1.       Shri. M.S. Sivaramakrishna, I.R.S (Retd.), Member.

2.       Shri. V. Krishnamoorthy, I.A.S, Member, Board of Revenue (Taxes)

Government also nominated Shri. Y. Sreedharan, Secretary (Taxes), Board of Revenue, as Secretary to the commission in addition to his duties as Secretary (Taxes).

            The following are the terms of reference:

(a)      To examine whether the present Sales Tax Laws of the State contain any provision, which causes unnecessary hardship to the merchant community and to suggest methods to remove such hardship, and possible incentives that can be granted to the traders without causing reduction or leakage of revenue.

(b)      To simplify procedures and restructure the laws so as to remove built-in delays and difficulties.

(c)      To examine the growth rate of Sales Tax revenue in the State in comparison with that in the other States in India and the possibility of further increasing the incidence of tax without detriment to the trade, commerce and industry.

(d)      To find out the lacunae, if any, which exist in the present Kerala General Sales Tax Act and Rules and to suggest measures to remove such lacunae and plug the loopholes, to augment revenues.

(e)      To suggest a suitable scheme of incentives to the trade, commerce and industry within the frame work of the Sales Tax Laws, without reducing the overall revenue.

(f)       To suggest measures for strengthening the vigilance and intelligence work of the Agricultural Income Tax and Sales Tax Department in the detection and prevention of offences and evasion of tax.

(g)      To suggest measures to improve the overall efficiency and effectiveness of the functioning of the Department.

(h)      To examine whether any changes in the related laws are necessary for the effective implementation of the Commission's recommendations.

(i)        Any other matters incidental or ancillary to the above.

(XII) The Commission took up the work relating to Sales Tax first.  While assessing the progress of the working of the Commission, the Government in D.O letter No. 14113/D3/86/TD dated, 20.7.1986 from the Secretary, Taxes Department requested the Commission to make recommendations on Agricultural Income Tax also giving the subject priority and without further loss of time.  The Commission on 2.8.1986 informed the Government that the Commission had collected materials for the preparation of questionnaire and would be publishing the questionnaire shortly and that the final report on that topic was expected to be presented by June 1987. The Government have since informed the Commission in D.O letter No. 14113/B3/86/TD dated, 19.9.1986 from the

Secretary, Taxes Department, that they have decided that a separate committee of officers would be constituted to study and make recommendation on Agricultural Income Tax and that the Commission need not proceed with the work relating to Agricultural Income Tax.  In view of this decision of Government, the Commission has decided not to proceed with the work relating to Agricultural Income Tax and to continue the preparation of the final report on Sales Tax.

(XIII) MAIN CONCLUSIONS AND RECOMMENDATIONS

1.  Kerala has a comparatively higher limit of minimum turnover for registration.  No upward revision of the existing limit is necessary.  The turn over limit should be identical for all classes of dealers in single point goods.(para 4.4, 4.5)

2.  To prevent bogus registration, a photograph of the applicant duly attested may be affixed to the application for registration.  A trade association or other responsible person may introduce the applicant. (para 4.8)

3.  The application for registration should be kept as a permanent  (para 4.10)

4.  The application for registration should contain more details about the place of business and antecedents of the applicant.  (para 4.11 & 4.12) 

5.  The name of the goods dealt with by the dealer should be given in the certificate of registration                                                                                        (para 4.13)

6.  Security for prompt payment of sales Tax is a necessity .(para 4.14)

7.  The security demanded should be on the basis of the admitted turnover in the first instance                                                                                                      (para 4.15.1)

8. The mode of furnishing the security should be left to the option of the assessee                                                                                                                   (para 4.15.2)

9.  Rule 6(2) may be amended to provide that in the case of personal sureties, they should be solvent to the extent of security demanded       Para 4.16)

10. There is not necessity of providing for interest on security as the deposits are governed by the general rules for payment of interests.  (para 4.17)

11.  There should be a provision corresponding to section 281 of the income Tax Act to the effect that any transfer of property during pendency of any proceedings under the Act shall be void as against any tax due from the assessee.  (para 4.18)

12.  The growth in the number of registered dealers is not commensurate with the increase in the number of trading establishments    (para 4.19)

13.  All potential dealers should be brought with in the tax net by proper street survey. (para 4.20)

14.  There should be time limit for issue of registration certificate. (para 4.22)

15.  The application for registration should be disposed of with in two weeks of its receipt                                                                                (para 4.23.2)

16.  The above period can be extended by another 2 weeks with the approval of the higher authority    (para 4.23.3)

17.  Provisional certificate has to be issued if the application is not disposed of within two weeks                                                                                         (para 4.23.4)

18.  Where the application is rejected, the applicant must be intimated of the reason and the order rejecting the application should be made appeal able.  (para 4.23.3 & 4.23.5)

19.  Continuance of business after rejection of application for registration may be made as specific offence.                                                               (para 4.23.6)

20.  Registration fee has to be enhanced to Rs. 100    (para 4.24)

21.  The procedure for renewal of registration may be simplified   (para 4.2)

22.  Entries 2 and 3 of third schedule are causing confusion (para 5.3)

23.  There is an over lap between entries 101 of first schedule and 2,3 and 13 of the third schedule.     (para 5.5.1)

24.  Entry 101 may be amended to delete reference to the Additional Duties of excise (Goods of Special Importance) Act, 1957 (para 5.5.3)

25.  Entries 2,3 and 13 of third schedule may be rewritten.     (para 5.5.4)

26 Exemption may be limited to tapioca and raw tapioca chips alone.    (para 5.6.2)

27. The introduction of the levy of tax on cooked food is recommended in part I of the First Interim Report. (para 5.7.9)

28.  Recommendation for levy of tax on toddy contained in the First Interim Report is re-iterated.                                                                                     (para 5.8.2)

29. It is advisable to prescribe conditions or restrictions whenever exemptions are granted under section 10.  They are to be administratively followed up for satisfying about the complaints of the conditions.  (para 5.10)

30.  Section 10 may be amended to recover the tax from the beneficiary where the conditions are violated.  (para 5.10)

31. If an unconditional exemption of a general nature has to be granted if can be done by amending the third schedule instead of through subordinate legislation. (para 5.10)

32.  The exemption on sales effected by Industrial Co-operative Societies Small Scale Industrial Units and Mini Industries may be withdrawn. (para 5.11.4)

33.  If deemed necessary subsidies loans other kinds of financial assistances etc could be granted in deserving cases through the concerned departmental agencies.  (para 5.11.4)

34.  There seems to be no justification for the continuance of the exemption on Journals, Magazines and Weeklies.  (para 5.12.2)

35.  There is no justification to enhance the present minimum limit of assessable turn over.                                                                                                  (para 6.6)

36.  There is no need to maintain a distinction between the registrable minimum and the taxable minimum. (para 6.7.4)

37.  There should be statutory time limit of 3 years for completing the original assessment and two years for making a denovo assessment after a remand.           (para 6.8, 6.10.1)

38.  In the case of reopening of assessments, ordinarily the time limit should be 4 years with an extension of one year after issue of the notice.  If cases of failure to file return or disclosure of material facts by the assessee the time limit should be 8 years.      (para 6.11.3)

39.  Specific provision may be made to make protective assessments   (para 6.12.2)

40.  Non-assessee cases (D2 Cases) should be disposed of in a summary manner, with provision for detailed scrutiny once in four years. (para 6.14.1)

41. The deputy commissioner may specify the scrutiny cases at the beginning of the financial year, in order to have an element of surprise and to prevent collusion.    (para 6.14.2)

42.  For discrepancies or evasion noticed after summary assessments severe penalties may be provided for.(para 6.14.3)

43.  The conditions for summary assessments under section 17(4) which are self-defeating may be removed so as to realize the objectives behind this provision.  (para 6.15)

44. The summary assessments under section 17(4) may be made applicable to cases in which a minimum compounding fee for technical offences has been levied.   (para 6.16)

45.  The turnover limit for summary assessments under section 17(4) may be enhanced to Rs. 3 lakhs as against Rs. 2 lakhs now provided for.(para 6.17)

46.  There should be enabling provision to advance the scrutiny of summary assessment cases wherever necessary. (para 6.19)

47.  As an exception to summary assessment, in the case of every new assessee, the 1sr three assessments should be on a scrutiny basis.(para 6.20)

48.  Effective steps should be taken to wipe off the huge pendency of arrear assessment engaging adequate number of Officers. (para 6.24)

49.  There should be a phased programme to finalize all the pending arrear assessments during a period of 2 years for which adequate number of reserve Officers with complementary staff may be deployed under the direct control of the Board of Revenue.                                                                                             (para 6.28)

50.  The practice of completing the assessments relating to a large number of years simultaneously is detrimental to the Revenue. (para 6.29)

51.  The present system of numerical quota may continue but the emphasis should shift for a proper blend of bigger and smaller cases by proper monitoring.     (para 6.35)

52.  In the case of summary assessments, the quota may be fixed at 200 assessments a month providing separate Officers with necessary jurisdiction.          (para 6.37.1)

53.  The work norm may be fixed at 200 assessments a year for the Assistant Commissioner in special Circles, 225 Assessments for a Sales, Tax Officer in urban area and 250 assessments for a Sales Tax Officer in rural area with a slightly increased number for the Additional Sales Tax Officer.  (para 6.38)

54.  In order to prevent self imposed fetters in sales Tax assessments in pursuance of Court decisions, suitable provision in law should be made of finalization of assessment on the basis of the High Court decision even if adverse to the revenue, with powers of suo motu revision by the assessing authority when the final decision of the higher authority becomes available.                                        (para 6.39)

55.  Separate register may be maintained to follow up such cases.           (para 6.42)

56.  The present system of compounded levy should be dispensed with   (para 6.43)

57.  To improve the quality of assessment manuals should be brought put on investigation of accounts incorporating the basic checks the assessing authority should take note of like established trade patterns crucial processes involved in manufacture consumption of fuel and energy waste age etc.(para 6.44, 6.45)

58.  There should be statutory provision enabling the assessing authority to make provisional assessments for the whole year in case of failure to file return for any month or filing return without payment of the admitted tax with provision to revise the provisional assessments so made under certain circumstances  (para 6.47)

59.  The scope of section 57(2) may be enlarged to cover payment of taxes and its mode.                                                                                               (para 6.47)

60.  The present practice of according approval at the pre assessment stage on an administrative basis may continue.  (para 6.48)

61. The role of inspection is to aid proper assessment.  It can also act as a deterrent in curbing unethical practices,  (para 7.2)

62.  The difference in the power of inspection and the power of search is qualitative and generally in the degree of their coverage and impact.   (para 7.4)

63.  On a parity of reasoning their would appear to be justification to follow a similar approach as obtaining in section 133 A of the Income Tax Act in regard to inspections by the Sales Tax Staff                                               (para 7.5.4)

64.  Occasional inspection of cases concluded under the summary assessment scheme may some times prove helpful. (para 7.6.2)

65.  Inspections should be pre-planned and result oriented not at random and haphazarduous                                                                              (para 7.7.1)

66.  Detailed investigations and collection of information should precede inspections   (para 7.9)

67.  The Department could develop the practice of utilizing informants    (para 7.10)

68. Inspections should be conducted under the supervisions and guidance of Senior Officers                                                                                      (para 7.12)

69.  Deputy Commissioner may be empowered to authorise search of residential accommodation                                                                            (para 7.13)

70.  The format of the present shop inspection report may be suitably revised to provide columns for recording explanations/comments of dealers         (para 7.15)

71.  Guidelines should be issued in regard to the conduct of the inspections (para 7.16)

72.  Inspecting Officers may be empowered to retain the documents recovered for a period of six months and thereafter with the concurrence of superior officers.     (para 7.18.3)

73.  There should be a time limit of six months for the disposal of crime files.    (para 7.19.1)

74.  Proforma of administrative inspection reports by higher authorities should have a specific column for ascertaining as to whether the shop inspection reports have been utilized in the assessment.  (para 7.22)

75.  Planned investigations and collection collation ad analysis of intelligence are important aids for making assessments and curbing evasions. (para 8.1)

76.  Investigations backed by advance gathering of information and proceded by a critical study of data o commodities and declares are more result oriented.  (para 8.4)

77.  No reliable data is available to quantify the evasion in different commodities     (para 8.5)

78.  Only in-depth studies can bring to surface materials for launching intelligence operations                                                                                       (para 8.7)

79.  Skill and intelligence are the most important requirements for any investigations to be successful. (para 8.9.1)

80.  Transactions requiring detailed probe could be entrusted for follow up with the investigating branch of the area concerned. (para 8.9.3)

81.  The present intelligence squads may be designed as Enforce Squads.  (para 8.9.4)

82.  There should be three branches – (1)  Intelligence branch  (2)  Investigation branch and (3) Enforcement branch   (para 8.12)

83.  Check posts are aids to arrest evasion of taxes  (para 9.1)

84.  Through efficient working of the check postage leakage of revenue could be arrested    (para 9.3)

85.  Accommodation at the major check posts are totally inadequate and sub standard. (para 9.5.1)

86.  Proper accommodation with lodging facilities and go downs are important adjuncts for toning up efficiency.. (para 9.5.3)

87.  Highway Check posts should b so located as not to obstruct general traffic  (para 9.5.4)

88.  Strong barricades, conspicuous speed brakers sign boards and signals should be provided in all check posts.   (para 9.5.5)

89.  Check posts officers should have power to prosecute persons not stopping vehicles intentionally at the check posts.   (para 9.6)

90.  Postings to check posts should be considered as sensitive.  Separate norm should be prescribed.  The probity and integrity should be taken into account when posting are made.         (para 9.7)

91.Major check posts should be headed by assistant commissioners with a suitable complement of sales tax officers   (para 9.8)

92.  Accommodation and other facilities should be provided on a Permanent basis in all check posts  (para 9.11.1)

93.  Weigh bridges cash chests strong rooms lighting facilities should be provided        (para 9.11.3 to 9.11.6)

94.  Separate checking points should be established in National and Staten Highways for incoming and outgoing vehicles.    (para 9.12.2)

95.  Additional counters should be opened at peak hours    (para 9.12.3)

96.  Data available in check post declarations should be computerized   (para 9.13.1)

97.  Staff should be rotated at short intervals.(para 9.15)

98.  Serially numbered declarations forms should be required to be filled at the check posts    (para 9.18)

99.  Crime files should be disposed of without undue delay      (para 9.19.1)

100.  Where security is not paid goods to the extent of that value alone need be detained.  (para 9.19.2)

101.  There should be a time limit of 3 months for the finalization of enquiry under section 29A (4)       (para 9.21)

102.  Cheques towards payment of taxes by dealers when sent in bulk for realizations often cause difficulties for he banks resulting in ordinance delay in the collection of state revenue.  (para 10.3)

103. The scheme at present obtaining in the Central Income tax Department for payment of taxes through nominated banks, can be usefully adopted for the payment of sales tax.  (para 10.7)

104.  Banks with extensive banking coverage throughout the state could be nominated for this purpose.  (para 10.7)

105.  Objections are bound to be there whenever reforms are launched but the Government will have to find a way out in the larger interests of the State revenue and the convenience of the public.     (para 10.10)

106.  The law should be specific as to the date of payment of tax    (para 10.11)

107.  Different dates maybe prescribed for the payment of tax by different category of dealers. (para 10.12)

108.  Proof of payment of tax or other amounts due may be insisted up on through the production of a chalan.  (para 10.13)

109.  The composition of the arrears shows that a sizable portion may ultimately become irrecoverable.  (para 11.3)

110.  Arrear may be classified as collectable and uncorrectable arrears.   (para 11.4)

111.Special follow up is necessary, where demands have been stayed pending disposal of appeals.  (para 11.5.1)

112.  Dossier cards could be prepared for major arrears and collection monitored by different supervisory tiers.  (para 11.5.2)

113.  Separate targets should be fixed for collectable old arrears and current arrears   (para 11.6)

114.  Collection of admitted tax should be closely followed up.  (para 11.7)

115.  Wording of section 49 should be made more specific so as to exclude jurisdiction of the subordinate courts in tax matters.  It could be amended on the lines of section 293 of the Income Tax Act.  (para 11.8)

116.  A separate wing of the Department may be created for the recovery of arrears and the Inspecting Assistant Commissioners may be vested with powers of the Collector under the revenue recovery Act.  (para 11.9)

117.  Insertion of provision analogues to section 281 of the income tax Act is in desirable to defeat fraudulent transfers of immovable properties.  (para 11.11)

118. Irrecoverable arrears could be written off without waiting for initiation and completion of disciplinary proceedings.  (para 11.12)

119.  Monetary limits of powers of write off can be enhanced.  (para 11.14)

120.  Research could be undertaken as to the causes for arrears for taking remedial steps.   (para 11.16.1)

121.  Assessing Officers may be treated as Civil Courts for the purposes of section 25 of the Kerala general Sales Tax Act.  (para 11.17)

122.  There should be machinery by which the assessee could reconcile the differences between their accounts and the Departmental figures.  Observance of Tax arrear clearness fortnights is desirable.  (para 11.18)

123.  Assessments should be made well ahead of the close of the financial year so that the entire demand gets ripe for collection far ahead of the close of the year.   (para 11.20)

124.  Collection of arrears involving bigger amounts should be watched by higher supervisory authorities.   (para 11.21)

125. Government as a Rule may refrain from staying collection of arrears.  (para 11.22)

126.  A provision analogues to section 276B of the Income Tax Act may be incorporated for prosecuting defaulters.  (para 11.23)

127.  It is desirable that in the interests of the assessee as well as the Revenue the appeals filed should be disposed of within a reasonable period say 6 months   (para 12.3)

128.  The state law department may review at appropriate intervals the quantitative adequacy of the disposal by the members of the Tribunal viz-a-viz the norms fixed.  (para 12.4.5)

129.  The statistics show at the independence of the first appellate authority is in no way whittled down by their being subordinate to the Board of Revenue.   (para 12.6.3)

130.  There is no necessity of taking the appellate assistant commissioners out of the administrative control of the Board of revenue.   (para 12.6.5)

131.  There is a case for cutting down the number of matters that could be taken up in revision by providing for appeal’s against such orders. (para 12.7.4)

132.  Section 39 may be suitable amended to reflect top change in policy in regard to confiscation of seized goods effected by Ordinance 12 of 1975.  (para 12.7.6)

133.  The appellate orders should be speaking orders.  A provision on the analogy of section 250(6) of the Income Tax Act could be incorporated.  (para 12.10.2)

134.  There is an increasing tendency for setting aside assessments.  The Appellate Assistant commissioner could himself conduct an enquiry or direct the Sales Tax Officer to make enquiry on specified points and report.  It is desirable to vest powers in the Appellate Assistant Commissioner for this purpose on the analogy of section 250(4) of the Income tax Act.   (para 12.11.1 & 12.11.2)

135.  There should be some guidelines for remanding a case of denovo disposal.  (para 12.11.5)

136.  Powers of revision now exercised by the Deputy Commissioner and the board of revenue, may expressly be limited to sup-motu revision from orders prejudicial to the revenue.  (para 12.14)

137.  A provision on the analogy of section 158(A) of the Income Tax Act may be incorporated to reduce the number of repetitive appeals.  (para 12.15)

138.  There should be a proper blend of disposal with higher priority for old cases as well as those involving larger revenue.  (para 12.17.2)

139.  Payment of interest on refunds should be made mandatory.  (para 13.2.2)

140.  Interest on delayed refunds may be may be enhanced to 12% per annum (para 13.3)

141.  Statutory time limit should be prescribed for grant of refunds and interest will become payable on refunds delayed beyond the statutory date.  (para 13.4.1)

142.  Procedure of treasury verification before grant of refunds may be dispensed with (para 13.5)

143.  Necessary amendments ill have to be made in the Kerala Treasury Code.   (para 13.5)

144.  Adjustment of refunds towards future dues may be strictly prohibited  (para 13.6)

145.  a provision analogues to section 241 of the Income Tax Act may be incorporated sot that the assessing authority is enabled to withhold refund in deserving cases.   (para 13.7.3)

146. For effective administration of tax laws there should be stern sanctions against the wrong doer.  The effort should be to swerve the errant to the path of rectitude for which the law should be administered humanely.  (para 14.1)

147.  Exercise of discretion in the matter of fixing the quantum of penalty without guiding principles may bring about lack of uniformity and avoidable discrimination  (para 14.3)

148.  Quantum of penalty leviable under section 28(8) may be correlated to the tax evaded or sought to be evaded.  (para 14.4.2)

149.  Section 29A (4) should be amended to take away the discretion in regard to the quantum of penalty in cases involving evasion   (para 14.5)

150.  In respect of offences falling under section 45A where the evasion is not quantifiable the commissioner may prescribe a schedule of penalties for the different offences.  (para 14.6.4)

151. The limit of Rs. 1,000 which can be imposed as fine, in respect of certain types of cases under section 46(1) should be raised to Rs. 2,000   (para 14.9.2)

152.  Prosecution should be specially provided for against offences under section 56A and abetment.  (para 14.9.5)

153.  There should be a more deterrent punishment for repetition of offences.  (para 14.10)

154.  No prosecution should be launched without the previous approval of the Commissioner.  He can delegate this power, exempt in some very serious cases, to an Officer nor below the rank of Joint Commissioner.   (para 14.11)

155.  For non-compliance with summons etc, issued under section 53, a provision identical to section 131(2) of the Income Tax Act for the imposition of a penalty may be incorporated.  (para 14.12)

156.  There should be compulsory prosecution in respect of grave offences  (para 14.14.2)

157.  No appeal for revision need be provided against composition proceedings  (para 14.14.5)

158.  One Sales Tax Officer may be posted in each district for handling prosecution cases. They should be given proper training.  A handbook, which could serve as a prosecution manual, should also be prepared.  (para 14.15)

159.  A provision analogues to section 287 of the Income tax Act for publication of the defaulters of tax evaders should be incorporated.  (para 14.16)

160.  An express provision on for the imposition of a penalty for default in payment of tax should be made.  (para 14.17)

161.  Tax concessions on industrial inputs will be an incentive to industrial growth and are necessary in the larger interests of the state economic growth.  (para 15.3.4)

162. Distinction between identifiable components and others for purposes o concession in respects of raw materials is artificial and creates confusion.  All kinds of inputs may therefore be grouped together as industrial inputs.  (para 15.4)

163.  Complete exemption on the industrial inputs will jeopardize the principle of parity inter se between the states in the Southern region and open up avenues for undesirable competition.  There should be therefore be a nominal tax incidence on the inputs.  (para 15.5)

164.  Taking in to accounts all relevant aspects industrial inputs shall be subjected to a uniform concessional rate of 2%  (para 15.5)

165.  There should be a provision of fasten the liability on the purchaser for the realization of the differential tax, as a result of availing the concession in case of its misuse.  (para 15.7)

166.  Concessional scheme of input taxation should be available ale only to registered dealers.  (para 15.8)

167.  Small Scale Industrial Units should be given complete exemption from input taxation  (para 15.10.1)

168. It will be possible top bring about a better measure of uniformity if for the purposes of classifications industrial units references to the volume of investment alone is taken note of.  v(para 15.10.2)

169.  A revised definition of small-scale industrial undertaking o he analogy of sub clause of the explanation to section 80 HHA (8) of the Income tax Act may be adopted.  (para 15.10.3)

170  For determining the actual value of plant and machinery for deciding upon the legibility of a unit to be classified as a small scale industrial unit the sales tax officer should have power subject to appropriate checks, to go into the question of valuation in detail in such cases where prices are artificially inflated to avail of the confession..  (para 15.10.5)

171.  Simplification of the law must necessarily include a reduction in the number of rates as well as clarity in classification and terminology.  (para 16.1.1)

172.  The attempt to reduce the number of rates should take into account certain factors and circumstances like mass consumption consumer goods goods mostly consummed by the common man etc, so the possibilities of an unnecessary extra burden or shrinkage in revenue etc, on the ground of rationalism are kept top the minimum.  (para 16.1.2)

173. The Schedules are re-arranged in an alphabetical order, concurrently arranging together goods under any particular group.                                    (Para 16.4)

174. Any change in the tax structure in regard to copra, coconut oil cake, coconut oil etc. should be conducive to containing the oil crushing industry within the State so that the installed capacity is fully utilised, the industry is revived and inter-state consignment of coconut and copra discouraged.                                      (Para 16.15)

175. There should be proper co-ordination and liaison among all the authorities (both Central and State) who are concerned with the gold trade so that the entire jewellery produced out of bullion and spacie smuggled or otherwise, is subjected to tax. (Para 16.1.2)

176. As a result of the changes recommended, the total number of tax rates would get reduced to eleven as against the prevailing seventeen rates.                        (Para 16.9)

177. Any notification granting reduction or exemption by Government on which the Commission has suggested alternative solutions may be cancelled. Whilst granting exemptions or reductions in future, Government may conform them to the revised rate structure, so that the total number of rates remain constant.               (Para 16.19.2)

178. As the surcharge has come to stay for nearly three decades and has not caused any serious distortions by way of its economic impact, there is no justification either to recommend its repeal or merger with the basic tax.(para 16.20.2)

179. Having regard to the spirit underlying the recommendation to bring cases with a total turnover up to 3 lakhs under the summary assessment scheme, it would only be in accord therewith, if the same concession were extended to such dealers in respect of the levy of surcharge by raising the limit.(para 16.20.3)

180. Merger or abolition of surcharge and Additional Sales Tax is not recommended. (Para 16.20.5)

181. Though it is desirable to have parity among States in the rates of tax, unless the policy is formulated jointly by all concerned and such policy is effectively implemented in the real spirit of such policy, nothing could be achieved on this score.  (Para 16.21.3)

182. An ideal goal of internal audit would be 100% audit.(Para 17.6)

183. For the internal audit wing, whilst the quota of disposal should have a proper blend of both the aspects of quality and quantity, taking into account the ultimate aim of audit, quality should get precedence.         (Para 17.9)

184. The aim should be that the audit should be competed in the financial year succeeding the year in which the assessment is completed.(Para 17.11)

185. Files in which summary assessments are made may be excluded from the purview of audit. Selective audit system may be introduced in the case of arrear files. Internal audit should be made up-to-date during a time frame of 3 years beginning from 1987-88 for which certain additional posts may be sanctioned.   (Para 17.11)

186. Imparting of training to audit Officers is a must. An audit manual should also be brought out.                                                                                      (Para 17.12)

187. Audit Officers should be given special pay.  (Para 17.14)

188. Service in the Audit Wing for a reasonable period should be made one of the conditions precedent for consideration for promotion to higher posts.(Para 17.17)

189. There should be an effective follow up of audit reports.        (Para 17.18)

190. Bona fide acts on the part of the Assessing Authority should not be visited with disciplinary action.     (Para 17.20)

191. Government should adopt some guidelines as regards selection and the tenure of the post of Commissioner and Member, Board of Revenue, in charge of Sales Tax. (Para 18.3.2)

192. The Commissioner should have a minimum tenure of four years.(Para 18.3.3)

193. The post of Commissioner should also be given appropriate status. The field of choice for selection to the post of Member (Commissioner) should also include the senior most Officers of the Kerala Sales Tax Service.(Para 18.3.4)

194. A common service name builds up esprit-de-cops and brings about better efficiency through the improvement of morale and dignity. The Kerala Sales Tax Service should be designated as Kerala Revenue Service (Taxs)     (Para 18.4.1)

195. Provision of uniforms for Officers and staff is desirable.       (Para 18.4.2)

196. To enable the Commissioner to give more concentrated attention for formulating policies and advising Government on all aspects of taxation, he should be assisted by three joint Commissioners     (Para 18.5.1)

197. The posts of joint Commissioner should be cadre posts of the Sales Tax Department. (Para 18.5.2)

198. The statistics wing of the Board of Revenue (Taxs) requires to be re-organized. An Assistant Commissioner of the Agricultural Income tax and Sales tax Department, having aptitude for statistical work, may be posted to head this unit and placed under the Joint Commissioner.                                                                            (Par 18.12.2)

199. There should be compilation of the commodity-war data through the aid of the computer.                                                                                           (Para 18.13)

200. A Central Circle should be created in the Board of Revenue, directly under the Commissioner, to deal with cases requiring special attention.            (Para 18.17)

201. A company circle to deal with big company cases, to start with, may be established at Ernakulam.                                                                                          (Para 18.17)

202. Clerical Assistance as per the norms fixed by Government may be made available. (Para 18.18)

203. All Officers representing the State before the Tribunal should be of the rank of Assistant Commissioner.                                                                    (Para 18.22.1)

204. Officers in the cadre of Sales Tax Officer may be posted for conducting the appeal cases on behalf of the State before the first appellate authorities.           (Para 18.22.2)

205. Officers in the cadre of Sales Tax Officers may be appointed to look after the interests of the State before the Subordinate Courts.                         (Para 18.23)

206. Officers in the cadre of Sales Tax Officers may be given proper training for the efficient conduct of prosecutions.      (Para 18.24)

207. Creation of a cadre of Tax Assistant, with minimum qualifications as a University Degree, is desirable.(Para 18.25)

208. Bio-data of Officers of and above the rank of Sales Tax Officers with their performance may be codified with the help of a computer.         (Para 18.26)

209. Training should be given to those recruited in the lowest entry cadre also. (Para 18.27)

210. A system of rewards to recognize merit should be instituted. (Para 18.33)

211. The Promotion quota for I.A.S. reserved for the Revenue Department should be distributed among the Officers of the Land Revenue, Sales Tax and Excise Departments in the ratio of their respective cadre strength.(Para 18.35.1)

212. Officers of the Department with outstanding ability and talent may be sent on deputation to Public Sector Undertakings etc.            (Para 18.35.2)

213. Modification of the form of confidential report is desirable.   (Para 18.36)

214. Tax collecting agencies should not be entrusted-with the duties of making collection for public purposes etc(Para 18.37)

215. A judicial member drawn from the judicial Department from the cadre of District judges may be appointed in every bench of the Tribunal.(Para 19.3.2)

216. Post of Accountant Member may be dispensed with.(Para 19.4)

217. Officers with a degree in Law and who have still more than 3 years of service left for retirement need alone be appointed as Departmental Members.            (Para 19.5.1)

218. The Chairman should be a Selection Grade District judge.     (Para 19.8)

219. A Single Member should be conferred with jurisdiction to dispose of cases where the tax disputed does not exceed Rs.10, 000(Para 19.9)

220. Constitution of a separate Tribunal service for the Secretariat of the Tribunal is not necessary.(Para 19.11)

221. Deputation allowance may be granted to the staff working in the Tribunals as an incentive.                                                                                        (Para 19.12)

222. Adequate attention to public relations will go a long way in improving the administration and streamlining the working.(Para 20.3)

223. Workshops could be conducted both at the District level and the State level, where Officers, traders, tax practitioners etc. could take part.(Para 20.3)

224. The publication of the bulletin has to be done in time and for this purpose, getting it printed through its own press is desirable.(Para 20.4.2)

225. A Public Relations Cell with allotted functions should be set up.(Para 20.5)

226. For dealing with matters relating to the staff, a Welfare Officer may be posted in the Board’s Office. (Para 20.6.3)

227. It will greatly contribute to a smooth and efficient functioning, if a separate press is established for the Agricultural Income tax and Sales tax Department.(Para 20.7)

228. Power of issuing clarifications under Section 59A should be appropriately vested in the Board of Revenue, with a time limit of three months.(Para 20.8)

229. If the clarification is issued beyond 3 months, it should have only prospective effect. (Para 20.8)

230. A revenue-earning Department, having to discharge very sensitive and delicate functions vis-à-vis the public, has to observe a more rigid code of propriety and aloofness in regard to matters like accommodation etc. (Para 21.1)

231. The work in a Sales Tax Office cannot be compared with that of other offices, due to its peculiar nature. Having regard to the large number of files they have to keep and the visitors whom they have to meet etc. the scales of accommodation would have to be calculated on a different basis.(Para 21.3)

232. It is only reasonable that basic amenities like sitting space, toilet, drinking water etc., are provided to the persons visiting the Sales Tax Offices.         (Para 21.3)

233. Tax office complexes may be constructed in a phased programme.(Para 21.4.1)

234. Future development may also be taken into account while finalizing the designs for the buildings.(Para 21.4.2)

235. Guest Houses may be provided along with each Tax Office Complex. (Para 21.4.3)

236. Quarters may be provided in the first instance at the District Headquarters exclusively for the Departmental Officers and staff.                            (Para 21.4.4)

237. Work of weeding and destruction of old records and registers require to be attended more energetically(Para 21.5)

238. A lot of statistical information is received in the Sales Tax Department. Such information has to be stored, collected and analysed. A computer will be a very useful aid.                                                                                    (Para 22.1, 22.2)

239. The approach to the question of introduction of computerization need not be on considerations of economy alone. The social impact has also to be taken into account. (Para 22.4)

240. The computer cannot be an effective substitute where application of the intellect and different facets of a person’s personality are involved.             (Para 22.6)

241. The very idea of computerization is to make the massive data collected at different place all over the State, available to the assessing authority for use in the assessment.                                                                                        (Para 22.6)

242. Research and analysis is a field where the computer can be put into service. (Para 22.7)

243. If the correct data with the end result in view is fed into the computer it can prove itself to be an effective substitute.(Para 22.8.1)

244. Computer can prove more profitable; utilizing the information contained in border check post declarations(Para 22.8.2)

245. Before computerization is introduced in certain selective fields, a systems analysis will have to be made by the experts for designing formats etc   (Para 22.11)

246. A number of forms now in vogue can either be deleted or merged with others. (Para 23.1)

247. Form 6A/Form 7 can be conveniently merged.(Para 23.1 (i))

248. Application forms when issued from any office should be on the basis of written request, serially numbered, sealed and a proper record kept thereof (Para 23.1 (ii))

249. Forms 8, and 9 could be merged. Form 10, is a one time form. It will greatly aid identification if it remains separate.(Para 23.1 (ii))

250. Format of the returns relating to turnover may require modification when computerization takes place.(Para 23.1 (ii))

251. Form 11 may be omitted.(Para 23.1 (iii))

252. Forms 13, 14B and 14C could be merged.(Para 23.1 (iv))

253. Form 14A could be deleted.(Para 23.1 (v))

254. Form 14 and 14D could be merged. (Para 23.1 (vi))

255. Form 15 may be deleted.(Para 32.1 (vii))

256. Forms 19 and 19A could be merged.(Para 23.1 (viii))

257. Forms 21, 21A, 22 and 23 may be deleted.(Para 23.1 (ix))

258. Forms 24A and 24B could be merged.(Para 23.1 (x))

259. Forms 23A and 27 may be merged. (Para 23.1 (xi))

260. Serially numbered declaration forms should be issued at Check posts and got signed by the driver or other persons.     (Para 23.1 (xii))

261. Form 31 may be deleted.(Para 23.1 (xiii))

262. Form 31A may be deleted.(Para 23.1 (xiv))