Commercial Taxes Department cf Kerala, which administers the Sales Tax Laws of the State, is under the control and general supervision of the Commissioner, Commercial Taxes Department. He is assisted in his functions by the Joint commissioners, Deputy Commissioners. Inspecting Assistant Commissioners and Sales Tax 0 'ficers. There are I5 Deputy Co~nmissioners at the district level and 26 Inspecting Assistant Cornmissioners at the sub divisional level. Each district is divided into several circles. A Circle is the smallest administrative unit in the Department. There are Departmental Tribunals and Appellate Authorities. The Department also controls 44 permanent check posts. Altogether there are 4579 employees working in the 296 offices of the Departinent in the State. The major work of the Department constitutes registration of dealers, assessment and collection of sales tax and agricultural income tax, recovery of' arrears of tax, prevention and detection of tax evasion and disposal of appeals and revision petitions.
2.1.0. Functions of the Commc?rcial Taxes Department The functions exercised by the C'ommercial Taxes Department are broadly classified as follows:
2.1.1. Head Office Commissioner of Commercial Taxes exercises general control of the Department and over all authoriq- under the Acts administered by it. As a part of this, the Commissioner inspects or causes inspection of sub-ordinate offices. Apart from the general control exercised by the Commissioner as Head of the Department, he is aso vested with powers of revision under the various Acts, suo motu as well as on application.
2.1.2. Assessment This function is exercised through the Sales Tax Officers!AgriculturaI Income Tax and Sales Tax OfficersiAssistant Co~nmissioners. Inspecting Assistant Commissioners at sub Ilistrict level and Deputy Co~nmissioners at district level supervises the officers of the Assessment Wing. The assessing authorities also function as Registering Authorities under the KGST Act, CST Act and Tax on Luxuries Act.
2.1.3. Appeals Appellate Assistant Cornmiss~oners and Deputy Commissioners (Appeals) are the first appellate authorities in respect of the orders issued by officers in the cadre of Sales Tax Officers and Assistant Commissioners respectively. Second appeals against orders issued by the first appellate authority vest with the Appellate Tribunal except in the case of Kerala Money Lenders Act and the Kerala Tax on Luxuries Act.
2.1.4. Intelligence This function includes inspection of business places and vehicles, investigation and detection of' frauds and evasion. These functions are exercised by the Intelligence Squads\Investigation Squads normally headed by an officer in the cadre of Sales Tax officer. Their work is supervised by Inspecting Assistant Comn~issioners (intelligence/investigation), Deputy Commissioners (intelligence) artd Joint Commissioner (Enforcement).
2.1.5. Revision The power of Revision is exercised by Deputy Commissioner's suo motu and on application, under the various Acts. Revision on application is provided against orders, which are not appealable. Suo motu power is exercised in order to correct any il1egali.y in the orders issued by the subordinate authorities.
2.1.6. Audit and inspection This includes audit of assessments. performance audit and inspection of offices. The objective is aclhieved through Sales Tau Officers (Audit) at district level. whose work is supervised by Inspecting Assistant Commissioners (Audit) and Dzputy Commissioners (Audit).
2.1.7. Check Posts Check posts conduct inspection of vehicles at notified areas with a view to prevent evasion of Tax under the KGST ActICST Act, and collect primary information regarding transport of goods in and out of the State. Check posts also collect entry tax undzr the Kerala Tax on Entry of Goods into Local Areas Act. Major check po:,ts are headed by Assistant Commissioners and others by sales tax Officers/Sales Tax Inspectors.
2.1.8. Licensing under the Keralk~ money Lenders Act Inspecting Assistant Commission,:rs at Sub-District level act as Licensing Authorities under the Kerala Monq Ixnders Act and also watch compliance of the provisions of the Act by the Money Lenders.
2.2. Brief History of Sales Tax in Kerala The history of sales tax in India kcgins in 1938. The levy of taxes on sale of goods and advertisements was auti~orised as per Entry 48 in List I1 of the ~11'~ Schedule of the Government of India Act. 1935 which empowered the provinces in British India to levy sales tax. The first province in India to levy tax on sale of goods under the above Act was Central Provinces and Bearar (renamed as Madhya Pradesh after independence), which in 1938 levied a tax on the retail sale of motor spirit and lubricants. A general sales tax levy on goods was first made in the State of Madras in 1938, while Shri. C. Rajagopalachari was in power. The State of Kerala was formed by the integration of the: princely States of Travancore and Cochin with the Malabar District and Icasargode Taluk of the State of Madras. In the princely State of Cochin, sales tex was introduced on the I" day of Chingom 1 122 (1 7'h August 1946) and in 7'ravancore on Is' day of Edavam 1 124. In the erstwhile Cochin area the administration of the Sales Tax Law was under the control of the Income Tax Department and in the Travancore area the Sales Tax administration was in the hands of the Excise Department.
On the integration of the two Slates on is' July 1949 the Travancore General Sales Tax Act, was extended to Cochin. This was later extended to the whole Kerala with the name the Gen,:ral Sales 'Tax Act, 1125. After the Federal Financial Integration as per G.P No.SR11-4611149lRD dated 12'~ May 1950, a separate Agricultural Income Tax and Sales Tax Department with the Board of Revenue at its head was formed in May 1950 to administer the General Sales Tax Act, 1125 and Agricultural Income Tax Act 1950. The present statute, the Kerala General Sales Tax Act, 1963 was enacted after repealing the General 5,ales Tax Act, 1125 on the basis of the recommendations of the High Level Sales Tax Committee headed by Shri. P.S. Nataraja Pillai, former Finance Minister. Consequent to the abolition of the Board of Revenue as per the Kerala Board of Revenue Abolition Act 1998 in July 1988: the Department was renamed as the Department of' Commercial Taxes and the Member Board of Revenue in charge was redesignated as the (:ommissioner of Commercial Taxes.
In the Constitution, the power to levy tax on the sale or purchase of goods other than newspapers rests wi.:h the State 1.egislature by virtue of entry 54, List I1 of the Seventh Schedule. These powers are regulated by Articles 286 and 301 to 304 of the Constitution. But as per item 92A of' list I1 taxes on 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, will come under the purview of the power of the Central Government. As per the scheme of taxation in India, Central Salts Tax is levled oy the Central Government while Local Sales Tax is levied by the State Government. Though Central sales tax is levied by the Central Government, it is administered by the State Governments and tax collc:cted in each state is retained by that State Government.
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