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CMA Final · Indirect Tax Laws and Practice · Special Economic Zone Scheme

A Developer's letter of approval is suspended under Section 10 of the SEZ Act, 2005, and the Board selects a transferee after inviting applications. On and from the date of suspension or earlier transfer, which statement about the Developer's position is correct?

On and from the date of suspension, or earlier transfer of the letter of approval, the Developer's rights, duties, obligations and liabilities cease absolutely, except liabilities that had accrued before that date, which survive under Section 10(9)(c).

  1. AAll rights, duties, obligations and liabilities cease absolutely, including liabilities accrued earlier
  2. BAll rights, duties, obligations and liabilities cease, except liabilities that accrued before that dateCorrect
  3. COnly the rights cease, while all duties and liabilities continue
  4. DNothing ceases until the Administrator is divested of management

Explanation

Section 10(9)(c) says all rights, duties, obligations and liabilities of the Developer cease absolutely from the date of suspension, or the earlier date of transfer, except liabilities that accrued before that date. The first option ignores this exception, and the third contradicts the text.

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