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8. Procedure for assessment

(1) In pursuance of Explanation II to clause (41) of section 2, the amounts specified in the following clauses shall not, subject to the conditions specified therein, be included in the turnover of a dealer -

(a) all amounts refunded to purchasers in respect of goods returned by them to the dealer, provided the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made or credit was allowed to the purchaser.

(b) all amounts received from the sellers in respect of goods returned to them by the dealer, provided the accounts show the date on which the goods were returned and the date on which and the amount for which refund was received or advice of credit was received from the seller.

(c) all amounts charged separately as interest on the unpaid amount payable or finance charges in the case of hire purchases or any such system of payment by instalments.

(2) While determining the taxable turnover, in respect of a dealer other than those who opted to pay tax under sub-section (4) of section 3, section 6 and section 8, the post sale charges and the amounts specified in the following clauses shall, subject to the conditions specified therein be deducted from the total turnover of a dealer -

(a) all amounts for which goods specified in the Fourth Schedule to the Act are sold;

(b) all amounts for which goods exempted by a notification issued by the Government under section 30 are sold or purchased, as the case may be, provided the terms and conditions, if any, for the exemption in the notification are complied with.

(3) In making an assessment under section 24, the assessing authority shall take into account such of the following factors as may be relevant to the determination of the prevailing market price of the goods, namely:--

(a) The price charged by other dealers at the relevant stage of sale of similar goods during the relevant period;

(b) The difference between the price charged by a dealer towards the purchase of the goods from the earlier seller and the price charged on the resale of the same goods;

(c) The difference between the price paid by the dealer towards the purchase of the goods from the earlier seller and price charged for the resale of the same goods; and

(d) The differential price charged on sales against bulk orders and small orders in respect of the same goods. If the difference in prices, exclusive of the tax element, is more than fifteen per cent (15%), the assessing authority shall examine the reasons for the variation, taking into account the relationship between the parties to the transactions, the charges for after sales services, packaging, transport and other expenses incurred by subsequent sellers which add to the cost of the goods at each stage of sale by successive dealers. The assessing authority shall also examine whether there is such difference in the price charged on the sales of the same goods to different customers and whether the goods are made available to all distributors or other customers in unlimited quantities and at the same prices. After making due allowance towards the variation in prices and normal profit margin, the assessing authority shall arrive at the market price that should have been charged by the dealer and levy tax on the taxable turnover so arrived at.

(4) On receipt of the return in Form N, the assessing authority shall pass orders -

(a) demanding the tax payable on the amount received due to price variation and shall serve upon the dealer a notice in Form O; or

(b) refunding the tax due on the amount returned and shall serve upon the dealer a notice in Form P.

(5) The taxable turnover of the dealer liable to pay tax under section 5 on transfer of property in goods involved in the execution of works contract shall be arrived at after deducting the following amounts from the total turnover of that dealer, namely:-

(a) All amounts involved in respect of goods involved in the execution of works contract in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India or in the course of inter-State trade or commerce;

(b) All amounts relating to the sale of any goods involved in the execution of works contract which are specifically exempted from tax under the Act;

Provided that no such deduction shall be allowed unless the dealer claiming deduction, produces proof that the sub-contractor is a registered dealer liable to pay tax under this Act and that the turnover of such amount is included in the return filed by such sub-contractor;

(d) All amount towards labour charges and other charges not involving any transfer of property in goods, actually incurred in connection with the execution of works contract, or such amounts calculated at the rate specified in column (3) of the Table below, if they are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority

. THE TABLE. Sl.No. Type of works contract Type of works contract Type of works contract Labour or other charges as a percentage value of the works contract (1) (2) (3) 1. 2. 3. 4. 5. 6. Electrical Contracts All structural contracts Sanitary contracts Watch and / or clock repair contracts Dyeing contracts All other contracts 15 15 25 50 50 30

(e) all amounts, including the tax collected from the customer, refunded to the customer or adjusted towards any amount payable by the customer, in respect of unexecuted portion of works contract based on the corrections on account of measurements or check measurements, subject to the conditions that—

(i) the turnover was included in the return and tax paid; and

(ii) the amount including the tax collected from the customer is refunded or adjusted, within a period of six months from the due date for filing of the return in which the said amount was included and tax paid.

(6) After assessment or revision of assessment under sections 22,24,25,27,28 or 29 of the Act, the assessing authority shall serve on the dealer a demand notice in Form O, after adjusting the eligible input tax credit. If the tax due on assessment or revision of assessment, after adjustment of eligible input tax credit, is lower than the tax already paid, the assessing authority shall serve upon the dealer a notice in Form P, informing the dealer of the adjustment of excess tax towards the arrears or the refund of the amount, as the case may be.

(7) The declaration that an identical question of law is pending before the High Court or the Supreme Court referred to in sub-section (1) of section 23 shall be in Form Q. 1

(8) (a) The assessment relating to the period from 1st day of April 2006 to 31st day of December 2006 shall be deemed assessment and accordingly, the Assessing Officer shall accept the returns filed under the repealed Act within the period already prescribed and assess the dealers without calling for the accounts from the dealers.

(b) Where the dealer did not submit the prescribed declaration Forms or certificates as required under the provisions of the Acts repealed under Section 88 of the said Tamil Nadu Act 32 of 2006 in support of the claim of the concessional rate of tax or exemption, as the case may be, the Assessing Authority shall assess them after giving the dealer a reasonable opportunity to file the prescribed declaration Forms or certificates.]

[(9) Where a registered dealer is deemed to have been assessed under the Act, the assessing authority shall not be required to issue any assessment or der or intimation to the dealer.

(10) The deemed date of service of the deemed assessment order shall fall on the 31st day of October of the successing year:

Provided that in respect o the assessments pending for the years 2006-2007, 2007-2008, 2008-2009, 2009-2010 and 2010-2011, the deemed date of service of the deemed assessment order shall fall on the 30th day of June 2012.]