

of a change of place or premises.

100.00

(v) For an inspection, examination or test of any

electrical installation, appliance or apparatus in a

307 raveling or temporary Cinema or other

temporary place of public entertainment

necessitated on account of a change of

installation, appliance or apparatus, so as to

confirm to the rules and regulations governing

permanent places of public entertainment.

200.00

(2) The fees shall be paid by the owner.

SCALE “C” (Part-II)

(1) Rates of fee for an inspection, examination or test of any electrical

installation, appliance or apparatus erected temporarily in any place or

premises, where entertainment as defined in Section 2 of the Gujarat

Entertainments Tax Act, 1977 is not provided.

308

Fees `

(i) Installation having up to 10 Kilowatt 75.00

(ii) Exceeding 10 Kilowatt but not exceeding 200.00

50 Kilowatt

(iii)Exceeding 50 Kilowatt but not exceeding 400.00

100 Kilowatt

(iv) Exceeding 100 Kilowatt installation 500.00

(2) The fees shall be paid by the owner.

SCALE “D”

(1) Rates of fees for an inspection, examination or test any electrical installation,

appliance or apparatus (other than a generating station or a receiving station

for which a separate fee will be charged under Scale ―B‖ (Part-1) in a factory

within the meaning of the Factories Act, 1948 (LXII of 1948), to which

energy is supplied by a supplier or in which energy is generated shall be as

under:-

(i) For lighting or for the purpose other than power provided that no fees under

this item shall be charged in respect of an electrical installation, appliance or

apparatus in any factory where not more than 9 workers are employed.

Capacity Fees(`)

(a)Up to and including 10 Kilowatts `30.00 per

or part thereof Kilowatts or

part thereof

(b) Exceeding 10 Kilowatts but not 500.00

exceeding 20 Kilowatts

(c) Exceeding 20 Kilowatts but not

exceeding 50 Kilowatts. 750.00

(d)Exceeding 50 Kilowatts but not

exceeding 100 Kilowatts. 1,000.00

(e)Exceeding 100 Kilowatts but not

exceeding 250 Kilowatts. 1,250.00

(f) More than 250 Kilowatt 1,500.00

SCALE”J”

Rates of fees for testing of electrical meters will be as under:-

(A) Any description‘s single meter for Laboratory testing.

(1) Not exceeding 20 Ampier ` 50.00

(2) Exceeding 20 Ampier but not `100.00

exceeding 100 Ampier

309

(3) Exceeding 100 Ampier but not ` 200.00

exceeding 500 Ampier

(4) More than 500 Ampier. ` 400.00

Explanation:- For the levy of fees in respect of the meters used with current

transformer or to be used shall be levied accordingly to their primary side current

transformer.

(B) If the meter is tested in place of customer, additional ` 50/- should be levied in

addition to fees prescribed under Clause (A) above.

(C) Fees shall be paid by the owner.

SCALE”N”

For deciding any case of difference or dispute arising under section 21(4), 26(4) or

26(6) of or clause V(2) or clause VI(3) of the Schedule to the Act and under rule

82(2)(b) of the rules, referred to the Inspector.

Capacity Fees(`)

(a) Low or medium Voltage 300.00 for each

installation case

(b) High or extra high voltage 1,000.00 for each

installation case

But for the purpose of verification and to ascertain the fact, fees of ` 500/- shall be

levied for each visit, each day or part thereof.

Provided that in the case of a difference or dispute referred o the Inspector for bring

decided under section 26(6) of the Act, and additional fee for the testing of a meter

in accordance with ―Scale J‖ shall be recoverable.

Fees shall be paid by disputed person.

SCALE”P”

Fees for inspection where certificate under

Rule 50-A is given and multistoried building

high more than 15 meters.

` 500.00

310

ENERGY & PETROCHEMICALS DEPARTMENT

Order

Sachivalaya, Gandhinagar, 15th

October, 1998

INDIAN ELECTRICITY RULES, 1956.

No. GU/(98)/(52)/IER/1597/2840/K:- In exercise of the powers conferred by sub-

rule (2) of the rule 7 and clause (a) of sub-rule (2) of rule 46 read with rule 8 of the

Indian Electricity Rules, 1956 and in supersession of all the previous orders issued in

this behalf, the Government of Gujarat hereby makes the following order, namely:-

1. SHORT TITLE:-

This order may be called the Indian Electricity (Fees for inspection, testing and the

services of Inspectors) Order, 1998.

(2) It shall come into force on and from 1st November, 1998.

2. DEFINITIONS:-

(1) In this order, unless the context otherwise requires,

(a) ―The Act‖ means the Indian Electricity Act, 1910,

(b) ―Owner‖ includes an occupier of any building, place, premises, carriage

or vessel in which energy is, or about to be, generated, received or used and also

includes the supplier and consumer:-

(c) ―the Rules‖ means the Indian Electricity Rules, 1956:

(d) ―Schedule‖ means the schedule appended to this Order.

(2) All other words and expressions used but not defined in this order shall have the

meanings respectively assigned to them in the Act and the Rules.

3. LEVY OF FEES:-

(1) Fees for inspections, examinations or tests of an installation made under the

provisions of the Act and the rules shall be levied in accordance with the

rates specified in Scales ―A‖ to ―H‖ to the schedule from the persons

specified therein:

Provided that in the case of second or subsequent inspection, examination or

test made within a period of twelve months from the date of the first

inspection, examination or test necessitated in the opinion of the Inspector or

of any officer appointed to assist the Inspector due to the neglect or failure of

the supplier or the owner to carry out, within the stipulated time, any work

specified in any written order of the Inspector or any officer appointed to

assist the Inspector or by a breach of any of the provisions of the Act or the

rules, fees at one half of the rates of the fees specified in the said scales ―A‖ to

―H‖ shall be levied.

Provided further that no fees shall be levied for such second or subsequent

inspection, examination or test if the same has not been so necessitated.

311

Provided also that the fees for initial inspection shall be levied at the rate

which shall be fifty percent more than the rates prescribed by this order in

case of (a) new high voltage and extra high voltage installation, and (b)

installation where entertainment as defined in Section 2 of the Gujarat

Entertainments Tax Act, 1977, is provided.

Explanation:- (I) The Inspector or any officer appointed to assist the

inspector may enter any premises for inspection and examination of any

installation as provided in sub-rule (1) of rule 5 of the Rules for any number

of times but the fee for such inspection and examination shall be levied only

once in a period of twelve months commencing from 1st April, of every year

and ending on 31st March, of the next year;

(2) Fee for initial inspection, examination or test of an installation made under the

provisions of the Act and the Rules shall be levied in accordance with the

rates specified in Scales ―I‖ to ―K‖ and as expressly provided in the scale ―F‖

in the schedule, from the persons specified therein;

Provided that, if in the opinion of the Inspector or any officer appointed to

assist the Inspector, a second or subsequent inspection, examination or test of

the installation is necessitated by the neglect or failure of the supplier, the

telephone authority or the owner, as the case may be, to carry out, within the

stipulated time, any work specified in any written order for the Inspector of

any officer appointed to assist the Inspector or by a breach of any of the

provisions of the Act, or the Rules, the rate of fees for such second or

subsequent inspection, examination or test shall be one half of the rate of fees

prescribed in the said Scales ―I‖ to ―K‖.

Provided further that if an extension to, or any alteration in the installation

made since the date of the initial or periodical inspection, examination or test

of the installation, is inspected, examined or tested within twelve months of

the said date, separate fees shall be levied in respect of such extension or

alteration in accordance with the rates specified in the Scales ―A‖ to ―H‖ in

the schedule, from the persons specified therein.

(3) Fees for the services of any Inspector or any officer appointed to assist the

Inspector requisitioned by a consumer or a member of the public shall be

levied in accordance with the rates specified in the scales ―L‖ to ―S‖ in the

schedule from the persons specified therein.

(4) Fees for inspection and examination of all low voltage installations including

sub-meters (not being low voltage installations in factory premises and in

place of public entertainment including cinema theatres and not covered by

scales ―A‖ to ―S‖ in the schedule) shall be levied in accordance with the rates

specified in scale ―T‖ in the schedule.

(5) Fees for the services of an Inspector or any Officer appointed to assist the

Inspector requisitioned by an owner or a member of the public under rule 50-

A of the rules shall be levied in accordance with the rates specified in scale

―P‖ in the schedule from the persons specified therein.

312

4. PAYMENT OF FEES.

(1) The fees payable under this order shall be paid, (i) prior to, or at the time of

the inspection, examination or test either, (ii) alongwith the application in

case of approval to the layout of installation or route of overhead line and

(iii) along with the application for referring the dispute.

(a) into the Government Treasury or the Reserve Bank of India to the credit

of Commissionerate of Electricity under 0043 Taxes and Duties on

Electricity. (102) fees under the Indian Electricity Rules, 1956

By challan in triplicate, the receipted duplicate being forwarded to the

concerned Inspector or concerned Officer appointed to assist the Inspector by

the Treasury Officer direct, or

(b) at the office of the Inspector or the officer appointed to assist the

Inspector in cash, by money order or cheque or demand draft.

Provided that in case of every out-station cheque, the amount of commission

to be deducted by the respective bank shall be added to the amount of fee

payable under this order.

Provided further that the supplier shall include the fees leviable under this

order as a separate item in the bill of charges for the energy supplied by him

to the agricultural consumers and shall collect the same from such consumers

along with his own charges for the supply of energy, on receiving the

information from the Inspector or the Officer appointed to assist him. The

supplier shall pay such fee into the Government Treasury by a challan within

40 days after the expiry of the calendar month for which it is levied.

(2) If for any reason, the fee is not paid either prior to, or at the time of

inspection, examination or test, such fee shall be paid within ten days from

the date of such inspection, examination or test.

(3) If for any reason the fees are not paid within ten days, of the time of

inspection, examination or test, as provided in sub-clause (2), the Inspector

may direct the supplier to recover the same along with the energy bills and

pay it to the Inspector or the officer appointed to assist the Inspector.

SCHEDULE

SCALE-A

(1) Rates of fees for an inspection, examination or test made in pursuance of

rules 51, 60 to 64 and 65 to 68 of the rules where energy is or is about to be

supplied or used at high, medium and low voltage (except in those cases to

which scales ―B‖ to ―S‖ of this schedule specifically refer) shall be as under:-

Capacity Fees `

(i) Not exceeding 5 Killowatts 25.00

(ii) Exceeding 5 killowatts but not

exceeding 10 Killowatts. 50.00

(iii) Exceeding 10 Killowatts but not

313

exceeding 20 Killowatts. 75.00

(iv) Exceeding 20 Killowatts but not

exceeding 50 Kilowatts. 100.00

(v) Exceeding 50 Killowatts but not

exceeding 100 Killowatts. 150.00

(vi) Exceeding 100 Killowatts but not

exceeding 250 Killowatts. 400.00

(vii) Exceeding 250 Killowatts but not

exceeding 500 Killowatts. 600.00

(viii) Exceeding 500 Killowatts but not

exceeding 750 Killowatts. 800.00

(ix) Exceeding 750 Killowatts but not

exceeding 1,000 Killowatts. 1,000.00

(x) Exceeding 1,000 Killowatts but not

exceeding 1,500 Killowatts. 1,200.00

(xi) Exceeding 1,500 Killowatts but not

exceeding 2,000 Killowatts. 1,500.00

(xii) Exceeding 2,000 Killowatts ` 1,500/- + ` 250

for every 250 KW or

part thereof in excess

of 2,000 KW subject

to maximum of

` 5,000/-.

(2) The fees shall be paid by the owner to whom energy is or is about to be

supplied.

SCALE”B”

(1) Rates of fees for an inspection, examination or test of any receiving station,

distributing station or other place in which energy is transformed or

distributed at a pressure of 100 Volts or more shall be as under:-

Capacity Fees (`)

i) Up to and including 25 KVA 100.00

ii)Exceeding 25 KVA but not exceeding

100 KVA 300.00

iii)Exceeding 100 KVA but not exceeding

500 KVA 1,000.00

iv) Exceeding 500 KVA but not

314

exceeding 1,000 KVA 1,500.00

v) Exceeding 1,000 KVA but not

exceeding 2,000 KVA 2,000.00

vi) Exceeding 2,000 KVA `2,000 + `1,000 for

every 500 KVA or part

thereof in excess of

2,000 KVA subject to

maximum of ` 7,500/-.

(2) In the case of receiving station, distributing station owned by the supplier, or

other place in which energy is transformed or distributed by the supplier, the

fee shall be paid by the supplier. In any other case, the fees shall be paid by

the owner.

(3) In the case of inspection of H.T switch gears controlling the transformer not

along with the transformers, the capacity of transformers, as the case may be,

shall be taken for any purpose of levy of fees.

SCALE”C”

(1) Rates of fees for an inspection, examination or test of any generating station

in which energy is generated at a pressure of 100 Volts or more shall be as

under:-

Capacity Fees (`)

i) Up to 25 KVA 100.00

ii)Exceeding 25 KVA but not exceeding

100 KVA 200.00

iii)Exceeding 100 KVA but not exceeding

500 KVA 500.00

iv) Exceeding 500 KVA but not

exceeding 1,000 KVA 1,000.00

v) Exceeding 1,000 KVA but not

exceeding 2,500 KVA 2,000.00

vi) Exceeding 2500 KVA but not

exceeding 5000 KVA 3,500.00

vii) Exceeding 5000 KVA 5,000.00

(2) In the case of generating station owned by the supplier of other place in

which energy is generated by the supplier, the fees shall be paid by the

supplier and in any other case, fees shall be paid by the owner.

(3) In the case of inspection of H.T switch gear controlling the generators not

alongwith the generators, the capacity of generators, as the case may be, shall

be taken for the purpose of levy of fees.

315

SCALE”D”

(1) Rates of fees for inspection, examination or test of any capacitor bank or

reactor in pursuance of rule 63 and other provisions of the rules connected to

a high or extra high voltage installation shall be as under:-

Capacity Fees (`)

i) Up to 500 KVAR 500.00

ii)501 to 1,500 KVAR 1,000.00

iii) 1,501 to 3,000 KVAR 1,500.00

iv) 3,001 to 5,000 KVAR 2,500.00

v) above 5,000 KVAR 5,000.00

(2) The fees shall be paid by the supplier or the owner, as the case may be.

SCALE”E”

(1) Rates of fees for an inspection or examination or test of an electrical

installation connected with the Neon Sign and X-Ray machine, in pursuance

or the provisions of rules 71, 72 and 73 of the Rules shall be as under:-

Fees (`)

i) Neon Sign 50.00

ii) X-Ray Machine 50.00

(2) The fee shall be paid by the owner.

SCALE”F”

(1) Rates of fees for an inspection, examination or test of any electrical

installation, appliance or apparatus in any public place where entertainment

as defined in section 2 of the Gujarat Entertainments Tax Act, 1977 is

provided shall be as under:-

Fees (Rs.)

(i)For the initial inspection, examination or

test of any electrical installation, appliance

or apparatus in a Cinema or a Theatre other than

a touring cinema or other temporary place of public

Entertainment referred to in clause (iv). 1,000.00

(ii)For every subsequent inspection examination

or test of the installation, appliance or

apparatusin such cinema or theatre

as is referred to in clause(i) 300

(iii)For an inspection, examination

316

Or testof any authorised addition

or alteration to theelectrical installation in a

Cinema or a Theatre . 100.00

(iv)(a) For an inspection,

examinationortest of any

electrical installation

applianceorapparatus in a travelling Cinema

or other temporaryplace of public

entertainment 200.00

(b) For every subsequent inspection, examination

or test of any electrical installation, appliance

or apparatus in such Cinema or place of public

entertainment

100.00

(v) For an inspection, examination or test

of any electrical installation, appliance or

apparatus in a travelling or temporary Cinema

or other temporary place of public entertainment

necessiated on account of a change of

installation, appliance or apparatus, so as to

confirm to the rules and reguulations governing

permanent places of public entertainment.

200.00

(2) The fees shall be paid by the owner.

SCALE”G”

(1) Rates of fees for an inspection, examination or test of any electrical

installation, appliance or apparatus erected temporarily in any place or

premises where entertainment, as defined in Section 2 of the Gujarat

Entertainments Tax Act, 1977, is not provided.

Fees (`)

i) Installation having capacity upto 10KW 75.00

ii) Installation having capacity exceeding 10KW 200.00

but not exceeding 50 KW

iii) Installation having capacity exceeding 50KW 400.00

but not exceeding 100 KW

iv) Installation having capacity 500.00

exceeding 100 KW

(2) The fees shall be paid by the owner.

317

SCALE – H

(1) Rates of fees for an inspection, examination or test of any electrical

installation, appliance or apparatus (other than a generating station or a

receiving station for which a separate fee will be charged under scales ―B‖

and ―C‖ in a factory within the meaning of the Factories Act, 1948 (LXII of

1948), to which energy is supplied by a supplier or in which energy is

generated shall be as under:-

(i) For lighting or for the purposes other than power.

Provided that no fees under this item shall be charged in respect of an

electrical installation, appliance or apparatus in any factory where not more

than 9 workers are employed.

Capacity Fees

a) Up to and including 10 KW ` 30 per KW or part

thereof

b) Exceeding 10 KW but not `500.00

exceeding 20 KW

c) Exceeding 20 KW but not `.750.00

exceeding 50 KW

d) Exceeding 50 KW but not ` 1,000.00

exceeding 100 KW

e) Exceeding 100 KW but not ` 1,250.00

exceeding 250 KW

f) Exceeding 250 KW `1,500.00

(ii) For power Fees according to the rates

specified in scale ―A‖.

(2) The fees shall be paid by the owner.

SCALE “I”

(1) Rates of fees for inspection or examination in pursuance of rule 29, 30, 31

and 92 of the rules shall be as under:-

Fees (`)

a) For inspection or examination of a 25.00

new medium or high voltage service

b) For inspection or examination of a 10.00

new medium high voltage tapping as

sub-service tapped from the main

service cut outs.

(2) The rates of fees for inspection or examination in pursuance of rules 29, 30,

31, 63 to 67 and 92 of the rules shall be as under:-

318

Fees (`)

a) For inspection or examination of a 25.00

new medium or high voltage service

b) For inspection or examination of a new high 50.00

or extra high voltage switch gear connected in

service or distributor not covered under Scales

―B‖ and ―C‖.

(3) The fees shall be paid by the supplier.

SCALE “J”

(1) Rates of fees for an inspection or examination in pursuance of rule 87 of the

rules shall be as under:-

a) For inspection or examination of every `.25.00

new aerial line including a service line,

crossing either above or below a telegraph,

telephone or other aerial line at one or

more spans, places or points.

Provided that where more than one crossing situated within a distance of

one kilometer of each other are inspected at the same time, the fee shall be

as follows:-

Fees (`)

For inspection of first crossing 25.00

For inspection of every additional crossing 10.00

(2) The fees leviable under this scale shall not be charged when the inspection

has been carried out in conjunction with an inspection for which a fee is

levied under Scale ―I‖ or ―K‖.

(3) The fee shall be paid by the person whose line was last erected.

SCALE “K”

Fees

(1) (a) Rates of fee for an inspection A minimum charge of

or examination of a new high ` 200 for a distance

pressure aerial line, in pursuance up to 10 Kilometers and

of rule 91 of the Rules. beyond that distance

` 30/- for every

kilometer or part

thereof.

(b) Rates of fees for an inspection ` 20/- per Kilometer

examination test of a medium or low or part thereof subject

pressure aerial distributing main, in to a maximum of

pursuance of rule 91 of the Rules. ` 450/-.

(2) The fees shall be paid by the supplier.

319

SCALE-L

(1) Rates of fees for either inspection `100/-

or issue of a certificate or for both under

rule 82(3) of the rules.

(2)The fee shall be paid by the person who proposes either to erect a new building or

structure or to make any temporary addition or alteration in or upon any building or a

structure.

SCALE-M

Fees (`)

(1) Rates of fees for an inspection or ` 200.00 per day or

examination of any electric traction part thereof subject

system, including trolley wires and to a maximum of

overhead equipment and test of bonding ` 800.00.

and leakage currents.

SCALE-N

Rates of fees for the testing of energy meters shall be as under:-

(a) For testing in Laboratory a single meter of any description.

i) of a capacity not exceeding 20 amperes ` 50.00

ii) of a capacity exceeding 20 amperes

but not exceeding 100 amperes ` 100.00

iii) of a capacity exceeding 100 amperes

but not exceeding 500 amperes. ` 200.00

iv) of a capacity exceeding 500 amperes ` 400.00

Explanation:- In case of meters in use or intended to be used with Current

Transformers, the capacity for the purpose of levying fees, is to be taken as the

capacity of Current Transformers on their primary side.

(b) If a meter is to be tested on the consumer‘s premises, the fees set out in clause

(a) shall be increased by ` 50.00 per meter.

(c) The fees shall be paid by the owner of the meter.

SCALE-O

Fees

(1) Rates of fees for an inspection, ` 75/- for the first

examination or test of any main, hour or part thereof

distributing main, or service line for and thereafter ` 30/-

the existence of leakage therein which per hour or part

may result in electrolysis or other thereof subject to

injury to any water, gas or other pipe a maximum of ` 420/-.

Or to any appliance connected there with

(2) If any leakage is discovered in any such main, distributing main or service line,

the fees shall be paid by the supplier or the owner of the main, distributing main, or

320

service line, as the case may be. If no leakage is discovered, the fees shall be paid

by the owner of the water, gas or other pipe or the appliance connected therewith.

SCALE-P

Fees

(1) Rates of fees for the testing ` 30.00

of an installation for the existence of

leakage to earth.

(2)The fee shall be paid by the party making the application.

SCALE-Q

(1) Rates of fees for inspection and test of any installation in pursuance

of rule 52 and leviable under rule 53 (3) of the rules shall be as

under:-

Capacity Fees

a) Low voltage installation ` 30.00

b) Medium voltage installation ` 50.00

c) High or extra high voltage ` 75.00

installation

(2) The fee shall be paid by the party making the application.

SCALE-R

Fees

(1) Rates of fees for localising ` 30.00 for the first

of leakage to earth in any hour or part thereof

installation and thereafter ` 20.00

per hour or part

thereof subject to a

maximum of ` 200.00

(2)The fees shall be paid by the party making the application.

SCALE-S

For deciding any case of difference or dispute arising under section 21(4), 26(4) or

26(6) of or clause V(2) of clause VI(3) of the Schedule to the Act and under rule

82(2) (b) of the rules, referred to the Inspector.

Capacity Fees

a) Low or medium voltage installation `300.00 for each case

b) High or extra high voltage `1,000.00 for each

installation case.

Provided that for every visit of any premises necessary for the purpose of testing or

verification of the fact, an additional fees of ` 500/- shall be charged for every day or

part thereof.

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Provided further that in the case of a difference or dispute referred to the inspector

for being decided under section 26(6) of the Act, an additional fee for the testing of a

meter in accordance with scale ―N‖ shall be recoverable.

The fees shall be paid by the person who refers the dispute.

SCALE-T

Rates of fees for inspection and examination of all low voltage installations

including sub-meters (not being low voltage installations in factory premises and in

places of public entertainment including cinema or theatre and not covered by scales

―A‖ to ―S‖ of this schedule) shall be as under:-

For inspection or examination of installation.

Fees (`)

i) having meters or sub-meters with 10.00

capacity not exceeding 20 amperes

ii) having meters or sub-meters of a 20.00

capacity exceeding 20 amperes but not

exceeding 50 amperes.

iii) having meters or sub-meters of a 40.00

capacity exceeding 50 amperes but not

exceeding 100 amperes.

iv) having meters or sub-meters of a 50.00

capacity exceeding 100 amperes.

Explanation:- In case of meters in use or intended to be used with current

transformers, the capacity for the purpose of levying fees is to be taken as the

capacity of current transformers on their primary side.

The fees shall be paid by the consumer to whom the energy is supplied.

SCALE-U

Rate of fee for an inspection of an installation provided in multi-storeyed building

having the height more than 15 Mtrs. and issue of a certificate in pursuance of rule

50-A.

` 500.00 per building

The fees shall be paid by the owner or occupier of the building before the final

certificate is issued.

SCALE-V

(1) Rates of fees for approval to layout of any medium, high or extra high

voltage installation of permanent nature shall be as under:-

Up to 500 KVA ` 500.00

Exceeding 500 KVA but not ` 1,000.00

exceeding 2500 KVA.

Exceeding 2500 KVA but not ` 2,500.00

322

exceeding 5000 KVA.

Exceeding 5000KVA ` 5,000.00

(2) Rates of fees for approval to route layout of any high or extra high voltage

over head line shall be ` 1000/- per route.

(3) The fee shall be paid by the supplier or owner as the case may be.

ENERGY & PETROCHEMICALS DEPARTMENT,

NOTIFICATION

Sachivalaya, Gandhinagar

Dated the 20th

February, 1997.

(Referred to in 7, part I Schedule I of Appendix II)

BOMBAY ELECTRICITY DUTY ACT, 1958.

No. GHU/97/10/ELD/1196/9841/K: In exercise of the powers conferred by sub-

section (3) of section 3 of the Bombay Electricity Duty Act, 1958 (BOM.XL of

1958), Government of Gujarat hereby remits in the whole of the state of Gujarat, the

electricity duty, payable under item 7 of schedule I to the said Act in respect of the

energy consumed for common ‗Effluent Treatment Plant‘ set up for treatment of

industrial effluents necessary for pollution control requirements and established by

the industrial estates defined under clause (b) of Section 2 of Gujarat Industrial

Development Act, 1962 or by societies registered under Section 4 of the Gujarat Co-

operative Societies Act, 1961 or by the private limited or public limited companies

established under Indian Companies Act, 1956 or by a Public Trust registered under

the Bombay Public Trust Act, 1950, for a period of five years from the date on

which this common effluent treatment plant is commissioned for the first time.

The remission of electricity duty as specified above shall be available subject to the

following terms and conditions, namely:-

1) The common effluent treatment plant established should be a ―new‖ plant

satisfying the requirements laid down to be declared as a ―new‖ industrial

undertaking as specified under Item (ii) of Explanation-I under Section

3(2)(vii) of Gujarat Electricity Duty Act, 1958.

2) The eligibility certificate for remission of electricity duty under this

notification shall be obtained form the Commissioner of Electricity,

Gandhinagar by making an application within 180 days from the date of

commissioning of affluent treatment plant or from the date of publication of

this notification is official Gazette, whichever is later.

3) Where an application for eligibility certificate (referred to in condition No.2)

above is made to the Commissioner of Electricity after expiry of the

stipulated period of 180 days, the period of five years for remission of

electricity duty shall be reduced by the period lapsed between the date of

commissioning and date of application made to the Commissioner of

Electricity.

By order and in the name of the Governor of Gujarat.

323

ENERGY & PETROCHEMICALS DEPARTMENT,

NOTIFICATION

Sachivalaya, Gandhinagar

Dated the 15th

July, 1997.

Read:- Government Notification No.GHU-87-43-ELD-1183-8171-K

Dated 10th

August, 1987.

(Referred to in 7 Part-I schedule I of Appendix-II)

BOMBAY ELECTRICITY DUTY ACT, 1958.

No. GHU-57-ELD-1197-1029-K: In exercise of the powers conferred by sub-section

(3) of Section-3 of the Bombay Electricity Duty Act, 1958, the Government of

Gujarat is pleased to amend the rate of Electricity duty as specified in Government

notification No. GHU-87-43-ELD-1183-8171-K dated 10.08.1987 from ―35 percent

of the consumption charges‖ to ―20 per cent of the consumption charges‖.

All other conditions stipulated therein remain uncharged.

By order and in the name of the Governor of Gujarat.

324

ENERGY & PETROCHEMICALS DEPARTMENT,

NOTIFICATION

Sachivalaya, Gandhinagar

Dated the 5th

April, 1997.

(Referred to in 4(a) of Part-I Schedule-I of appendix-II)

BOMBAY ELECTRICITY DUTY ACT, 1958(BOM XL OF 1958).

No.GHU-97-27-ELD-1196-57-K:- WHEREAS the Government of Gujarat has

introduced a New Package Scheme of incentives for Tourism Projects 1995-2000,

under the ―New Tourism Policy 1995‖ vide Government resolution,

Information,Broadcasting and Tourism Department No.NTP-1095-1983-C dated 20th

December, 1995 (hereinafter referred to as ―the said resolution‖).

AND WHEREAS the Government of Gujarat considers it necessary so to do in the

public interest:

Now, THEREFORE, in exercise of the powers conferred by section (3) of section 3

of the Bombay Electricity Duty Act, 1958 (BOM.XL of 1958) (hereinafter referred

to as ―the said Act‖), the Government of Gujarat hereby remits the electricity duty

payable under item 4(b) and 7 of Schedule I to the said Act in respect of electrical

energy consumed by a new Tourism Unit or expansion of existing Tourism Unit

which is located in the eligible areas specified in Para 4.6 and which fulfils the

criteria laid in Appendix-B of the said resolution (hereinafter referred to as the

eligible tourism unit) during the eligible period or up to the period of expiry of the

limits of incentives, whichever is earlier, to the extent referred to in para 8.1 of the

said resolution, subject to the following conditions:

1. The eligible tourism unit or existing eligible unit which is covered under para

3 of the said Resolution shall have to obtain an Eligibility Certificate from

the appropriate authority within 180 days of the commencement of

commercial operation.

2. The eligible tourism unit shall-

(a) in the case where the eligibility certificate has been obtained from the

appropriate authority prior to the date of this Notification, within ninety days

from the date of publication of this notification, and

(b) in other cases, within ninety days from the date of receipt of the eligibility

certificate, apply to the Commissioner of Electricity, Gandhinagar for

obtaining the certificate for remission of electricity duty.

3. An application for obtaining the certificate for remission of electricity duty

shall be accompanied by the original eligibility certificate issued to the

eligible tourism unit by the appropriate authority.

4. If the application of an eligible tourism unit for obtaining the certificate for

remission of electricity duty is received in the office of the Commissioner of

Electricity, Gandhinagar after the expiry of the time limit specified in

condition No.2, the certificate of remission shall be made effective from the

325

date on which the application is received by the Commissioner of Electricity.

In such a case, the total period of remission shall be reduced by the period of

delay in submission of application under condition No.2, in case where the

application is received within the time limit specified in condition No.2, the

certificate of remission shall be made effective from the date mentioned in

the Eligibility Certificate.

Provided that the Commissioner of Electricity, on being satisfied that the

application for certificate of remission could not be submitted within the time

limit specified in condition No.2 due to circumstances beyond the control of

the eligible tourism unit, the Commissioner of Electricity may condone the

delay.

5. Separate meters shall be provided by the eligible tourism units duly tested

and sealed by the licensee for recording the consumption of electrical energy

for expanded portion in case of an expansion of an existing unit becoming

eligible for incentives under the said resolution.

6. The eligible tourism unit may at its option request the Commissioner of

Electricity that the certificate of remission be made effective from a date

subsequent to the date mentioned in the eligibility certificate. In such a case,

the certificate of remission shall be issued accordingly without changing the

time upto which the remission is admissible.

7. The certificate of remission shall contain details regarding the date from

which the remission commences, aggregate amount of duty of remission

towards sales-tax, turnover tax, Electricity duty, Luxury tax and

Entertainment Tax, the time upto which the remission is admissible and the

category of eligible tourism unit as shown in the Eligibility Certificate issued

by the appropriate authority.

8. The eligible tourism unit has to file the returns in the prescribed form within

the time limit prescribed therefore by the Commissioner of Electricity.

9. If eligible tourism unit has more than one tourism unit, it shall have to obtain

a separate eligibility certificate for each such tourism unit.

10. If the eligible tourism unit contravenes any of the condition of this

notification or any of the provisions of the Act or the rules made thereunder,

the certificate of remission issued to it by the Commissioner of Electricity

under the scheme shall be liable:-

(i) to be suspended for a period not exceeding six months. The eligible tourism

unit shall be liable to pay electricity duty on the consumption of electricity

during the period of such suspension. The period of such suspension shall be

counted for the purpose of total period of remission:

(ii) to be cancelled, and on such cancellation, the tourism units shall be liable to

pay electricity duty on the consumption of electricity.

11. (i) In the case of new tourism unit, the aggregate amount of tax

exemption towards all the taxes, namely sales-tax, turnover tax, electricity

duty, luxury tax and entertainment tax shall not exceed 100 per cent of

eligible capital investment as provided in the said resolution.

326

(ii) In the case of existing eligible tourism unit the aggregate amount of tax

exemption towards all the taxes namely sales-tax, turnover-tax, electricity

duty, luxury and entertainment tax shall not exceed additional capital

investment made during the operative period of the scheme.

(iii) The category and the period of remission of electricity duty shall be as

under:-

Category of eligible Number of years

Tourism Unit. For remission of duty

Prestigious unit 10

Large scale unit 8

Small scale unit 6

Tiny unit 5

Expansion of existing unit 5

12 For the purpose of deciding quantum of remission of electricity duty,

the Commissioner of Electricity shall make assessment as per the provisions

of the said Act.

13 The eligible tourism unit shall, within thirty days from the last date of

each calendar month, furnish to the Commissioner of Electricity and the

Appropriate Authority, the details of electrical energy consumed and the

details regarding quantum of remission of electricity duty availed of in the

respective month.

14 Appropriate authority shall collect from the concerned tax authority

the details of remission of duty availed of by the eligible tourism unit towards

sales-tax, turn-over tax, electricity duty, luxury tax and entertainment tax on

month to month basis and furnish to the Commissioner of Electricity, the

details of aggregate amount of exemption towards all taxes availed of by the

eligible tourism unit in a month.

15 Appropriate authority shall be responsible for maintaining the accounts,

scrutiny and verification of remission of electricity duty availed of by the

eligible tourism unit.

16 The eligible tourism unit shall be liable to pay electricity duty as soon as the

quantum of exemption availed of towards sales-tax, turnover tax, electricity

duty, luxury tax and entertainment tax equals the amount specified in the

eligibility, certificate issued by the Appropriate Authority or on expiry of the

time limit mentioned in the said certificate, whichever is earlier.

17 If the eligible tourism unit have availed of remission of electricity duty in

excess of the quantum sanctioned under the eligibility certificate, it shall be

liable to pay interest at the rate of two percent per month on such excess

amount.

18 The remission under this notification shall be subject to all terms and

conditions referred to in Government Resolution dated 20th

December, 1995

and further conditions stipulated in this notification and on breach of any of

these conditions, the remission of electricity duty shall be withdrawn with

327

immediate effect and the eligible tourism unit shall be liable to pay electricity

duty for which benefit of remission is availed of.

19 The eligible tourism unit shall install and effectively operate and maintain

pollution control measures as per the standards that may be prescribed by the

Appropriate Authority.

20 The commercial operation of eligible tourism unit shall be continuous for at

least five years after it is commissioned. However, in cases where the

operation is discontinued due to reasons beyond the control of such tourism

unit the Appropriate Authority may examine the individual cases and

condone the period of discontinuation based on the guide-lines to be issued

by the Government.

21 The eligible tourism unit shall furnish details regarding commercial

operation, employment or any other details, which the State Government may

prescribe from time to time.

22 The eligible tourism unit shall have to follow guidelines of the employment

policy of Government regarding employment of local persons.

EXPLANATION

For the purpose of this Notification, Appropriate Authority means:-

(ii) in case of large and prestigious units, the Member-Secretary of State Level

Committee i.e. the Director of Tourism, and

(ii) in case of Tiny and small Units, the Member-Secretary of District level

committee, i.e. The District Manager of Tourism.

328

APPENDIX-II

(As referred to paragraph No. 6.3.2)

SCHIDULE-1

(See section 3 (1) (a))

(Rates of duty payable by consumers other than those referred to in section 2

(a) (i) and (ii)).

Nature of consumption Rates of duty

1 2

PART-1

(1) For energy consumed by a consumer in respect of premises used for

residential purposes or educational purposes

(a) in rural areas 20 per cent of consumption charges.

(b) in urban areas

(i) where the total consumption per month

does not exceed 40 units 25 per cent of consumption charges.

(ii) where the total consumption 40 per cent of

per month exceeds 40 units. consumption charges.

Explanation. -"Educational purpose" means the purpose of imparting education by

an approved school as defined in clause (2) of section 2 of the Bombay Primary

Education Act, 1947, a recognized school or a registered school as defined in clause

(q) or as the case may be. clause (s) of section 2 of the Gujarat Secondary Education

Act, 1972, or a University established by any law for the time being in force in the

State. or a College affiliated to or an institution recognized or approved by, such

University..

(2) For energy consumed for motive power by a service undertaking 30

per cent of consumption charges.

(3) For energy consumed for the use of

(a) (i) hall or 45 per cent of consumption charges.

(ii) auditorium

used for commercial purpose or let out for any purpose, or

(b)(i) cinema house or

(ii) theatre.

(4) for energy consumed by

(a) an undertaking engaged in the manufacture or the production of

eatables or drinks which are not intended to be and are not consumed

on the premises of such undertaking.

Deleted by Gujarat Act No. 7 of 1991 with effect from 01/04/1991.

329

(b) hotels including peshlentile hotels, restaurants, eating houses and

lodging and boarding house - 45 per cent of consumption charges..

A Scheme ―1995-2000 Package of intensive for Tourism Project‖

introduced by the Government under New Tourism Policy. Correction

was made in Section 3 (3) and Appendix 4(b) & 7.

(5) For energy consumed by an industrial undertaking, not being an undertaking to

which item (2) or (4) applies, other than energy consumed in respect of any of its

premises used for residential purposes –

(a) where an industrial undertaking consumes - 20 per cent of

consumption charges. high tension energy

(b) where an industrial undertaking consumes - 10 per cent of

consumption charges exclusively low tension energy.

Explanation - I- Any energy consumed by the industrial undertaking for installation

of any additional plants, machineries and equipment of such industrial undertaking

shall be construed as energy consumed by such industrial undertaking.

Explanation - II For the purpose of this item –

(a) "high tension energy" means any energy supplied the voltage of which exceeds

450 volts under normal conditions subject however to the percentage variation

allowed by the Indian Electricity Rules, 1956.

(b)"low tension energy" means any energy supplied, the voltage of which does not

exceed 450 volts under normal conditions subject however to the percentage

variation allowed by the rules aforesaid.

(6) For the energy consumed in respect of pumping

water for agriculture irrigation purposes - 5 per cent of consumption charges.

Explanation : Any energy consumed for lighting in respect of premises used as a

pump house shall be construed as energy, consumed in respect of the pumping water

for agricultural irrigation purposes.

7) For energy consumed in respect of any

premises and not falling under any of the

items (1) to (6) above - 45 per cent of consumption charges w.e.f.1.4.2002.

(i) as to the item in this Schedule under which any consumption of energy falls:-

Any industrial estate or Co-operative Society or private/ public limited company

or any public trust established from the day of an new common effluent treatment

plant for protection of pollution control in Gujarat were exempted from the only

use of electricity for five years subject to terms and conditions of Notification

No. GHU/97/10/ELD/1196/9841/K dated 20.02.1997.

Explanation 1- For the purposes of this Part, the expression "consumption

charges" means the charges payable by a consumer to a licensee or any person who

generates energy for the energy supplied by such licensee or person but shall not be

deemed to include any of the following charges. namely –

(i) Meter charges

(ii) Interest on delayed payment

330

(iii) Fuse-off call charges and reconnection charges:

Provided that –

(a) Where no energy has been consumed by a consumer, minimum charges

payable by him shall not be deemed to be consumption charges:

(b) Where the units of energy actually consumed by a consumer are less than the

units of energy. for which prescribed minimum charges are payable,

"consumption charges‘. Shall, in the case of such consumer. means the charges

for the units of energy actually consumed by him and not the prescribed minimum

charges.

(c) Where a licensee who has installed the generating set for his own use

supplies surplus electrical energy to any other industrial undertaking (hereinafter

referred to as ―the receiving undertaking‖) the charges payable by any other

consumer for such quantum of power to the licensee who is engaged in the

business of supplying energy within the area where the receiving undertaking is

located shall be deemed to be ―consumption charges‖ for such supply of energy

(Clause (c) was added by Guj.8 of 1999).

Explanation II -In Explanation 1

(a) The expression "energy, supplied by such licensee or person" shall not include

the losses of energy sustained in transmission or transformation by a licensee of

person before supply to a consumer;

(b) the term "prescribed" means prescribed by the licensee or the person supplying

the energy.

PART-11

Where any dispute arises-

(i) whether any undertaking in an industrial undertaking or a new industrial

undertaking or a service undertaking:

(ii) whether any premises are used by an industrial undertaking for residential

purpose or any other purpose:

(iii) as to the item in this Schedule under which any consumption of energy falls

(iv) where energy is consumed for different purposes, as to what portion is

consumed for any particular purpose.

the dispute shall be referred for decision to such authority as the State

Government may, by notification in the Official Gazette specify and different

authorities may be specified for different areas of the State. The authority

concerned shall, after such inquiry as it deems fit, record its decision.

An appeal shall lie against such decision to the State Government within

sixty days from the date of the decision.

Where no appeal is filed against a decision of the authority, the State

Government may of its own motion or otherwise within one year from the

date of any order passed by the authority call for and examine the record of

any proceeding of the authority for the purpose of satisfying itself as to the

legality or propriety of any decision or order passed and as to regularity of

the proceedings of such authority and pass such order thereon as it thinks fit.

331

The decision recorded by such authority subject to any appeal to or revision

by the State Government and the order of the State Government in appeal or

revision, shall be final and shall not be called in question in any court.

SCHEDULE 11

(See section 3 (1) (b))

(Rates of duty payable by consumers

referred to in section 2(a)(i) and (ii))

Nature of consumption Rates of duty

1 2

Part – 1

(1) For energy consumed by consumer in respect of premises, used for residential

purposes or educational purposes:-

(a) in rural areas 10 paise per unit.

(b) in urban areas 20 paise per unit.

Explanation- "Educational purpose" means the purpose of imparting education on

the premises of an approved school as defined in clause (2) of section 2 of' the

Bombay Primary Education Act, 1947. a recognised school or registered school as

defined in clause (9) or as the case may be, clause (s) of section 2 of the Gujarat

Secondary Education Act. 1972. or a University, established by any law for the time

being in force in the State or a college affiliated to or, institution recognised or

approved by such University.

(2) For energy consumed for motive power

by a service undertaking. 15 paise per unit

(3) For energy consumed for the use of- 25 paise per unit.

(i) hall or

(ii)Auditorium used for commercial purpose or let out for any purpose. Or (b) (1)

cinema house or (ii) theatre.

(4)(a) For energy consumed by –

* Deleted by Gujarat Act No. 7 of 1991 with effect from 01-04-1991

(a) H otels including residential hotels, restaurants, eating houses and lodging

and boarding houses. 30 paise per unit.

(5) For energy, consumed by an industrial undertaking. Not being an undertaking to

which item (2) or (4) or (6) applies. Other than energy consumed in respect of

any of its premises used for residential purposes:-

(a)where an industrial undertaking consumes high tension energy

40 paise per unit(a)

(b) where an industrial undertaking consumes exclusively low tension energy.

5 paise per unit

332

Explanation I. : Any energy consumed by the industrial undertaking for installation

of additional plants. Machineries and equipments of such industrial undertaking shall

be construed as energy, consumed by such industrial undertaking.

Explanation II. For the purpose of this items:-

(a) ‖high tension energy‖ means any energy supplied. The voltage of which exceeds

450 volts under normal conditions subject however to the percentage variation

allowed by the Indian electricity Rules, 1956.

(b) "low tension energy" means any energy supplied, the voltage of which does not

exceed 450 volts under normal conditions subject however to the percentage

variation allowed by the rules aforesaid.

(6) for energy generated by co-generation or back pressure turbine and consumed

for any purpose. 20 paise per unit

(7) for energy consumed in respect of any premise not falling under any of the items

(1) to (6) above. 20 paise per unit.(c)

Explanation :- For the purpose of this Part in determining the units of energy

consumed the losses of energy sustained in transmission or transformation by a

licensee or any person who generate energy. before supply to a consumer. shall be

excluded.

(a), (b) and (c) the figures were substituted by Guj.Act 8 of 1999.

Part-II

Where any dispute arises-

(i) whether any undertaking is an industrial undertaking or a new industrial

undertaking or a service undertaking..

(ii) whether any premises are used by an industrial undertaking for residential

purpose or any other purpose

(iii) as to the item in this Schedule under which any consumption of energy falls .

(iv) where energy is consumed for different purpose as to what portion of

consumption is consumed for any particular purpose,

The dispute shall be referred for decision to such authority as the State

Government may by notification in the Official Gazette, specify and different

authorities may be specified for different areas of the State. The authority

concerned shall after such inquiry as it deems fit record its decision.

An appeal shall lie against such decision to the State Government within sixty days

from the date of the decision.

Where no appeal is filed against a decision of the authority,. the State Government

may, of its own motion or otherwise within one year from the date of any order

passed by the authority call for and examine the record of any .proceedings of the

authority, for the purpose of satisfying itself as to the legality or propriety, of any

decision or order passed and as to the regularity of the proceedings of such authority

and pass such order thereon as it thinks fit.

333

The decision recorded by such authority, subject to any appeal to or revision by the

State Government and the order of the State Government in appeal or revision, shall

be final and shall not be called in question in any court.

6.5 ELECTRICITY DUTY AND FEES

6.5.1 FUNCTION AND DUTY OF STATE ELECTRICITY BOARD.

Under the provisions of the Electricity (Supply) Act,1948 and the Gujarat Electricity

Supply Rules 1966, the Board has the control over the supply of energy. Guidence to

the Government in respect of issue of licensee for generation of Electricity energy

and supply there of to the consumers are given by the Commissioner of Electricity

through the Inspection of installation made by the consumers at their premises for

various purposes viz. Residential, Industrial, Commercial, temporary, others etc.

A Electricity Duty

1. The rates of Electricity duty is prescribed under Schedule I and II to the Act.

The Electricity duty is required to be levied on the consumption of Electricity

and to be paid to the Government (Section 3(1).

2. The Electricity duty is not leviable on the units of energy consumed by the

consumers as prescribed under Section 3(2) of the Act.

3. The State Government may by notification in the official Gazette and subject

to such terms and conditions as may be specified therein, reduce the rate of

duty or remit the duty in respect of-

(a) electro-chemical electro-lystical or electro-metallurgical process carried

on by an Industrial under taking or;

(b) such class of consumers or such class of premises in such area and for

such period as the State Government may specify in the notification.

[Section 3(3)]

4. Every licensee is required to collect and pay to the Government at the time

and in the manner prescribed, the proper Electricity duty payable under this

Act in respect of energy supplied by him to consumers. The duty so payable

is required to be a first charge on the amounts recoverable by the Licensee

for the energy supplied by him and is the debt due by the Government.

[Section 4(2)]

5. In case, if the licensee is supplying energy to any consumers at free of cost,

the consumers have to pay duty to the Government.

[Section 4(2)]

6. Where any consumer fails or neglects to pay the amounts of duty due from

him, such duty is required to be deducted from Deposits recovered from the

consumers, after giving notice less than seven clear days to cut-off the supply

of energy and action under the Act to recover the dues.

[Section 4(3)]

7. In respect of any consumers, the Government may (1) extend the date of

payment (2) allow to pay in installments (3) allow deferment of payment of

Electricity Duty not exceeding 5 years in aggregate. [Section 4(3A)]

334

8. Rebate on cost of collection of Electricity duty is required to be allowed to a

licensee. [Section 4(4)]

9. A person or Licensee who uses energy generated by him has to pay duty on

the units of energy consumed.

[Section 4(5)]

10. Returns in such forms and at such a time as may be prescribed by the

Government is required to be submitted to the Government showing all the

details as required in the forms. [Section 4(5)]

11. Section 6&7 deals with the appointment of Inspector and who exercises

powers and performance of duty under the Acts and Rules. .

12. Interest for belated payment of duty: Any sum due on accounts of Electricity

duty, if not paid at the time and in the manner prescribed is required to be deemed as

in arrears and there upon such interest not exceeding 24 per cent per annum which

the Government may by general or special order fix is required to be payable on such

sums and the sums together with interest there on is required to be recovered either

through a civil court or as an arrears of land revenue. (Section-8)

13. FINES

If the licensee fails to submit returns or keeping books of accounts or willfully

obstructs the Inspector, he is liable for fine which may be extended to one thousand

rupees (w.e.f.1-4-99). (Section-8)

RULES FOR LEVY OF ELECTRICITY DUTY

1. LEVY AND COLLECTION OF ELECTRICITY DUTY.

Every licensee have to recover the duty from the consumers and credited to the

Government within 40 days after the expiry of the calendar month for which duty

was collected provided, extension for time limit for the said payment, the

Government can grant extension not exceeding 15 days subject to 80 per cent

payment of duty on the basis of duty paid for the previous month within a period of

40 days. (Rule-3)

I.E.C.Rules 1956

Further, if licensee pays the duty by cheque, the date of payment should be the date

of credit accounted for in Government accounts.

2. MAINTENANCE OF RECORDS BY THE LICENSEE

Under Section 5, the Licensee have to maintain the books of accounts, registers etc.

under Sub-Rule (v) to (II) of Rule 4.

3. SUBMISSION OF RETURNS

Under Section 5, the licensees have to Submit the monthly returns in duplicate

(i) In form-A details of Sub Rule (I) to (II) of Rule 6,

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(ii) In form-B details of Sub Rule (1) (2) of Rule 6,

within 40 days of the month to which it retates, to the Collector of Electricity duty or

Electricity duty Inspector.

(Rule 6)

4. ASSESSMENT OF RETURNS

Records as maintained under Section 5 should be inspected minimum at least once in

a month and returns to be scrutinised so far as Electricity duty is concerned and also

verify the entry of exemption of Electricity duty.

5. LEVY OF HIGHER RATE OF ELECTRICITY DUTY

For different kind of purposes, the consumers have to install a separate meter,

however, if no separate meter is installed, higher rate is applicable.

(Rule 10)

6. EXEMPTION FROM PAYMENT OF DUTY

Either in form E or `F' the applicant has to make application within 180 days from

the date of

(a) starting generating the Energy. (For Licensee)

(b) first time manufacturing or (for Customer) production of goods.

Exemption is not available for delay in submission of application.

7. REFUND OF EXCESS DUTY PAID

Application along with duty paid receipt is required to be submitted within 12

months from the date of such payment and after scrutiny of the claim, satisfying the

excess payment, appropriable authority may grant such refund. (Rule 12)

8. INTEREST FOR DELAY PAYMENT

Any sum due on account of Electricity duty, if not paid in time and in the manner

prescribed under the rules, such amounts in arrear will carry interest at 24 per cent

and the sum together with any interest there on shall be recoverable either through a

civil court or as arrears of land revenue. (Section 8 of the Act)

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Prevailing rates of electricity duty under the Gujarat Electricity Duty Act, 1958

(1)Duty on consumption of electricity other than production of electricity by self

(in percentage of cost of consumption)

Sr. No category Rate of electricity

duty

1 Residential and educational

(a) Rural area 7.50 per cent

(b)Urban area 15 per cent

2 Hostel for students

(a) Rural area 7.50 per cent

(b)Urban area 15 per cent

3 Industrial units

(a) High voltage 15 per cent

(b) Low voltage 10 per cent

4 Other than above(includes commercial) 25 per cent

(2)Electricity duty on electricity produced by self (Per unit)

1 Residential and educational

(a) Rural area 10 paisa

(b)Urban area 20 paisa

2 (a) (1) Hall

(2)Auditorium

25 paisa

(b)(1) Cinema House

(2)Theater

3 Hotel and restaurant 30 paisa

4 Industrial units 55 paisa

5 Other than above( includes commercial) 40 paisa

6.6 DETAILS OF AUDIT PROCEDURE

It would have been seen from the earlier chapters that the audit of electricity

duty and fees will be conducted in two different sets of offices, namely, the

executive offices and the office of the Collector of Electricity Duty.

In the executive offices, registers are maintained showing different

consumers or licensees generating/ distributing/ transforming electricity whose

installations will require periodical inspection by the executive staff. The periodicity

of inspection in respect of each such installation like generating unit, transformer etc.

is laid down by the State Government. It should be seen in audit with reference to

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these registers whether the periodicity prescribed by the Government in relation to

the inspection of each unit is observed and whether the fees for inspection collected

by the executive are according to the scale of fees laid down by Government where

certain installations have not been inspected for years together for want of adequate

executive staff or for any other reasons, the point should be brought to prominence in

the local audit report.

Usually, Government also prescribes the quantum of inspection that each

inspector should conduct during a calendar year. It should be seen that as far as

possible, inspection is carried out by each inspector according to the quantum fixed

for him and inspections do not lapse into arrears on account of any short-fall in the

inspection quota of one or more of the inspecting staff.

In regard to the collection of electricity duty, the returns received from the

different licensees should receive attention in audit. It should be seen that energy

consumed for different purposes and which are subject to payment of duty at

different rates is indicated separately in the returns and charges are correctly levied

on the consumption shown in the return. Where in any case, a consumer having

different installations liable for payment of duty at different rates has not installed

separate meters for recording the consumption separately for each of his

installations, it should be seen whether duty has been levied at the highest rate at

which the consumer is liable to pay duty.

Exemptions from the payment of electricity duty either wholly or partially

should receive special attention. The exemptions should be examined from the point

of view of the provisions in the Act and from the point of view of propriety wherever

necessary.

In the course of audit, reports of inspection of different installations which

are conducted by the executive officers can be obtained and studied in order to see

that the nature of the installations falls within the correct duty classification in the

rate schedule. Wherever a doubt is felt regarding the eligibility of a unit to pay

duty at a particular rate and not a higher rate, the department should be asked to

furnish complete information regarding the consumer in question so that audit can

decide whether the rate of duty being charged to the consumer is correct or not.

Refunds of duty granted by the Collector of Electricity Duty will be examined in

audit to see that the refunds are admissible and the payments of refunds are so noted

on the records that a second claim would not be admitted.

Subject to the general audit checks indicated above, the following detailed audit

procedure should be followed.

(1) In the offices of the licensees, meter reading books should be scrutinized to

see whether the units of energy consumed are correctly worked out.

(2) The units consumed are correctly entered in the consumer's ledger from the

meter reading book.

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(3) The bills are prepared correctly to include the energy consumed as entered in

the ledger.

(4) The rates of duty charged are correct according to the scale laid down.

(5) The realisation of the amount of duty and their payment into Government

account is being promptly done.

(6) The revenue collection register maintained by the collector of electricity duty

should be checked with the returns of the licensee and treasury challans.

Reconciliation of the amounts received at each treasury should be independently

carried out with the consolidated treasury receipts obtained from the treasury officer

concerned.

(7) Electricity duty at normal rates is charged in all cases in which energy is

supplied free by the licensee.

(8) Electricity duty has been realized from persons consuming from their own

source of generation.

(9) Meters being installed for generation and consumption of energy in the

auxiliaries should also be seen. In cases where meters for generating the energy

shown as consumed in the process of generation, may be compared with the

percentage fixed by the Government or any authority or obtaining in other

comparable identical units.

(10) The inspections of the electrical installations have been carried out only after

the payment of prescribed fees.

(11) It should be seen in audit whether interest at prescribed rate of 24 per cent is

levied on all sums of electricity duty not paid within prescribed time limit.

6.7 AUDIT CHECKS

The sampling technique and the audit checks to be adopted while conducting audit in

respect of Inspection fee & Electricity duty has been brought out in Annexure-6(A)

and Annexure-6(B) respectively.

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VALUE ADDED TAX

INTRODUCTORY

7.1.1 AUTHORITY OF CAG TO CONDUCT AUDIT OF VALUE ADDED

TAX RECEIPTS

As per Section 16 of the Comptroller and Auditor General‘s (Duties, Powers and

Conditions of Service) Act 1971, the Comptroller and Auditor General of India has

been entrusted with the audit of all receipts which are payable into the Consolidated

Fund of India and of each State and of each Union Territory having a Legislative

Assembly and to make for this purpose, such examination of the accounts as he

thinks fit and report thereon.

7.1.2 SCOPE AND EXTENT OF AUDIT

(i) Audit of receipts and refunds of Value Added Tax is regulated by the general

principles governing the audit of receipts as laid down in chapter 4 of Section-II of

the C.A.G.‘s Manual of Standing Orders (Audit) and provisions of this Manual.

(ii) The most important function of audit is to see that adequate regulations and

procedures have been framed by the Commercial Tax Department (the Department)

to secure an effective check on the assessment, collection and proper allocation of

Value Added Tax and to satisfy itself that such regulations and procedure are in

accordance with law and that they are actually being duly carried out. Audit should

also make such examination as it thinks fit with respect to the correctness of sums

brought to account in respect of Value Added Tax.

(iii) It is primarily the responsibility of the departmental authorities to see that all

revenue or other debts due to Government which have to be brought to account are

correctly and promptly assessed, realised and credited to Government account.

During the audit of receipts it should, however, be seen that all receipts due to

Government are actually received and brought to account and that receipts, which

have entered the books of the Department, are correctly calculated and are, in fact,

credited to Government account in time. It should also be checked that the

executives have not granted unjustified or unauthorised remissions to tax payers.

(iv) Audit of revenues differs from audit of expenditure in that, in the former,

attention must be given not only to examine the records of amounts actually received

but also to ascertaining that adequate precautions are taken to ensure that all amounts

received or due to be received in the period of account are properly and promptly

brought to account. Since the laws under which the revenue is collected provide for

judicial remedy or judicial interpretation, the scrutiny by audit should be generally

limited to those matters which are not subject to judicial processes.

CHAPTER 7

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(v) The Audit should not in any way substitute itself for the revenue authorities in

the performance of their statutory duties. But Audit should satisfy itself in general

that the departmental machinery is sufficiently safe-guarded against errors and fraud,

and so far as can be judged, the procedure is calculated, to give effect to the

requirements of the law.

(vi) Audit does not consider it the main part of its duties to review the judgement

exercised or the decision taken in individual cases by officers entrusted with those

duties but it must be recognised that an examination of such cases may be an

important factor in judging the effectiveness of assessment procedure. Where, for

example, the information received on any individual case is insufficient to enable

Audit to see how the requirement of the law have been complied with, Audit may

consider it its duty to ask for further information to enable it to form the judgement

required of it as to the effectiveness of the system. It is, however, towards forming a

general judgement rather than to the detection of individual errors of assessment etc.

that the audit enquiries should be directed. The detection of individual errors is an

incident rather than the object of audit.

(vii) Members of the audit department will have access to relevant papers and records

of the Department, but they should observe secrecy in the same way as officers of

the Department.

(viii) The most important function of Audit in relation to Value Added Tax

assessments and refunds is to satisfy itself by such test checks as it may consider

necessary, that the internal procedure adequately provides for and actually secures :

(a) the collection and utilisation of data necessary for the computation of demand or

refund under the law,

(b) the prompt raising of demands on tax payers in the manner provided by the law,

(c) the regular accounting of demands, collections and refunds,

(d) the correct accounting and allocations of collections and their credit to the

Consolidated Fund,

(e) that proper safeguards exist to ensure that there is no wilful omission or

negligence to levy or collect taxes or to issue refunds,

(f) that claims on tax-payers are pursued with due diligence and are not abandoned

or reduced except with adequate justification and proper authority,

(g) that double refunds, fraudulent or forged refund orders, or other losses of

revenue through fraud, default to mistake are promptly brought to light and

investigated, and

(h) that interest recoverable from the assesses for belated payment of tax is properly

calculated in accordance with law and there is no omission to levy or collect the

interest, and in cases where levy of penalty is discretionary whether such levy

was at all considered by the assessing authority and a note has been kept to this

effect. Where the levy of penalty is not mandatory, the quantum of penalty

imposed would be outside the purview of audit.

(ix) To discharge these functions effectively, the auditor must be thoroughly

conversant with the processes and procedure relating to the levy and collection of

taxes and the laws and the rules governing such processes and procedure.

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(x) In the subsequent chapters, the basic provisions of the law and the rules

governing the assessment and collection of Value Added Tax are set out. Being only

a summary, this manual can in no sense, be regarded as a substitute for the Acts

themselves and, therefore, it should be treated merely as a preliminary step to enable

the auditor to grasp the essential of the administration of the Value Added Tax Laws.

For a fuller and comprehensive study, he should refer to the provisions of the Acts

and the Rules made there under and also to the case laws on the subject as

summarised in the leading commentaries.

(xi) Physical verification of the premises and stocks etc. of any class of licenses and

independent enquiries from the general public are outside the scope of audit.

LEGISLATIVE BACKGROUND

7.2.1 CONSTITUTIONAL PROVISIONS

Seventh Schedule to the Constitution of India has three lists namely Union List (List

I), State List (List II) and Concurrent List (List III). These lists contain subject

matters on which Parliament and State Legislatures have powers to make laws. On

matters enumerated in List I Parliament has powers (Article 246(1) of the C.O.I) and

on matters appearing in List II, States Legislatures have powers (Article 246(3) of

C.O.I.). Both the Parliament and State Legislatures have jurisdiction to make laws on

matters listed out in List III subject to conditions laid down in Article 246(2) of the

Constitution of India.

Entry 54 of List II reads as ―Taxes on the sale or purchase of goods other than news

papers‖ was later amended by the Constitution (Sixth Amendment) Act, 1956. The

amended entry 54 of List II reads as ―Taxes on the sale of purchase of goods other

than news papers subject to the provisions of entry 92.A of the List I‖.

By virtue of Article 246(2) of the Constitution of India, States have acquired powers

to levy tax on the subject matters enumerated in Entry 54.

By virtue of entry 92.A in List I which reads as ―Taxes on the sale or purchase of

goods other than news papers where such sale or purchase takes place in the course

of inter-State trade or commerce‖ read with Article 246(1) of the Constitution of

India, Union has acquired powers to levy tax on the above subject matter and

accordingly Central Sales Tax Act, 1956 was enacted to fulfill the objective (Entry

92.A of List I). Levy of tax on sale or purchase of goods in the course of inter-State

trade or commerce is out of the purview of the State Legislatures, however Article

269 of the Constitution of India provides that taxes on inter-State sales shall be

levied and collected by the Central Government but shall be assigned to the State. A

provision is made in the Central Sales Tax Act, 1956 (Section 9) which empowers

the State Governments to collect tax and retain the proceeds provided that such sale

takes place within the territory of the State.

Article 286 of the Constitution of India, excludes from the purview of the State

Legislation levy and imposition of tax on sales or purchase of goods (I) in the inter-

State trade or commerce, (II) in the course of import into or export out of the

territory of India and (III) that takes place outside the State and restricts the power of

States in so far as it imposes or authorises the imposition of tax on the sales or

purchase of goods declared by the Parliament by law to be of special importance in

the inter-state trade or commerce. The principles governing these restrictions are

formulated by the Parliament in the Central Sales Tax Act, 1956.

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On 3rd

February, 1983, 46th

amendment to the Constitution was made enlarging the

definition of tax on the sales or purchase of goods (clause 29.A of Article 366 of

Constitution of India) and also a new levy on consignment of goods where such

consignment take place in the course of inter-state trade or commerce. Gujarat State

has adopted this enlarged definition of the sale from 5th

August, 1985. In Central

Sales Tax Act, 1956 the provisions of new levy on consignments has not been

incorporated so far.

7.2.2 ENACTMENT OF THE GUJARAT VALUE ADDED TAX ACT, 2003.

The levy of Value Added tax in the Gujarat State is based on and is regulated by:

(a) Gujarat Value Added Tax Act, 2003

(b) Gujarat Value Added Tax Rules, 2006

(c) The Central Sales Tax Act, 1956

(d) The Central Sales Tax (Registration and Turnover) Rules, 1957

(e) The Central Sales Tax (Gujarat) Rules, 1970

(f) Gujarat Motor Spirit Cess Act, 2001

(g) Gujarat Motor Spirit Cess Rules, 2001

(h) The Gujarat Tax on Entry of specified Goods into Local Area Act, 2001.

7.2.3 SCOPE OF DEPARTMENTAL INSTRUCTIONS

Departmental circulars have no statutory value. A construction placed by the

executive Government cannot bind Audit or a Tribunal or a quasi-judicial Tribunal.

They are merely administrative directions issued by the Executive and must be

within the ambit of the laws and the rules.

BASIC FEATURES OF THE GUJARAT VALUE ADDED TAX ACT

7.3.1 The Gujarat Value Added Tax Act, 2003, was enacted and came into force

with effect from 1-4-2006. This Act contemplates levy of tax on sales or purchases

of various goods by dealers who carry on business in the State. This Act has three

Schedules. Schedule I comprises all tax free goods. Section 5 of the Act governs this

Schedule. Schedule II contains list of various goods which attract Value Added tax

and Schedule III contains goods which attract tax on petroleum product. Section 7 of

the Act governs this Schedule. The Act envisages composite system of levy of tax.

The Act also contemplates levy of purchase tax on the purchase of goods under

certain circumstances.

Value Added Tax (VAT) is a modern and progressive form of sales tax. It is

a multipoint tax with provision for granting set-off or credit of the tax paid on the

purchases to be utilised against the tax payable on sales. In simple terms ‗value

added‘ means the difference between the sale price and the purchase price. Goods

pass through various stages in the manufacturing and the distribution chain till they

reach the consumer. At each stage, some value is added. VAT works on the

principle of tax on the value addition at each such stage. VAT is payable, when there

is sale of taxable goods by a registered dealer within the state in the course of his

business. The tax so charged or collected is shown separately in the books of

accounts and should not form a part of the turnover of the dealer. The flow chart

given below explains the concept of VAT in a simple manner.

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Some important changes made in VAT are as under:-

Tax under VAT has been levied on sale at every stage instead of single point

levy in sales tax.

There is no provision of Registered Dealers resale in VAT as input tax credit

system has been introduced in VAT.

Input tax credit has been allowed in VAT system on purchase of raw materials,

packing materials, consumable store, capital goods for utilising the same

towards payment of output tax.

In Sales tax, set off was allowed in restricted manner, but in VAT system, input

tax credit is allowed even on capital goods but subject to certain conditions.

Taxable goods under sales tax were classified under 195 entries. In VAT system

there are only 87 entries in Schedule II and 6 entries in Schedule III.

Slab of rate of tax was numerous in sales tax but in VAT, there are mainly three

slabs i.e. 1%, 4% and 12.5%, plus additional tax.

Unlike sales tax, checks by the Department have been restricted under VAT.

There is no provision of cent percent assessment under VAT. Self assessment

has also been introduced. Provisions for imposing penalty have been widened in

VAT system.

7.3.2 IMPORTANT DEFINITIONS

The Value Added Tax Act is a law which empowers Government to levy tax on sales

or purchases of goods affected by dealer who carries on business. Therefore, it is

necessary to understand certain important terms. Such as dealer, business, goods,

resale, manufacture etc. Certain important terms are briefly explained below for

benefit of members of audit party. Provisions of bare Act, Rules and notifications are

not reproduced below so as to make the field parties habituated to refer to the

provisions from bare Act and Rules.

7.3.2.1 ADDITIONAL TAX: SEE SECTION 2(1A)

Levy of additional tax is governed by Section 1(A) of section 7 or sub section (6) of

Manuf act urer B Sal e Pri ce `100 VAT 10 % (`10)

Raw Mat er i al Producer A

Sal e pri ce `180 VAT 10% Tot al VAT `18 Tax Payabl e `18 l ess `15= `3

Sal e Pri ce `150 VAT 10% Tot al VAT `15 Tax Payabl e `15 l ess`10=`5

Whol esal er C

Sale price `200

VAT 10%

Total VAT `20

Tax Payable `20 less 18= `2

Consumer E Ret ai l er D

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section 9. The additional tax is chargeable from 1-4-2008.Two and half paise in the

rupees on the goods specified in the entries at serial numbers 25, 46B, 48A, 49A,

49B, 51A, 76A and 87 is leviable whereas one paisa in the rupee on the goods

specified in other entries except in entry at serial number 13 in Schedule II is

leviable on goods specified as declared goods and under Section 2(11) of the Act.

With effect from 11.4.2014, additional tax is also leviable on declared goods at the

rate of one paise in the rupee.

7.3.2.2 BUSINESS: SEE SECTION 2(4)

This term is divided into 2 clauses. As per clause (i) the term includes any trade,

commerce or manufacture or any adventure or concern in the nature of trade,

commerce or manufacture whether or not such trade, commerce, manufacture,

adventure or concern is carried on with motive to make profit or gain and whether or

not any profit or gain accrues from such trade, commerce, manufacture, adventure or

concern. In other words, even if the intention of an activity is not to earn profit, such

activity still falls within this definition. Clause (ii) includes of any transaction of

buying or selling or supplying of goods which is ancillary or incidental to or

resulting from such trade, etc.

7.3.2.3 DEALER: SEE SECTION 2(10)

―Dealer‖ means any persons who, for the purpose of or consequential to the

engagement in or, in connection with or incidental to or in the course of his business

buys, sells, manufactures, makes supplies or distributes goods, directly or otherwise,

whether for cash or deferred payment, or for commission, remuneration or other and

includes the persons listed in (a) to (h) of sub section 2(10). However, Agriculturist

who sells exclusively agricultural produce grown on land cultivates by him

personally, an individual who sells exclusively any fish or any sea food caught by

him personally or by any member of his family on account of or on behalf of such

individual and a charitable, religious or educational institution carrying on the

activity of manufacturing, buying, selling or supplying goods, in performance of its

functions for achieving it avowed objects are not in the nature of business.

7.3.2.4 DECLARED GOODS: SEE SECTION 2(11)

These are the goods enumerated in Section 14 of the CST Act, 1956. By virtue of

Section 15 of the CST Act, 1956, tax is to be levied at one stage at a rate not

exceeding 4% + 1% additional tax from 11-4-2011.

7.3.2.5 GOODS: SEE SECTION 2(13)

All kinds of movable property with the exception of newspaper, actionable claims,

electricity or stocks, share or securities is treated as goods. It includes all materials,

articles and commodities and every kind of property (whether as goods or in some

other form) involved in the execution of works contract, all intangible commodities

and growing crops, grass, standing timber or things attached to or forming part of the

land, which are agreed to be severed before sale or under the contract of sale.

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7.3.2.6 PERSON: SEE SECTION 2(15)

Since the person who carries on business is a dealer, it is necessary to understand

this term. It includes (1) Individual (male or female) (2) Legal person (3) Company

(4) An association of persons (5) Body of individuals (6) A society (7) A club (8)

Joint family or HUF (9) A firm (10) A local authority (11) Central Government (12)

State Government.

7.3.2.7 REGISTERED DEALER: SEE SECTION 2(20)

―Registered dealer‖ means dealer registered under this Act who holds a certificate of

registration granted or deemed to have been granted under this Act.

7.3.2.8 RESALE: SEE SECTION 2(21)

―Resale‖ means a sale of purchased goods (i) in the same form in which they were

purchased or (ii) without using them in the manufacture of any goods or without

doing anything to them which amount to or results in a manufacture.

7.3.2.9 SALE: SEE SECTION 2(23)

―Sale‖ means a sale of goods made within the State for cash or deferred payment or

other valuable consideration and includes,

(a) Transfer, otherwise than in pursuance of a contract, of property in goods for

cash, deferred payment or other valuable consideration,

(b) Transfer of property in goods (whether as goods or in some other form) involved

in execution of a works contract,

(c) Delivery of goods on hire purchase or any system of payment by instalments,

(d) Transfer of the right to use any goods for any purpose (whether or not for a

specified period) for cash, deferred payment or other valuable consideration,

(e) Supply of goods by any unincorporated association or body of persons to a

member thereof for cash, deferred payment or other valuable consideration,

(f) Supply of goods by a society or club or an association to its members on

payment of a price or of fees or subscription or any consideration,

(g) Supply of goods by way of or as part of any service or in any other manner

whatsoever,

(h) Supply of goods being food or any other article for human consumption or any

drink (whether or not intoxicating) where such supply or service is for cash,

deferred payment or other valuable consideration,

(i) supply by way of barter of goods,

(j) Disposal of goods by a person in the manner prescribed in Explanation (iii) to

clause 10 but does not include a mortgage, hypothecation, charge or pledge; and

the words ―sell‖, ―buy‖ and ―purchase‖ with all their grammatical variations and

cognate expressions shall be construed accordingly.

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EXPLANATION

(i) For the purposes of this clause, ―sale within the State‖ includes a sale determined

to be inside the State in accordance with the principles formulated in sub -section (2)

of section 4 of the Central Act;

(ii) for the purpose of sub clause (b) ―works contract‖ means a contract for execution

of works and includes such works contract as the State Government may, by

notification in the Official Gazette, specify;

(iii) every transfer of property in goods by the Central Government, any State

Government, a statutory body or a local authority for cash, deferred payment or other

valuable consideration, whether or not in the course of business, shall be deemed to

be a sale for the purposes of this Act,

As definition of the term ‗sale‘ does not include mortgage, hypothecation, pledge or

charge on goods, it is necessary to understand these terms.

(A) MORTGAGE

Section 58(a) of the Transfer of Property Act defines a mortgage to be ―the transfer

of interest in specific immovable property for the purpose of security payment of

money advanced by way of loan, an existing or future debt or the performance of an

engagement which may give rise to a pecuniary liability.

(B) HYPOTHECATION

By hypothecation is meant a pledge without immediate change of possession; it

gives right to the person making advances on the faith of it to have the possession of

goods if the advances are not paid at the stipulated time; but it leaves to the owner of

the goods hypothecated, the power of making such payment and thereby freeing

them from the obligation.

(C) PLEDGE

Under Section 172 of the India Contract Act, 1872 (IX of 1972) pledge is the

‗Bailment of goods as security for payment of a debt or performance of promise.

(D) CHARGE

Section 100 of the Transfer of property Act, 1882 says that ―where immovable

property of one person is by act of parties or operation of law, made security for the

payment of money to another and the transaction does not amount to a mortgage, the

latter person is said to have a charge on the property‖.

7.3.2.10 TAXABLE GOODS: SEE SECTION 2(29)

This clause does not define or list out any taxable goods. It says that goods other

than those whose sale or purchase is wholly exempt from tax by virtue of Section 5

of the Act.

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7.3.2.11 YEAR: SEE SECTION 2(36)

Year means a financial year.

7.3.2.12 ZERO RATED SALE: SEE SECTION 2(37)

―Zero rated sale‖ means a sale of goods by a registered dealer to another registered

dealer on which the rate of tax leviable shall be zero but tax credit on the purchase

related to that sale is admissible.

7.3.3 CHARGING SECTIONS

Sections 7 and 9 are charging sections.

These Sections are explained below:-

As per Section 7(1) State Government shall levy the tax on turnover of sales of

goods specified in Schedule II and III at the rate mentioned against each entry

and additional tax shall be levied under section 7(1A). Section 7(2) is relating to

power of the State Government to reduce rate of tax, omit or amend any entry or

part thereof in the Schedule II or III, but the state Government cannot enhance

the rate of tax.

Section 9(1) provides that purchase tax is to be levied on purchases of goods

from a person who is not a registered dealer at the rate applicable as specified in

Schedule II or III.

Section 9(2) provides that a registered dealer purchasing sugarcane from a

person who is not a registered dealer for use in manufacture of sugar or

khandsari is liable to pay purchase tax on purchase of such sugarcane at the

applicable rate.

Section 9(3) provides a person or a dealer who has purchased any taxable goods

under certificate or declaration under the provision of VAT Act did not comply

with the conditions therein, such person or dealer is liable to pay purchase tax on

turnover of such purchases at the applicable rate to such goods in Schedule II

and III.

Section 9(4) provides that if a dealer purchase taxable agricultural produce from

commission agent holding lump sum tax permission and does not resell such

goods in Gujarat, purchase tax is payable on turnover of such goods at the rate

applicable to such goods.

7.3.4 RATE OF TAX ON PACKING MATERIALS: SEE SECTION 10

Where goods packed in any materials are sold, the materials in which goods are so

packed shall be deemed to have been sold or purchased along with the goods and the

tax shall be leviable on such sales or purchases of the materials at the rate of tax, if

any, as applicable to the sales or as the case may be, purchase of the goods

themselves.

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7.3.5 SPECIAL PROVISION REGARDING LIABILITY TO PAY TAX IN

CERTAIN CASES: SEESECTION 57

This Section speaks about liability of person under different circumstances

irrespective of the facts whether the said person is liable to pay tax or not under

Section 3 of the Act.

1) If a registered dealer dies and if the business of the deceased is continued by any

person then that person shall be liable to pay all the tax dues whether such tax,

interest, penalty is assessed or not. If the business of the deceased is not continued

then the tax dues would be payable by the heirs from the estate of the deceased.

2) In case of partition of Hindu Undivided Family (HUF), all members of the HUF

are jointly and severally liable to pay tax, penalty etc. Similarly if a firm is

dissolved, then partners of the firm are liable to pay the tax and if a dealer

transfers his business as a whole or in part then transferor and transferee are

jointly and severally be liable to pay tax.

ORGANISATIONAL STRUCTURE

OFFICE OF COMMISSIONER OF COMMERCIAL TAX

VAT is administered by the Commercial Tax Department. The Commercial Tax

Department functions under the administrative control of the Finance

Department of the State Government. The Department is headed by a

Commissioner of Commercial Tax. He is assisted by a Special Commissioner

and two other Additional Commissioners. There are eleven administrative

divisions, 23 range offices and 103 unit offices. A division is headed by Joint

Commissioner. Dy. Commissioner is the head at range level and unit offices are

headed by Assistant Commissioners of Commercial Tax. Every division has one

DC Enforcement office i.e. in total there are eleven DC Enforcement offices.

Following two organizational charts explains the set up of the Department.

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Following branches are functioning in the office of the Commissioner of

Commercial Tax:

Establishment Branch

PRO Branch

Estate Branch

Registry Branch

Inspection Branch

Administration Branch

a) E-Governance Branch

b) Research and Statistical Branch

Training Branch

Accounts Branch

Audit Branch

Appeal Branch

Court (Adalat) Branch

Legal Branch

Vigilance Branch

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Jagrut Branch /Flying Squad Unit

Corporate Cell/Petroleum Branch

Industrial Incentive Branch

The detailed working of some of the important branches of the office has

been explained below:

ESTATE BRANCH

Following are the important functions performed by the Estate branch:

Very important for expenditure audit of O/o the Commissioner of Commercial

Tax.

Different files and registers maintained for different works executed.

Management of telephone/intercom services of the office and sub-ordinate

offices.

Management for security of ―Rajya Kar Bhavan‖ and recruitment of security

guards and payment of expenses thereon.

Purchase, maintenance and all works relating to vehicles like payment of bills

on repairing, fuel, insurance, etc.

Recruitment and payment of drivers through outsourcing on fixed pay.

Purchases, distribution and maintenance of furniture, air conditioners, fax

machines, R.O. plants etc. for the office and sub-ordinate offices.

Work relating to maintenance and repairs of office building including

maintenance of fire protection system, construction or renting of office buildings

for sub-ordinate offices.

Work relating to electricity supply, maintenance of lifts, payment of electricity

bills, purchase of electrical equipment‘s, uniform for Class-IV employees,

rubber stamps, etc.

Maintenance of the Gardens.

Work relating to Conference Hall.

Outsourcing of the work of cleaning of the office building, hiring and payment

of daily wages.

Purchase and distribution of office computers stationery, servicing and refilling

of printers, payment of Municipal Taxes.

Other work assigned by Commissioner and Special Commissioner.

RECORD BRANCH

The important function performed by this branch is accepting all the

„Chapter Closed‟ records from the different branches of Commissioner

Office (Proper classification done) and to make thorough check of subject,

page Nos., year of Chapter closed, year of destruction etc. and taking

approval of Higher Authorities to destroy them as per destruction year

(Except Permanent Record). All the records maintained by this branch are

classified into following categories:

“A” Permanent Record

“B” To destroy after 30 Years

“B1” To destroy after 15 Years

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“C” To destroy after 5 years

Before sending any old record to old record branch, they are classified as per the

classification manual of the Department and a list of such records is kept both with

the concerned wing and this branch.

This branch is responsible for maintenance of old records of the Commissioner

office only. Old records of the subordinate offices are looked after by a separate

branch in the respective offices.

This branch may be helpful for audit where old files/documents/ assessments etc. are

required by audit especially during review work.

INSPECTION BRANCH

Following are the important functions performed by the Inspection branch:

Inspection of Unit offices, Offices of Dy. CCTs and Joint CCTs (22 inspections

in a year)

Co-ordination of LAQs (Legislative Assembly Questions), correspondence with

the Finance Department and Minister references

Co-ordination of RTI online system and sending quarterly Statement to FD

This branch is responsible for inspection of the sub-ordinate offices. Inspection

parties visit the units periodically and check all records, and registers except

assessment files and ensure follow up and implementation of directives/orders

issued by the Commissioner. Inspection notes (Mudda) are issued to the office

inspected and compliance thereof are ensured.

Inspection Notes for different offices gives information about the important issues

being pursued by the Department and the audit risk of different units. Important

information will be available while examining the internal control system of the

Department. Important questions raised in the assembly and their answers can

provide valuable information. Quarterly statement and references made to the FD

can also give important information.

ADMINISTRATION BRANCH

Administration branch is controlled by the Additional Commissioner

(Administration). Overall functions of field offices in respect of registration,

assessment, receipt, return defaulters, Challan defaulters, return scrutiny,

recovery, and refund at all the field offices covered by all 7 divisions, are

monitored by this branch. Following are the important functions

performed by this branch:

To issue internal circulars relating to functioning of the field offices

To collect and consolidate the information in respect of recovery, receipts,

refund, etc.

To prepare selected statistics and publish the information

To attend representation from Bar Association/dealers/companies

Activities related to monthly evaluation meeting

To provide information to PAC (Public Accounts Committee)

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The administration branch receives statements from the JC offices every

month containing the following information;

Latest statistical position of registration of CST/VAT dealers

Position about the allotment of Tax Deduction Number (TDN) under VAT

Act

Monthly receipts under VAT, GST, CST, MST, MS Cess, Entry Tax, and

Professional Tax

Latest position of return and Challan defaulters

Position of scrutiny of returns

Position of assessment by the Dy. Commissioners

Position of assessment by the Assistant Commissioners/ Commercial Tax

Officers/CTIs

Latest positions of the outstanding recoveries

Position regarding refund granted

Classification of refund granted during the month

Details regarding lump sum tax payers

Position regarding applications for statutory forms

Latest position regarding professional tax

This is the most important branch of the Department and is responsible for co-

ordinating and controlling other branches. They monitor the overall working of the

Department. The wing is very important for audit for collecting various information

in respect of functioning of the Department. Consolidated information can be

gathered for the purpose of Chapter-I of Audit Report as well as for any performance

audit. Minutes of monthly evaluation meeting can provide information related to

important issues of the Department.

RESEARCH AND STATISTICAL BRANCH

Dy. Director (Research) is the head of this branch. The main function of this branch

is to publish ―Selected statistics‖ by collecting information from all offices of the

Commercial tax department and to publish statistical profile annually. Annual

reports up to the year 2009-10 have been approved. Annual report of the Department

can give important information about the working of the Department. This branch

also maintains Dead Stock Register. It can be analysed for internal control system.

ACCOUNTS BRANCH

Accounts branch is headed by the Deputy Director (Accounts). Following

are the important functions of this branch:

To prepare budget estimates, allotment of grant and control over grant

expenditure.

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Reconciliation of the Income/Expenditure figures with the O/o A.G.

(A&E) Rajkot.

To prepare monthly statements of receipts under GST/VAT/CST of each

treasury and submit it to the Finance Department.

The Department has developed a system under which dealers of

Ahmedabad and Gandhinagar may get refunds through “ECS (Electronic

Clearance System)”. Under this system, accounts branch receives refund

orders from unit offices and prepares two floppies of it. One floppy is sent

to SBI for scrutiny. SBI sends the same to RBI to credit the refund amount

in the dealers‟ accounts. A treasury statement (VTS) is received at the end

of the month in respect of refund through ECS. The statement is forwarded

to JC Rajkot for further reconciliation with the records the office of AG

(A&E) Rajkot.

To monitor the activities of VTS with the help of “Integrated Financial

Management System”. Department can ascertain the details of payment

made by a dealer by inserting 10 digit TIN number in the system.

To issue the Refund Payment Order books/Refund Adjustment Order

books.

To conduct internal inspections.

Link of Cyber treasury Integrated Financial Management System has

been given to all commercial tax offices.

With the help of Cyber treasury IFMS, a registered dealer can make

payment of tax anywhere in Gujarat and the same can be verified in the

office through IFMS.

For the purpose of e-payment, seven banks have been designated viz.

SBI, BOB, Corporation Bank, IDBI, ICICI, Axis Bank and HDFC bank.

This branch maintains following registers related to its functions:

Grant received and allotment registers,

Annual and revised Budget file,

Refund order file for ECS,

Refund order register,

Bank correspondence files

Cash book

Receipt Book

Grant surrender register

This branch is important to examine the internal control system related to receipt of

the tax and payment of refunds electronically. Analysis of grant and expenditure can

be done for the expenditure audit.

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AUDIT BRANCH

Joint Commissioner (Audit) is the controlling officer of the branch.

Following are the important functions of this branch:

To attend the work relating to Accountant General (Audit).

To attend the works related to the PAC (including Audit Report).

To conduct internal audit.

To conduct post audit of the cases.

APPEAL BRANCH

There is a post of Assistant Commissioner (Appeal), which functions under

Additional Commissioner of Commercial Tax (2), at the Commissioner

Office. After formation of eleven divisions there are eleven Joint

Commissioners (Appeal) and Dy. Commissioners (Appeal) (one each in

eleven divisions) in the field. This branch performs the following functions:

To conduct post audit of the appeal orders passed by the Joint

Commissioner(s).

Pre-audit of appeal cases finalized by the Joint Commissioner (Appeal).

To do re-assessment in case of any omission noticed in the orders passed

by JC (Appeal).

This branch can provide useful information during the review of the

functioning of the Joint Commissioners (Appeal).

LEGAL BRANCH

Joint Commissioner (Legal) is the head of legal branch. This branch

performs the following functions:

To put proposal and drafts for amendment in law, rules.

To put proposal for notification, public circular, departmental circulars.

Correspondence with other government departments.

Determination orders under Section 80 of the GVAT Act.

Enrollment of the Commercial Tax Practitioners.

Dealing with matters of the dealers and tax practitioners related to law,

rules, notifications, circulars etc.

This branch can provide useful information related to background for changes in the

acts, rules etc. Copy of all determination orders can be obtained from here.

Correspondence with other government department may reveal some important

issues.

INDUSTRIAL INCENTIVE BRANCH

Controlling officer of this branch is the Addl. Commissioner of Commercial

Tax (Administration). This branch does following functions:

Monitoring in respect of the units availing tax exemption incentive under

various industrial incentive schemes.

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Monitoring in respect of the repayments of annual installments of deferred tax

amount.

To monitor repayment of deemed loan sanctioned by GSFC and GIDC.

To collect information from unit offices regarding dealers availing tax

incentive for review of the Industrial Incentive.

To monitor Top 100 tax incentive dealers in the state.

To monitor the recovery in respect of the Gokul Gram Yojana contribution.

To inform State government about tax liability of sick textile mills.

To provide information to the state level committee and state level high power

committee (Kutch Incentive Scheme) and to follow up the decisions taken in the

meetings.

To collect information about outstanding tax amount in respect of units

registered under BIFR and submit the same to the Industries and Mines

Department, Finance Department, BIFR office at Delhi and other concerned

offices/agencies.

To undertake correspondence with official liquidator and issue instructions for

recovery in the light of BIFR decision.

This branch maintains following registers for the purpose of its functioning:

Progressive position of Gokul Gram Yojana contribution

Top 100 incentive availing units.

Progressive position of recovery of deferred tax payment.

Progressive position of Exemption/remission.

Though no industrial incentive scheme is presently in force, this branch can be a

source of good information related to recovery in respect of earlier incentive

schemes. An analysis on recovery position and efforts can be a good comment in

Chapter-I.

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7.4 FLYING SQUAD UNIT

Following is the organization structure for the Flying Squad unit in the office of the

Commissioner of Commercial Tax.

In the office of the Commissioner Commercial Tax, there is one Additional

Commissioner who is assisted by a Dy. Commissioner (Enf.), and a Dy.

Commissioner (Check post). There is also a flying squad unit consisting Asst.

Commissioners and Commercial Tax Officers which is listed as one of the

auditee units. At the division level, there are Dy. Commissioners (Enf.) for all

the seven divisions. In addition, there are four offices of ACCT (Enforcement)

at Bharuch, Valsad, Junagadh and Gandhinagar.

FUNCTIONING OF DC (ENFORCEMENT)

On receipt of any complaint or on the basis of some internal input,

a proposal for the purpose of enforcement activity would be forwarded by the

ACCT/CTO to the respective range Dy. Comm. The Dy. Comm. would forward

the same to the Dy. Comm. (Enf.) of the concerned division, who in turn would

forward the same to the office of the Additional Commissioner (Enf.) for further

necessary action.

On detailed analysis of the case, after getting Special Commissioner‘s approval,

a warrant would be issued by the office of Additional Commissioner

(Enforcement). After conducting enforcement activity, the concerned officer

would pass a provisional order to the dealer. In case the books of accounts are

seized, the concerned officer, after the consent of competent authority, may

make Audit Assessment and pass an order. Provisional assessment order is

based on and limited to the period or turnover involved in the raid conducted.

When regular assessment of the dealer is done (assessment period wise) by the

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assessing officer concerned, the provisional assessment with the tax paid is

taken into consideration.

Dy. Commissioner (Enforcement) and Flying squad unit may also propose

to take up an enforcement activity on the basis of their own research work

or on receipt of any complaint. All complaints are registered in the

complaint register in confidential branch.

FUNCTIONING OF DC CHECK POST

Check post branch controls the activities of the commercial tax check posts in

Gujarat. There are 10 check posts at the borders of Gujarat and one at

Samakhiali. The officers at the check post check and note down the names of the

goods coming into and going out of the state.

The officials posted at the check posts verify the copy of bills/ invoices available

with the vehicle owners and affix seal of the check post in case there are no

irregularities. In case of irregularity, the official collects tax and penalty from

the vehicle owner. In case of any serious irregularity, if the vehicle is detained

for more than 24 hours at check posts, the papers are submitted to DC (C.P.) and

tax and penalty are recovered accordingly.

They also issue transit passes for vehicles which pass through Gujarat state and

collect the same at the exit check post. The registers maintained at the check

post are Stop delivery memo register, Raid case register and Daily income

statement.

FUNCTIONING OF FLYING SQUAD UNIT

Flying squad unit is stationed at Ahmedabad and is empowered to conduct raids

at any place in the State. Flying Squad functions directly under the office of the

Additional Commissioner (Enforcement). Officers of the Flying Squad also

conduct audit assessment of enforcement cases.

In case of any complaints regarding evasion of tax from any dealer/private party,

by any official of the department and on the basis of any tips from the research

wing of the department if, the information is found genuine, the flying squad

conducts raid, otherwise the complaint is filed. The Addl. Commissioner issues

warrant for enforcement activity.

The officer who is authorized to raid the premises of the dealer has to submit a

report to the warrant issuing authority within the time limit mentioned in the

warrant. Follow-up action on the report submitted by the officer who conducted

raid is taken by Additional Commissioner by way of deposit of cheque in

Government Account, scrutiny of records to find out tax evasion and impress

upon the dealers to pay tax. If the dealer is ready for regular assessment, the

head of the enforcement team passes an assessment order for the ‗period and

turnover‘ covered by raid. In other cases, a provisional assessment is passed but

in both cases, the order is sent to the ACCT/CTO under whose jurisdiction the

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dealer files his returns for incorporating the turnover and tax paid while passing

regular assessment for the assessment period.

A consolidated register is maintained in Confidential Branch of the Additional

Commissioner‘s Office wherein name of the Officers who were authorized to

carry out raid and other details are maintained.

FUNCTIONING OF DC (ENFORCEMENT) AT DIVISION LEVEL

In case of any complaint about evasion of tax by any businessman, the

genuineness of complaint is investigated by deputing the staff. If the complaint

is found genuine, the raid is conducted with the approval of Dy. Commissioner

(Enforcement). The Dy. Comm. also issues warrant for search and seizure in the

premises of dealer. The officer who conducted raid is required to submit detailed

report to the officer who issued warrant for conducting raid. The time limit for

submission of detailed report is also mentioned in the warrant. During the raid,

the officer conducting raid may work out the approximate tax evasion by the

dealer. If he is unable to work out the tax from the books of accounts of the

dealer, he may seize the records of the dealer and subsequently intimate the

dealer about the tax amount evaded by him. Dy. Commissioner (Enforcement)

would also ensure, after scrutiny of Books of Accounts of dealer, that tax evaded

is paid in time and assessment is also finalized within the time limit.

The Dy. Commissioner (Enforcement) is also required to submit monthly

returns to Add. Commissioner (Enf.) in form no. 1 to 12A

Position of complaints and result of disposal thereof.

Issue of notice in form 401 U/s 67.

Cross checking of quantity of goods with other States.

Raids conducted during the month and cheques obtained from dealers are

deposited in Govt. Account.

Details of cheques viz. name of the dealer, amount, date of cheque, reasons for

seizure, amount of tax/penalty and reasons for which the amount is still

outstanding.

Pending assessment in case of Seizure (Sales Tax.).

Pending assessment in case of Seizure (V.A.T.).

Assessment, if necessary in other than seizure cases.

Stop delivery during the month and released during the month.

Details of attachment during the raid viz., Bank, Property and third party etc.

amount released during the month and amount outstanding at the end of the

month.

Information about recovery i.e. on account of search premises, discretionary

inspection, stop delivery, mobile checking and cross checking etc.

Details of demand raised on account of assessment of those cases where there

was seizure during the raid.

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Details of demand raised on account of assessment of those cases wherein there

was no seizure during the raid.

Information on functioning of enforcement wing at different levels is very useful

while conducting any review related to enforcement activities.

REGISTRATION AND TAX LIABILITY

The registration of dealers is the first stage in the scheme of levy of VAT. Its

objective is to keep a complete record of the business activities of all dealers who are

assessed to tax and to ensure that all dealers who are liable to assessment under the

GVAT Act are so assessed.

7.5.1 OBLIGATORY REGISTRATION

(i) No dealer shall, while being liable to pay tax under this Act, carry on business as

a dealer unless he possesses a valid certificate of registration (Sec 21(1)).

The application for registration is required to be filed in Form 101 within 30 days to

the registering authority. A dealer having one place of business shall make an

application for registration to registering authority within whose jurisdiction his

place of business is situated and where more than one place of business shall make

an application to the registering authority in whose jurisdiction his chief place of

business is situated. If the prescribed authority is satisfied that an application is in

order, a certification of registration shall be issued in Form 102. The dealer can

apply for cancellation of registration for the circumstances mentioned in Section 21

and Section 27 within 30 days of contingency or event to the registering authority.

7.5.2 DEALERS ALREADY REGISTERED UNDER GUJARAT SALES TAX

(GST) ACT

A dealer who is already registered under the GST Act shall be deemed to have been

registered under the GVAT Act from the date of its commencement and is not

required to seek fresh registration under GVAT Act (Section 23).

7.5.3 VOLUNTARY REGISTRATION (SECTION 22)

(i) Any person intending to commence or having commenced a business may,

notwithstanding that he is not liable to get registration under section 21, apply to the

authority competent to grant registration in the prescribed form for registration.

(ii) The authority competent to grant registration, after making such enquiry as it

may consider necessary, may grant a certificate of registration in the prescribed

manner from the date of application or as the case may be from the date of

commencement of business and the provisions of section 21 shall mutatis mutandis

apply. The dealer has to deposits an amount of rupees twenty five thousand in the

Government Treasury. The dealer may, in his return to be furnished in accordance

with section 29 adjust the amount so deposited against his liability to pay tax,

penalty or interest payable by him.

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7.5.4 REGISTRATION UNDER CST

Section 7 of the CST Act provides that every dealer liable to pay tax under CST shall

within such time as may be prescribed for the purpose, make an application for

registration in the appropriate state as Central Government may specify and every

such application shall contain such particulars as may be prescribed. If the authority

to whom an application is made in the prescribed form is satisfied that application is

in conformity with the provision of the Act and rules made there under and the

condition imposed has been complied with, he shall register the applicant and grant

to him a certificate of registration in prescribed form.

7.5.5 DEALER OF EXEMPTED GOODS

A dealer exclusively dealing in exempted goods mentioned in first schedule is not

required to get registration under the GVAT Act. (Section 21(2)

7.5.6 REGISTRATION OF CASUAL DEALER OR AN AUCTIONEER

Under Section 3(2) of the GVAT Act, every casual dealer or auctioneer shall be

liable to be registered if his taxable turnover of sales exceeds ten thousand rupees

and he shall be liable to pay tax in accordance with the provisions of the Act.

7.5.7 ITC CLAIMS OF ALL DEALERS

Important provisions related to claiming of Input Tax Credit (ITC) by a dealer are as follows:

The amount of tax credit shall be reduced by the amount of tax calculated

at the rate of 4% on the taxable turnover of purchase within the State:

of taxable goods consigned or dispatched for branch transfer outside the

State,

of taxable goods which are used as raw materials in the manufacture or in

the packing of in goods which are dispatched outside the State, and

of fuels used in the manufacture of goods. (Sec. 11(3)(b))

Tax credit shall not be allowed for purchases:

made from any person other than a registered dealer under this Act,

made from a registered dealer who has been permitted under Sec. 14

(including 14A to 14D) to pay lump sum amount of tax,

made prior to the date of registration,

made during the course of inter-State trade and commerce,

of the goods (not being taxable goods dispatched outside State in the course

of branch transfer or consignment) which are disposed of otherwise than in

sale, resale or manufacture,

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of the goods specified in the Schedule I (goods exempt from tax) or the

goods exempt from whole of tax by a notification under Section 5 of the

GVAT Act,

of the goods and capital goods used in manufacture of goods specified in the

Schedule I or the goods exempt from whole of the tax by a notification

under Section 5(2) or in packing of goods so manufactured or in generation

of electrical energy including captive power,

of vehicles of any type and its equipment, accessories or spare parts (except

when the purchasing dealer is in the business of sale of such goods),

of the goods which are used as fuel in generation of electrical energy for

captive use or otherwise,

of petrol, high speed diesel, crude oil and lignite unless such purchase is

intended for resale,

of capital goods used in transfer of property in goods involved in execution

of works contract,

where original invoice does not contain the details of tax charged separately

by the selling dealer from whom goods were purchased,

made from a dealer who is not liable to pay tax under this Act,

made prior to the relevant date of liability to pay tax as provided in Section

3(3),

of the property or goods not connected with the business of the dealer,

of the goods which are used as fuel in motor vehicles,

of the goods for which right to use is transferred for any purpose,

made from a dealer after the name of such dealer has been published under

Section 27(11) or 97 of the Act,

of the goods which are remained as unsold stock at the time of closure of

the business,

of the goods purchased during the period when the permission granted

under Section 14(1)(a) remained valid under Section 14(1)(b),

where original or duplicate tax invoice is not available with the purchasing

dealer or there is an evidence that it was not issued by the selling dealer

(Section 11(5))

where ITC has been claimed on purchase of capital goods, and the capital

goods are not used continuously for full five years in the State, the amount

of tax credit shall be reduced proportionately (Section 11(8)(b)).

7.5.8 COMPOSITION OF TAX

It is the payment of a lump sum tax as per Section 14, 14A, 14B, 14C and

14D of the GVAT Act, 2003 in lieu of the amount of tax payable under

Section 7 of the GVAT Act, 2003. In case of dealers carrying specified

business, the Act allows the dealer to pay lump sum tax calculated at

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certain percentage of the turnover. These provisions are made to simplify

the tax regime for such dealers.

TYPES OF COMPOSITION SCHEMES

The following category of dealers can opt for payment of lump sum tax in

lieu of regular tax:

Re-sellers,

Person executing Works contract,

A dealer purchasing agricultural produce,

A person receiving income of right to use the goods, and

Hotels, restaurants, caterers etc., who deals in sales of eatables.

7.5.8.1 RESELLERS OPTING FOR LUMP SUM TAX

Section 14 provides for payment of lump sum tax on total taxable turnover

for small dealers, who resell their goods to the consumers. Section 14

provides following conditions under which a dealer can be allowed to pay

lump-sum tax:

Total turnover does not exceed `50 lakh in the previous year.

Permission for payment of lump sum tax shall not be granted to a dealer

who:

Is an Inter-State trader or an exporter.

Purchased goods in previous year or purchases the goods in the course of

inter State trade or imports goods.

Effects branch transfer received in previous year or receives the goods

through Inter State branch transfer.

Was a manufacturer in previous year or is a manufacturer.

Has sold or purchased in previous year or made sales or purchases through

commission agent.

Is a works contractor or a dealer engaged in transfer of right to use any

goods for any purpose.

Permission for lump sum tax will remain valid till the dealer follows the

provisions of the Section and Rule, on contravention; he shall be liable to

pay tax under Section 7 and 9.

Rate of lump sum tax applicable to such dealers is one-half per cent of total

turnover.

Further, a lump sum tax permission holder shall not claim ITC, or charge

any tax in the sales bill, or issue tax invoice to purchasers.

In addition to lump sum tax, the dealer shall also pay purchase tax under Sub

section (1),(3) and (6) of Section 9 of the Act. Section 9(1) provides for levy of

tax on purchases from an unregistered dealer, Section 9(3) provides for levy of

tax on purchases against a certificate or declaration under any provision of the

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VAT Act or earlier law, rule or notification where the conditions specified in the

said certificate or declaration are not complied with. Section 9(6) provides for

levy of additional tax on turnover of purchases liable to tax under sub-section

(1) and (5), wherever prescribed.

The dealer shall follow the following procedure to obtain permission for

composition of tax:

Application form for payment of lump sum tax in Form-210 shall be submitted

by a registered dealer to the CTO concerned. Rule 28(1).

Decision on permission or rejection of application shall be communicated to the

dealer within fifteen working days. Rule 28(4)

The permission shall be granted in Form-211.

A registered dealer opting to pay lump sum tax who has already claimed ITC on

the stock on the date of effect of permission shall reverse and pay such tax

credit. Rule 28(3A).

7.5.8.2 WORKS CONTRACTORS (REGULAR AND LUMP SUM)

The word ‗WorksContract‘ has not been defined in the Act. Hence, any

dealerwho executes some work or carry out some processon behalf of another

dealer/person will fall in the category of works contract dealers. Examples are

all types of civil workscontractors, fabricprocessing dealers etc.

Workscontract dealers canbe assessed under two options:

When the dealer has opted for composition

When the dealer has not opted for composition

WHEN THE DEALER HAS OPTED FOR COMPOSITION

The composition rates applicable to different kinds of dealers are given by way

of Notification. A dealer who wants to optfor composition, can make application

under Section 14(A). Important provisions related to such dealers are as follows:

SECTION 14A(1)

The Commissioner may, in such circumstances and subjectto such conditions as

may be prescribed, permit every dealer referred to in sub-clause (f) of clause

(10) of Section 2 to pay at his option in lieu of the amount of taxleviablefrom

him under this Act in respect of any period, a lump sum tax by way of

composition at such rateas may be fixed by the StateGovernment by notification

in official gazette.

SECTION 2(10)(f) says that ‗any person who transfers property in goods

(whether as goods or in some other form) involved in the execution of a works

contract‘ willbe considered as ‗Dealer‘.

A dealer can opt for composition for each contractbasis or for the whole year. In

the first case, Rule 28(8) (b) is applied and in case of whole year permission,

(bb) of the same rule is applied.

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SECTION 14A(2)

The provisions of sub-sections (3) and (4) of section 14 shall applymutatis

mutandisto a dealerwho is permitted under sub-section (1) to paylump sumtaxby

way of composition.

The mostimportantprovision is Section 14A(2) which says that provisions of

section 14(3) and 14(4) will also applyto the workscontract dealers who have

opted for composition.

SECTION 14(3)

A dealerwho is permitted topaylump sumtax shall not -

Beentitledtoclaimtaxcredit in respect of tax paid by him on his purchases,

Charge any taxunder this Act in his sales billor sales invoice in respect of the

sales on which lump sum tax is payable; and

Issuetaxinvoiceto any dealerwho has purchased the goodsfrom him.

SECTION 14(4)

A dealerwho is permitted topaylump sumtax shall beliable to pay purchase

taxleviableunder Sub-sections (1), (3) and (6) of Section 9, in addition to the

lump sum tax under this section.

Other importantprovisionsunder the Rules relatedtocomposition by the

workscontractdealer are mentioned below:

An applicationforcomposition shall be made within 30 days from the beginning

of the contract.Rule 28(8)(b) (iii)

In respect of dealers in whose case the tax already paid along with the

respectivereturnsfor any periodpriorto the date of application is less than the

amount of compositionpayable for the particular period, such a dealer shall pay

the amount of difference between the composition due for that period and the

amount already paid along with the interest on unpaid amount at the rateof one

and one half per cent per month. Rule 28(8)(b)(iv)

The dealer shall not use the goods in the execution of works contracts covered

under the permissiontopaylump sum tax, if the goods are-

Purchased in the course of interstatetradeor imported from outside India

Received from his branch situated outside the State. Rule 29(8)(vi-a)(1)

If the permissiontopay lump sum tax is granted, the dealer shall not dispatchthe

goods to his branch situated outside the State. Rule 28(8)(vi-a)(4).

According to this, the amount shall be considered to have been received from

the date on which it becomes dueasper the schedule of payment, if it is provided

in the contract,

The date on whichthe bill is prepared, if there is no schedule of payment.

Rule 28(8)(e).

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The composition money shall be payable by the dealer on the full amount

received by him at any time in respect of those contracts for which permission

has been granted after deducting the amount paid by way of price for entire sub-

contract, if any, made with sub-contractor. Rule 28(8)(c).

The option exercised under this rule shall befinal and irrevocable. Rule 28(8)(i).

RATE OF LUMP SUM TAX IS AS UNDER

Sr.No. Description of workscontract Rateof lump sum tax

1

All kinds of works contracts

other than any of the following

entries

2% of totalvalue of

workscontract

2

Processing of Polyester Textile

Fabrics including bleaching, dyeing

and printing thereof.

0.5% of totalvalue of

workscontract

3

Various kinds of civilworks as

listed in this entry

0.6% of totalvalue of

workscontract (w.e.f. 11/10/06).

Before this date, 2% was

applicable.

WHEN THE DEALER HAS NOT OPTED FOR COMPOSITION

In case of dealers who have not opted for composition, the most important

guiding rule is Rule 18AA.

The value of the goods at the time of the transfer of property in the goods

involved in the execution of a workscontract shall be determined by deducting

the amounts paidby way of pricefor sub contract made with registereddealer

pertaining to the said works contract. Rule 18AA(1)

A registereddealerwho claims any deduction referred to in Section 2(30)(c),

shall maintaintrue and correct records for such deductions and prove that he

hasactually paid the amount in the year in which deduction is claimed and

furnish true and correct evidence for claiming such deductions.

Where the amount of charges towards labour, service and other like charges are

not ascertainable or the accounts maintained are not clear, a lump sumdeduction

shall beadmissiblein accordance with the percentages mentioned in the table

given below the rule. Rule 18AA(2).

Section 2(30)(c) provides that in relationtoworkscontract turnover, the charges

towards labour, service and other like charges shall be deducted from the taxable

turnover.

Notwithstanding anything contained in this Act, taxcredit shall not be allowed

for purchases of capitalgoods used in transfer of property in goods involved in

the execution of works contract. Section 11(5)(mm)

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7.5.8.3 COMPOSITION OF TAX ON AGRICULTURAL PRODUCE

Section 14B defines the role of a Commission Agent, who exclusively carries

on business of agricultural produce and who is licensed as general commission

agent with a market committee established under the Gujarat Agricultural

Produce Market Act, 1963.

Section 14B provides conditions under which a dealer can be allowed to pay

lump sum tax. Accordingly, permission for payment of lump sum tax shall not

be granted to a dealer who:

Is an Inter-State trader or an exporter.

Purchases the goods in the course of inter State trade or import.

Effects branch transfer or receives the goods through inter State branch transfer.

Sells the goods to a person who is not a registered dealer.

Sells the goods to a dealer who is permitted to pay lump sum tax under section

14.

Further, a lump sum tax permission holder shall not:

Claim ITC,

Charge any tax in the sales bill, and

Issue tax invoice to purchasers.

In addition to lump sum tax he shall pay purchase tax under sub section (1), (3),

(4) and (6) of section 9 of the Act.

Permission for lump sum tax will remain valid till the dealer follows the

provisions of the Act and Rule, on contravention; he shall be liable to pay tax

under section 7 and 9.

Procedure to obtain permission for composition of tax and the rate of tax

applicable is explained below:

Application form for payment of lump sum tax in Form-210A shall be submitted

by a commission agent to the CTO concerned. Rule 28A(1).

The permission shall be granted in Form-211A. Rule 28A(3).

Rate of lump sum tax applicable for such dealers is 0.05 per cent of total

turnover. (Notification No. GHN 62 dated 17.5.2006)

7.5.8.4 COMPOSITION OF TAX ON TURNOVER OF RIGHT TO USE THE

GOODS

RIGHT TO USE GOODS

The term ―Right to Use Goods‖ has been understood to be transfer of right to

use goods by way of lease, license, bailment, exchange etc. Transfer of right to

use goods is one of the elements of ―deemed sale‖. Therefore, at point of time

when the control and possession of the goods is transferred to the customer, the

customer acquires right to use the said goods. For example, giving mobile

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towers on rent to cellular company is a deemed sale covered under right to use

goods.

Section 14C deals with such kinds of dealers who transfers the right to use of

any goods for any purpose. It provides conditions under which a dealer can be

allowed to pay lump-sum tax. Accordingly, a composition tax permission holder

shall not:

Claim ITC,

Charge any tax in the sales bill, and

Issue tax invoice to purchasers.

In addition to lump sum tax he shall pay purchase tax under Section 9 of the

Act.

Permission for composition tax will remain valid till the dealer follows the

provisions of the Section and Rule, on contravention; he shall be liable to pay

tax under Section 7 and 9.

Rate of lump sum tax applicable to such dealers is Four per cent of total

turnover. (Notification No. GHN 63 dated 17.5.2006)

Procedure to obtain permission for composition of tax has been explained

below:

Application form for payment of lump sum tax in Form-210B shall be submitted

by a dealer to the CTO concerned. Rule 28B(1).

The permission shall be granted in Form-211B. Rule 28B (3).

7.5.8.5 COMPOSITION OF TAX ON SALES OF EATABLES BY HOTELS,

RESTAURANTS, CATERERS ETC.

Section 14D provides for composition scheme on sale of eatables by hotels,

restaurants, caterers etc. Commissioner may permit any dealer who is engaged

in the business of sale of eatables in any form (whether processed or

unprocessed) served, delivered or given in package from the place of business of

the dealer or any other place to pay at his option lump sum tax by way of

composition. The Commissioner shall not grant permission to pay lump sum tax

to a dealer who is engaged in the activity of manufacturer such goods as the

Government may specify.

Eatables: means all kinds of foods for the purpose of consumption including all

types of alcoholic and non alcoholic beverages, water (mineral, purified or

aerated) and soda water, ice-cream and kulfi, sweets and sweetmeats, fruits and

fruit juice, all types of milk preparations, bakery products and such other goods

as the State Government may, by order, specify. (Explanation below Section

14D)

INELIGIBLE DEALERS

As per Notification No. GHN 90 dated: 17.08.2006, manufacturers of following

goods shall not be granted permission to pay lump sum tax under sub-section (1)

of Section 14D:

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Alcoholic and non alcoholic beverages, including soda water.

Aerated, mineral, purified, medicinal, and ionic or 369emineralised water or

water sold in sealed container.

Ice cream and kulfi

Biscuit (branded).

Section 14D provides conditions under which a dealer can be allowed to pay

lump-sum tax. Accordingly, a lump sum tax permission holder shall not:

Claim ITC,

Charge any tax in the sales bill, and

Issue tax invoice to purchasers.

In addition to lump sum tax he shall pay purchase tax under Section 9 of the

Act. Permission for composition tax will remain valid till the dealer follows the

provisions of the Section and Rule, on contravention; he shall be liable to pay

tax under section 7 and 9. Rate of lump sum tax applicable to such dealers is

four per cent of total turnover. (Notification no. GHN 89 dated 17.8.2006).

The dealer shall not import or purchase eatables or raw materials in the course

of inter State trade. He shall not receive any such goods from branch outside the

State. However, the dealers may import, receive through branch transfer or

purchase in the course of inter State trade goods like, disposable bowls, spoons,

straw, paper napkin, packing materials and oven, freeze and other capital goods.

(Circular dated: 11.07.2008)

Procedure to obtain permission for composition of tax is explained as under

(Rule 28 C):

Application form for payment of lump sum tax in Form-210C shall be submitted

by the dealer to the CTO concerned. Rule 28C (1).

The permission shall be granted in Form-211C within a period of fifteen

working days.

A dealer opting to pay lump sum tax who has already claimed ITC on the stock

on the date of effect of permission shall reverse and pay such tax credit. Rule

28C (3A).

The Commissioner shall not grant permission to a dealer who has in his stock

raw materials or eatables in any form which was imported or purchased in the

course of inter State trade or branch transferred to him or have not borne the tax

payable under the Act.

RETURNS UNDER GVAT ACT/RULES

7.6.1 Return is a document which reflects the gross turnover, taxable turnover,

output tax, tax credit and net tax payable/refund due by a dealer during a return

period, also known as ―tax period‖. Filing of true and correct return within the

stipulated time is not only mandatory but also a legal obligation of the registered

dealer. By not filing return within the given time or filing an incorrect return, the

370

dealer is not only deprived of the benefit of self assessment but also liable for penal

consequences.

7.6.2 Every registered dealer shall assess his tax liability and furnish return for

such period, in such form as may be prescribed to the Commercial Tax Officer

within whose jurisdiction his chief place of business as mentioned in certificate of

registration is situated. Form numbers, periodicity and mandatory period of few

important returns are given in the table below:

S.No.

Return

Form No. Periodicity Nature of dealer/ mandatory period

1 201 along

with

201A,201B

Monthly

(Rule19)

A registered dealer

(1) whose turnover exceeded rupees fifty lakh in

the previous year,

(2) who make zero rated sale under Section 5A

of the Act,

(3) who import or export the goods out of

territory of India,

(4) who being an eligible unit obtained a

certificate of entitlement under Rule 18A,

(5) who has established an industry in SEZ or

developer or co-developer of SEZ,

(6) who is a unit carrying on business in the

processing area or in the demarcated area of

SEZ,

(7) who is registered under the provisions of the

CST Act, 1956 or

(8) who deals in commodities (i) Timber (ii)

Ceramic tiles (iii) scrap of iron and steel (iv)

Tobacco and tobacco products (excluding

unmanufactured tobacco)and (v) major

minerals as may be specified by the

Commissioner.

Where taxable turnover exceeds one crore the returns

is to be uploaded on website of the Department.

2 201

alongwith

201A,201B

Quarterly A registered dealer (who is not liable to pay tax

exceeding sixty thousand during year or previous

year) and

(1) Who purchases goods from the state and sold

the same in state of Gujarat,

(2) Who is manufacturer or sell and purchase in

the course of inter State trade and commerce

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or dispatch or received goods from his branch

or from consigning agency,

(3) Who has been granted permission to pay

composite tax. Where taxable turnover

exceeds one crore the returns is to be

unloaded on website of the Department

201 Half

yearly

A registered dealer who is a co-operative society

engaged in the manufacture of sugar or khandsari

202 Monthly/

Quarterly/

Annual

Every registered dealer who is granted

permission under section 14,14A.14B,14C or

14D

203 or 204 Monthly Every dealer who hold certificate of exemption or

certificate of deferment of tax under any or the

incentive scheme and availed the benefit of the

scheme.

205 Annual Every registered dealer furnish annual return by

way of self assessment

Explanation: Quarter means the period of three months ending on 30 June, 30

September, 31 December and 31 March and month shall mean calendar month.

[Under Rule 2(g)]

Revised Return: If any dealer having furnished returns discovers any mistake, error,

omission or incorrect statement therein, he may furnish a revised return before the

expiry of one month from the last date prescribed for furnished the original return.

ASSESSMENT UNDER GVAT ACT

Assessment means verification of correctness of returns furnished by a dealer,

determination of the turnover and quantification of VAT payable on sales made by

him during any financial year. The tax becomes due at the moment a dealer makes a

sale which is subject to tax. Obligation to pay tax arises at the moment tax becomes

due. The tax liability, which has come into existence, cannot be enforced till

quantification is effected by the assessment proceedings. Under the GVAT Act,

assessment is related to a tax period and dealer has been given an opportunity to

compute his turnover and determine his tax liability in a self assessment manner.

Return, if filed in time and complete in all respects, shall be deemed to be assessed

on the date of furnishing of such return. This step, perhaps, has been taken to allow

the refunds of excess tax credit on the basis of completed assessment. In accordance

with Section 42 of the GVAT Act the dealer has to pay the tax, interest and penalty

assessed under Section 32,33,34,35,75 or 79 within thirty days from the date of

service of notice of demand issued. Therefore, assessment of tax is a pre-condition

before raising a demand against the dealer. However, assessment under GVAT Act

is required to be made in the (following) manner discussed in the succeeding

paragraphs.

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7.7.1 PROVISIONAL ASSESSMENT

As per Section 32 every returns or revised returns is subject to scrutiny by the

Commissioner. The Commissioner may issue notice for the circumstance mentioned

in Sub-section 2 of Section 32 of the Act requiring him to explain him in writing, the

basis on which dealer has furnished such returns or revised returns. After considering

the explanation furnished by the dealer a provisional assessment is finalized. Where

the dealer has not furnished the return the Commissioner is empowered to assess on

the basis of past returns or past records or on the basis of the information received by

him. The Commissioner may provisionally assess to the best of his judgment the

amount of tax payable by the dealer for the reasons mentioned in Sub-section (4) of

Section 32.

7.7.2 SELF ASSESSMENT

As per Section 33 of the GVAT Act every registered dealer who has filed

return/revised return within the prescribed time and paid tax due according to such

returns and the Commissioner is satisfied that the returns or as the case may be,

revised returns and annual return furnished by such dealer are correct and complete

and notice under Sub-section (2) of Section 34 has not been served for audit

assessment, such dealer shall be deemed to have been assessed for that year. The

Commissioner on his own motion within a period of three years from the end of the

year in respect of which or part of which the tax is assessable, may call for and

examine the record of such dealer who has been deemed to have assessed and after

serving notice and giving the dealer an opportunity of being heard, pass an order of

assessment thereon in accordance with the provision of Section 34, as the

Commissioner may think just and proper.

7.7.3 AUDIT ASSESSMENT

As per Section 34 of the GVAT Act every return furnished by a registered dealer

shall be subjected to such scrutiny and where the Commissioner is not satisfied with

the bonafides of claim of tax credit, exemption, refund, deductions, concession,

rebate or genuineness of any declaration or evidence furnished by the dealer along

with self assessment or has reason to believe that detailed scrutiny of case is

required, serve notice to dealer for audit assessment. The commissioner may assess

to the best of his judgment for the circumstances mentioned under sub section (4),(5)

and (6) of Section 34.

Any dealer who has been liable to pay tax in respect of any period has failed to get

himself registered, the assessment shall be done under Section 34(8).The assessment

shall be made within four years from the end of the year in respect of which or part

of which tax is assessable. And no assessment under Sub section (8) (registration not

obtained) shall be made after eight year from the end of the year in respect of which

or part of which the tax is assessable (Sub-section 10 ).

7.7.4 TURNOVER ESCAPING ASSESSMENT

As per section 35 of the Act where after a dealer has been assessed under section

32,33 or 34 for any year or part thereof the Commissioner has reason to believe that,

the whole or any part of taxable turnover has escaped assessment or under assessed

or assessed at a lower rate or wrongly allowed any deduction or wrongly allowed

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any credit may serve notice and after hearing the dealer, assess to the best of his

judgment, the amount of tax due from the dealer in respect of such turnover which

comes to his notice subsequently. The assessment under this Section shall not be

made after the expiry of the five year from the end of the year in respect of which or

part of which tax is assessable.

7.7.5. ASSESSMENT ON BASIS OF FAIR MARKET PRICE

If the Commissioner is of the opinion that any transaction by any dealer during any

tax period or a set of transactions by the dealer has been accounted in a manner so as

to pay tax less than the tax otherwise payable on such sale or purchase, then the

Commissioner shall calculate the tax liability as per fair market price of such

transactions. Fair market price means the value at which goods of like kind are sold

or would be sold in the open market in the State. (Section 34A)

7.7.6 REFUND OF EXCESS PAYMENT

As per Section 36 of the Act, the Commissioner may refund to a person the amount

of tax, penalty and interest paid by such dealer in excess of the amount due from

him. The Commissioner shall first apply such excess towards the recovery of any

amount due under the Act or the earlier laws and shall refund the balance. No such

adjustment shall be made towards recovery of an amount stayed by an appellate

authority.

7.7.7 PROVISIONAL REFUND

If a registered dealer has filed any return which shows any amount to be

refundable to the dealer, the Commissioner may grant provisional refund

pending assessment. The dealer has to apply in such form and in manner

prescribed.

The Commissioner may require the dealer to furnish Guarantee or other security

for an amount equal to the amount of refund.

The Commissioner may direct early assessment of relevant period and adjust the

provisional refund against the tax due.

Excess amount of provisional refund shall be recovered as if it is a tax due and

interest shall be charged at the rate of eighteen per cent per annum from the date

of grant of provisional refund till the date of assessment (Section 37).

7.7.8 INTEREST ON REFUND (SECTION 38)

Where refund of any amount of tax becomes due as per an order of assessment,

the dealer shall be entitled to simple interest at the rate of six per cent per annum

from the date immediately following the date of the closure of the accounting

year till the date of payment of refund.

Where the dealer has paid any amount of tax after the closure of accounting year

and such amount is required to be refunded, no interest shall be payable from the

date of closure of such accounting year to the date of payment of such amount.

Where the realization of any amount remains stayed by the order of court or

authority and such order is subsequently vacated, interest shall be payable also

for a period during which such order remained in operation.

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OFFENCES AND PENALTIES/INTEREST

7.8.1 Besides payment of tax, the dealer, under certain circumstances, has to pay

penalty and interest. These provisions are explained below:

S.NO. DEFAULT PENALTY

1 Penalty for not making application for

registration (Section 34(8) of the GVAT

Act)

Equal to tax assessed or a

sum of rupees five thousand,

whichever is more.

2 Penalty for unauthorised collection of tax

(Section 31(3) and (4) of the GVAT Act)

Amount so collected shall be

forfeited and penalty of a

sum equal of such amount is

payable in addition to tax.

3 Penalty for avoidance or evasion of tax

(Section 34(7)of the GVAT Act)

Penalty of a sum not

exceeding one and half time

of the amount of tax assessed

for the said avoidance or

evasion.

4 Penalty on awarder where an awarder of a

works contract fails to deduct the amount in

lieu of tax from the bill of contractor as

prescribed, or after having deducted such

amount from such bill does not deposit the

same in the prescribed manner and

time(Section 59B(12) of the GVAT Act)

A sum not exceeding twenty

five per cent of the amount

required to be deducted by

him.

7.8.2 OFFENCE AND PENALTY

Clauses (a) to (g) of Section 85 (1) list out various offences which a dealer is likely

to commit. In such cases, the dealer shall, on conviction be punished with

imprisonment for a term which may extend to six months or with fine not exceeding

rupees twenty thousand or both provided that in absence of special and adequate

reasons to the contrary to be mentioned in the judgement of the Court, such

imprisonment shall not be less than one month and such fine shall not be less than

rupees ten thousands. If the offence is a continuing one, on conviction, a daily fine

not exceeding rupees one hundred during the period of the continuance of the

offence is recoverable in addition to the punishment provided in the Act.

Section 85 (2) clauses (a) to (j) also list out various offences which a dealer is likely

to commit. In such cases, the dealer shall, on conviction be punished with a

imprisonment for a term which may extend to six months or with fine not exceeding

rupees ten thousand or with both. If the offence is a continuing one, a daily fine not

exceeding rupees one hundred during the period of the continuance of the offence is

recoverable.

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7.8.3 COMPOSITION OF OFFENCES

Once a decision is taken to initiate prosecution proceeding, Section 89 of the Act

authorises the Commissioner to compound the offences punishable under section 85

or rules made there under for a sum of rupees five thousand or where offence is

charged under section 85 not exceeding double the amount of tax but not less than

the amount of tax, which would have been payable on the turnover of sale or

purchase to which said offence relates, whichever is greater.

THE CENTRAL SALES TAX ACT

7.9.1 OBJECTS OF THE CST ACT

The Central Sales Tax (CST) Act, 1956 provides for the levy, collection and

distribution of taxes on sales of goods in the course of inter-State Trade or

Commerce. The Act also formulates principles for determining when a sale or

purchase of goods takes place in the course of inter-State Trade or Commerce or

outside the State or in the course of an import into or export from India. The

following principles govern the scheme of the Central Act.

7.9.2 LEVY AND COLLECTION OF TAX (SECTION 9(4))

The Union Government had delegated the right of administration of this Act to the

States. The executive machinery provided in the State law is employed for

administering the Central Act. Provisions of State Law regarding the filing of

returns, appeals, revisions, penalties, compounding of offences are applicable

mutatis mutandis. The proceeds of any tax including any penalty levied and collected

under this Act in any State on behalf of Government of India shall be assigned to

that State and shall be retained by it.

7.9.3 INTER-STATE SALE, CONSIGNMENT SALE/STOCK TRANSFER,

EXPORT, IMPORT

INTER-STATE SALE

A sale or purchase of goods is deemed to take place in the course of inter State

trade or commerce, if the sale or purchase:

occasions the movement of goods from one State to another or ;

is effected by a transfer of documents of title to the goods during their movement

from one State to another. (Section 3)

A sale or purchase of goods is deemed to take place inside the State if the goods

are within the State

in the case of specific or ascertained goods, at the time the contract of sale is

made; and

in the case of unascertained or future goods, at the time of their appropriation to

the contract of sale by the seller or by the buyer, whether the assent of the other party

is prior to or subsequent to such appropriation. (Section 4)

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EXPORT (SECTION 5 (1))

A sale or purchase of goods shall be deemed to take place in the course of the export

out of the territory of India only if the sale or purchase either occasions such export

or is effected by a transfer of documents of title to the goods after the goods have

crossed the customs frontiers of India.

To constitute a sale in the course of export there must be:

an intention on the part of both the buyer and seller to export;

an obligation to export;

actual export.

A sale in the course of export predicates a connection between the sale and export,

the two activities being so integrated that the connection between the two cannot be

voluntarily interrupted without a break of contract.

IMPORT (SECTION 5 (2)

A sale or purchase of goods shall be deemed to take place in the course of the

import of goods into the territory of India only if the sale or purchase either

occasion such import or is affected by a transfer of documents of title to the goods

before the goods have crossed the customs frontiers of India.

SALES MADE TO MERCHANT EXPORTERS (SECTION 5(3)

Last sale or purchase of goods preceding the sale or purchase occasioning the export

of those goods out of the territory of India shall also be deemed to be in the course of

export, if such last sale or purchase took place after, and was for the purpose of

complying with, the arrangement or order for or in relation to such export, and such

sale or purchase of the goods are exempted from levy of tax on production of ‗H‘

Forms, subject to:

the sales must be for the purpose of complying with agreement or order in

relation to export, and

such sale is made after the agreement or order in relation to export, and

same goods which are sold in penultimate sale should be exported.

STOCK TRANSFER/CONSIGNMENT SALE (SECTION 6A)

Stock transfer/consignment of goods from one State to another State other than by

way of sale is exempted from levy of tax subject to production of ‗F‘ Forms.

SALES MADE TO SPECIAL ECONOMIC ZONE (SEZ) (SECTION 8(6)

TO 8(8))

Sales made to SEZ unit or SEZ developer of the other state are exempted from levy

of CST subject to production of ‗I‘ Forms.

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RATES OF TAX

A dealer is liable to pay Central Sales Tax (CST) on all inter-State sales. The rates of

CST have been prescribed in Section 8 of the CST Act. The concessional rate of 4

per cent from 1-7-1975 (2% up to 30-6-1975) is applicable only in cases of sales

affected to the Government and registered dealers on production of prescribed

certificates i.e. Form C or D. CST rate on sales against C-forms was reduced to 3%

from 01-4-2007 and to 2% from 01-6-2008.

Sales to registered dealers can be of only those goods specified in the certificate of

registration granted to him as being intended for resale by him or for use by him in

the manufacture or processing of goods for sale in mining or in the generation or

distribution of electricity or any other form of power.

Note: The concessional rate of tax at 4% against D-Forms in respect of sales made

to Government Departments was withdrawn with effect from 1st April 2007.

7.9.4 WHERE SALES ARE NOT TO A REGISTERED DEALER-

The rate of tax in the case of declared goods shall be calculated at twice the rate

applicable to the sale or purchase of such goods inside the appropriate State

(effective from 1-7-1975) and the rate of tax, in the case of goods other than declared

goods is 10 per cent or the rate applicable to such goods, under the State Law,

whichever is higher.

Note: Where sales are not to a registered dealer, rate of tax (CST) was leviable at

the rate applicable to the sale or purchase of such goods inside the appropriate

State under the Sales Tax law of that State with effect from 1-4-2007.

A dealer is liable to pay tax under this Act on the inter-State sale of any goods even

though no tax would have been leviable (whether on the seller or the purchaser)

under the Sales Tax Act of that State, if that sale had taken place inside that State.

The only exemptions authorized by the Central Act are those where the State

Government by Notification in the Gazette may exempt the goods from tax (or

reduce the rate of tax) in respect of sales made by a dealer in the course of inter-State

trade. The exemption/lower rate of tax is available only to dealers who have a place

of business in the State and sales are made from such place of business.

7.9.5 C AND D FORMS

Proviso to Rule 12 of the Central Sales Tax (Registration and Turnover) Rules

required that a Form ‗C‘ or ‗D‘ should not cover more than one transaction of sale,

except in cases where the total amount of sales made in a year covered by one

declaration or certificate, does not exceed `25,000/- (enhanced to `1 lakh from 30

September 1993).

The Rule does not lay down a time limit for filing these declarations. So the

declarations filed before assessment, are valid and should be accepted (20 STC

‗S66‘19 STC 306). Where no declarations are filed by the time of assessment, the

assessing officer should give an opportunity to the dealer (20 STC 266).

According to the new proviso to Section 8(4) of the CST Act introduced from 1-4-

1973 by the Central Sales Tax (Amendment) Act 1972 (61 of 1972), ‗C‘ forms have

378

to be furnished to the ―assessing authority‖ within the prescribed time or within such

further time as that authority may, for sufficient cause, permit. The proviso refers to

extension of such period by the assessing authority.

With effect from 01-10-2005, Rule 12(7) : The declarations in Form C or Form F or

the certificate in Form E-I or E-II shall be furnished to the prescribed authority

within three months after the end of the period to which the declaration or the

certificate relates.

If the prescribed authority is satisfied that the person concerned was prevented by

sufficient cause from furnishing such declaration or certificate within the aforesaid

time, that authority may allow declaration or certificate to be furnished within such

further time as that authority may permit.

With effect from 01-04-2011 the dealers have been now enabled to download ‘C

Forms’ electronically after furnishing relevant information without the need of the

approval of any departmental authority. By this there is no scope for any delay and

there is total transparency in service delivery.

The selling dealer is not concerned whether the goods are such as can be used by a

purchaser for the declared purpose. He has only to satisfy himself that the purchaser

is a registered dealer and the goods are specified in the certificate of registration.

in respect of sale or purchase of goods which are generally exempt under the State

Sales Tax Act or tax on which is leviable under the State Act at a rate less than 3 per

cent (four per cent with effect from 1-7-1975) whether called a tax or fee or by any

other name), the Central sales tax leviable in respect of sales of such goods in the

course of inter–State trade or commerce would be ‗nil‘ or the rate applicable under

the State Sales Tax Act as the Case may be.

The word ‗generally‘ used is very important. The provisions of ‗Explanation‘ below

Sub-section 2A of Section 8 of the Central Sales Tax Act should be borne in mind.

If the lower rate/exemption is available only on the fulfillment of certain conditions

it should be ignored, because in that case, the goods cannot be said to be generally

exempt from tax.

If a particular commodity is taxable at purchase point but is not taxable at the sale

point under the State law, it is not generally exempt from tax. Thus the turnover of

the seller though not taxable under the State law, is taxable under the Central Act.

Similarly, if a sale is taxable at the first point under the State law and if it is the

second or third point seller who sells it in the course of inter-state sale, the

commodity is not generally exempt from tax. Thought it would not be taxable under

the State law in the hands of the second or third point seller, it would be taxed under

the Central Act.

The turnover for purposes of this Act is to be determined in accordance with the

provisions of Section 8A of the CST Act 1956.

7.9.6 DECLARED GOODS (SECTION 14 & 15)

Article 285(3) of the Constitution lays down that in the case of goods which have

been declared by Parliament by law, to be of special importance in the inter-state,

trade or commerce, the State Sales Tax on these goods would be subject to such

restrictions and conditions as Parliament by law may specify. These

379

restrictions/conditions can be in the nature of system of levy, rates and other

incidents of tax. The list of goods thus declared is contained in Section 14 and items

are added or deleted from this list from time to time. The restrictions on the State law

have been spelled out in Section 15 of the Act.

They are:-

the rate of tax should not exceed 5% with effect from 11-4-2011 (4% w.e.f

1.7.1975 to 10.4.2011)

the State can levy such tax at one stage only

where a tax has been levied on the sale or purchase of such declared goods within

the State and such goods are again sold in the course of inter-State trade or

commerce, the tax so levied shall be reimbursed to such persons in such manner and

subject to such conditions as may be provided for under the law in force in that State.

(Section 15(b)).

380

QUANTUM OF AUDIT & AUDIT CHECKS

FOR LOCAL VAT OFFICES

QUANTUM OF AUDIT

QUANTUM OF AUDIT BY WHOM TO BE

CHECKED

WHOM TO BE REVIEWED

a. Cases having turnover of

more than 5 crore assessed

under Section 34

Sr. Audit

Officer/Audit

Officer

b. Cases having turnover

between 5 crore and 2 crore

assessed under Section 34

Assistant Audit

Officer/Supervisor

Sr. Audit Officer/Audit

Officer

c. Cases having turnover

between 2 crore and 50 lakh

assessed under Section 34

Assistant Audit

Officer /Supervisor

d. Cases having turnover of

less than 50 lakh assessed

under Section 34

Auditor/Sr. Auditor Assistant Audit Officer

/Supervisor

e. Cases of top 50 dealers in

self assessment cases

(turnover wise) are to be

selected for audit

Assistant Audit

Officer / Supervisor

Sr. Audit Officer/Audit

Officer

f. Top 25 cases of lump sum

dealers whose total turnover

exceeds 75 lakh (self

assessment) other than

those mentioned in (e)

Assistant Audit

Officer / Supervisor

Sr. Audit Officer/Audit

Officer

g. Refund cases above 1 lakh. Assistant Audit

Officer / Supervisor

Sr. Audit Officer/Audit

Officer

For selection of Audit assessment cases i.e. cases assessed under Section 34

(category a, b, c & d of the table above) the following criteria shall be adopted:-

a) Based on tax payable top 10 percent assessment cases should be checked 100

percent.

381

b) After excluding above cases remaining cases should be arranged in descending

order according to turnover and;

i) 20 percent of the assessment cases should be checked 30 percent.

ii) Remaining 70 percent of the assessment cases should be checked 10 percent.

c) The cases in (b) above should be selected on random basis using IDEA or any

other sampling techniques.

d) The above sample selection is subject to a minimum of 100 assessment cases

to be selected as sample for audit in each auditee unit.

e) When the number of cases to be seen calculated by the formula prescribed in the

circular falls short of minimum 100 cases to be seen, the cases required to meet

the shortfall will first be selected from the second strata on random basis. If the

shortfall cannot be met even by exhausting all the cases of second strata the

required number of cases may be selected from the third strata on random basis.

f) The working of sample selection along with the list of total assessment cases

arranged in descending order according to the amount of tax paid as well as

according to turnover as prescribed above should invariably be enclosed with

the LAR and should be duly signed by Sr.AO/AO of the audit party concerned.

g) The sample size determined above shall not be increased ordinarily. In

exceptional cases where the audit party feels the need to increase the sample

size, a detailed note justifying the requirement for increase of sample size will

be submitted by the Sr.AO/AO of the party concerned for obtaining prior

approval of the group officer.

Illustrations for selection of cases are as under:-

S.No Illustration 1

Steps

1 Total number of assessments done in the audited

entity during the period covered by audit 500

2

All the assessments as mentioned at Sl. No.1 are to be

arranged in the descending order on the basis of tax

payable

500

3

The top 10 percent cases from amongst those arranged

in descending order at Sl. No. 2 are to be selected for

audit 100%.

10% of 500

= 50

4 Number of cases remaining after selection at S.No. 3 500-50 =

450

5

The cases remaining at S.No. 4 (Excluding those

selected at S.No. 3) are to be arranged in descending

order on the basis of turnover

450

6 Select number of top cases equal to 20 percent of

assessments made (20% of number at S.No. 1). 20% of 500 = 100

7 Of those selected at S. No. 6, select 30 percent cases

for audit through random sampling 30% of 100 = 30

8 Assessments remaining after selection at Sl. No. 3 and

6 (500-50-100) = 350

382

9 Of the cases remaining (As per S.No. 8) 10 percent

are to be selected for audit through random sampling 10% of 350 = 35

10 Total No. of cases to be audited (3+7+9) 50+30+35=

115

S.No Illustration 2

Steps Example 1 Example 2

1

Total number of

assessments done in the

audited entity during the

period covered by audit

400 200

2

All the assessments as

mentioned at Sl. No.1 are

to be arranged in the

descending order on the

basis of tax payable

400 200

3

Strata I: The top 10

percent cases from

amongst those arranged in

descending order at Sl.

No.2 are to be selected for

audit 100%

10% of 400

= 40

10% of 200

= 20

4 Number of cases remaining

after selection at S.No.3 400-40=360 200-20=180

5

The cases remaining at

S.No. 4 (Excluding those

selected at S.No. 3) are to

be arranged in descending

order on the basis of

turnover

360 180

6

Strata II: Select number of

top cases equal to 20

percent of assessments

made (20% of number at

S.No. 1).

20% of 400 = 80 20% of 200 = 40

7

Of those selected at S. No.

6, select 30 percent cases

for audit through random

sampling

30% of 80 = 24 30% of 40 = 12

8

Strata III :Assessments

remaining after selection at

Sl. No. 3 and 6 (400-40-80)=280 (200-20-40)=140

9

Of the cases remaining

(As per S.No. 8)10 percent

are to be selected for audit

through random sampling

10% of 280=28 10% of 140=14

10 Total No. of cases (3+7+9) 40+24+28=92 20+12+14=46

383

11

No. of cases by which

total cases are falling

short of minimum 100

cases

8 54

12

No. of cases to be selected

from each Strata

1. Strata I : 40 out

of 40

2. Strata II:

24+8=32 to be

selected

randomly out of

80

3. Strata III: 28 to

be selected

randomly out of

280

1. Strata I : 20 out of

20.

2. Strata II: 12+28=40

out of 40.

3. Strata III: 14+26=40

to be selected

randomly out of 140.

13

Total No. of cases to be

selected for audit finally 40+32+28=100 20+40+40=100

384

CHECKS TO BE APPLIED DURING AUDIT OF VAT REGISTRATION OF

DEALERS

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether the dealer had submitted

an application for registration

within the prescribed time from the

date of his liability as per the

applicable provisions of the VAT

Act. (30 days – form 101)

The audit party should

prepare a section wise list of

the applications that were not

made in the prescribed forms.

The details of the forms may

also be indicated. The list

should also indicate whether

such cases were referred to

the Business audit branch.

(ii)

Whether market survey was

conducted on periodic basis to

unearth the errant dealers? Have

departmental instructions been

followed regarding the frequency

of surveys?

The audit party should make

a list of date-wise surveys

conducted, no. of dealers

unearthed, no. of dealers

registered and reasons for

non-registration of those

unearthed. A similar list must

also be made in respect of

those dealers in respect of

whom input tax credit has

been claimed (i.e. purchases

above Rs. 1 lakh in a single

transaction have been

included in the return of any

dealer) but whose returns are

not available.

(iii)

Are prescribed registration fees

and security paid by all the

applicants?

The audit party should make

out a list of registration

applications without the

prescribed fees and security.

(iv)

Whether the registration certificate

is issued by the competent

authority within the prescribed

time and with correct TIN.

TIN should consist of 11

digits, the first two being the

State code. The audit party

should prepare a list of all the

dealers whose TIN is not

correct and no return is

available.

Any tatkal registration done as per

rules

Audit party should check

non-localised dealer not to

apply.

385

(v)

Whether the registration certificate

indicates the goods being

produced/dealt in with correct

description.

The audit party should

ascertain the correct

classification of the goods

and make a list of such cases

where the dealers are dealing

in the goods not mentioned in

their RC and work out the

consequent loss of revenue.

(vi)

Whether any dealer has been issued

duplicate TIN.

The audit party should

prepare a list of all dealers

who have been allotted more

than one TIN after running

duplicate key detection test

using CAATs. In case this is

not possible, the party should

get a certified CD containing

all the details with TINs. The

returns submitted by these

dealers should be cross

verified with the statutory

forms issued to them.

(vii)

Whether in case of any change in

the nature and/or place of business,

the RC has been suitably amended.

The audit party should make

a list of all such cases where

the returns are not submitted

as per the amended RC.

(viii)

Whether the prescribed registers/

records like VAT register, default

register, late registration register,

issue of RC register etc are being

maintained/updated properly.

The audit party should make

a list of all registers/lists

which are either not updated

or are incomplete or have

discrepancies. The extent of

discrepancies should be

clearly indicated.

(ix)

Whether the application for

cancellation was made within the

prescribed time of the closure of

the business and whether the

cancellation order was issued in

time.

The audit party should make

a list of all the cases where

cancellation orders were

issued but the electronic

database was not corrected

indicating the arrears of tax

due against each.

(x)

Whether cancellation of VAT

dealers, registered under the

appropriate provisions of the VAT

Act, has been made after the expiry

of the prescribed period from the

date of registration.

The audit party should make

a list of all the cases where

cancellation orders though

due have not been made.

386

(xi)

Whether the VAT dealer whose

registration is cancelled has paid

back Input Tax Credit (ITC)

availed in respect of all the

taxable/capital goods on hand on

the book value on the day of

cancellation.

The audit party should make

a list of all the cases where

cancellation orders have been

issued but ITC has not been

refunded.

(xii)

Whether the certificate of a VAT

dealer who has failed to pay the

tax, interest or penalty payable,

failed to furnish the monthly

returns and has committed any

other offence, has been suspended.

The audit party should make

a list of all such cases

referred by the returns branch

where RC was not suspended.

(xiii)

Whether before cancelling the

certificate of registration it has

been ensured that the certificate

merits cancellation on the basis of

prescribed conditions.

Make a list of cases where the

registration certificates have

been cancelled in disregard to

the conditions prescribed and

bring out the financial

implications of the tax

foregone. Check the

prescribed conditions e.g.

where the business has been

discontinued, where the firm

stands dissolved, where in

respect of a dealer his

turnover and taxable turnover

is within the prescribed

threshold (e.g. total turnover

during the year immediately

preceding the appointed day

is less than `5 lakh and

taxable turnover is less than

`10,000 in a year) (Gujarat

VAT Act, 2003).

(xiv)

Whether the dealer whose

certificate of registration has been

cancelled has paid the tax, penalty

or interest due for any period prior

to the date of cancellation whether

such tax, penalty or interest is

assessed before the date of

cancellation but remains unpaid or

is assessed thereafter?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

387

(xv)

Whether the dealer whose

certificate of registration has been

cancelled has paid, in respect of the

taxable goods held in stock on the

date of cancellation, an amount

equal to the tax which would have

been payable if the goods had been

sold at fair market price on that

date or the total tax credit

previously claimed in respect of

such goods, whichever is higher?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact of

the tax not collected or the

input tax credit not refunded

by the dealer may be

calculated.

(xvi)

Whether there are any cases where

certificates of registration have

been found to be transferred by one

dealer to another?

In case of irregular transfer of

the certificates, there is a

danger of corruption of the

database of dealers and

evasion of tax. Any change

in the nature, ownership,

place etc of business will

have to be covered by

amendment of the certificate

within six months (period

may vary under different

Acts) and not transfer.

(xvii)

Whether at the time of amendment

of a certificate of registration, the

amendment was without prejudice

to any liability for tax, interest or

penalty or for any prosecution of

offence under the Act?

Make a list of cases where

consequent to amendment,

the tax, penalty and interest

has not been collected

correctly and work out the

financial implication.

(xviii)

Whether the assessing officer has

imposed penalty as provided under

the Act after following due

procedure in case of a dealer who

fulfils conditions necessitating

amendment in his registration

certificate but has not brought facts

to the notice of the assessing

officer?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

388

(xix)

The Act provides for cancellation

of the certificate of registration by

the departmental authority in

certain circumstances, such as

failure of the dealer to file three

consecutive returns within the

prescribed time period, knowingly

furnishing incorrect details in his

returns etc. Whether such

instances have been detected and

certificates cancelled as provided

under the Act?

A list of cases where the

provisions have not been

followed may be prepared.

Where the certificates have

not been cancelled, trade

would continue and tax credit

could continue to be availed.

The financial impact of less

payment of tax and tax credit

irregularly availed may be

calculated.

(xx)

Whether on the failure of the

dealer to surrender his certificate of

registration on cancellation, the

necessary penalty has been

imposed and recovered by the

assessing officer?

The financial impact of non-

levy of penalty may be

calculated. Also the point

made above may hold true in

this circumstance also.

(xxi)

Whether the Commissioner has

published the particulars of the

dealers whose certificate of

registration has been cancelled as

provided under the Act?

A list of such dealers may be

prepared and irregular

availing of tax credit by such

dealers may be worked out.

Also a dealer purchasing

goods from an unregistered

dealer has to pay purchase

tax; the non-levy of purchase

tax can be calculated.

(xxii)

Whether every registered dealer

has filed a declaration stating the

name of the person or persons who

shall be deemed manager/managers

of business of such dealer?

Compliance with the

provisions in the Act may be

seen.

(xxiii)

Whether a periodical survey/

enumeration of the dealers whose

registration certificates have been

cancelled has been done to check if

their total turnover and taxable

turnover calculated from the

commencement of any year

exceeds the thresholds of turnover

on any day within the year?

In case no survey has been

done, this may be commented

upon. Alternatively, if a

survey has been done, the

action taken may be seen.

(xxiv) Any other point(s) specify

389

SUBMISSION AND SCRUTINY OF RETURNS

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether all regular registered

VAT dealers/presumptive tax

dealers submitted their monthly/

quarterly/annual returns in time

and in the prescribed proforma

indicating that the payment of tax

was made on or before the

prescribed period.

The audit party should make

a list of all the dealers who

are not submitting the returns

regularly. The list should

indicate whether references to

business audit branch were

made.

(ii)

Whether revised returns have

been filed within the specified

time indicating the reasons for

such revision. (one month)

The audit party should make

a list of all such dealers and

ascertain the suitability of the

reasons assigned by the

dealers for the revision of

returns.

(iii)

In case of revised retuns, any

excess amount of tax to be paid

has been calculated and paid

along interest

(iv)

Whether the VAT dealer whose

registration has been cancelled

has filed the final return within

the specified time.

The audit party should make

a list of all such dealers in

whose case this has not

happened and work out the

revenue implication.

(v)

Whether the casual dealers have

filed declarations within the

specified time of arrival of goods

in the state and paid the advance

tax and filed final declaration on

the last day of business along with

the details of payment of tax

The audit party should make

a list of all the dealers who

filed a purchase declaration

but did not file sale

declaration.

(vi)

Whether the dealers whose gross

turnover exceeded the prescribed

limit have furnished the audited

accounts within the specified

time.

The audit party should make

a list of all such dealers in

whose case this has not

happened and ask for the

Annual Audited Accounts.

390

(vii)

Whether the VAT dealer, who is a

manufacturer also, has filed a true

and complete statement showing

the quantity and value of goods

received for use/consumption in

manufacture, closing stock of

such goods and quantity and value

of goods manufactured.

The audit party should make

a list of purchases, on

selection basis, reflected in

returns which need cross

verification with Income

tax/Central excise records and

offer comments on such cases

referred to them by

Headquarters.

(viii)

Whether penalty at the prescribed

rate on the tax and interest

payable from the date it has

become due to the date of its

payment or to the date of order of

assessment, whichever is earlier,

has been levied.

The audit party should make

a list of all such dealers in

whose case this has not

happened and work out the

revenue loss case wise.

(ix)

Whether a VAT dealer or any

other person or dealer liable to

pay tax, interest and penalty, has

deposited the amount on the date

prescribed in the notice.

The audit party should make

a list of all such dealers in

whose case this has not

happened and work out the

revenue due including

interest/penalty scrutinised

case wise.

(ix)

Whether returns were scrutinised

by the assessing authorities to

verify the correctness of

calculation, application of correct

rate of tax and interest and input

tax credit claimed therein and full

payment and interest payable by

the dealer for any tax period.

The audit party should make

a list of mistakes case wise

and work out the revenue

loss.

(x)

Whether the details of returns

received were entered in the

register/computer within the

specified time and bank scrolls

reconciled with tax amounts

mentioned in the return where

applicable.

The audit party should make

a list of all such dealers in

whose case this has not

happened.

(xi)

Whether notice has been issued

requiring the dealer to pay the

amount of tax along with interest

in case the amount paid is less

than the amount to be paid.

The audit party should make

a list of all such dealers in

whose case this has not

happened. Interest payable

for non/delayed payment may

be worked out.

391

(xii)

Whether in case of a seller who

has accounted for, either in the tax

invoice or in the return, an

incorrect amount of tax (in case of

the events mentioned in the Act),

the adjustment in calculating the

tax payable by him has been

carried out in the return for the tax

period during which it has

become apparent that the tax is

incorrect, and not in any tax

period prior to that?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

(xiii) Any other point(s) specify

392

SELF/PROVISIONAL ASSESSMENT

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether the dealer has filed all

the returns and annual returns in

respect of any tax period within

the prescribed time.

The audit party should see

that the following documents

have been filed with the

annual returns within the

specified period for the

purpose of self assessment:

A declaration, duly issued

by a selling dealer, in the

prescribed form.

Copy of the audited

accounts along with the form

of audit certificate in the

prescribed form if the

turnover exceeds the

prescribed limit or

manufacturing, trading and

P&L Account as the case

may be.

Statement showing the

purchases, stock transfer

receipts or import of goods

under the CST Act, 1956.

Statement of the purchases

and sales to the registered

dealer within the state along

with the details of tax

invoices received or issued

and particulars thereof.

Statement showing the

details of all the Central/State

declaration forms received or

issued in support of the

claims.

(ii)

Whether arithmetical errors have

been checked before accepting

the self-assessment.

393

(iii)

Whether the return and revised

returns, if any, have been

furnished by a dealer within the

prescribed period and in the

prescribed manner and self

assessment claims are correct,

consistent and complete, the

prescribed authority has checked

the arithmetical errors and

accepted the self assessment after

necessary adjustments.

(iv)

Whether the returns of the VAT

dealers are in order as compared

with the records of the dealers

under the CST Act.

The audit party should verify

whether all classes of goods

purchased from outside the

State through declaration

forms are properly exhibited

in the returns under the VAT

Act. Besides, up-to-date

submission of the utilisation

statements of the declaration

forms may also be verified

from the CST file of the

dealer and discrepancy, if

any, found in the return

furnished under the VAT Act

be highlighted.

(v)

Whether a final assessment was

made by the prescribed authority

keeping in view whether the

returns/revised returns were not

filed in time and were not

sufficient/relevant for self-

assessment. Whether such

adjustments as may be necessary

in disallowing input tax credit,

exemptions, concessions,

refunds, levy of interest etc. were

made, wherever required, in the

final assessment.

The audit party should make

a list of all such

dealers in whose case

provisional assessment was

resorted to but final

assessment is pending.

Suitable comments should be

made pointing out the errors

and omissions in such

assessment and its impact on

revenue.

(vi)

Whether assessment for any tax

period was made after the expiry

of the permissible period from

the end of the tax period

The audit party should make

a list of all such dealers in

whose case this has not

happened and comment on

the revenue implications.

394

(vii)

Whether a demand notice in the

prescribed form has been issued

if the tax assessed along with

interest and penalty is more than

the amount paid along with the

self-assessment.

The audit party should make

a list of all such dealers in

whose case this has not

happened and comment on

whether the notice has taken

care of the difference or not.

Besides, interest payable for

delayed/non-payment of tax

may also be worked out.

(viii)

Whether provisional assessments

have been carried out in the cases

fulfilling the conditions

mentioned in the Act?

Provisional assessments have

been specified in certain

cases, e.g. where net tax

payable is nil, where tax

credit is carried over to the

subsequent return, where a

dealer has not filed the return

etc. Lack of provisional

assessments can be

commented upon suitably.

(ix) URD assessment cases there ? if

yes, assessement done correctly

(x) Any other point(s) specify

395

BUSINESS/TAX AUDIT ASSESSMENT

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

(ii)

Whether the dealers have been

properly selected for Business

Audit/Tax Assessment and

justifications for selection are

available on record.

Whether the dealers who should

have been selected for Business

Audit/ Tax Assessment have been

left out. Some applicable

parameters may be the continuation

of the following conditions in the

returns of the dealers:

ITC > OUTPUT TAX

SALES < CLOSING

STOCK

PURCHASES <= WAY

BILLS

PURCHASES = 0

The registered dealers are

selected for audit assessment

by the prescribed authority

on the basis of specified

criteria or on random basis.

The criteria are:

a) The registered dealer has

failed to furnish any return

in respect of any tax period.

b) If the prescribed authority

is not satisfied with the

correctness of the return

filed or genuineness of any

evidence like declaration

forms or bonafides of any

claims like exemption, input

tax credit etc.

c) If the prescribed authority

has reasons to believe that

detailed scrutiny of the case

is necessary.

(iii) What is the percentage of selection

of the total number of registered

dealers in the State selected for

Business Audit/Tax Assessment?

Audit party should see that

the provisions of the

Act/instructions have been

adhered to so as to cover all

dealers under Business

Audit/ Tax Assessment

within a specified period. If

not done, its effect on

revenue may be worked out,

if feasible.

(iv) Whether cross verification of any

information gathered during the

course of an audit assessment was

made to establish the implication of

revenue.

The audit party should

examine whether the

required cross verification

has been correctly done and

comment on revenue

implications.

396

(v) Whether input tax credit,

exemptions and other credits or

concessions claimed by the dealer

in the returns were disallowed for

which no supporting documents

were filed/produced.

(vi) Whether the tax audit report was

handed over to the dealer and the

dealer filed his final reply within

the specified period after receipt of

the report.

(vii) Whether the prescribed authority

assessed the dealer to the best of his

judgment.

(viii) Whether the prescribed penalty was

imposed if the prescribed authority

was prevented from conducting the

proceedings or if the dealer

committed any act of omission in

order to evade or avoid payment of

tax.

(ix) Whether a demand notice was

issued for additional amount of tax

with penalty.

(x) Whether audit assessments have

been completed within the time

provided under the Act?

Delay in assessments and

impact thereof may be

commented upon suitably.

(xi) Whether in the case of a dealer, the

amount of tax assessed or

reassessed for any period exceeds

the amount of tax already paid for

this period by 25 per cent

(percentage could vary across

States) of the amount so paid, the

amount of penalty as provided

under the Act has been levied?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

(xii) Whether in case of a dealer whose

part turnover has escaped

assessment is assessed within the

prescribed time under the Act?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

397

(xiii) Whether the liability of the dealer,

registered under different clauses,

to pay tax has been calculated from

the correct date?

Make a list of cases where

the liability to pay tax has

been calculated from

incorrect dates to ascertain

the financial implication e.g.

where the turnover exceeds

the threshold, liability to pay

tax takes effect from the

appointed day, where

turnover in any year exceeds

the threshold for the first

time, liability takes effect

immediately from the date

the turnover exceeds the

threshold etc.

(xiv) Whether on assessment, if the

provisional refund granted is found

to be in excess, it has been

recovered as if it is a tax due from

the dealer and interest has been

charged at the rate of 18 per

cent

per annum?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact may

be calculated.

(xv) Whether in the cases of

assessments under audit

assessment, on refund becoming

due, simple interest of 6 percent

only has been allowed for the

period from the date of closure of

the accounting year to the date of

payment of such amount?

Financial impact of excess

refund may be worked out.

(xvi) Whether purchase tax has been

levied on a dealer who purchases

goods from an unregistered dealer?

Non-levy of tax may be

calculated.

(xvii) Whether appeal against assessment

order has been accepted without

proof of payment of the tax (a

minimum of 20 per cent of the tax

assessed has to be paid) in respect

of which the appeal has been

preferred?

The incorrect acceptance of

such appeals may be pointed

out and the amount of the

tax not collected including

the interest due on it may be

calculated and commented

upon.

Percentage of interest leviable may vary across the States.

398

(xviii) Whether the liability for tax to be

paid in a works contract (in some

Acts goods used in the execution of

works contract are deemed as sale

of such goods) has been computed

correctly as per the provisions in

the Act?

The provisions in the Act for

payment of tax on Works

Contract may be seen.

There is a provision of lump

sum tax on work contract

(Maharashtra) or in other

places (Delhi, for instant) a

particular percentage of

labour, services and other

like charges have been given

which are to be deducted

from the total contract price

to arrive at the taxable price

of a contract. In case the

contractor can establish the

cost of the labour utilised in

the contract, he may deduct

the same for arriving at his

liability of a particular

contract. When goods are

sold in the execution of

works contract, the rate of

tax applicable to the goods

shall be the rate of tax

applicable to such goods.

(xix) In case of business transfer cases,

tax liability, if any, has been paid

by transferor or transferee. (Sn 51

ex: good will)

(xx) In case of amalgamation of

companies, tax assessed correctly.

(Sn 52)

(xix) Any other point(s) specify

399

REFUNDS, SET-OFF AND COMPENSATION CLAIMS

S. No. WHAT TO CHECK Y/N/NA COMMENTS

A. Regular refunds

(i)

Whether the application of

refund was submitted in the

prescribed form within the

specified period.

Whether application received

in prescribed form in time?

(ii)

Whether all the returns due

have been filed and the taxes,

interest or penalties due have

been paid and a notice of excess

demand has been issued by the

prescribed authority and

received by such dealer.

Audit party has no verify

from demand register.

(iii)

Whether any tax, penalty etc. is

outstanding against the dealer

under the Repealed Act or CST

Act.

(iv)

Whether any refund has been

made within the specified

period of filing of such claims

and after examination of the

case by Business/tax audit wing

and after verifying the proof of

deposit of tax.

(v)

Whether the VAT dealer

claiming refund under the scope

of section 5(1) or 5(3) of CST

Act have furnished all the

required documents according

to the provisions of Act/Rules.

(vi) Whether any amount has been

paid as interest.

Refund orders to be verified.

B. Provisional refund

(vii)

Whether the application of

refund has been submitted in

the prescribed proforma within

the specified period from the

date of filing of the return and

all the documents showing that

the sales made by him is zero

rated sales and he is entitled to

input tax credit, have been

enclosed with the application.

Whether application submitted

in time?

400

(viii)

Whether the VAT dealer has

filed an affidavit that input tax

has been paid by him to the

registered VAT dealers against

the tax invoices under the

provisions of the Act.

(ix)

Whether the VAT dealer

claiming provisional refund has

furnished security either in the

form of a bank guarantee or in

some other form.

Bank guarantee register to be

verified.

(x)

Whether the amount of

provisional refund found to be

in excess on assessment has

been recovered as tax due.

(xi)

Whether interest at the

prescribed rate has been

charged on the excess amount

of provisional refund from the

date of refund to the date of

assessment. ( @18%)

Calculation to be verified.

C. Refund to Special Category

(xii)

Whether the application of

refund has been submitted in

the prescribed proforma within

the specified period of the tax

so paid with the documents as

required under the relevant

VAT Rules.

(xiii)

Whether the refund order in the

prescribed proforma was passed

within the specified period from

the date of receipt of the

application.

Refund to be verified.

D. Set-off/Compensation claims

(xiv)

Whether refunds have been

accurately accounted for before

claiming compensation.

(xv)

Whether the details/break up of

VAT and non-VAT receipts

were available since refunds are

allowable only on the VAT

receipts.

401

(xvi)

Whether set-off/concessional

rates of tax were wrongly

allowed for refund and

compensation claims.

(xvii) Whether ITC has been adjusted

against CST dues.

(xviii)

Whether any interest on refund

has been allowed on the tax paid

by the dealer after the closure of

the accounting year, from the

date of the latter to the date of

payment of such amount?

In case the dealer has paid

the amount of tax after

closure of the accounting

year and it is to be refunded,

interest shall not be payable.

If interest has been paid, its

financial impact may be

calculated.

(xix) Any other point(s) specify

402

INPUT TAX CREDIT (ITC)

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether ITC has been allowed

in any inadmissible case.

The audit party should

check whether ITC

was allowed in the

following cases where

ITC is not

admissible**:

(ii)

Whether ITC has been allowed

to be carried over without the

excess credit being ‗set-off‘

against any outstanding tax,

penalty or interest payable.

The audit party should

prepare a list of all

such cases and

comment on impact on

revenue.

(iii)

Whether ITC has been

correctly adjusted against CST

dues before carrying forward.

The audit party should

prepare a list of all

cases where wrong

credit was allowed and

comment on impact on

revenue.

(iv)

Whether in the case of a

dealer, who purchased goods

intended for the purposes

specified in the Act and used

the same fully or partly for

other unspecified

purposes/prohibited

circumstances, the tax credit

has been reduced from the tax

credit being claimed for the

tax period during which such

use has taken place?

A list of cases where

the provisions have not

been followed may be

prepared and the

financial impact may

be calculated.

(v)

Whether in the case of a

purchaser (registered dealer),

if the tax credit availed by him

in any period in respect of

which the purchase of goods

relates, becomes short/excess

(due to issue of credit/debit

note or return of goods), the

adjustment of the amount of

tax credit allowed to him in

permitted only in the tax

period in which the credit or

debit note has been

issued/goods have been

returned?

A list of cases where

the provisions have not

been followed may be

prepared and the

financial impact may

be calculated.

403

(vi)

Whether tax credit has been

allowed correctly in respect of

inputs if the goods are sold in

another State?

Purchases intended for

inter State sales as well

as exports are eligible

for tax credit in excess

of 4 percent CST. Any

instances where tax

credit has been

incorrectly

availed/allowed may

be brought out in audit.

(vii)

Whether ITC has been reduced

proportionately where inputs

are used partly to make taxable

goods and partly for exempted

goods?

As an illustration, X

purchased machinery

for Rs. 1 lakh and paid

a tax of Rs 12,500 on it

and used it in the

manufacture of taxable

as well as exempted

goods. If the share of

taxable goods made by

that machinery is 80

per cent, his ITC

would have to be

restricted to

Rs. 10000 (80 per cent

of Rs.12,500).

(viii)

ITC availed on capital good

are not used continuously for

five years, but sold, the

amount of tax credit shall be

reduced proportionately

having regard to the period of

failing short of the period of

five years.

Audit party should see

that fixed assest sales

in schedule of balance

sheet and ascertain the

details for

proportionately reverse

if applicable.

(ix)

In case ITC availed on capital

goods, i.e plant & Machinery,

are meant for use in

manufacture of taxable goods

and accounted as capital assets

in the books of accounts.

Audit party should

verify the balance

sheet and fixed assets

schedule to confirm

that plant and

Machinery capitalized

and on which only ITC

availed.

404

(x)

if the goods are sold in the

course of inter-state trade or

commerce or used in the

manufacture of the goods

which are sold in the course of

inter-state trade and

commerce, tax credit to be

reduced :

(1.07.10 to 30.09.14)

@2% : except sr.no.13 of

schedule II

w.e.f.: 1.10.14

@1% : except sr.no.

13,24,48(i), 54,76

@2% : crude oil,furnance oil,

avaiation turbine fule,HSD

oil,LDO,Solvent,petrol, low

sulpur heavy stock, linear

alkyl benzene, bitumen,

liquefied petroleum gam and

other petroleum products and

natural gas

Audit party has to

verify correctness of

ITC reverse

calculations.

(xi) Any other point(s) specify No

405

PAYMENT AND RECOVERY OF TAX, PENALTY AND INTEREST

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether a notice of demand has been

served on the dealer for payment of

assessed tax, interest and penalty.

The date specified should not be

more than the period allowed from

the date of service of notice.

The audit party should

prepare a list of all cases

where it was not done and

comment on the impact on

revenue.

(ii)

Whether the prescribed authority has

taken care in the interest of revenue

while allowing payment of any

demand in installment and for

reasons to be recorded in writing on

the condition that the said dealer

furnishes sufficient security for such

facility.

The audit party should

prepare a list of all cases

where it was not done and

comment on the impact on

revenue.

(iii)

Whether the rate of penalty, interest

or any other amount due, as

prescribed in the Act, have been

levied for failure to make payment of

the assessed tax etc. for every month

for the period for which payment has

been delayed by him after the date on

which such amount was due to be

paid.

The audit party should

prepare a list of all cases

where it was not done and

comment on the impact on

revenue.

(iv)

Whether a proceeding has been

initiated to recover the unpaid

amount even after the due date in

pursuance to the notice of demand

issued to the dealer.

The audit party should

prepare a list of all cases

where it was not done and

comment on the failure of

department/impact on

revenue.

(v)

Whether the cases where whole or

part of the tax, penalty or interest

payable by any dealer or class of

dealers has been remitted or of any

specified class of sales or purchase

has been remitted, this has been done

by an order of the State Government?

The existence of an order

of the State Government

may be checked. Else the

financial impact of the

irregular remission may be

commented upon.

406

(vi)

Whether the dealer has paid the

amount of tax (assessed, reassessed

etc.), penalty and interest that have

become payable within 30 days of

the demand notice served upon him?

It may be seen whether a

system of monitoring such

delays exists in the offices.

(vii)

Whether, if payment of tax has been

allowed in instalments and the dealer

has defaulted in paying an

instalment, the dealer has been held

to be in default in respect of the

whole amount then outstanding and

all other instalments have been held

to have become due on the same date

as the date of the instalment in

default?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact

may be calculated.

(viii)

As a special mode of recovery,

whether the assessing officer, in case

of a defaulting dealer on whom

demand notice has been served in

respect of tax, penalty or interest, has

served a notice to any person from

whom any amount of monies is due

or may become due to the dealer or

to any person who holds monies for

or on account of such dealer?

The financial documents

on the basis of which the

demand was raised/

assessment files of such

dealers may be scrutinised

to check if such persons

are discernible on whom

notices could be served in

respect of the defaulting

dealer. The efforts made

by the assessing officer

towards use of this mode

of recovery may be

selectively commented

upon and substantiated.

(ix)

Whether interest has been charged at

the prescribed rate of eighteen per

cent for the delay in payment of dues

from the due date until the date of

payment?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact

may be calculated.

(x)

Whether interest has been charged at

the prescribed rate of eighteen

percent for the period as has been

extended or the instalments that have

been granted?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact

may be calculated.

407

(xi)

Whether the assessing officer has

imposed the penalty of the sum equal

to the amount of the tax in case of

dealers furnishing incorrect

information/availing incorrect tax

credit etc in an attempt to

evade/avoid payment of tax?

A list of cases where the

provisions have not been

followed may be prepared

and the financial impact

may be calculated.

(xii) Any other point(s) specify

LUMPSUM TAX

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether lump sum permission

obtained by dealer to continue the

lump sum payment. (01.08.08

permission granted earlier shall b

continued)

.

The audit party should check

whether dealer obtained

permission to pay tax in

lumpsum. If assessement

cases are after 01.08.08,

check whether pemission

obtained to continue the

same.

(ii)

Under Section 14 A, who opted to pay

lump sum tax has been paid

(i) @0.6% only for his work contract

covered under sub-items (i) to (ix)

of item 3 of Notification (GHN-

106) S.14A (v) dated 11.10.06.

(ii) @ 2% other than works contracts

specified above

The audit party should see

that correct lump sum tax

has been levied for the

specified works contract.

(iii)

Whether there are any instances in

case of a dealer who has been

permitted to pay lump sum tax in lieu

of tax on sales, where purchase tax

leviable on specified instances in the

Act has not been paid?

A list of cases where

purchase tax has not been

levied may be prepared and

the financial impact may be

calculated.

(iv)

Any contravention of any of the

provisions of the lump sum permission

granted.

The audit party should list of

all cases where dealer breach

the lum sum permission.

(v)

Whether tax has been levied under

Section 7 & 9 from the first day of the

month during which event of such

contravention has occurred.

In case of contravention,

dealer is to be considered as

normal dealer and such cases

list to be prepared and

financial impact may be

calculated.

(vi)

Tax deducted at source under 56B (8),

has been furnished the certificate

along with other particulars

TDS – whether original

certificates are available

408

(vii)

Whether dealer furnished original

certificate to avail credit and that TDS

pertains to the relevant year for

payment of lump sum tax under

Section 14 A

TDS – original certificates

produced and credit availed

are pertains to relevant year

only. If not, credit to be

disallowed.

(vi) Any other point(s) specify

MISCELLANEOUS

S. No. WHAT TO CHECK Y/N/NA COMMENTS

(i)

Whether opening stock on the

appointed date is correctly calculated

using the prescribed formula (e.g. Tax

amt. = rate of tax * purchase value of

opening stock/100+ rate of tax in the

State)

The audit party should prepare

a list of all cases where it was

not done and comment on the

failure of department/impact

on revenue.

(ii)

All inter-state sales, export sales, sales

made to an unit located in ―SEZ‖ or

―EOU‖ or ―STP‖ or ―EHTP‖ shall be

termed as ‗ZERO RATED SALES‘.

In these types of sales, no VAT is

payable, but such dealers shall qualify

for ―input tax credit‖. Calculation of

ITC and its admissibility should be

properly checked.

The audit party should prepare

a list of all cases where ITC

was wrongly allowed and

comment on the failure of the

department/impact on

revenue.

(iii)

All inter-state branch transfers or

stock transfers or consignment sales or

such transactions that involve inter-

state movement otherwise than by

way of sale is termed as ―Exempt

Transactions‖. In such transactions, no

VAT or CST is payable.

No ITC up to 4% input tax is,

thereafter, admissible. Only

proportionate ITC in excess of 4%

shall be admissible. It should be

checked whether the ITC on exempt

transactions was correct.

The audit party should prepare

a list of all cases where ITC

was wrongly allowed and

comment on the failure of

department/ impact on

revenue.

409

(iv)

All dealers who are neither importers

nor manufacturers and whose turnover

does not exceed the prescribed limit

for VAT (e.g., Rs. 50 lakh in

Jharkhand) shall be eligible for

Composition or Presumptive Tax

Scheme. They shall not be eligible for

any ITC, nor can they issue tax

invoice. It should be checked whether

any ITC was allowed to such dealers

covered under the Composition or

Presumptive Tax Scheme.

The audit party should prepare

a list of all cases where ITC

was wrongly allowed and

comment on the failure of

department and loss of

revenue.

(v)

Whether the time limits for filing

appeals, filing of memorandum of

cross objections (By the

Commissioner on appeals decided by

the Deputy Commissioner) and

revision cases is being adhered to?

(vi)

Whether the goods, vehicles or

documents seized at the check-

post/barrier have been released after

payment of tax, penalty and interest or

on furnishing security?

A list of cases where the

provisions have not been

followed may be prepared and

the financial impact may be

calculated.

(vii)

Whether a transit pass issued at a

check post for a boat, vehicle or

animal carrying goods coming from

outside the state and bound for a place

outside the state, is shown at the last

check post before exit from the state?

The issue and receipt of the

transit passes of all check

posts within the state must be

cross checked. In case the

transit pass is not shown at the

last check post before exiting

the state, it is to be presumed

that the goods so carried have

been sold within the State and

tax and penalty payable has to

be levied. Instances of non

levy of such tax and penalty

may be aggregated and the

amount ascertained.

(viii)

Whether a survey has been done of the

owners/lessee of cold storage/ware

houses, godowns who store taxable

goods for hire or reward to ascertain if

correct and complete records are being

maintained by them in respect of the

particulars of the person whose goods

are stored in such places and in

respect of the quantity, value and date

of delivery of such goods?

(ix) Any other point(s) specify

410

CHECKS TO BE APPLIED DURING AUDIT OF PROFESSION TAX.

S. No. PARTICULARS CHECK TO BE EXCERCISED

1.

Check Monthly return filed

by the Employer in Form 5

(Refer Rule 11(1) of The

Gujarat State Tax on

Professions, Traders Callings

and Employment Rules,

1976)

Annual return filed in Form

5-A/5-AA filed by the

employer? (Refer Rule 11(2)

& 11A(i) of The Gujarat

State Tax on Professions,

Traders Callings and

Employment Rules, 1976)

(1) Verify that the employer has filed the

return within fifteen days on expiry of

the previous month?

(2) Verify that the employer has filed the

return within fifteen days on expiry of

the previous succeeding year. (in case

wherein the number of employees does

not exceed more than twenty employees)

(3) Verify that the employer has paid

within fifteen days immediately

succeeding the quarter an amount

equivalent to the tax

[As and when, number of employees

exceeds twenty, the employer shall from

the following year, furnish the return in

accordance with provisions of rule-11]

(4) The return shall be furnished to the

prescribed authority separately for each

place of work, unless the employer is

permitted to file a consolidated return

under sub – rule (3).

(5) Verify that the payment of tax is at

the rates specified in entry I of Schedule -

I appended to the Act on account of

salaries and wages that may be paid to

the employees.

(6) Monthly/Annual return as the case

may are received in time including

payment of tax should be checked.

2.

Payment of tax

salaries/wages including

arrears of Salaries/wages

may be paid to the

employees by the employer?

1) Check the rates of tax deducted

conform to and is in accordance to the

entry I of

Schedule - I appended to the Act.

2) Employees receiving monthly

salaries/wages less than Rs 6,000/- in that

case no deduction towards tax is required

to be made.

3) Person does not have status of regular

employment in that case no deduction

towards tax is required to be made.

4) The designated authority is State

Government to be approached for

compliance of professional tax matters?

All other area not covered under a

Panchayat, Municipality or Municipal

411

Corporation.

5) Check that in the return salaries or

wagespaid by the employer in respect of

the year is correct and tax is deducted

accordingly.

6) If tax payable according to the return

is more than thetax paid for each month

see that the employer has furnished along

with the return, a copy of receiptshowing

payment ofdifferential amount of tax,

interest and penalty if any. (Refer Section

9 & 10)

3.

Registration certificate

issued

1) Every employer not being an officer of

Government liable to pay tax under

Section-4 shall obtain a certificate of

registration from prescribed authority.

(Refer Rule 3(1) & (2)

2) Check registration file to ascertain

whether registration is done on time and

that there has been no delay thereof from

the date on which liability has arisen

4.

Registration certificate

cancelled

Certificate of registration granted under

rule 3 can be cancelled by theprescribed

authority after he satisfies himself that

the employer has ceased to be an

employer. (Refer Rule 7)

5.

Arrears in collection of

Profession tax if any.

1) Arrears of any tax, penalty, interest or

fees due under this Act shall be

recoverable as arrears of land revenue.

(Refer Section 11)

Govt. of Gujarat has notified the jurisdictions of following designated authorities in

whose office; a person falling under entry 2 to 10 of Schedule 1 may approach.

1. District Panchayat: - Area of District Panchayat.

2. Municipality: - Area of Municipality.

3. Municipal Corporation: - Area of Municipal Corporation.

4 State Government: - All other area not covered under a Panchayat,

Municipality or Municipal Corporation. Hence, taking into view jurisdiction

of the designated authority only Registration Certificate has been considered as

the same falls under the State Government which is administered by the Value

Added Tax Department.

GVAT FORMS

FORM NAME PROVISIONS OF THE

RULE DESCRIPTION

Form 101 Rule 5 Application For VAT Registration

Form 101A Rule 5 Details of Additional Places of

Business

412

Form 101B Rule 5 Address of Branches and Godowns

outside Gujarat

Form 101C Rule 14(1) Specimen signature of Authorized

person

Form 101D Rule 5(5) Details of Partners / Directors

Form 101E Rule 14 Addition information of Business

Form 102 Rule 6 Certification of VAT Registration

Form 103 Rule 10(1) Application for Cancellation of

Registration

Form 104 Rule 10(3) Notice for Suspension / Cancellation of

Registration

Form 105 Rule 12 Security under section 28 & 67(16) of

the GVAT Act

Form 106 Rule 13 Declaration/Revised declaration

regarding manager of business

Form 107 Rule 14(2) & (3) Revised declaration regarding bank

accounts

Form 108 Rule 16 Statement of goods held in stock (on

31/03/2006)

Form 109 Rule 18A(3) Application for Certificate of

entitlement

Form 110 Rule 18A(4) Certificate of entitlement

Form 111 Rule 15(5A) List of purchase of goods

Form 112 Rule 15(5B) List of purchase of goods

Form 201

Rule 18 and sub rule

(2),(3A),(3B) and (3C) of

rule 19

Monthly/ Quarterly return

Form 201A Sub rule (2) of rule 19 List of Sales of goods

Form 201B Sub rule (2) of Rule 19 List of Purchases

Form 201C

Sub rule (2),(3A) and

(3B) of rule 19 Balance of Stock (List of inventory)

Form 202

Sub rule (3) of rule 19 and

sub rule (4) of rule 20

Monthly/Quarterly / Annual return for

Lump Sum Dealers

Form 202A Sub rule (3) of rule 19 List of Purchases for Lump Sum

Dealers

Form 202 B Rule 19(3) List sales of goods against retail

invoices

Form 202 C Rule 19(3) List of purchases of goods

Form 203

Sub rule (4) of rule 19 and

sub rule (9) of rule 20 Monthly / Annual return of incentives

Form 204

Sub rule (4) of rule 19 and

sub rule (9) of rule 20

Monthly / Annual return of deferment

of tax

Form 205 Sub rule (2) of rule 20 Annual return (self assessment)

Form 205A Sub rule (1) of rule 20 Additional Information of Business

Form 206 Sub rule (1) of rule 22 Application for Permission to file

separate return

Form 207 Rule 23 Challan

Form 208 Rule 24 Notice for Crossing Threshold of

413

Turnover

Form 209 Sub rule (1) of rule 25 Application for Exemption from filing

returns

Form 210 Sub rule (1) of Rule 28

Application for Permission to pay lump

sum tax under Section 14 of GVAT

Act

Form 210A Rule 28A(1)

Application for Permission to pay lump

sum tax under Section 14 of GVAT

Act

Form 210B Rule 28B(1)

Application for Permission to pay lump

sum tax under Section 14C of GVAT

Act

Form 210C Rule 28C(1)

Application for Permission to pay lump

sum tax under Section 14D of GVAT

Act

Form 211 Sub rule (4) of rule 28 Permission to pay lump sum tax under

Section 14 of GVAT Act

Form 211A Rule 28A(3) Permission to pay lump sum tax under

Section 14B of GVAT Act

Form 211B Rule 28B(3) Permission to pay lump sum tax under

Section 14C of GVAT Act

Form 211C Rule 28C(4) Permission to pay lump sum tax under

Section 14D of GVAT Act

Form 212 Sub rule (5) of rule 19 MST Return

Form 213 Sub rule (5) of rule 19 Daily Account of MST Commodities

Form 214 Sub rule (8) of rule 28 Application for Permission to pay

composition for works contract

Form 214 A Sub rule (8) of rule 28

Application for Permission to pay lump

sum tax for works contract executed

during the year

Form 215 Sub rule (9) of rule 28 Permission to pay composition for

works contract

Form 215A Sub rule (8) of rule 28 Permission to pay composition for

works contract

Form 216 Sub rule (8) of rule 28 Statement for composition of works

contract

Form 216 A Rule 19(3BB)

Statement of claiming credit of amount

deducted as tax under Section 59B of

the GVAT Act

Form 217 Sub rule (1) of rule 44 Audit report

Form 301 Sub rule (1) of rule 29 Notice for Provisional Assessment

Form 302 Sub rule (1) of rule 31 Notice for Audit Assessment

Form 303 Sub rule (1) of rule 32 Notice for Re-assessment

Form 304

Sub rule(2) of rule 29 and

sub rule (2) of rule 31 and

sub rule (2) of rule 32

Assessment Order under Section 32,

34,35 of GVAT Act

Form 305 Rule 27 Notice for amount assessed

Form 306 Rule 37(1) Application for Provisional Refund

414

Form 307 Rule 38 and 40 Refund / Interest Payment Order

Form 308 Rule 39(2) Refund Adjustment Order

Form 309 Rule 46(1) Notice for Imposing Penalty

Form 310 Rule 63(2) Order for compounding of offences

Form 401 Rule 48 General notice for seeking information

Form 402 Rule 51 Movement of goods within / going

outside the state

Form 403 Rule 51(5) Goods entering into the state from

other states

Form 404 Rule 52(1) Application for issue of Transit pass

Form 405 Rule 52(2) Issue of Transit pass under Section

69(1) of the GVAT Act

Form 501 Rule 54(3) Application for Appeal or second

appeal under Section 73 of GVAT Act

Form 502 Rule 54(4) Application for revision under Section

75 of GVAT Act

Form 503 Rule 57(2) Notice before passing Order in Appeal

/ Revision

Form 504 Rule 57(3)

Notice before passing order of

rectification under Section 79 of

GVAT Act

Form 601 Rule 59(2) Application for enrolment as Tax

Practitioner under GVAT Act

Form 602 Rule 59(3) List of Tax Practitioners

Form 603 Rule 60(2) Authority by Tax Practitioner/CA

Form 604 Rule 60(1) Authority by a Relative

Form 701 Rule 65(2) TDS Exemption Certificate

Form 702 Rule 65(3)

Statement by the contractor to the sub-

contractor under Section 59B(3)( c) of

the GVAT Act

Form 703 Rule 65(4) TDS Certificate under Section 59B(8)

of the GVAT Act

Form 704 Rule 65(5) Yearly Declaration by a person paying

specified sale price to contractor

Form 705 Rule 65(4)

Register to be maintained by the

person responsible for the deduction of

tax at source.

Form 706 Rule 65A(1) Application for allotment of TDS

account number

Form 707 Rule 65(3) Tax Deduction Account Number

(TDN)

Form 708 Rule 65A(4) Application for cancellation of TDN

415

ANNEXURE-1 (refer paragraph no.1.25.2)

ALLOTMENT OF WEIGHTS ON THE DESIRABILITY ACCEPTABILITY

MATRIX

RECEIPT AUDIT REPORTS

Acceptability

index/para

desirability

index

Recovered Accepted by the

department/government

Not accepted by the

department/government

but effectively rebutted

by audit

No reply

from

department

or

government

Non

compliance to

laws, rules,

etc.

R1

(1)

R2

(0.8)

R3

(0.4)

R4

(0.2)

Lacuna in

law/procedure,

policy

- S2

(0.4)

S3

(0.2)

S4

(0.15)

Control

weaknesses

T1

(0.3)

T2

(0.2)

T3

(0.15)

T4

(0.10)

WEIGHTED AGGREGATE OF MONEY VALUE

AUDIT REPORT FOR THE YEAR ENDING

Para

No.

Financial

period

Money

value

Premium

for

timeliness

Matrix

identity

Matrix

Weight

Weighted

money

value

Contributing

office

(4.2) (2001-02) (50

lakh)

(55 lakh) H4 (0.10) (5.5 lakh)

Signed

Accountant General/Pr. Director

Note-1: Money value of paras pertaining to transactions of preceding two years will

be enhanced by 10 per cent

Note-2: Last column needs to be filled up only for the reports for which materials is

contributed by more than one office.

416

Figures in brackets are shown as illustrations.

PROFORMA

Bond copy of Audit Report (Revenue Receipts) Government of ______________

for the year ___________

Para-wise Money Value of DPs/Reviews

(` In crore)

Para

No.

R1 T1 R2 S2 T2 R3 S3 T3 R4 S4 T4 Total

Chapter-wise Money Value of Paras and Reviews

Chapter R1 T1 R2 S2 T2 R3 S3 T3 R4 S4 T4 Total

417

CALCULATION SHEET FOR WEIGHTED MONEY VALUE OF REVENUE

RECEIPTS FOR AUDIT REPORT – GOVERNMENT OF ____________ FOR

THE YEAR __________

Sl.

No.

Category/Reference

of the paras

Matrix Matrix

weight

Money

value

Premium for

timeliness

Weighted

money value

(1) (2) (3) (4) (5) (6) (7)

01. Recovered

Non compliance to

law, rules etc.

R1 1

T1 0.3

Total

02. Accepted by the Department/Government

Non compliance to

law, rules etc.

R2 0.8

Lacuna in law,

procedure, policy

S2 0.4

Control weaknesses T2 0.2

Total

03. Non accepted by the Department/Government

Non compliance to

law, rules etc.

R3 0.4

Lacuna in law,

procedure, policy

S3 0.2

Control weaknesses T3 0.15

Total

04. No reply

Non compliance to

law, rules etc.

R4 0.2

Lacuna in law,

procedure, policy

S4 0.15

Control weaknesses T4 0.10

Total

Grand Total

418

ANNEXURE-2 (refer paragraph no.1.27)

DIRECT ACCESS TO PRIVATE SECTOR RECORDS FOR AUDIT BY

CAG-PROTOCOL

The duties and powers of the Comptroller and Auditor General of India (CAG) to

directly access and audit the records of the private sector have been under discussion

for some time. This issue was examined by the Hon‘ble Delhi High Court and the

Supreme Court of India in the case of access of records of Private telecom

companies by the CAG. The Hon‘ble Courts recognized that the records for private

players entrusted with the responsibility of delivering public goods and services by

utilizing the state owned resources should be accessible to the CAG for audit.

Important arguments accepted the rationale behind the judgments and the highlights

of the above mentioned judgments that have wider implications for audit by the

CAG of private sector organisations are brought out below:

JUDGMENT DATED 6TH

JANUARY 2014 OF THE DELHI HIGH COURT

Applicability of Principle of ‗Res Communes‘ – The doctrine of ‗res Communes‘

claims that some things are common to mankind – the air, the water etc. Thus, the

titles of these resources are vested with the State as the sovereign, in trust for the

people (Para No 21). Licensees are the accountants of the Central Government and

are expected to maintain complete, accurate and honest books of accounts as to any

transaction(s) involving revenue as a fiduciary duty. (Para No 31).

Revenue would include any income of the nation derived from any source, to be

credited into the Consolidated Fund of India. Therefore, the revenue shared by the

Licensees with the Central Government, flowing into the CFI is the income of the

nation and it comes under Article 266(1) of the Constitution (Para No 48).

JUDGMENT DATED 17TH

APRIL 2014 OF THE SUPREME COURT OF

INDIA

Article 149 of the Constitution and the Comptroller and Auditor General of India

(DPC) Act 1971 is to provide for Parliamentary control of executive on public funds,

consequently ambit of audit by CAG has to cover all issues that are required to be

examined by the Parliament (Para No 18).

Article 266 of the Constitution of India take in ―all revenue receipts by the

Government of India‖ and submitted that a combined reading of Sections 13, 16 and

18 of the C&AG (DPC) Act would indicate that it is obligatory on the part of the

CAG to audit all transactions entered into by the Union and the States pertaining to

the consolidated Fund (Para No 19).

When nation‘s wealth/natural resources, like spectrum, are being dealt with either by

the Union, State or its instrumentalities or even the private parties, like service

providers, they are accountable to the people and to the Parliament (Para No 37).

CAG‘s examination of the accounts of the Service Providers in a Revenue Sharing

Contract is extremely important to ascertain whether there is an unlawful gain to the

Service Provider and an unlawful loss to the Union of India, because the revenue

419

generated out of that has to be credited to the Consolidated Fund of India (Para No

41).

The Expression ―to audit all receipts‖ doesn‘t distinguish the revenue receipts and

non-revenue receipts (Para No 45).

Section 13 read along with the Section 16 makes it clear that the expression ‗to audit

all transactions‖ so also ―audit of all receipts‖. Payable into Consolidated Fund of

India would take in not only the accounts of the Union and of the State and of any

other authority or body as may be prescribed or under any law made by the

Parliament but also to audit all transactions which Union and State have entered into

which has a nexus with Consolidated Fund, especially when the receipts have direct

connection with Revenue Sharing (Para No 45).

Unless the underlying records which are in the exclusive custody of the Service

Providers are examined, it would not be possible to ascertain whether the Union of

India as per the agreement, has received its full and complete share of revenue, by

way of license fee and spectrum charges (Para No 48).

CAG is not actually auditing the accounts of the UAS Service providers as such, but

examining all the receipts to ascertain whether the Union is getting its due share by

way of License fee and Spectrum charges, which it is legitimately entitled to, by way

of revenue sharing (Para No 50).

CAG‘s function is separate and independent and is not familiar to the audit

conducted by the DoT under clause 22.5 or special audit under clause 22.6 (Para No

51).

ROLE OF CAG IN A CHANGING AUDIT ENVIRONMENT:

In essence, these judgments have emphasized that the duties and powers of the CAG

being part of the basic structure of the Constitution, are to be interpreted and carried

out to meet the changing needs and requirements of accountability. In the current

scenario, the purpose of audit by CAG of records of private sector organizations can

be stated as under:

Providing an independent assurance that the terms and conditions of the

agreements have been compiled with in letter and spirit.

Assisting in protecting the legitimate interest of public at large.

Ensuring parliamentary oversight.

An independent assurance by the CAG, as an external auditor, to the Government is

necessary and different from the roles of executive, the statutory auditor and the

regulator. As the audit of such private sector records is to safeguard the interests of

the State or its agencies of instrumentalities, it is the constitutional mandate of CAG

and has been upheld in the above said judgment. Therefore, there may be no

requirement of specific entrustment of such audits.

PROTOCOLS

The emerging audit scenario requires a new protocol to be established for

accessing/auditing private sector records. This guidance note aims at laying down

the procedure on the following aspects :

Identification of agreements involving private sector participation

Determination of need to access private sector records

420

Scope of examination of private sector records

Mode of interactions with private sector

Composition of Audit parties and capacity building.

Identification of agreements involving private sector participation

The field audit offices are required to prepare a master data base of all agreements

entered into by the Union and State Governments and their agencies or

instrumentalities with private sector:

a) For delivery of public goods and services

b) Dealing with transfer or natural resources (like land, water, spectrum and general

resources) or public properties to private sector, if such transfer affects public

interest.

c) Nexus with consolidated fund of India or State.

d) Having an impact on public matter.

Presence of one or more of the above mentioned parameters could be the basic

identification of agreements for this purpose. These parameters would help in

identifying agreements/ contracts which could require access to private sector

records by CAG to provide assurance as indicated above.

DETERMINATION OF NEED TO ACCESS PRIVATE SECTOR RECORDS

The decision to access the records of any private sector organization has to be taken

with the approval of controlling DAI/ADAI. The necessity of accessing the private

sector records would be decided by the HQ on a case by case basis, depending upon

the risk assessment of the subject matter and the ability /inability of the CAG to

effectively fulfill his mandate only through audit records of the government/public

entity which comes under the CAG audit purview. HQ would also decide the

applicable section of the CAG‘s DPC Act under which such audit would be

conducted deciding in turn the scope of audit. A self contained proposal giving

justification/necessity for such direct access has to be sent by the field audit officer

to the headquarters. While recommending the need to access/audit private sector

records the following aspects may be kept in view:

a) The contract may provide for specific agreements clauses requiring private sector

organization to provide access to information/records to public sector partners or

any other public authority.

b) In most of the cases it may be possible to get the required information through

the public sector audited entity entering into agreement with the private sector

entity in question. The public sector entity should be the first port of call.

c) In certain cases, it would not be possible to provide assurance that the terms and

conditions of the agreement are being complied with, unless the underlying

records that are in the exclusive custody of the private sector organization are

examined.

d) In all cases, the materiality and the risk perception need to be given due

consideration.

421

ANNEXURE-2(A) (refer parapgraph no.2.11)

Land Revenue and Expenditure Audit: Sampling and selection criteria

There are basically three types of cases bearing major revenue implication being

finalized in Collector Offices

1. Land Allotment Cases

2. Non Agricultural Assessment Cases

3. Change of Tenure cases

The following branches are generally to be audited while conducting audit of

Collector Offices.

(1) Chitnis Branch

(2)Tenancy and Appeal Branch

(3)Additional Chitnis Branch

(4) Extra Chitnis Branch

(5) Accounts Branch (mainly dealing with Expenditure)

(6) Land Acquisition Branch (mainly dealing with Expenditure)

In respect of land revenue cases, following sampling/selection criteria is proposed to

be adopted:

Sl.

No.

Category of case Sample size

1 Allotment of Govt. Land

cases 100%

2

Change of

tenure

(Premium)

cases

Agriculture

to agriculture

purpose

Top 50% cases subject to maximum of 50

cases

Agri. to Non-

Agri.

purpose

100% where area is greater than or equal to

10000 Sq. Meter

50% where area is between 5000-10000 Sq.

meter

3

Non

Agricultural

Assessment

cases

u/s 65

100% where area is greater than or equal to

10000 Sq. Meter

50% where area is between 5000-10000 Sq.

Meter

25% where area is below 5000 Sq. Meter

u/s 66

100% where area is greater than or equal to

10000 Sq. Meter

50% where area is between 5000-10000 Sq.

Meter

25% where area is below 5000 Sq. Meter

u/s 67

100% where area is greater than or equal to

10000 Sq. Meter

50% where area is between 5000-10000 Sq.

Meter

422

25% where area is below 5000 Sq. Meter

Other cases,

if any

25% subject to max 100 cases

EXPENDITURE AUDIT: Any Two months on the basis of (highest) expenditure

incurred may be selected

Important Contracts awarded may be checked. This is also applicable to other

selected offices under the Collector.

In respect of Integrated Audit the following Offices under the Collector is to be

selected for detailed audit.

1. MAMLATDAR OFFICE: Any 2-4 Mamlatdar (the date of last audit may please

be checked so that all Mamlatdar offices are covered within a span of 5 years).

The following work is to be checked in this office:

Where there is a Nagar Palika, the records of Kasba Talati is to be checked to see

whether orders of Collector are being implemented and proper follow up action is

being taken or not. In respect of other offices the records of concerned Talati cum

Mantri of the village may be called for to ascertain the follow up of action of the

Collector‘s orders.

2. PRANT OFFICE: First ascertain whether any powers regarding Conversion of

land or NA Assessment has been assigned/delegated by the Collector to the Prant

officer. In that case, audit has to check all the records in that respect. Monitoring

work of the Prant officer may also be seen.

Audit in respect of Office of Additional Chief/ Pr. Secretary Revenue

Department

The following branches are to be audited:-

A,A-1,G,L and K Branches Allotment of Government Land/Lease of

Government Land

J and JH Branch Conversion of Land from New Tenure to Old

Tenure

V1 and V4 Branches ULC/Agricultural Land Ceiling Act 1960

GH,CH,CHH and L-1 Branches Land Acquisition

H1Branch - Jantri related issues

H2 Branch -Computerisation of land records.

For Expenditure audit -Cash and Record Branch

No methodology is prescribed as it depends on the production of cases by the

department.

423

ANNEXURE-2(B) (refer parapgraph no.2.11)

AUDIT PROCEDURE & CHECK LIST

Land revenue according to Government falls under the following three main

classification.

1. Fixed agricultural revenue

2. Fixed non-agricultural revenue

3. Miscellaneous and fluctuating revenue

It has been seen that fixed agricultural land revenue is based on survey settlement

and audit of actual recoveries is conducted with reference to VFI, the ledgers and

receipt books etc.

In regard to non-agricultural revenue, it has to the noted that under Rule 81 of

the Gujarat Land Rules, with effect from 1-8-1976, the classification of villages,

towns and cities was revised to ‗A‘ to ‗E‘ class on population basis and the revised

rates based on the use of Land have been prescribed. The details have been given in

para 2.4.1 to 2.4.10.

While checking the non-agricultural assessments with reference to VFII, it should be

first seen whether the rate of NA-assessment is in accordance with the rate fixed by

the Collector for the village concerned.

Inregard to miscellaneous or fluctuating revenue the source from which

moneys enter the accounts is VF IV and TF IV. These moneys may relate to fines,

penalties, premia on sales of land, occupancy prices of lands disposed of by the

Government etc. In each such case, it has to be verified whether demands raised are

in accordance with the rules and orders governing the transaction and whether the

demands have been entered properly in the accounts and recovery effected without

loss of time. It should be ensured that in all cases, in which rules require interest to

be recovered for delayed payments or on payment of occupancy prices of lands in

installments, interest is in fact correctly recovered. In respect of sales of land which

are held under new and impartible tenure, audit must see whether necessary premium

on the sale has been recovered and brought to account.

Under this head of miscellaneous revenue, fines levied for unauthorized NA

use of land and encroachment on Government land are significant where land is use

for NA purposes without permission, the case required to be dealt with under the

orders of the State Government and suitable such cases are dealt with by TDO/DDO

concerned depending upon the class of village, towns or city. Such cases will form

an important part of the audit of the accounts of TDO/DDO.

Encroachments on Government land are reported by Talati/Circle Inspectors

to the concerned Mamlatdar, who issues suitable orders in each case. The recovery

of land revenue and fine under Section 61 of the Land Revenue Code has to be

scrutinized.

424

AUDIT IN MAMLATDAR’S OFFICES:

The Talatis in charge of municipal areas work under the Mamlatdars who maintain

the accounts of such areas as an exception to the general arrangement of

maintenance of land revenue accounts by the TDO. Whenever, therefore, the audit

party will visit the Mamlatdar‘s office and carry-out necessary audit. In addition,

while the audit of TDO‘s office is undertaken, the audit party will visit the office of

the Mamlatdar, in order to verify the records of the Mamlatdar relating to disposal

of Government land or regularisation of cases under section 61 of the Land Revenue

Code etc. when necessary.

DISTRICT INSPECTOR OF LAND RECORDS:

The following checks should be exercised in the audit of the DILR‘s offices.

The applications received by the DILR for private measurement are recorded

by him in a register of measurement and the measurement work allotted to one

Surveyor or the other. The Surveyor would on completion of the work submit a

report to the DILR.

It should be seen in audit, whether charges recoverable for such measurement

have been recovered in accordance with the scale of fees laid down by Government

from time to time.

The DILR also arranges for Pot Hissa survey whenever necessary. In respect

of such work demands are prepared village-wise and Khatedar-wise and sent to the

Village Talati through the Mamlatdar for recovery. The Talati effects recovery from

time to time and makes a report to the DILR.

It should be seen in audit, whether demands are correctly worked out in

accordance with the orders of Government and recoveries are watched by

maintenance of suitable registers.

The recovery of charges for sale of maps, for supply of extracts from the

Tippan book and other copies from revenue records should receive the attention of

audit. The fees for the services rendered by the DILR will be generally regulated by

rule 142 of the Gujarat Land Revenue Rules and orders of Government issued from

time to time.

The charges recoverable for measurement on an urgent basis or during the

monsoon season are generally higher than the normal charges. It should be verified

whether enhanced charges have been levied wherever necessary and recoveries

effected accordingly.

The Survey establishment is normally expected to be self sustaining. In order

to watch this the DILR is required to maintain a register as prescribed in the Manual

of Standing Orders of the Department showing the expenditure incurred on each

surveyor and the receipts realised on his account while assessing the receipts time

spent on Government measurement will be estimated and added to the receipts from

private parties. A comparison should be effected in audit of the expenditure and

receipts on account of each surveyor in order to assess whether the survey

establishment is necessitated fully by the work-load and whether any contraction of

the establishment would be warranted.

425

With a view to make survey establishment self sustaining Settlement

Commissioner and Director of Land Recorders is competent to revise the rates of

survey charges. The rates of survey charges revised by the settlement commissioner

and /director of Land Records under his order No.L.R./227 dated 1-12-1988 are

made effective from 1-1-1989.

MISCELLANEIOUS AUDIT INSTRUCTIONS

An occupant of agricultural Land can put his holding to any non-agricultural

use only with the prior permission of the collector. Prior to 1st August, 1976, levy of

non-agricultural assessment was to be levied from the date on which non-agricultural

use commenced. However, with effect form 1st August, 1976, levy of non-

agricultural assessment has been made effective from the commencement of the

revenue year in which the land is permitted or deemed to have been permitted to be

used for any other purpose or is used without the permission of the collector further

according to executive instructions issued in May 1967, where Land is acquired for

specific non-agricultural purposes and handed over to the acquiring bodies (GIDC,

Boards, Corporations, etc.) no separate permission for non-agricultural use is

necessary. In these cases, such permission is deemed to have been granted and non-

agricultural assessment is leviable from the date of handing over possession to the

acquiring body. In addition to Land Revenue, Local Fund Cess at the prescribed

rates is also leviable.

Land granted to the ONGC for the purpose of mining petroleum oil is liable

to the payment of royalty and surface rent. These recoveries are not credited to the

land revenue head, but are credited to the head ―Mines & Mineral‖. NA assessment

would however be leviable on land used by the ONGC not for mining purpose, but

for other NA activities, like building etc.

Under Rule 32 of Gujarat Land Revenue Rules, Agricultural Produce

Marketing Committee constituted Under the Gujarat A.P.M.C. Act, 1963 are granted

land, free of occupancy price and free of revenue subject to rule 32. In Government

Revenue Department notification No.LRF-56/5670-P dated 10th

September 1976, it

was clarified that if any of the marketing committee wanted to lease out lands from

the market yards granted to them revenue free to traders on payment of rent the

occupancy price and Land Revenue on land so used by the committee were to be

recovered. Further under Government Resolution No.LRF 5362-51540-G dated 17-

2-65 occupancy price and land revenue also recoverable from land utilized by the

committee for hotels, pan shops etc. out of free grant of land made to them.

During local audit it should be ensured that instructions contained in

Government orders referred to above and subsequent order form time to time are

adhered to.

Free grants of land by the Government are to be scrutinized in audit with

reference to the Rule 32 and 35 of the Gujarat Land Revenue Rules. The sanctions

received from competent Authority granting revenue free land should be scrutinized

in central audit and submitted to the Branch Officer for acceptance. Important cases

involving any deviation from the normal rules will however be submitted for

acceptance by the Sr. D.A.G.

The State Government has brought out the orders issued by them in revenue

matters in a compilations, ―Sarkari Hukamono Sangraha‖ in two parts. These

426

compilations are available with the T.D.O.s/D.D.O.s and should be freely made use

of in the course of audit. While exercising audit checks in departmental offices the

orders should be gone through in their entirety before any audit conclusions are

drawn.

CHECKS IN INTEGRATED AUDIT OF COLLECTOR OFFICES

During integrated audit of Collector Office we undertake the audit of receipt and

expenditure. Further under the Collector Office we have also to undertake the Prant

Offices which generally deals with the expenditure and in cases where powers are

delegated also receipts. Further we select two Mamlatdars and one Talati under each

Mamlatdar.

In the Collector Office generally there are three important branches where we

concentrate our audit.

Chitnis Branch

Ganot Branch

Establishment Branch

The Chitnis Branch deals with cases of conversion of land under section 65, 66 and

67 of the GLR Code and allotment/grant of Government land either on occupancy

price or on lease. Section 65 deals with conversion of land from agriculture to non

agriculture, section 66 deals with penal provisions where usually land is used

without permission/or breach of conditions of the order and 67 deals with conversion

of land from one use to another.

The Ganot Branch deals with the conversion of land from new tenure to old tenure.

The Establishment branch deals with the expenditure of the office and order for issue

of refund of stamps. In the Prant Office we generally concentrate on expenditure side

and whenever powers are delegated also the receipt side. In the Mamlatdar we audit

the expenditure side and in the Talati Office we audit VF II to verify whether NAA

is being recovered at correct rates and cases where Government land has been

granted on lease whether rent is being recovered and revision of rent has taken place.

Looking to the above aspects the check list has been prepared.

RECEIPT AUDIT

Chitnis Branch

1. In respect of conversion of land from agriculture to non agriculture use whether

conversion tax and Non agricultural assessment (N.A.A.) has been recovered at

applicable rates.

2. In respect of cases of NA use whether NAA is made applicable from the revenue

year in which land has been used.

3. In respect of unauthorized use without permission of competent authority/breach

of conditions whether penalty at applicable rates has been recovered.

4. In respect of application received for allotment/grant of Government land on levy

of occupancy price/recovery of rent on or after 26th

April 2011 whether service

charge @ 1 percent of jantri rates have been recovered.

5. In respect of allotment of Government land whether conversion tax and NAA has

been recovered and condition for handling over land on payment of stamp duty

has been inserted in the order of the Collector.

427

GANOT BRANCH

6. In respect of conversion of land from new tenure to old tenure whether premium

has been recovered @ 25 percent and 40 percent of jantri rates for agricultural

use and Non agricultural use in the Urban area and @ 40 percent of jantri rates

for NA use in the Rural areas.

7. In cases where no rates are prescribed in the jantri for non agricultural use then

twice for residential, thrice for industrial and four times for commercial use of

agricultural jantri rate have been recovered before converting the land to old

tenure for NA purpose.

8. In case where old jantri rates are more than the new jantri then whether rates of

old jantri has been taken into consideration for levy of premium.

9. In case where the sale price is more than the jantri rate whether premium has

been recovered accordingly i.e. at the sale price.

10. In case of change of purpose whether differential premium has been recovered.

11. In respect of cases where irrevocable power of attorney/power of attorney with

possession has been executed whether the deed has been registered in the SR

Office.

ESTABLISHMENT SECTION\

12. In respect of refund of stamps whether the application for refund has been made

within six months from the date of its purchase.

13. Dead stock register is annually verified and all purchases of dead stock items

are made in the register.

14. Whether ABC register is being maintained.

15. In respect of AC bills drawn whether DC bills has been submitted.

16. All monetary transactions have been entered in the cash book and has been

closed and verified.

17. All receipts have been credited in the bank and reconciliation with treasury

carried out.

18. Apart from the three important branches stated above the following aspect is to

be seen while conducting integrated audit:

(A) In respect of Gujarat Land Ceiling Act, the following points needs to be

examined in audit.

(a) Whether the cases are reviewed by the Collector in his jurisdiction detected the

excess land or declared such land as surplus land?

(b) Whether the name of agriculturist entered in revenue records are supported by

an evidence of their ownership?

(c) If the agriculture land is declared as surplus, whether the action is taken to

acquire such land to Government head?

(d) Whether any action is taken to dispose off such surplus land to needy person as

per the provisions of the Act? In respect of cases pending for scrutiny, whether

prompt action is taken to finalise permissible holding by the owner of the land?

(B) In respect of Urban Land Ceiling Act, the following points needs to be examined

in audit.

428

(a) Whether appropriate action taken by the Department in respect of cases of

breach of conditions?

(b) Whether rebate paid to the owners and refund in any case made to the

Government was correctly worked out?

(c) Where the land was occupied by the Government, whether the cases were

promptly finalized for disposal of the surplus land?

(d) Whether the premium price was recovered properly in cases regularised under

section 20(1) and 21 of the ULC Act in view of the prevailing instructions and

orders of the Government?

(e) Whether the certificates are issued by appropriate authority in the cases where

the land was not occupied by the Government? Where the land had been

occupied by the Government, whether it remains to transfer to Government

head?

EXPENDITURE AUDIT

1. Collector Office/ Dy.Collector(Prant)/Mamlatdar

We have to collect the information in statement 1 to 12 from the information we

have to audit the records.

(a) Grant received – disbursement – utilization (Expenditure incurred) – balance if

any – surrender of grant. We have to check Head wise account-of the grant

received.

(A)(1) Grant utilized (Expenditure incurred) by the Collector himself

(i) See the vouchers for expenditure incurred. Whether the expenditure is according

to provision of Rules. Quotations/ Tenders invited. Rates compared quality and

quantitative may be checked.

(ii) Whether the vouchers are endorsed with a rubber stamp ―passed for payment‖.

After payment made whether it is endorsed with rubber stamp ―paid and

cancelled‖ in view to avoid double payment on bill.

Further purchase of a capital dead stock item whether it is entered in dead stock

register along with all details of voucher and the entry No. & date of entry is made

on reverse of voucher and attested by the appropriate authority and vice versa.

(iii) Whether there is sufficient grant to incur such expenditure or diverted fund from

other grant. Reasons thereof and prior approval of competent authority is

obtained may be checked.

(iv) Whether the full grant has been utilized or not? If not, whether it is surrendered

immediately to the Govt. Account? It not, reasons for the same may be

checked.

(v) Whether the grant received for a specific purpose is really utilized for such

purpose or diverted for other purpose, reasons thereof may be checked.

(A) (2) GRANT RECEIVED AND DISBURSED TO OTHER OFFICES

Viz. District Development Office (DDO) and DDO disbursed it to Taluka

Development Offices (TDO). All Mamlatdars working under him. Municipal

Corporation, Boards, District Sports Office etc. we have to check.

429

(i) Whether the utilization certificate is received from the respective offices.

Saving if any surrender to the Govt. accounts, if not reasons for the same

may be checked.

(ii) See all the utilization certificate is received as on 1st April of previous year

and not a single one is pending (Expenditure incurred by such offices is

separately audited may be checked there).

(B) CONTINGENT EXPENDITURE (OFFICE EXPENSES)

(1) Whether the register for dead stock articles and consumable articles are

separately maintained.

(2) Checks to be exercised as mentioned in (a) (i) & (ii).

(3) Whether the Municipal/ Nagarpalika tax bills and Electricity bills are paid on due

dates. Check any delay is there and delay payment charges paid – delay charges and

discount amount for payment on due dates are the avoidable expenditure.

(4) Whether the payment of telephone charges is relating to office premises only or

any other? Please check the payment of mobile bill charges are as per norms

prescribed by the Government or in excess paid by individual officer to whom this

facility provided by the Government as per designation.

(5) Whether the expenditure incurred on items, spare parts, petrol, diesel etc. are in

accordance with the Rules for maintenance of vehicles provided to the office. Any

irregularities in such payment may be checked.

(6) Whether the expenditure incurred for maintenance of office are in accordance

with the Rules. Further checks may be applied as per Treasury and Financial Rules

framed for such expenditure.

(C ) PAY AND ALLOWANCES EXPENDITURE

(i) Whether it is in confirmative with Administration orders and other orders

issued from time to time.

(ii) Whether allowances are paid is in confirmative with the employee is eligible

for it as per Rules made there under.

(iii) Whether the recovery of advances taken by the employees are regularly

recovered as per the installments granted to him.

(a) House Building Advance

(b) Motor Cycle/ Car Advance

(c) Food Grain Advances

(d) Festival Advances etc.

Whether the register is being maintained or not.

(iv) Whether the increment register is maintained and increment is regularly

allowed after cross of the efficiency bar.

(v) Whether the HRA, CCA etc. is as per norms prescribed for city/ town/

district etc. and are in accordance with Rules.

(D) Whether the TA/TTA/LTC registers are maintained. The claim of the

officials are in accordance with the respective Rules and Resolution passed

by the Government from time to time in this regard.

430

(E) Whether the medical claim register is maintained. Check the claims are

in accordance with the medical claim rules and instructions of the

Government issued from time to time.

(F) Whether the Permanent Travelling Allowance (PTA) is drawn to the

officials who having been entrusted field work. The amount of PTA is

subject to following conditions:-

(i) Whether the officials have achieved the target of days and nights journey as

per norms prescribed by the Government. If any short fall, PTA is recovered

for such short fall in days or nights at the rates as prescribed by the

Government.

(ii) Whether the tour diary is submitted by the official for each of the

month.

(iii) Whether quarterly short fall in days and nights worked out and recovery made

thereof.

(G) MAINTENANCE OF VEHICLES USED FOR OFFICE PURPOSES

(i) Whether the Logbook is maintained in prescribed proforma in register.

(ii) Whether all the column is duly filled up and attested by the officer who is in

charge of the vehicle.

(iii)Whether the vehicle is used for official purpose and if used for private purpose,

amounts have been recorded as per norms prescribed by the Government and

credited to Govt. Accounts.

(iv) Whether the vehicles are duly insured with the nominated Insurance

Company by the Government and nowhere any lapse of insurance.

(v) Whether the average of the vehicles is properly worked out in view of used

kilometer and fuel utilized.

(vi) History sheet of vehicles.

(a) Whether it is properly maintained as per purchase and details thereof.

(b) Whether expenditure incurred for items, spare parts etc. are entered in register.

(c) Whether the expenditure incurred from time to time shall not exceed the

purchase value of vehicles as per norms prescribed by the Government.

(H) CHECKS OF SERVICE BOOKS

We have to call for following service books:-

(i) List of service books maintained by the office

(ii) List of service books who retired within five years. Checks to be exercised.

(a) Whether the first page of service book is checked by the competent authority

on every five years of services and duly attested by him.

(b) Whether the increment drawn every year is attested by the employee and

agreed with that of.

(c) Whether the service verification of each year is checked by competent

authority and attested by him.

431

(d) Whether the leave account is properly maintained. Leave taken by the

employee viz.EL, HPL, LTC purpose, Home Town purposes are properly

debited.

(e) Whether the leave account is properly closed every year and carry forwarded to

next year as opening balance and not exceed the maximum limit of leave.

(f) Whether all event and orders of pay fixation done by the competent authority is

noted in the service book and attested by him.

(I) PERMANENT ADVANCE

For petty contingent expenditure, this advance is granted to office, viz.

purchase of soap, detergent, phenyl, zadu (savarni) etc. We have to see

whether every month if any expenditure made is recouped from Treasury

Office submitting purchase vouchers thereof.

(J) RECEIPT REALIZED AND CREDITED INTO GOVT ACCOUNT

The receipt realized by way of sale of plastic, sale of dead stock articles, sale of

consumable articles etc.

Whether the receipt realized is correctly credited into Govt. account in due time, is

there any delay in crediting the same. Receipt acknowledged by the purchaser is

kept on records.

Whether the challan No. & date of credit is noted in cash book on payment side.

Whether the receipt realized is noted in cash book on receipt side.

(K) DEAD STOCK REGISTER

(1) Whether the dead stock articles other than consumable purchased during the

audit period is entered in the register along with all the details.

(2) Whether a physical verification of dead stock articles is carried out every year

and a certificate to that effect given by the Head of the office.

(3) Whether review is conducted for unserviceable articles and lying idle. Any action

taken to dispose off the same. Receipt realized please see Sr.No.(J).

(4) Whether timely action is taken before condemn of the article or any delay result

in lower upset price.

(L) PERSONAL LEDGER ACCOUNTS (PLA)

PLA Register, cheque book, Bank pass book, A/c No. etc.

It is a one type of deposit account and payment called for thereof through Collector

only.

We have to see –

(i) Whether any deposit amount is lying in such accounts for more than three

years/prescribed period, if yes, whether credited in Deposit accounts of the

Government. If not, an HM is to be issued, why it is not done.

(ii) Whether the amount received for disbursement to any institution etc. is paid to

such institutions in prescribed time limit.

432

(iii)Whether the amount lying as Earnest Money Deposit (EMD) for any kind of

work to be entrusted to a contractor with lowest cost of tender/ quotations etc. is to

be kept till he complete the work. The EMP paid by others is to be refunded

immediately to avoid interest payment for delay in refund.

CHEQUE BOOK & BANK PASS BOOK

(i)Whether the cheques issued by the Collector and encashed by the party is

traceable in bank Passbook, it is ensured by the Department. If date of cheque is

expired without encashment by the party should be reviewed by the departments

after all necessary checks.

(ii)Whether the cheque signed by the Collector is not lying more than three days and

reason thereof.

(iii)Whether action is properly taken on cancellation of cheque to avoid misuse.

(iv)Whether the proper acknowledgement of receipt of cheque by the claimant is

taken and kept on records.

(v)Whether the account is properly maintained etc. At the end of each month an

abstract is prepared. Opening balance/ closing balance of amount agreed with actual

transaction of receipt and payment.

(vi)Whether the cheque book issued to the Collector by Treasury Officer is in

confirmative with treasury accounts.

Checks to be applied by the Sr.Auditor/ Auditor

List of records/ registers maintained:-

(1) BILL REGISTER

The Collector/ Dy.Collector (Prant) Officer/ Mamlatdar is not a cheque drawing

Officer (DDO) except PLA Accounts. For PLA accounts, the Treasurer, Officer is

issuing a Government cheque book duly machine numbered to the Collector for

payment to be made from such accounts.

In view of above, a bill is to be prepared for any kind of payment and to be entered

in this register and sent to the Treasury Office for passing such payment and issue of

cheque. The Treasury Officer will give token thereof and as per token after

completion of necessary checks issue cheque thereof and token is taken back.

Please see,

(a) Whether all column of bill register is properly filled up and attested by the Head

of the Office.

(b) Whether the cheque received against bill amount is correctly entered. The entry

of the same is also entered in cash book on receipt side. All the cheque received

against bills day to day entered in cash book. No delay is there for the purpose.

(c) Whether the abstract bill (AC) amount is correctly entered in cash book, the

payment is for immediate requirement, if so, a detailed bill (DC) along with

supporting vouchers, saving if any surrender to the Government accounts by a

challan and kept with DC Bill.

433

Whether the DC Bill is submitted to the AG, Rajkot Office within three months from

the date of drawal.

(d) It may be ensured that encashed bill entered in cash book. If not, the reasons

thereof.

(2) Cash Book

(1) Whether it is maintained in prescribed Form No. GTR-2 under Gujarat

Treasury Rules, 2000.

(2) Whether it is maintained/ followed the provisions given under Rule 28 of

GTR 2000.

(3) Whether any withdrawal of amounts from the Govt. accounts is in accordance

with Rules 63, 64, 66, 68 and 76 of GTR 2000.

(4) Whether bill amounts entered in receipt side of cash book is timely paid to the

claimant.

(5) For audit of contingent vouchers, please see Sr.No.(B) as above.

(6) Whether any amount not encashed by the claimant due to any reasons and

return back is properly entered on receipt side. The amount is refunded to Govt.

account immediately by challan and entered on payment side and intimated to the

Treasury Officer.

(3) Whether other registers, viz. Increment register & Recovery of advance

register, Stationery register, Library register, Dead stock register etc. are

properly maintained as per Rules of GTR-2000.

The above checks are necessary. However, any other checks required under

Provisions of the Act, Rules framed for the purpose may also be taken into account

while conducting such audit.

GUJARAT TREASURY RULES – 2000

Rule 28 - (i) Maintain Cashbook in Form GTR-2.

(ii)All monetary transaction should be entered in Cash book as soon as they occurred

and attested by the Head of the office in token of checks.

(iii)Cash book should be closed regularly and completely checked. The Head of the

office should verify the totaling of cash book or get the same done by some

responsible subordinate other than writer of cash book and initial it as correct.

(iv)At the end of each month, the Head of office should verify the cash balance in

the cash book and record a signed and dated certificate to that effect mentioning

therein the balance both in words and figures. A/cs. Abstract.

(v)Remittance made into Treasury should be reconciled as soon as after completion

of the month.

(vi)An eraser or over writing of an entry once made in the cash book is strictly

prohibited. If a mistake is discovered, it should be corrected by drawing pen through

the incorrect entry and inserting the correct one in red ink between the lines. The

Head of the office should initial every correction and invariably dated initials.

(vii)Special sanction to handle non-government money kept separately as per rules

prescribed.

434

Rule 63 - Withdrawals from Govt. Account

Rule 64 - For disbursement of or on behalf of Govt. unless the Govt. after

consultation of AG. Otherwise directs in any case, money may not be withdrawn

from Government accounts without written permission of TO or IA&AD authorized

by AG.

Rule 66 - Not permit withdrawals by TO unless claim for withdrawals complied

with the provisions contained in the Rules.

Rule 68 - Not to pass disputed claim brought to Government.

Rule 76 - Same as otherwise specifically provided in these rules, money may

not be withdrawn from Govt. accounts except by presentation of bills

or cheque.

Note:2 - An order endorsed by TO for payment shall be valid for a

period of three months and may be revalidated thereafter any time it

shall be cancelled.

Rule 3(2) - Electricity Duty shall not be leviable on the units of energy

consumed.

(i) by the GOG (save in respect of premises used for residential

purpose).

(ii) By or i/o any Municipal corporation, Municipality Local Boards,

notified area, Committee, Cantonment board or Panchayat constituted

under any law for the time being in force in the state for the purpose

of, or in respect of, public street lighting, public water works

(including head works and other ancillary water supply works and

pumps used for the purpose), public gardens including zoo, museums

or system of public sewerage or drains.

(iii) Residence up to 250 units.

(iv) Hospital or dispensary which is not maintained for private gain (Not

for residence).

(v) Agricultural, irrigation purpose.

(vi) Generated and used for vehicles or vessels.

435

ANNEXURE-3 (refer paragraph no.1.27)

GUIDANCE NOTE

PREFACE TO AUDIT REPORTS

A need has been felt for bringing about some uniformity and consistency in the

preface to the audit reports of CAG of India. The preface is essentially to convey to

the reader of the purpose and scope of the report. It is therefore necessary that the

following essential elements must be present in the preface of all the audit reports of

the Union and State Governments.

I. MANDATE- Constitutional mandate that the report has been prepared under

Article 151 of the Constitution for submission to the President/ Governor, as the

case may be, has to be mentioned in all reports other than the reports prepared

exclusively on the Public Sector Undertakings (PSUs).

In case of reports dealing exclusively with the audit of PSUs, a reference has to

be made about the mandate available under the Companies Act, 2013. A

reference has also be made about the supplementary nature of the accounts/audit

which is being done under Section 19(i) of the CAG‘s DPC Act.

There is no requirement of mentioning the provisions of the CAG‘s DPC Act for

any other report.

II. SCOPE OF THE REPORT- Scope of the report would be to cover the

following 4 sub-elements:

i. Year of the Report – In case of the reports which are prepared on an annual

basis i.e. the report on State Finances, the compliances and performance audit

reports, a reference has to be made about the year for which the report has been

prepared. However, there is no requirement of mentioning for the year ended

_________ in the case of the stand alone audit reports.

ii. Audited entities – Names of the departments whose results of audit are covered

in the report may be mentioned. This has become necessary after restructuring of

the Department and splitting of reports among different sections. A references

may also be made that departments not covered in this particular report would

feature in other reports. However, it is not required to mention the name of

department under audit in the report No 1 of the Union Government and the

report on the State Finances as those reports cover the concerned Government as

a whole. In case of the stand alone reports the subject matter under audit may be

mentioned.

iii. Type of Audit – The preface should contain the information about the nature of

the audit i.e., that this report contains results of

performance/financial/compliance audit as applicable.

iv. Period of Audit – The preface should explain period to which the instances

pointed out in this report belong to. Mention that certain instances may also

belong to the earlier years or subsequent year as applicable may be required.

III. STANDARDS – Preface should mention that the audit has been undertaken

in conformity with the CAG‘s auditing standards.

436

IV. ACKNOWLEDGEMENT – In case of the standalone reports, an

acknowledgement of the cooperation extended by the Executive may be

mentioned. However, in the case of other reports the acknowledgement could

appear in the relevant chapters.

Formats designed for different types of Audit Reports are attached. The

modifications in the structure and language can be made, if necessary, with the

approval of DAI/ADAI for the report concerned.

DRAFT PREFACE (Specimen-No.1)

This report for the year ended March [the relevant year] has been prepared for

submission to the President/ Governor of [name of state] under Article 151 of the

constitution of India.

The report contains significant results of the performance audit and/or compliance

audit of the Departments of the Union Government/Government of [name of the

state] under the [economic/general and social services] including Departments of

[name of departments covered in the report]. However Departments of [name of the

department not covered in the report] are excluded and covered in the Report on

[General and Social Services/Economic].

The instances mentioned in this Report are those, which came to notice in the course

of test audit for the period [relevant financial year] as well as those which came to

notice in earlier years, but could not be reported in the previous Audit Reports;

instances relating to the period subsequent to [relevant financial year] have also been

included, wherever necessary.

The audit has been conducted in conformity with the Auditing Standards issued by

the Comptroller and Auditor General of India.

(Applicable to the Reports dealing with Economic (including Revenue) and

General & Social Service sectors)

437

ANNEXURE-3-A (refer parapgraph no.3.4.1)

Sampling Methodology

Audit in O/o Inspector General of Registration & Superintendent of Stamps

(HOD)

Registration Branch

Adjudication Branch

Amalgamation/Re construction and Merger Cases, Mortgage, Conveyance audit

party may adopt random selection basis/judgemental sampling.

Verification of Stamp Vendor offices, Expenditure incurred against supply of

stamps,

Contract finalised if any. For detailed Expenditure Audit two months to be selected

Dy. Collector (Stamp Duty Valuation Offices) Offices

Sl

No.

Selection criteria Reasoning and aspects to be

checked

1. 100% documents finalized and stamp

duty collected during the selected

month (Selection of month shall be

based on the maximum number of

documents finalized and disposed by

DC under Section 32 and 33)

These cases may be checked with

reference to speaking order of DC

for ascertaining proper

classification of the document,

application of value of land and rate

of stamp duty.

2. 100% documents pertaining to ‗other

source of revenue collected during the

selected month

‗Other source of revenue‘ - as

directed by Superintendent of

Stamps vide Circular dated

28.07.2011 (as per return)

3. 100% documents of the selected

month where opinion under Section 31

of GS Act 1958 is given by DC

These cases may be checked to

ascertain the extent of deviation

from the jantri rates and reason and

justification for such deviation

4. 100% documents where stamp

duty/interest/penalty/service charge

has been collected after issue of

notices under Section152/ 154/155 of

Gujarat Land Revenue Code, 1879 and

Rule 117 of Gujarat Land Revenue

Rules.

These cases may be verified to

ascertain the correct application of

rate of stamp duty, levy of service

charge etc.

5. Cases which are remanded by the

CCRA (U/s.53 and 53A of GS Act

1958)

These cases needs to be checked to

ascertain the promptness in

finalization of the cases

6. Cases which are finalized by CCRA

and forwarded to DC for recovery of

These cases may be checked with

reference to the promptness of

438

deficit stamp duty/penalty etc. (U/s.53

and 53A of GS Act 1958)

creation of charge in Record of

rights/efforts taken to recover the

dues.

7. 100% refund cases Application of correct rates,

provisions of the Act, Rules etc.

*If audit is for more than one year, select the latest plus one or two years

depending on time available.

SUB REGISTRAR OFFICES

Sl No. Criteria of document Selection

1 Conveyance/Sale deeds /Gift Deed

(Article 17,20,28)

Basis- stamp duty paid.

A Category Unit

Top 300 documents.

plus 150 documents to be

selected randomly.

B Category Unit

Top 200 documents

plus 100 to be selected

randomly.

C Category Unit Top 100 documents

plus 50 to be selected randomly

2 Mortgage deeds/Deposit of Title

deeds/Hypothecation deeds/Debenture

Trust Deeds

(Article 6, 27, 36)

Top 25 documents plus 10 at

random

(Loan Amount to be considered)

3 Following category of documents Top 10 documents each plus 5

others randomly selected (each

category). a. Development agreement

{Article 5 (ga)}

b. Cancellation of sale deeds

(Article 16)

c. Exchange of property (Article

26

d. Lease (Article 30)

e. Leave and License agreement

(Article 30A)

f. Partition (Article 43)

g. Partnership (Article 44)

h. Dissolution of partnership

{(Article 44 (3)}

i. Power of Attorney {Article 45

f and 45 (g)}

j. Release (Article 49)

k. Settlement (Article 52)

439

l. Transfer of lease or

Assignment (Article 57)

m. Declaration/Consent deed

4 Documents where exemption from

stamp duty/registration fees is given

based on Government

Orders/Notifications etc.

100 % (in order to verify the

applicability of exemption in

accordance with the provisions

of the Act and Rules).

* If more than one year for audit then select the latest plus one more year at

random.

440

ANNEXURE-3-B (refer parapgraph no.3.4.1)

Audit Checks on Stamp Duty and Registration Fees

Introduction:

Entry No.63 of List II-State list of the seventh schedule to Article 246 of the

Constitution enables the State Government to legislate on the rates of stamp duty in

respect of documents other than those specified in the provisions of List I with

regards to rates of stamp duty. In addition, the subject of stamp duty (other than

duties collected by means of judicial stamp but not including rates of stamp duty)

finds a place in entry No.44 of List III (concurrent list) also. By virtue of these

constitutional provisions, the Bombay Stamp Act 1958 which was in force in the

State of Gujarat which has been now renamed as the Gujarat Stamp Act, 1958 with

retrospective effect from 1st May, 1960 by the Gujarat Short Title (Amendment)

Act, 2011. Entry No.63 of List II-State list of the seventh schedule to Article 246 of

the Constitution enables the State Government to legislate on the rates of stamp duty

in respect of documents other than those specified in the provisions of List I with

regards to rates of stamp duty. In respect of registration fees, by virtue of the powers

conferred by Section 78 of the Registration Act, 1908 in its application to the State

of Gujarat, Government of Gujarat fixes the rates of the registration fees from time

to time on various types of instruments.

Following audit checks are prepared with reference to various provisions of the Act

and the existing instructions issued by the State Government from time to time on

the application of stamp and duty and registration fees on various instruments

executed in the State. These are illustrative but not exhaustive. Audit parties may

exercise their own audit checks with reference to the recitals of the instruments apart

from following these audit checks:

(A) Audit checks on Stamp Duty in Sub Registrar Office

(I) GENERAL

1. Call for Annual Administrative Report (Vaarshik Vahivat Ahwal) and

analyse revenue realization and volume of work

2. Whether the classifications of the instruments are properly done with reference

to the definition given in Section 2 of the Act on various types of instruments

and on the basis of the recitals and transactions appended therein?

3. Whether the applicability of provisions of Section 3 is fulfilled in respect of

chargeability of duty on various instruments mentioned in Schedule I, other

than those exempted under Section 9, which was not previously executed in the

State?

4. Whether additional duty at 40% of basic rates has been charged on the various

instruments (Certificate of Sale, Conveyance, Exchange of Property, Further

Charge, gift, lease, Mortgage under Article 36, Power of Attorney with

Consideration and authorizing the attorney to sell any immovable property

under Article 45 (f), Settlement and Transfer of Lease listed under Section 3A

of the Act?

5. Whether the duty charged on several instruments (multiple instruments) used in

single transaction was correct with reference to the principal instrument only

and other instruments charged with a duty of one hundred each? (Section 4)

441

6. Whether instruments comprising or relating to several distinct matters or

distinct transactions have been charged with the aggregate amount of duties on

each distinct matters/transactions as provided under Section 5? Also examine

whether any instrument comprises distinct elements of conveyance/release i.e.

releasing of existing rights in the property in favour of another co-owner other

than blood relations during his/her life time, gift i.e. relinquishment of existing

rights/interests in the property to another who has no pre-existing rights in the

property.

7. Section 6 provides that wherein an instrument contains two or more

descriptions in Schedule I, and where the duties chargeable thereunder are

different, then only the highest of the duty will be chargeable. Here it may be

checked whether there are no distinct matters/transactions (Section 5) involved

in such instruments, which might attract applicability of aggregate amount of

such distinct matters/transactions.

8. Whether the provisions contained in Section 7 on payment of higher duty in

respect of certain instruments have been fulfilled? For example, a copy of

Debenture Trust Deed executed in Maharashtra when filed before the Registrar

of Companies in Gujarat at Ahmedabad, it would be liable to levy of

differential stamp duty.

9. Whether the exemption/remission/reduction in duty given on the instruments

was complied with the provisions contained in Section 9?

10. Please see that the benefit of exemption/remission/reduction in duty has been

given in respect of a particular class of instruments and not in individual cases.

11. Whether the proof of government notification/circular/orders was made

available in support of exemption/remission/reduction?

12. Please see that only one instrument has been written on a piece of stamped

paper and no second instrument has been written on the same piece of stamp

paper (Section 14).

13. Please see that in respect of instruments executed in State, the duty has been

charged before or at the time of execution or immediately thereafter on the next

working day following the day of execution (Section 17).

14. Please see whether in respect of instrument executed out of State and brought

to the State have been stamped within three months after it has been first

received in the State. (Section 18)

15. Whether the provisions of Section 19 have been applied correctly for charging

differential duty in respect of instruments described in Schedule I to the Act

executed out of the State and subsequently received in the State.

16. Please see whether deduction/adjustment in duty is given in respect of any

property transferred to the mortgagee (Section 25).

17. Please see that in respect of any property contracted to be sold, apportionment

of market value has been correctly done with reference to the instruments

executed in different parts and aggregate duty has been charged. (Section 29)

18. The liability as to by whom duty is payable on different instruments described

in Schedule I has been mentioned in Section 30. In case of any doubt, these

provisions may be examined.

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19. Section 31 provides that when any person brings to the Collector, whether

executed or not and whether previously stamped or not and seeks his opinion of

the chargeability of duty on it, the Collector shall determine the duty and give his

opinion on the chargeability of proper duty. In this connection please examine -

Whether an officer appointed as Collector under clause (f) of Section 2 has

reason to believe that the market value of the property has not been truly set

forth; he shall refer the matter to the Collector of such district for determining

true market value under Section 32A.

Whether in between the date of seeking opinion and execution of the instrument,

if there is change in rates of market value (jantri rates), provisions of Section

32A have been adopted.

Whether separate registers maintained in respect of instruments referred to the

Dy. Collector (Valuation) under Section 31/32A/33 of the GS Act

Whether the instrument referred to under Section 32A each accompanied with

Form I comprising details of properties referred for valuation?

Whether the monthly returns on the properties registered as per the prescribed

value were regularly sent to the Income Tax Department?

Whether the Sub Registrars ensured inclusion in the instruments details of PAN

Numbers of executants of various instruments, wherever necessary during

registration process?

Whether the Sub Registrars ensured compliance to provisions of Section 52 C

regarding invalid stamps in all the cases

Whether the Sub Registrars verified copy of power of attorneys submitted in

support of execution of instruments by POA holders and ensured that it did not

violate the existing provisions and there was no escapement of duty?

20. Section 32A- Determination of market value of property

It may be seen –

Whether the registering officer has referred the instruments of conveyance,

exchange, gift, certificate of sale, partition, partnership, settlement or power of

attorney to sell immovable property when given consideration, or transfer of

lease where correct market value is not adopted, to the Collector for

determining true market value ?

Whether the Collector followed the provisions of Rule 8 of the Bombay Stamp

(Determination of Market Value of Property) Rules, 1984 ?

Hon‘ble Gujarat High Court in the case of Gorva Vibhag Cooperative Housing

Societies Association Vs. State of Gujarat has clearly observed that following

factors are to be taken into consideration while deciding the true market value

of the property:

Whether the property is subject to mortgage charge

Whether there are sitting tenants in the instruments of conveyance where

deduction in market value on account of their period of holding in the

properties were given.

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Whether the agreement to sell executed by the parties if being genuine one, the

Collector is bound to consider it

Any factors mentioned in the instrument which is relevant for the purpose of

determining market value

Any other factor which the Collector thinks to have a bearing on the valuation of

the property.

Check out the cases finalized by the CCRA and find out whether the applicants

have preferred appeals before CCRA within 90 days from the date of order by

the Dy. Collectors.

(II) Audit Checks with reference to Article-wise registration of instruments:

There are 58 Articles under Schedule I to the Act under which several

instruments are registered. Here are some important Articles requiring proper

audit checks which are likely to yield audit outputs:

1. Article 5(ga) – Agreements, popularly known as “Development Agreement”:

Check whether applicable rates of duty i.e. one rupee (from 1.9.2001 /three

rupees and fifty paise (with effect from 1.4.2014.) for every hundred rupees or

part there of the market value of the property have been charged.

Check whether true market value has been adopted as per the prevailing jantri

rates with reference to the correct area of land/property agreed to be

developed.

Examine the recitals to find whether any power of attorney, rights, title and

interest in the property had been passed on to the developers for ascertaining

chargeability of higher duty as per conveyance.

2. Article 6/Article 14 – Agreement or Memorandum of Agreement relating

to Deposit of Title Deeds (commonly known as Deposit of Title Deeds),

Pawn, Pledge or Hypothecation/Bond

Check whether the classification of the instrument was in order i.e. whether

any rights, title and interest in the property have been created in favour of

mortgagee requiring applicability of additional duty (@ 40%) under Article

3A

Check whether correct rate of duty had been charged with reference to the

ceiling of loan amount i.e. loan amounts/amount secured which does not

exceed/exceed rupees ten crore

3. Article 17 – Certificate of Sale

Generally, Certificate of Sale are executed by any Civil/Revenue Court

order/decree or as a result of highest bidder getting the property by way of

public auction etc. In such cases, following area may be checked.

Check to ensure that the duty applicable to conveyance under Article 20 on the

market value of the property had been levied on the instrument of Certificate of

Sale granted to the purchaser of any property sold by public auction by Civil or

Revenue Court or Collector or Revenue Officer

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Check whether movable property also transferred simultaneously with the

immovable property on which proper stamp duty at 2 per cent levied on

consideration or market value whoever is higher

4. Article 20 – Conveyance:

• Examine and find how the seller of the property has acquired ownership of

the property conveyed so as to link the earlier missing transaction.

• Examine and find the interests/rights in the property in respect of any third

party/confirming party coming in the instrument.

• Examine and find any other element of distinct transaction involved to

comment for application of provisions of Section 5.

• Examine and ensure whether the correct market value/deductions/floor-wise

deductions as per jantry guidelines were applied in all the cases audited.

• Ensure jantry rates applicable to correct zone in which the property conveyed

is situated.

• Examine and find whether the areas considered for application of market

value are as per correct TP.Scheme/Survey/Block/Revenue Survey Nos.

• Ensure the area mentioned in the instruments is converted to square metres

for the purpose of application of jantry rates.

• Ensure whether the market values of movable/immovable properties are

segregated for application of proper rate of duty on movable/immovable

properties.

• Ensure whether proper duty applicable on a deemed conveyance under an

Agreement to sell by which possession of the property had been charged on

instrument of Agreement to Sell/Irrevocable power of attorney under which

possession of immovable properties had been given/agreed to be given before, at

the time of or after the execution of such instrument.

• Ensure whether provisions of valuation under Section 32A have been applied

in respect of instruments of Agreement to Sell/Irrevocable Power of Attorney

• Ensure whether in case of instruments by co-owners of any property, proper

duty as per conveyance is charged as provided Explanation-I below Section 2(g)-

Conveyance inserted with effect from 4.4.1994.

• Check whether movable property also transferred simultaneously with the

immovable property on which proper stamp duty at 2 per cent levied on

consideration or market value whoever is higher

In respect of instrument of conveyance on account of

reconstruction/amalgamation of companies as a result of High Court order,

examine whether -

Stamp duty had been correctly levied at one per cent on the aggregate market

value of shares issued or allotted or the face value of shares whichever is higher

and the amount of consideration, if any, paid for such amalgamation or an

amount equal to one per cent of the true market value of immovable property of

the transferor company in Gujarat State, whichever is higher

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All the movable/immovable properties listed in the High Court order situated in

the State of Gujarat amalgamated/reconstructed have been considered for

valuation and recovery of stamp duty

Market value of listed/unlisted shares issued or allotted in exchange of or the

face value of such shares, whichever is higher have been considered for the

purpose of valuation and recovery of stamp duty

Amount of consideration paid for such amalgamation also taken for the purpose

of valuation and recovery of stamp duty

The value of movable/immovable properties transferred after the date of order of

Higher Court was also considered for the purpose of recovery of stamp duty

(5) Article 26 - Exchange of Property

• Whether same duty as is leviable on a conveyance under Article 20 on the

market value of the property of greatest value had been levied?

• Ensure other provisions applicable to instrument of conveyance including

application of correct market rates are applied.

(6) Article 27 – Further Charge

Ensure that the principal instrument was mortgage only Article 20(a)

Ensure stamp duty at prescribed rate is levied.

(7) Article 28 - Gift

• Ensure whether the provisions applicable to instrument of conveyance such levy

of stamp duty at conveyance rates, provisions of market value under Section 32A

etc. are applied.

(8) Article 30 – LEASE

• Examine whether property duty had been recovered with reference to the period

of lease, premium/lease rent mentioned in the lease agreement.

• Ensure whether all the amounts paid including municipal taxes, recurring charges

undertaken to pay, rent paid in advance excluding such amount to be set off

towards the last installment or installments of rent, security deposit amount paid

payable are included for the purpose of working out average annual

rent/premium.

• Examine whether proper rate of duty with reference to period of lease/extended

period of lease had been recovered.

• Ensure whether conveyance rate of duty had been charged in respect of

assignment of lease applying market rate as per jantry or consideration

whichever is higher.

• Examine whether the taxes/duties/land revenue/non-refundable security deposits

etc are also included for the purpose of levy of stamp duty.

• Ensure that instrument of assignment of lease subject to provisions of market

value.

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(9) Article 30A – Leave and License Agreement:

• Ensure whether the total amount payable including the total amount of fine or

premium or money advanced irrespective of the period for which such leave and

license mentioned in the agreement had been subject to levy of duty.

(10) Article 36 - Mortgage Deed:

• Ensure whether the same rate of duty as applicable on a conveyance had been

charged where possession of the property had been given/agreed to be given,

excluding the possession agreed to be given in case of default.

• Ensure additional duty under Section 3A had been charged.

• The conditions on the instruments classified as Mortgage without possession are

examined and found correct.

• Examine whether duty at conveyance rate is applied on instrument of mortgage

with possession of the property given/agreed to be given, but not on account of

any provision for giving consent for possession in case of any default of the

conditions prescriobed.

• Ensure proper rate of duty had been charged in respect of mortgage of the

property in the nature of collateral security.

(11) Article 43/44 – Partition

• Ensure whether duty had been applied on the amount after separation of largest

share.

• Ensure co-owners are legal holders of the property partitioned

• Ensure that in case of property owned by a partner brought to the partnership

firm as his share of capital contribution and transferred to another partner on

dissolution of the property is charged with the rate of duty applicable to

instrument of conveyance.

• Examine whether registration fees are recovered at one per cent of the market

value of the property.

• Ensure that the partition appeared to have been taken place as could be seen from

the instruments are compulsorily registered.

• Ensure in the case of death of father and where co-owners who hold equal rights

in the property as per Hindu Succession Act, 1956 and had released their share in

favour of other co-owners without taking any monetary consideration, proper

duty as applicable to conveyance is charged.

• Ensure whether duty as applicable to conveyance is charged in case of

dissolution of partnership under which any immovable property is taken by any

of the partners other than the partner who bought that property as his share or

contribution to partnership {(Article 44 (3)}.

(12) Article 45 – Power of Attorney:

• Ensure that all such powers of attorney given to persons other than blood

relations are liable to proper stamp duty.

• Ensure whether in case of instruments of power of attorney given for

consideration authorizing the attorney to sell any immovable property, rate of

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duty is charged as is leviable on a conveyance with additional duty under Section

3A.

• Ensure that all such powers of attorney with consideration given in respect of

immovable properties are compulsorily registered.

(13) Article 52 – Settlement:

• Ensure that where settlement is made for other than for a religious or charitable

purpose, rate of duty is charged as is applicable on a conveyance.

• Examine whether instruments of gift/release/conveyance etc. made by persons

other than by family members have been misclassified as instrument of

―settlement‖

(14) Article 57 – Transfer of Lease

• Ensure that stamp duty is levied as is leviable on a conveyance under Article

20(a)-Conveyance for the amount of consideration or market value whichever is

higher.

• Ensure that instrument of assignment of lease is subject to the provisions of

market value under Section 32A.

• Ensure that the instrument of assignment of lease executed by GIDC in respect of

its industrial sheds are subject to the provisions under Section 32A

Application of jantry 2011 – Certain Guidelines issued by the Revenue

Department

Though, the jantri has no legislating backing of the Gujarat Stamp Act, 1958,

Revenue Department has issued certain guidelines for implementation by

registering authorities for the purpose of valuation, which the assessing

officers are mandated to follow. Some of the important guidelines are as

below:

At present, prevailing jantry had been made effective from 18-4-2011 prescribing

distinct rates in respect of immovable properties situated in various

villages/cities/towns/nagarpalikas etc. The jantry is stated to have been prepared

various parameters by taking into consideration the ongoing trend of rates of open

land with reference to development, location, availability of common facilities,

source of water, means of road approach and means of transport facilities available

in the vicinity of the property. Rates of construction separately for Rural and Urban

Areas have also been given with reference to load bearing structure, RCC frame

structure, semi-temporary structure, industrial shed (RCC concrete and tin sheds).

Besides percentage/deduction of construction/proportionate floor-wise deduction, the

rates of depreciated value of construction have also been given.

The jantry is stated to have been prepared in consultation with the various

departments of the State Government and also seeking public opinion as well.

The prevailing jantry also give different rates applicable to agricultural land,

developed/open land, construction rates inclusive of land cost for residential,

commercial, shops etc.

Some important deductions required to be applied in valuation of constructed

properties as per the jantri guidelines are mentioned below:

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(A) Floor-wise deduction admissible to conveyance of flats/apartments

Floor Percentage of valuation on

construction with lift facilities Percentage of valuation

on construction without

lift facilities

Ground floor 100% 100%

Ist floor 100% 100%

Second floor 100% 95%

Third floor and

above 100% 90%

Top floor 95% 90%

(B) Road frontage for shops valuation:

Floor Shops with road frontage Shops without road frontage

Ground floor 100% 75%

First floor 75% 70%

Second floor

and above 70% 65%

Note: For Shopping Mall, Arcade, Multiplexes, floor-wise/road frontage

deduction will not be applicable

(C) RATES OF INCOMPLETE CONSTRUCTION

Incomplete construction Percent

Incomplete structure without slab Consider 50% of related SOR

Incomplete structure with slab Consider 70% of related SOR

(D) VALUATION OF THE BANKS, HOSPITALS, NURSING HOME:

Floors Percentage valuation

On above first floor Rates shown against concerned

value zone of office

Ground floor and first floor Concerned value zone of shops

(D) VALUATION OF CELLAR:

Purpose of use Percentage valuation

For residential purpose Concerned value zone of

residential rates @ 40%

Commercial use Concerned value zone @80%

(E) CAR PARKING VALUATION:

Nature of construction Covered parking Open parking

Residential 10% 5%

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Commercial 20% 20%

Note: When car parking area is not shown, then for each car 8 sq.mtrs. area

will have to be considered and where definite area is not mentioned in the

instrument, calculation of area has to be worked out taking the base area of

minimum of 8 sq. mtrs.

(F) Agricultural land purchased for non-agricultural purposes with

permission of competent authority:

Purpose of use Rates at which valuation to be done

Non-agricultural Concerned value zone of open land

Industrial purpose Rates applicable to industrial non-

agricultural rates

Note: (1)The area of land purchased for industrial purpose under section 63 of

the Mumbai Tenancy & Agricultural Land Act, 1948 is more than 10000 sq. mts.,

then 20% deduction will have to be made and copy of permission given by the

competent authority may be made available.

(2) For industrial purpose land under the charge of Forest department is allotted,

industrial rates to be applied

(G) DEPRECIATION VALUE OF OLD CONSTRUCTION:

Age of properties Percentage of deduction available for

valuation

From 0 to 50 years 1.2% per year on the cost of construction

Above 50 years 60% of the total construction value

(H) Valuation of Cellar

Purpose of use Percentage of value zone rates

applicable

Residential purpose 40%

Commercial purpose 80%

(I) Terrace rights valuation:

Individual bungalows including the terrace,

flat/office/shop terrace

40% of concerned value zone

(J) Mezzanine Valuation i.e. lowest balcony or forward part of such balcony in

a theatre:

For valuation of mezzanine floor, 70% value of concerned value zone to be

considered.

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(K) For valuation of properties obtained in public auction/tender:

Market value as per jantri rates or auction/tender price, whichever is higher would

be applicable.

(L) For valuation of properties having tenants: (tenants staying for more than

15 years):

Valuation deduction will be available for residential properties only

Deduction will be available for residential properties holding tenancy rights for

more than 15 years

80% of SOR/jantri rates will be applicable

Copy of municipal tax bill/receipts of taxes paid be produced for proving

evidence of staying for more than 15 years

Effect of recent Amendments in the rates of stamp duty from1.8.2013:

Article 6- Deposit of Title Deeds:

(in `)

Loan Amount Maximum duty

amount (old) Maximum amount (new

rates)

Not exceeding 10

crore(Clause – (1) a(i) Subject to maximum of

one lakh rupees,

twenty-five paise for

every hundred or part

thereof.

This limit of rupees one

lakh rupees removed.

Where it excees 10

crore (Clause – (1) a(ii) Subject to maximum of

three lakh rupees, fifty

paise for every

hundred or part

thereof.

Subject to maximum of

eight lakh rupees, fifty

paise for every hundred

or part thereof.

Hypothecation Maximum duty

amount (old) Maximum amount (new

rates)

Loan not exceeding 10

crore(Clause – (b) (2)

(i)

Subject to maximum of

one lakh rupees,

twenty-five paise for

every hundred or part

thereof.

This limit of rupees one

lakh rupees removed.

Where the loan

exceeds 10 crore

(Clause (b) – (2) (ii)

Subject to maximum of

three lakh rupees, fifty

paise for every

hundred or part

thereof.

Subject to maximum of

eight lakh rupees, fifty

paise for every hundred

or part thereof.

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Similar amendments have been carried out in Article 14 (Bond), and in respect of

Article 27 (Further Charge), clause (b) item (ii) (a) where the loan not exceeding `

10.00 crore, the limit of rupees one lakh had been removed and in respect of clause

(b) item ((ii) (b), the limit of rupees three lakh had been enhanced to rupees eight

lakh.(Act No. 15 of 2013)

Article 44 – Instrument of Partnership – Rates of duty revised from 1.8.2014

(Act No. 17 of 2014)

Where such share of capital is brought

in by way of cash

Subject to maximum of ten thousand

rupees, one rupee for every hundred

rupee or part thereof of the amount of

the capital of partnership

Where such share of capital is brought

in by way of immovable property

The same duty as is levible on a

conveyance under Article 20 for the

market value of such immovable

property

Where such share of capital is brought

in by way of immovable property

The same duty as is levible under sub-

clauses (a) and (b) respectively

In Article 45 (f), following sub item have been added:

(i) When authorizing to sell or transfer

immovable property without

consideration or without showing

any consideration, as the case

may be -

(a)If given to the father, mother,

brother, sister, wife, husband, son

daughter, grandson, granddaughter

One hundred rupees

(b) In any other case The same duty as is leviable on a

conveyanceunder Article 20 for the

amount of consideration or, as the case

may be,market value of the immovable

property whichever is greater.

In Article 45 (g), for the words ―One rupee‖ ―Three rupees and fifty paise‖ have

been substituted (w.e.f. 1.8.2014)

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In Article 49 (Release), following clauses have been substituted:

49. Release – that is to say, any instrument

(not being such a release as is provided for

by section 24) whereby a person renounce

a claim upon another person or against any

specified property.

Rate of duty

(a) I the release deed of an ancestral

property or part thereof is executed by or in

favour of brother or sister (children of

renouncer‘s parents) or won or daughter or

son of predeceased son or father or spouse

of the renouncer or the legal heirs of the

above relations

One hundred rupees

(b) In any other case

The Same duty as is leviable on a

conveyance under Article 20 for

the amount of consideration or, as

the case may be, market value of

the share, interest, part or claim

renounced in immovable property,

whichever is greater.

REGISTRATION FEES:

Whether all the compulsorily registerable instruments covered under Section 17

(c) of the Registration Act were brought to registration, wherever necessary?

Whether fixed fees in respect of instruments registered under the provisions of

Gujarat Table of Registration Fees on several articles as prescribed were levied

and in order?

Whether registration fees on ad valorem basis leviable on certain instruments

including instrument of partnership were levied correctly?

Whether aggregate registration fees were levied separately on each distinct

transaction comprised in Section 5 of the Gujarat Stamp Act, 1958 were levied

wherever necessary?

Whether exemptions from registration fees given to women acquiring immovable

properties and exemption given to other class/type of beneficiaries were in order?

Whether such exemption given is only related to instruments involving transfer

of immovable properties where the women only become the owner?

Check List in the Offices of Dy. Collector (Valuation):

Whether there were separate registers maintained for recording instruments

received under Section 31/32A/33?

Whether there was any amnesty scheme during the period of audit?

Whether conditions of eligibility for instruments considered for the amnesty

scheme had been correctly applied in such cases?

453

Whether interest and penalty under Section 46 of the GS Act had been correctly

applied wherever applicable?

Whether the Dy. Collector had recorded speaking orders in all the cases of

valuation/pre-valuation?

Whether the principles laid down under Rule 4 and Rule 8 of the Gujarat Stamp

(Determination of Market Value of Property) Rules, 1984 had been followed for

determination of market value of agricultural/non-agricultural properties?

Whether the Sub Registrar had kept Form I comprising the details of properties

of each instruments referred to the Dy. Collector (Valuation)?

Whether the recovery proceedings made under Revenue Recovery Certificates

(RRC) were adequate and notices issued under Land Revenue Code, attachment

of properties etc. were adequate?

Whether action taken for recovery in pending cases was adequate?

Whether in respect of instruments referred to the Chief Controlling Revenue

Authority (CCRA), time-limit of 90 days had been observed?

Whether in cases remanded by the CCRA, timely action was taken to finalize the

cases early and raise demands?

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Annexure-4-A (refer parapgraph no.4.13)

SAMPLING METHODOLOGY IN RESPECT OF TRANSPORT

DEPARTMENT

COMMISSIONER OF TRANSPORT (HOD)

Assessment of Tax (MVT and Passenger Tax) in respect of Fleet owners

(100%)

Enforcement Activities, if any.

Counter signature procedure in respect of other states.

Expenditure Audit any two months (100%)

Contracts sanctioned during the year.(100%)

ARTOs/RTOs

1. Form-20; Registration records of the vehicles registered during the year of

the selected one month.

2. Form -20 Special category vehicles (100%), Four wheelers (50% subject of

maximum of 200 cases in respect of remaining 11 months)

3. Scrutiny of Tax Collection Registers (Form 24) for selected series in respect

of Goods Vehicles/Transport Vehicles/Special Category vehicles; home

series and other region.

4. Inspection of Transport Vehicles and Certificate of Fitness in respect of the

selected Vehicles as mentioned in 3 above

5. NDC/NOC if any in respect of the selected series.

6. DA Branch (cases to be selected for one month)

7. Records relating to National Permit for selected month.

8. Renewal/License issued in respect of Motor Driving Training schools.

9. Temporary Registration issued in respect of Transport Vehicle.

10. FT Register/ Vehicle Transferred from other states.(max. 25%)

11. Mamlatdar Revenue Recovery Branch

12. Tracing of Credit in respect of selected month.

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Annexure 4-B (refer parapgraph no.4.13)

Check List for Audit of RTO/ARTO

1. REGISTRATION OF MOTOR VEHICLE

Registration of Motor Vehicles as required under Section 39 of Motor Vehicles Act,

1988 is to be done by making suitable entries about the vehicles in this register. Now

the registration of Motor vehicles is done in VAHAN Software.

As per Section 39, no person shall drive any motor vehicle or permit the vehicle to

be drive in public place unless the vehicle is registered the owner of the vehicle has

to apply in Form ―E‖ Form 20 registration of the vehicle.

Points to be seen= Register of Motor Vehicles

Please see whether following items are mentioned:

(i) Status of owner (Whether individual or other than individual)

(ii) Classification of vehicle made properly

(iii) Fuel used = Petrol/diesel

(iv) Weight of the vehicle for applying appropriate tax rate

(v) Seating capacity as mentioned in E Form

(vi) Schedule of rate of tax properly applied

(vii) Tax levied at correct rates

(Ledger Form 24) (From 1-4-11 computerized)

(i) See that all above entries are made in the ledger against the same vehicle

(ii) Subsequent payment of tax made properly

(iii) Any subsequent changes made in registration and affect the tax duly

authorized by RTO

(iv) In case of transfer of vehicles to other region/state, whether the tax has been

paid up to the date of transfer

(v) If status of the vehicle is changed due to transfer of ownership of vehicle and

attracts higher rate of tax, whether the same was recovered.

(vi) If seating capacity is increased/decreased whether the changes have been

approved by the authority / whether the higher/lower rates of tax have been

recovered.

Whether the tax has been collected correctly in the case of where annual payment of

tax is required to be paid and whether the payment of tax is not made within

prescribed time the penalty and interest is recovered correctly.

1.1 TAX INDEX CARDS/TAX REGISTERS

It should be seen that:-

(1) Tax index cards/tax registers are maintained for each vehicle.

(2) Entries regarding seating capacity, standing capacity, registered laden weight,

unladen weight, annual rate of tax, quarterly rate of tax, taxation class etc.

recorded in the T.I.C. tax registers are correctly filled in and that the entries

tally with the Registration Register/Certificate.

456

(3) Motor vehicle tax recovered/adjusted in respect of a vehicle is recorded from

year to year and entries thereof are duly attested.

2 TEMPORARY REGISTRATION REGISTER:

Certificate of temporary Registration: Monthly: CTREM

Section 43 of the Motor vehicle Act, 1988(Temporary Registration)

(i) Validity only for a period not exceeding one month and shall not be

renewable

(ii) Where the extended period allowed, it may be examined that the certificate in

Form 22 A has been obtained from the body builder in proof of confirming

the extended period.

3 PERMIT ISSUE REGISTER:

. Section 66 of the Motor Vehicles Act,1988

Section 80 Procedure

Section 81-82 transfer/removal

Section 70 Stage Carriage Permits/Passengers tax

Section 73 Contract Carriage permits/Composite tax

Section 78 Goods Carriage Permits/ M.V.T

Section 87 Temporary/Casual permits/ as the case may be

POINTS TO BE SEEN

(i) Whether vehicle is used as per permits granted

(ii) Whether permit period expired and vehicle is still used as such, No. of such

case should be listed out and commented in the LAR. The action taken by the

department should be scrutinized. Whether penalty was levied for non

renewal within prescribed period.

(iii) Tax has been paid as per permit issued i.e. Contract Carriage, Goods

Carriage, School Buses, Staff Buses etc.

(iv) Action taken for breach of conditions.

(v) D.A. cases should be linked for breach of conditions.

4 BT REGISTER

The Register has been prescribed to note the alternation made to a vehicle. A notice

is required to be given by the owner of the vehicle for any alterations proposed to be

made to the vehicle. Along with the BTI the owner is required to file an additional

declaration within 14 days of alterations in Form: ―BT‖ Under rule 9 of the Gujarat

Motor Vehicle Tax/ Rules. In case the alterations made to the vehicles, make him

liable to pay additional tax in respect of altered vehicles. The Registering authority

after satisfying himself that the particulars in the additional declarations are correct

and complete, makes a note of such alteration in this register and in the Registration

Register and determined the additional tax payable before issuing a tax token. It may

be seen that the procedure has been adhered to and additional tax levied.

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5. FT REGISTER

Register for the assignment of new registration mark on removal of motor vehicles to

another state. All applications for assignment of new registration mark are entered in

this register. A fees as prescribed under Rule 91 of the Motor Vehicles Act,1988 for

such assignment is collected and collection of fees is also noted in this register. The

registering authorities intimates the original registering authority before assigning

new registration mark and on receipt of the particulars from the original registering

authority, enter the particulars and notes the new regise4ring mark assigned to the

vehicle. It may be seen that this procedure has been followed in such cases.

6. DEPARTMENTAL ACTION CASES

D.A. fine cases Section 177,178 and 200 of the Motor Vehicle Act, 1988.

The taxation authority on detection of any offence made by the vehicle owner/driver

issue memo to the owner of the vehicle/driver. Police Department may also issue

such memo to the vehicle. On receipt of such memo in R.T.O office, fine as a

composition fees as prescribed in the Act is required to be levied.

POINTES TO BE SEEN:

If the Vehicle is under non use and detected as used on road, whether the tax is

levied for the entire period of non use or not.

(i) If the vehicle is exempted from payment of tax and found as used for

other purpose whether the tax exemption is withdrawn tax is levied at

appropriate rate.

(ii) If the vehicle is used other than the purpose for which the permit has

been granted or there is a change in seating capacity as prescribed in

permit, whether tax is levied for extra/additional seats fitted, effective

from 1 April or the date of detection whichever is earlier or not?

7 REFUND ORDER BOOK:

On application of refund of tax amount due to certain reasons, the taxation authority

may scrutinize the case and issue refund orders to vehicles owners

(i) Whether the refund amount is correctly calculated.

(ii) Whether refund is made to the vehicle owners only. If not, in how many

cases irregularity was noticed.

(iii) Whether the reasons for refund properly mentioned and are in accordance

with the Act/Rule. No. of cases where not as per Act/Rules.

(iv) Whether the signature of the claimant has been obtained. If not in how many

cases not done so.

(v) Whether the refund order are in serial numerical order and whether all the

counterfoil of refund vouchers are available. If not in how many cases, not

done so.

(vi) Whether refund order book has been kept in safe custody.

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(vii) Whether original receipt of payment of tax available in proof of payment of

refund.

8 NON USE PERIOD REGISTER:

If the Vehicle owners desire to keep his vehicle under non use, he is required to file

―NT‖ form stating the reasons of non use, period of non use and place where the

vehicle is kept for non use. These details are required to be entered in the register.

The facts stated for non use of vehicles are verified physically by the Inspector of

Motor Vehicle and report of the same and sent to the taxation authority. Note of this

report is entered in the register.

POINTS TO BE SEEN

(i) Whether the permission of non use period has been granted by the competent

authority. In all the Cases?

(ii) Whether the tax has been recovered in respect of non use period not granted

by the competent authority?

(iii) Whether the tax has been paid from the date on which vehicle kept in use (

see AT Form. Whether all AT forms produced?

(iv) Whether the tax has been levied for non use period in case the vehicle was

not found at the place where it was required to be kept (As per IMC reports).

How many checked done by the department for such vehicles? How many

irregularities noticed? Out of, this tax was levied for entire non use period as

leviable in how many cases?

(v) Whether the tax has been recovered, if it was found used on road (DA fine

cases) Whether the tax has been recovered for the entire period of non-use, in

addition to levy of penalty.

(vi) Whether the timely actions have been taken to regularize the non use period

by the competent authority.

(vii) Whether the evidences of non use are enclosed with NT Forms in all the

cases if not, please incorporate in how many cases out of total cases not done

so.

9 RECEIPT BOOK/STOCK REGISTER/CASH BOOK

Receipt book is an important document as it directly deals with cash amounts.

Points to be seen:

(i) Whether receipts books received are entered in stock register and

acknowledged in all cases.

(ii) Whether each page is machine numbered and no page is missing, counted by

and certified by the officer in charge.

(iii) Whether the accounts of receipt/ issue and closing balance tallies with the

physical stock certified by the officer in charge.

(iv) Whether cancelled receipts crossed out and cancelled properly.

(v) See each books having 50 copies of receipts.

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(vi) Whether the receipt books issued to the RTO/ARTO and inspectors of motor

Vehicle have been properly recorded in the register and signature of

recipients of the receipt books have been properly recorded in the register

and signature of recipients of the receipt books has been taken.

(vii) Whether the RTO/ARTO/Inspectors of Motor vehicles has submitted the

accounts of receipt books and amount realized had been credited to the

Government account without delay.

(viii) Whether any departmental actions taken against those officer who had not

submitted any account of receipt books non crediting the amount realized by

them to Government Account.

(ix) Whether all receipts are entered in Cash book and the cash book amount is

correctly credited in Government account.

(x) Two months should be selected for detailed checking of remittance into

treasury (i.e. Challan verification with treasury/Sub Treasury records)

(xi) Whether the challans for above two months were actually verified with

treasury/Sub Treasury Records,if not, to what extent with reasons thereof.

10 REVENUE RECOVERY CERTIFICATE REGISTER:

If motor vehicle tax is not paid by the defaulters within 15 days of the demand

notice, taxation authority is required to issue RRC to recover tax as arrears of land

revenue through the Recovery Mamlatdars.

POINTS TO BE SEEN

(i) Whether the department has explored all sources available to them for

recovery of outstanding dues in how many cases.

(ii) Whether the requisition issued to the Recovery Mamlatdar is proper and

contains all required information of the defaulter‘s address, property etc.

(iii) Whether the Recovery Mamlatdar has taken action to recover the dues as

arrears of land revenue as provided under provisions of BLR Code, 1970 at

the beginning of the year.

(iv) Whether the machinery for collection and realization of arrears is adequate.

11 CHECK POSTS:

In the audit of check posts it should be seen that the Inspector of Motor Vehicles

maintains the register of vehicles which entered in Gujarat with proper details and

the prescribed returns are sent by him to the COT. The cash book and receipt books

should be thoroughly scrutinized to ensure that all moneys collected are remitted into

Government Treasury and challans are on records. The correctness of the amount

fees/taxes collected would be scrutinized..

12 VALIDITY OF CERTIFICATE OF FITNESS:

According to rule 62 of CMR,,1989 a fitness certificate granted under the M.V.Act

in respect of a newly registered transport vehicle is valid for two years and is

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required to be renewed thereafter every year on payment of prescribed under Rule

81(1)

13 IMPORTANT POINTS OF NATIONAL PERMIT:

The following points may be borne in mind while auditing the office of the

Commissioner of Transport, as regards the reciprocal and National Permit Schemes -

(i) Whether the conditions of Agreement are scrupulously followed and

observed by each of the reciprocating States as can be traced and Test-

checked in their returns:

(ii) Whether the maximum number of vehicles fixed for each State as per

agreement is not exceeded by any of the States. For this purpose, the register

and case file maintained in Commissioner of Transport Office may be

reviewed.

(iii) Whether the demand drafts in respect of the amounts fixed as per agreement

are duly received, accounted for and credited to the home state & vice versa.

(iv) Whether the period for which the permits issued/countersigned is according

to the provisions of the Act, Rules & the agreements.

(v) Whether all vehicles of other State entering Gujarat, as reported by the check

posts in their monthly returns to the Commissioner, are actually covered

under the schemes and that no tax is evaded by vehicles of other State not

under the coverage of these schemes.

(vi) Wherever fees for counter signature/renewal of permits have been prescribed

under the agreements, these are properly realised and accounted for.

14 AUDIT CHECKS – FLEET OWNERS

The nature of audit check is outlined as under: -

14.1 FORM OF PRELIMINARY DECLARATION FORM-"HT"

It should be seen that: -

(1) all horizontal columns are filled in and necessary details are given in respect of

each vehicle kept in the division.

(2) the annual rate of tax (Based on seating as well as standing accommodation)

is assessed correctly.

(3) the date of expiry of tax period is indicated against each vehicle shown therein

(4) the totals of provisional tax assessed in the preliminary declaration is checked

by the Taxation Authority and a certificate of provisional assessment under

sub-section(2) of Section 10 is issued by the Taxation Authority in form "KT"

by the second week of April of the year to which it pertains.

(5) the fundamental data of seating capacity and standing accommodation shown

in "IT" form agrees with the data shown in Tax Index Cards and certificate of

registration and tax assessed and recovered accordingly.

(6) the preliminary declaration is duly signed by the fleet owners and delivered

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to the taxation authority by hand delivery or sent by registered post as required in

rule 16(2).

14.2 FORM OF FINAL DECLARATION FORM-IT

It should be seen that: -

(1) The final declaration in respect of Motor Vehicles used or kept for use is

submitted Division wise by the fleet owner in the form-IT with all columns

duly filled in.

(2) the period of non-use as shown therein in respect of each vehicle agrees with

the 'IT' form received, from the fleet owners as well as the information

received in 'NT' form for each "Non-use' received from him. This may also be

checked with the entries of non-use as recorded in FOV register maintained by

the Commissionerates

(3) the totals of final tax worked out for each division are checked by the

Commissioner and the amount of additional tax due, if any, as a result of the

final assessment is paid by the fleet owner within fifteen days from the date of

receipt of the certificate of final assessment by him [Rule 16(5)].

(4) the seating and standing capacity as shown in HT form is correctly taken for

the purpose of tax assessment.

(5) the Motor vehicle tax is recovered correctly for those vehicles which are

registered during the course of the year and for which no advance tax in HT is

paid.

14.3 STATEMENT OF TRANSPORT VEHICLES IN USE TO BE

MAINTAINED BY A FLEET OWNER IN FORM'JT' (RULE 16(8)

OF GUJARAT MOTOR VEHICLE TAX RULES, 1959)

It should be seen that: -

(1) Every fleet owner maintains a records of his transport vehicles in use in form

'JT'

(2) The entries of non-use are noted in 'JT' as per the non-use intimation received

from the fleet owner periodically in respect of such motor vehicles.

(3) The entries in 'JT' tally with the entries in the FOV register maintained by the

Commissioner of Transport.

(4) The final tax is assessed correctly in respect of each Motor Vehicle after

taking into account the period of non-use of such vehicle and the final tax is

realised correctly.

15 INTERNAL CONTROL

The objective is to assess the efficiency of internal control system of the Department

and monitoring mechanism prevalent to watch the classifications of vehicles

registration of vehicles, assessments, collection of tax, issue of notices for recovery

of dues, etc. Through the functional offices (i.e. RTO/ ARTO/IMV) economically,

effectively and efficiently. It may be seen that whether adequate system adopted for

internal control and monitoring the mechanism by the office in charge?

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ANNEXURE-5-A (refer parapgraph no.5.10)

Sampling Methodology in respect of Geology and Mining Receipts

Commissioner of Geology and Mining (HOD)

Enforcement Activities, if any, undertaken during the period of audit.

Sanction of Lease in respect of Major Minerals.

Deficiency in control mechanism

Expenditure Audit in respect of the two months selected.

Contracts finalized during the period of audit.

Geologists/ Assistant Geologists

Scrutiny of Lease sanctioned during the period of audit for major and minor

minerals (Max. 50 cases /25%)

Scrutiny of Demand and Collection Register in respect of both Major and

Minor Minerals (50% or100 cases)

Scrutiny of RRC cases (max 50%)

System issue- Inspection of Lease; Renewal of Lease; Auction cases of Sand

block., Expenditure Audit

Audit in respect of Directorate of Petroleum

Scrutiny of Lease Register i.e. new Leases sanctioned during period of audit.

(100%)

Return scrutiny i.e. whether payment made within prescribed period in

respect of new leases (50%)

Scrutiny of Lease Register, renewal of old leases (25%)

Return scrutiny i.e. whether payment made within prescribed period (25%)

Profit sharing contract entered with lessee other than ONGC.(100%)

Expenditure Audit for the selected two months.

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ANNEXURE-5-B (refer parapgraph no.5.10)

CHECKS TO BE APPLIED DURING THE COURSE OT THE AUDIT:

MAJOR MINERALS

1 Register of applications for Reconnaissance Permits:

(a) Whether register is maintained in the prescribed proforma i.e. Form G 1

(Rule 7D of Mineral Concession Rules).

(b) Whether the applications were submitted in prescribed proforma, i.e.

Form A, in triplicate alongwith requisite fee at the rate of ` five per sq km

and other necessary documents (Rule-4).

(c) Whether all valid applications have been entered into the register. Any left

out applications may be looked into with reasons for not entering.

(d) Disposal of all the applications, i.e. whether granted or refused has been

mentioned in the register under authentic signature. Which is the authority

to sing? Whether authenticated person has signed the disposal.

(e) Any other check as deemed fit, may be applied.

2 Register of Reconnaissance permits:

(a) Whether register is maintained in the prescribed proforma i.e.

Form H1 (Rule-7D).

(b) Whether all the Reconnaissance Permits issued have been entered into

register. Discrepancies may be pointed out.

(c) Whether a deed granting Reconnaissance Permits have been executed in

Form F1 within 90 days of the date of the communication of order or such

further period as the State Government may allow (Rule7A)

If not, whether order granting Reconnaissance Permit has been revoked by the

State Government where non-execution of deed due to any fault on the part of

the applicant and fee paid has been forfeited to the State Government.

(d) Whether Security deposit has been paid by the applicant before execution of

the deed of Reconnaissance Permit at the rate of ` 20 per sq.km. or part

thereof for which permit has been granted. (Rule 7B)

3 Register of applications for Prospecting Licences:

(a).Whether register is maintained in the prescribed proforma, i.e.

Form G (Rule 21)

(b).Whether applications were submitted by the applicants in prescribed

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proforma, i.e. Form B, in triplicate alongwith requisite fee calculated in

accordance with the provisions of schedule II and other necessary

documents. (Rule 9)

(c) Whether all valid applications have been entered into the register.

(d) Whether disposal of all the applications, i.e. whether granted or refused has

been mentioned in the register under authentic signature.

(e).Whether applications for renewal, if any were submitted in Form E in

triplicate alongwith necessary documents and / or fee. (Rule 9).

(f).Whether renewal application submitted at least before 90 days of completion

of validity of the Prospecting licence originally granted or renewed.

(Rule11)

(g) Whether all valid renewal applications have been entered into the register.

(h).Whether disposal of the renewal applications, i.e. whether renewed or

refused has been mentioned in the register under authentic signature.

4 Register of Prospecting Licence:

(a) Whether the register is maintained in Form H (Rule-21)

(b) Whether all the Prospecting Licence issued have been entered into the

register.

(c) Whether entries regarding renewal of the Prospecting Licences have been

made in the register.

(d) Whether a deed granting Prospecting Licence has been executed in Form-F

within 90 days of the date of the communication of order or such further

period as the State Government may allow (Rule 15).

If not, whether order granting Prospecting Licence has been revoked by the

State Government in case non-execution of deed due to any fault on the part

of the applicant and fee paid has been forfeited to the State Government.

(e) Whether security deposit has been paid by the applicant before execution of

the deed of Prospecting License at the rate of ₹ 2,500 per sq.km. or part

there of which license has been granted. (Rule-20)

5 Register of applications for Mining Lease:

(a) Whether register is maintained in Form L (Rule 40).

(b)Whether applications were submitted by the applicants in Form I, in

triplicate alongwith requisite fee of ₹ 2,500 and deposit of ₹1,000 for

meeting preliminary expenses and other necessary documents. (Rule 22)

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(c) Whether all valid applications have been entered into register.

(d) Whether disposal of the applications, i.e. whether granted or refused has

been mentioned in the register under authentic signature.

(e) Whether renewal applications, if any, were submitted in Form J in triplicate

alongwith requisite fee and necessary documents/ information at least before

12 months of the date of expiry of the lease period originally granted or

renewed. (Rule 24A)

(f) Whether all valid renewal applications have been entered into register and

forwarded to the State Government.

(g)Whether disposal of the renewal applications, i.e. Whether renewed or

refused applications has been mentioned in the register under authentic

signature.

6 Register of Mining Lease:

(a) Whether the register is maintained in Form M (Rule 40)

(b) Whether all the Mining Lease granted have been entered into register.

(c) Whether entries regarding renewal of Mining Lease have been made in

register.

(d) Whether lease deed has been executed in Form-K within six months of the

order granting lease or within such further period as the State Government

may allow. (Rule 31)

If not, whether the order granting Mining Lease has been revoked by the State

Government wherein non-execution due to any fault on the part of the applicant

and application fee has been forfeited to the State Government.

(e)Whether security deposit of ₹ 10,000 has been paid by the applicant before

execution of lease deed. (Rule 32)

7 Lapsing of Mining Leases: (Rule 28)

(a) Whether the lease has been declared as lapsed by the State Government and

communicated the declaration to the lessee in the cases where mining

operations are not commenced within two years from the date of execution

of lease or is discontinued for a continuous period of two years after

commencement of such operations.

(b)Whether any application has been submitted by the lessee to the State

Government stating reasons where non-operation is due to reasons beyond

the control of the lessee.

(c) Whether such application, if any, has been submitted at least three months

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before expiry of period of two years and accompanied by requisite fee.

(d) Whether disposal of such application has been mentioned under authentic

signature quoting order of the State Government.

(e) Whether entries regarding lapsing of lease have been made in the register

against concerned lease under authentic signature quoting order of the State

Government.

8 Transfer of Lease: (Rule 37)

(a) Whether consent in writing has been received for transfer of lease from the

State Government or as the case may be, the Central Government.

(b) If not, whether the State Government has determined the lease.

(c) Whether entries in respect of either of the case above have been made in the

register against concerned lease under authentic signature.

(d) Whether a transfer lease deed has been executed in Form-O within three

months of the date of the consent or within such further period as the State

Government may allow.

9 Returns and Statements: (Rule 51)

(a) Whether holder of a Prospecting Licence or a Mining Lease has furnished to

the State Government such returns and statements and within such period as

may be specified by it.

(b)Whether penalty has been levied for non-furnishing of any document or

statement or information or returns as the case may be (Rule 52)

(Discretionary).

10 Demand and Collection Register:

(a)Whether all monthly accounts showing mineral excavated, cleared/

consumed, royalty paid, if any, along with chalans have been submitted by

the lessee and entries thereof have been made promptly.

(b) If not, whether any action has been taken to get them submitted by the

lessee.

(c)Whether the register/ account has been closed at least at the end of the

financial year and outstanding dues have been carried forward to the next

financial year correctly under authentic signature.

(d)Whether demand notices have been issued in respect of outstanding dues of

royalty, dead rent, surface rent, interest or any other sums as the case may

be.

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11 Refund Register:

(a) Whether any register in respect of refunds has been maintained.

(b) Whether refunds, if any, made has been entered in the register.

(c) No. of cases where refunds have been made.

(d) Whether refunds granted were examined and requisite audit checks

exercised to the extent prescribed as per Hqrs. (RA Manual, Circular and

Other orders)

12 Revenue Recovery Certificates:(Section 25 of the Mines and minerals

(Development and Regulation) Act, 195

Whether Revenue Recovery Certificates have been issued in cases where rent,

royalty or other sums are outstanding for a considerable period.

MINOR MINERALS

Gujarat Minor Mineral Rules, 2010

13 Register of applications for Quarry Lease:

(a) Whether register is maintained in Form C (Rule 9)

(b)Whether applications were submitted by the applicants in Form-A in

triplicate alongwith requisite fee i.e. non-refundable application fee for

processing of such lease applications as below and other necessary

documents (Rule 6)

(A) For sand, kankar, gravel and ordinary clay

(i) ₹ 500 For an area less than five hectares

(ii) ₹ 1,000 for an area of five hectares or more

(B) For minor mineral other than A above

(i) ₹ 2,500 for an area less than five hectares

(ii) ₹ 5,000 for an area of five hectares or more

(c) Whether all valid applications have been entered into register.

(d) Disposal of the applications, i.e. whether granted or refused has been

mentioned in the register under authentic signature.

(e) Whether renewal applications, if any, were submitted in Form-F in triplicate

alongwith requisite fee and other necessary documents/ information at least

before 90 days of the date of expiry of the lease period originally granted or

renewed. (Rule17)

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(f) Whether all valid renewal applications have been entered into register.

(g) Disposal of the renewal applications, i.e. Whether renewal granted or

refused has been mentioned in the register under authentic signature.

14 REGISTER OF QUARRY LEASE:

(a) Whether the register is maintained in Form-E (Rule11)

(b) Whether all the Quarry Lease granted have been entered into register.

(c) Whether entries regarding renewal of Quarry Lease have been made in the

register.

(d) Whether lease deed has been executed in Form-D within prescribed time

limit [Rule 10(3)]

(e) Whether security deposit at the rate of ₹ 1,000 per hectare or part thereof

subject to a maximum of ₹ 10,000 for quarrying sand, kankar, gravel and

ordinary sand and ₹ 2,500 per hectare or part thereof subject to maximum of

₹ 25,000 for other minerals has been paid by the applicant before execution

of a lease deed. (Rule19)

15 SURRENDER OF QUARRY LEASE: (RULE 18)

(a) Whether there are any cases of surrender of any part or whole of the lease by

the lessee.

(b)Whether notices in Form G were given by the lessee in writing to the

competent officer at least before six months.

(c)In case of acceptance of surrender of any part or whole of the lease by the

competent officer, whether entries to that effect has been made in the

register.

(d)Whether all outstanding dues i.e. royalty, dead rent, surface rent, interest or

other sums have been recovered in full prior to acceptance of surrender of

lease from the lessee.

(e)Whether possession of the leased area surrender by the lesseea to the

competent officer.

16 TRANSFER OF QUARRY LEASE: (RULE 20)

(a) Whether previous consent in writing has been received for transfer of lease

from the Director.

(b) If not, whether the competent officer has taken any action viz. determined

the lease.

(c)Whether entry in respect of either the case above has been made in the

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register against concerned lease under authentic signature.

(d) Whether a transfer lease deed in Form H has been executed within

prescribed time limit, if any, of the date of the consent.

(e) Whether the holder of quarry lease make payment of a fee to the

Government

(i) In case quarry lease transferred for first time, an amount equal to the single

rent charged per year, and

(ii) In cases quarry lease is transferred for second or any additional time, an

amount equal to twice the amount of yearly dead rent or twelve and half

(12.5) per cent of monitory consideration whichever is higher.

17 RETURNS:

(a) Whether any register has been maintained to watch the receipt of returns.

(b) Whether the lessee has furnished to the competent officer monthly returns in

Form J within eight days from completion of the month [Rule 34(i)]

(c) Whether annual return has been furnished by each lessee in Form I for

every financial year before 30 April of the succeeding year to the

Commissioner [Rule 34(ii)]

18 FINE FOR EXCAVATION FROM AREA NOT COVERED BY LEASE

Whether any fine which may extend up to 100 per cent of royalty and an

amount equal to the mineral value for the mineral excavated from the

encroached area has been levied and recovered and encroachment area vacated

by the competent authority (Rule 25).

19 INSPECTION OF LEASE BY COMPETENT AUTHORITY

Whether any directions issued by the competent authority during inspection of

lease to prevent wasteful extraction and to ensure safety and conservation of

minor minerals has been complied with by the lessee. In case of non-

compliance, whether penalty not exceeding twice the amount of dead rent

imposed (Rule 36)

20 CANCELLATION OF LEASE FOR DISCONTINUOUS MINING FOR

ONE YEAR

Whether any action has been taken for cancellation of quarry leases in cases

where lessees ceases to work quarry for a continuous period of one year.

Whether any authenticate prior permission has been obtained by such a lessee

for not operating the quarry.

21 DEMAND AND COLLECTION REGISTER:

(a) Whether all monthly returns have been furnished by every lessee and entries

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there from regarding mineral excavated and cleared/ transported, royalty /

dead rent/ surface rent paid have been made promptly.

(b) If not, whether any action has been taken to get them furnished by the

lessee.

(c) Whether the register/ account has been closed at least at the end of the

financial year and outstanding dues have been carried forward to the next

financial year correctly under authentic signature. (Authority for signing it)

(d) Whether demand notices have been issued in respect of outstanding dues of

royalty, dead rent, surface rent, interest or any other sums, as the case may

be.

22 REFUND REGISTER:

(a) Whether any register of refunds has been maintained

(b) Whether refunds made, if any, have been entered in the register.

(c) No. of cases where refunds have been granted.

(d) Whether refunds granted were examined and requisite audit checks

exercised to the extent prescribed as per Hqrs. (RA Manual, Circular and

Other orders)

23 REVENUE RECOVERY CERTIFICATE:

Whether Revenue Recovery Certificates have been issued promptly in cases

where rent, royalty or any other sums are outstanding (Rule 45)

24 QUARRYING PARWANA:

(a) Whether any register has been maintained for Quarrying Parwana issued.

(b) Whether quarrying parwana has been issued in Form k for a maximum

period of one year, on payment of a non-refundable fee of

(i) ₹ 100 for an area upto 1,000 sq mtrs. And

(ii) ₹ 200 for an area exceeding 1,000 sq mtrs

(c) Whether all the quarrying Parwana issued have been entered into the

register.

(d) Whether security deposit has been paid as determined by the Commissioner

per parwana (Rule 60)

(e) Whether any action has been taken to recover dues not paid within 30 days

from the due date, as arrears of Land Revenue and the parwana has been

determined. [Rule 58(14)]

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(f) In cases where parwana has been transferred or power of attorney has been

given, whether such parwana has been cancelled [Rule 58(16) and

Rule 58(21)]

25 REGISTER OF APPLICATION FOR QUARRYING PERMITS:

(a) Whether any register has been maintained in respect of applications of

Quarrying Permits received:

(b) Whether applications were submitted by the applicants in Form L alongwith

requisite fee i.e. non refundable fee at the rate of ` 100 for every 500 tonnes

or part thereof and necessary documents. (Rule 61)

(c) Whether all valid applications have been entered into register.

(d) Whether disposal of applications, i.e. permit granted or refused, has been

mentioned in the register under authentic signature.

26 REGISTER OF QUARRYING PERMITS:

(a) Whether register has been maintained in Form H [Rule 64 (3)]

(b) Whether all quarrying permits issued have been entered into register.

(c) Whether Quarrying permits have been granted in Form M [Rule 62(1)].

27 Records maintained in respect of Surprise checks by the Head of the

Office:

(a) No. of illegal excavation of minerals found.

(b) No. of illegal transportation of minerals found.

(c) Whether necessary action has been taken as per provisions of the Rules

(d) Any other checks deemed fit with specific mention.

28 ESTABLISHMENT OF DISTRICT MINERAL FOUNDATION (DMF)

Whether a trust, as a non-profit body has been established in the district by

notification to work for the interest and benefit of persons and areas affected by

mining related operations. [Section 9B(1)]

Whether any amount has been recovered on removal of minor minerals from

each lessee at the rate prescribed by the State Government as contribution

towards DMF.[Section 9B(4)]

Whether contribution recovered has been credited to the DMF in a manner

prescribed by Government.

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29 ESTABLISHMENT OF NATIONAL MINERAL EXPLORATION

TRUST (NMET)

Whether any amount has been recovered at the rate of two per cent of royalty as

contribution towards NMET.[Section 9C(4)]

Whether the sum recovered has been credited to NMET in a manner prescribed

by the Central Government.

30 INTEREST ON DELAYED PAYMENT

Whether any simple interest at the rate of 18 per cent per annum has been

recovered on any rent, royalty or other sums due from the date fixed by the

competent authority or Government till the date of payment of such amount.

(Rule 72)

31 RECOVERY OF SURFACE RENT

Whether surface rent has been recovered on total area of the quarry lease at Non

Agriculture Assessment (NAA rate) prescribed for mining [Rule 22 (a)].

473

ANNEXURE-6-A (refer parapgraph no.6.7)

Sampling Methodology to be adopted

AUDIT IN RESPECT OF CHIEF ELECTRICAL INSPECTOR ANDCOLLECTOR OF

ELECTRICITY DUTY (HOD)

Scrutiny of returns filed by licensee i.e. GUVNL, Torrent Power Ahmedabad

and Surat.

Scrutiny of Self Generating units (Max. 50 cases or 25%)

Cases of Electricity Duty exemption granted during the year. (Max. 0f 25%)

Cases of Electricity Duty exemption granted during the previous years.

(Max. of 25%)

Expenditure Audit for the selected two months (100%)

Scrutiny of Contracts executed during the period of Audit (100%).

AUDIT IN RESPECT OF DEPUTY CHIEF ELECTRICAL INSPECTOR LIFT AND

ESCALATORS (HOD)

Scrutiny of permissions granted for lifts and escalators during the period of

audit.(Max.25%)

Scrutiny of Renewal granted in respect of lifts and escalators (Max 25%).

Expenditure Audit for the selected two months (100%)

UTCs in respect of grants received, if any

AUDIT IN RESPECT OF ELECTRICAL INSPECTORS/ ASSISTANT

LECTRICALINSPECTOR

Scrutiny of Inspection Register/Ledger (Max. 25%)

Expenditure Audit in respect of two months (wherever applicable)

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Annexure-6-B (refer parapgraph no.6.7)

Checks to be exercised during audit of Electricity duty and Inspection Fees

The audit of electricity duty and fees will be conducted in two different sets of

offices, namely, the executive offices and the office of the Collector of Electricity

Duty.

It is the function of the Electrical Inspectors assisted by the Assistant Electrical

Inspector to carry out the provisions of the Indian Electricity Act, 1910 and the rules

framed there under and the Gujarat Electricity Duty Act, 1958. Inspections of

Electrical installations, testing of equipments etc, are conducted by these executive

officers.

From the point of view of audit, the powers of inspection by Electrical Inspector

are of much relevance because the inspections are conducted on payment of

prescribed fees.

Audit Check-

Questionnaire

CHECKS TO BE APPLIED DURING THE COURSE OF THE AUDIT OF EXECUTIVE OFFICES/ASSTT. ELECTRICAL INSPECTOR:

Date of audit:-

Sr. No What to check Y/N/NA Comments

(i) Whether periodicity prescribed

by the Government in relation to

the inspection of each unit is

observed

The audit party should

prepare the list of all such

cases where it was not done

and comment on the impact

on it.

(ii) Whether inspection is carried

out by each inspector according

to the quantum fixed for him

and inspections do not lapse into

arrears on account of any short-

fall in the inspection quota of

one or more of the inspecting

staff

The audit party should

prepare the list of all such

cases where it was not done

and comment on the impact

on it

(iii) Whether returns furnished by

subordinate office were received

in time.

The audit party should

scrutinize the return and

delay if any may be pointed

out

(iv) Whether returns and reports

submitted to Head Office,

Government or departments

were in time.

The audit party should

scrutinize (Discrepancy if

any to be brought out in the

report).

475

(v) Whether the fees for inspection

levied by the executive are

according to the scale of fees

laid down by Government

The audit party should verify

the inspection report

regarding inspection carried

out by the Inspector for

HT/LT consumer and prepare

the list of all such cases

where it was not done and

comment on the impact on

revenue

(vi) As per rule 46 Indian Electricity

Rules,1956 the inspection fee is

to be paid in advance or at the

time of inspection

The audit party should verify

the register of recovery of

inspection fee and Non/short

recovery if any, pointed out.

(viii) Whether inspection fee for

Lifts/ Escalators has been

recovered.

The audit party should verify

the registers of recovery of

inspection fee for Lifts/

Escalators and Non/Short

recovery if any pointed out

(ix) Whether inspection fee collected

were credited into Government

account

The audit party should verify

cash book/receipt of challans

and list out the cases where

any discrepancies found and

comment on it.

(x) Whether the cases where whole

or part of fees of any consumer

has been remitted, this has been

done by an order of the

Department/Government

The existence of an order of

the Department/State

Government may be checked.

Else the financial impact of

the irregular remission may

be commented upon.

Note:- The department vide their letter No.CEI-11-2011-3796-K dtd.5 December

2013 to Chief Electrical Inspector directed not to levy any inspection Fees, till a

suitable amendment made by the Govt. of India in section 162 of Electricity Act,

2003 enabling the Central Electricity Authority to make a provision about the

collection of fees in the regulation.

Based on the above direction it was decided in the meeting held on 18.12.2013 that

no inspection fees shall be charged w.e.f 1st January 2014 till the next directives are

issued by this office. Inspection fees shall be recovered in respect of the installation

already inspected and to be inspected up to the 31st December 2013. All outstanding

dues in respect of inspection fees shall positively recovered by 31st March 2014.

(xi)

Whether outstanding fees were

recovered by 31st March 2014

The audit party

should prepare a

list of cases

where it was not

done and

comment on

476

short/non

recovery of

inspection fees.

(xii) Whether a notice of demand has been

served on the consumer for payment

of inspection fees.

The audit party

should prepare a

list of cases

where it was not

done and

comment on the

impact on

revenue.

(xii) Any other point(s) specify --

Checked by

signature

Name:

Designation Audit Officer

AAO

In addition to the Electrical Inspectors, who are the executive officers of the

department, a Collector of Electricity Duty has been appointed by the State

Government to ensure the prompt collection of electricity duty from the different

licensees. In the city of Ahmedabad, the Ahmedabad Electricity Company (now

torrent powers Ltd) is an important private licensee, licensed by the State

Government under the Indian Electricity Act. In the districts, generation and supply

of power are mainly undertaken by the different divisions of the Gujarat Electricity

Board (now Gujarat Vij company Ltd and its five subsidiary companies). These

divisions and also the Torrent powers Ltd submit their monthly returns to the

Collector of Electricity Duty along with challans indicating payment of electricity

duty made by them into the treasury. With reference to these returns and the

maintenance of suitable registers for watching the receipt of these returns from the

licensees, the Collector of Electricity duty exercises control over the collection of

Electrical Duty.

477

Audit Check-Questionnaire

CHECKS TO BE APPLIED DURING THE COURSE OF THE AUDIT OF

COLLECTOR OF ELECTRICITY DUTY:

Date of audit:-

Sr. No What to check Y/N/NA Comments

(i) Whether monthly returns (in Form-

A and in Form-B) in duplicate to be

submitted under section 5 by

licensee were received in time and

checked

The audit party should

prepare the list of all

such cases where it was

not done and comment

on the impact on it.

(ii) Whether copy of return under sub

rule (I) were forwarded to the

Collector of Electricity Duty and to

the Electricity Duty Inspector

within 40 days of the expiry of the

calendar month to which the return

pertains.

The audit party should

prepare the list of all

such cases where it was

not done and comment

on the impact on it

(iii) Whether energy consumed for

different purposes and which are

subject to payment of duty at

different rates is indicated

separately in the returns and

charges are correctly levied on the

consumption shown in the return

The audit party should

make a list of such

cases and work out the

revenue impact on it.

(iv) Where in any case, a consumer

having different installations liable

for payment of duty at different

rates has not installed separate

meters for recording the

consumption separately for each of

his installations, it should be seen

whether duty has been levied at the

highest rate at which the consumer

is liable to pay duty.

The audit party should

make a list of such

cases where it was not

done and work out the

revenue impact on it

(v) Assessment of the returns had been

completed or not, If completed,

Duty has been properly recovered

or not, If not completed, reason for

delay ascertained.

The audit party should

prepare the list of all

such cases where it was

not done and comment

on the impact on it

(vi) Whether licensee had paid the duty

collected by him within 40 days

after the expiry of the calendar

month for which the duty was

collected.

The audit party should

make a list of all the

licensee in whose case

this has not happened

and work out the

revenue due including

interest/penalty

scrutinized case wise.

478

(vii) Whether the Government extend

the period of payment by a period

not exceeding 15 days where the

meter reading continues beyond

25th

of a calendar month subject to

the condition that 80 per cent of

payment on the basis of duty paid

in the previous month is paid by the

licensee within a period of 40 days.

The audit party should

make a list of all the

licensee in whose case

this has not done and

work out revenue

impact.

(viii) Whether an application of person

who intends to generate energy for

his own use and person not being a

licensee who generates and supplies

it to another person free of charge

to the Collector of electricity Duty

for registration in form ―C‖ were

received.

The audit party should

make a list of all such

case in which the

application were not

received.

(ix) Whether person not being a

licensee, who generated energy and

supplies it to another person free of

charge shall collect and pay to the

state government electricity duty

within 10 days after the expiry of

the month for which duty is

collected.

The audit party should

make a list of all the

licensee in whose case

this has not happened

and work out the

revenue due including

interest/penalty

scrutinized case wise.

(x) Whether any sum due on account of

electricity duty if not paid in time

and in the manner prescribed under

the rules has been recovered along

with interest at the rate of 24 per

cent..

The audit party should

make a list of all the

licensee in whose case

this has not happened

and work out the

revenue due including

interest/penalty

scrutinized case wise

(xi) Whether the case where whole or

part of the tax, interest payable by

the consumer or class of consumer

has been exempted, this has been

done by an order of Collector of

Electricity duty.

The exemptions should

be examined from the

point of view of the

provisions in the Act

and from the point of

view of propriety

wherever necessary.

Else the financial

impact of the irregular

exemption may be

commented upon.

(xii) Whether the rate of duty being

charged to the consumer is correct

or not.

Report of inspection of different

installations which are conducted

by the executive officers can be

The audit party should

make a list of such

cases where it was not

done and work out the

short levy of duty/tax.

479

obtained and studied in order to see

that the nature of the installation

falls within the correct duty

classification in the rate schedule.

Wherever a doubt is felt regarding

the eligibility of a unit to pay duty

at particular rate not a higher rate,

the department should be asked to

furnish complete information

regarding the consumer in question.

(xiii) Whether the consumer entitled to

refund of any electricity duty paid

by him in excess of the duty

leviable under the Act had madean

application for the refund supported

by the original energy bill and

receipt of payment granted by the

licensee within a period of 12

months from the date of payment of

such excess duty to the Collector of

Electricity Duty

The audit party should

prepare a list of all such

case where the

application received

after the period 12

months and commented

up on it.

(xiv) Whether refunds of duty granted by

the Collector of Electricity Duty

were proper and payment of

refunds are so noted on the records

that a second claim would not be

admitted.

The audit party should

prepare the list of all

such cases where it was

not done and comment

on the impact on it

(xv) Subject to the general audit checks

indicated above, the following

detailed audit procedure should be

followed (If units were visited by

the audit party).

Whether the units of energy

consumed are correctly worked out.

In the offices of the licensees (if

visited by the audit party), meter

reading books should be

scrutinized.

Whether the units consumed are

correctly entered in the consumer's

ledger from the meter reading book.

Whether the bills are prepared

correctly to include the energy

consumed as entered in the ledger.

Whether the rates of duty charged

are correct according to the scale

laid down.

Whether the realisation of the

amount of duty and their payment

into Government account is being

480

promptly done

Whether reconciliation of the

amounts received at each treasury

should be independently carried out

with the consolidated treasury

receipts obtained from the treasury

officer concerned..

The revenue collection

register maintained by

the collector of

electricity duty should

be checked with the

returns of the licensee

and treasury challans.

The audit party should

prepare a list where

reconciliation was not

done and commented

upon.

Whether electricity duty at normal

rates is charged in all cases in

which energy is supplied free by

the licensee.

Whether electricity duty has been

realized from persons consuming

from their own source of

generation.

Meters being installed for

generation and consumption of

energy in the auxiliaries should also

be seen. In cases where meters for

generating the energy shown as

consumed in the process of

generation, may be compared with

the percentage fixed by the

Government or any authority or

obtaining in other comparable

identical units.