PART XI

MISCELLANEOUS

Rule 166. Transitional relief on stock in hand. (1) At the date of commencement of the Act, any registered dealer shall be entitled under section 18 to relief on the goods taxable under the Act held in stock which were taxable under the Karnataka Sales Tax Act (Karnataka Act.25 of 1957)(hereinafter referred to as the said Act) and were purchased during the preceding twelve months within the State from other dealers registered under the said Act for resale or use in manufacture as component part or raw material in whatever for they are held in stock on such date or consumable other than as fuel as defined under the said Act, at an amount equivalent to,-

(a) the tax payable under section 5 or 5A or 6 of the said Act, or

(b) the tax payable under section 4 of the Act,

whichever is lower.

(2) Any goods sold prior to the date of the commencement of the Act,

(a) which are returned from the purchasers within a period of six months from the date of delivery of such goods and in respect of which deduction is allowed under the said Act, or

(b) which are received by the purchasing registered dealer after such date,

shall be deemed to be held in stock for the purpose of sub-rule (1).

(3) The amount of tax payable for the purpose of sub-rule (1) shall be,

(a) the amount charged and collected by the selling dealer in the bill of sale issued or calculated on the value of the goods at which the selling has charged tax at the applicable rate, and

(b) in respect of tax payable under clause (b) of sub-section (3) of section 5 and section 6 of the said act, the amount paid as tax.

(4) If the selling dealer has not charged tax in the bill of sale for the reason of him not being the first or the earliest of the successive dealers liable to tax under the said Act or for any other reason including for the reason that the selling dealer is a new industrial unit exempt by a notification issued under sub-section (1) of section 19-C of the said Act but excluding when goods are sold in the course of inter-State trade or commerce or in the course of import into the territory of India, the amount of tax deemed as paid or payable shall be calculated at the rate specified under Section 5 of the said Act or Section 4 of the Act, whichever is lower, on the value of goods as shown in the bill of sale less ten per cent.

(5) In respect of any goods purchased from a selling dealer who is a new industrial unit exempt by a notification issued under sub-section (1) of section 19-C of the said Act, relief would be allowed under sub rule (1) only if the goods are for re-sale in the State.

(6) Every registered dealer claiming relief under sub-rule (1) shall make an application in Form VAT 265 to the jurisdictional Local VAT officer or VAT sub-officer within thirty days of the commencement of the Act and also make a revised application in respect of any change in the application made on account of goods returned by him or by the purchasers, within ten days of such return of goods.

(7) The jurisdictional Local VAT officer or VAT sub-VAT officer shall review such application including any revised application made and issue a certificate in Form VAT 270, indicating the amount to which the dealer is entitled as relief.

(8) The relief under sub-rule (7) may be refunded or adjusted towards arrear of any tax or out put tax payable by the dealer in the manner prescribed under sub-rules (1) of rules 127 and 128 in equal monthly installments over a period of six months from the end of three months after the commencement of the Act and any amount not adjusted during such period shall be allowed to be adjusted towards the out put tax payable for any subsequent tax period.