Research › Search › Judgment

J&K High Court · body

2008 DIGILAW 175 (JK)

Anil Tyre Co. Ltd. v. State Of J. &K.

2008-05-09

J.P.SINGH

body2008
1. Aggrieved by Commercial Taxes Officer Circle "G" Jammus Communication No. 1034/CTO/G dated July 25, 2007 refusing VAT registration to the petitioner, the petitioner has filed this writ petition seeking quashing of July 25, 2007 communication besides a direction to the respondents for petitioners VAT registration under Rule 12 of the Value Added Tax Rules, 2005. 2. Respondents have filed their objections raising serious allegations against the petitioner hinting at its not being a genuine concern which had been alleged to be involved in massive evasion of Central Excise Duty besides its being non-functional in the State and urging that the petitioner would not be entitled to its registration under VAT. 3. With the consent of learned counsel for the parties, this petition has been taken up for final hearing. 4. Registration under Value Added Tax Rules, 2005 is governed by Rule 12 of the Rules which for facility of reference reads thus: - "12. Registration (a) Every dealer other than a Causal Trader liable to be registered (including voluntary registration) shall submit an application in Form VAT-01 to the jurisdictional Registering Authority. The application for registration by a casual trader shall, however be, in Form VAT-02. (b) The Registering Authority shall examine in detail each application submitted for registration in order to satisfy itself as also to ensure that the application contains all the requisites information and thereupon shall acknowledge the receipt of application. (c) After an application of registration has been acknowledged by the Registering Authority it shall cause an inspection of the business premises of the dealer to be conducted and the verification of the contents of the application carried out by the Inspector of the concerned Commercial Taxes Circle. (d) The Inspector shall submit his inspection and verification report within 7 days of the application being marked by the Registering Authority, in his name. (e) Immediately after receiving the report under sub-rule (d), the Registering Authority shall make such other enquiry as it deems fit to satisfy itself as to the bona fide intentions of the applicant dealer and the documents submitted by him for the grant of registration. (e) Immediately after receiving the report under sub-rule (d), the Registering Authority shall make such other enquiry as it deems fit to satisfy itself as to the bona fide intentions of the applicant dealer and the documents submitted by him for the grant of registration. (f) The Registering Authority on being satisfied that the dealer is genuine and the application is in order and complete in all respects, shall assign TIN in case of a VAT dealer and a voluntary registration dealer, and a registration number in case of other dealers and issue a certificate of registration in Form VAT-03 to a VAT dealer and a Voluntary registration Dealer, in Form VAT-04 to a Turnover Tax Dealer and in Form VAT-05 to a Casual Trader and also certified copies of such certificate for any additional place of business, with in 20 days from the date the applicant dealer makes the requisite application to the Registering authority in this behalf. (g) The Registering Authority may demand a security prescribed under Rule 27 before issuing a certificate of registration. (h) If the Registering Authority is not satisfied that the particulars and details given in the application are correct and complete, it shall, for reasons to be recorded in writing after giving the dealer a reasonable opportunity of being heard reject such an application. (i) The documents which shall accompany the application for registration in Form VAT-01 shall be as may be notified by the Commissioner Commercial Taxes Department from time to time. (j) Every application for registration in Form VAT-01 and Form VAT-02 shall be accompanied by a Treasury receipt of Rupees five hundred paid under the Account Head-0040 as registration fee. (k) If the registered dealer is a partnership firm or an association of persons it shall submit further application in Form VAT-01 (A) to the Registering Authority. (I) If a registered dealer has more than one place of business, he shall submit a further application in Form VAT-01 (B) to the Registering Authority along with Form VAT-01, if the additional place of business exists at the time of submission of an application for registration and in other cases within one month from the opening of additional place of business. (m) It shall be mandatory on the part of every registered dealer to display the certificate of registration at a prominent place at his main place of business and certified copies shall accordingly be displayed at the additional place of business; if any. (n) Any registered dealer who closes any of his additional places of business shall report such closure, within one month of such closure and surrender the copy of certificate of registration issued and certified copies of additional place(s) of business to the Jurisdictional Registering Authority, (o) Where a dealer liable to get registered under section 27 has failed to do so the Jurisdictional Registering Authority shall proceed against the dealer under section 30." 5. Perusal of the above quoted Rule indicates that registration under VAT is not as a matter of course and may be issued only to those dealers whose application was in order and complete in all respects and who had been found to be genuine and bonafide dealers. 6. In order to verify the credentials of the concern seeking its Registration under Value Added Tax Rules, 2005, the registering authority is inter alia empowered to make inspection of the business premises of the dealer besides conducting verification of the contents of dealers application. The registering authority has been vested with wide powers to conduct such other enquiry as it may deem fit to satisfy itself about the bonafide intentions of the applicant-dealer and the documents submitted by him seeking VAT registration. 7. While holding inspections, conducting enquiries and forming opinion as to whether or not the dealer was entitled to registration, the registering authority is however required to be within the limits of its powers vested in it under Rule 12 of the Value Added Tax Act, 2005. In terms of Rule 12 (h) of the Rules, if the Registering Authority is not satisfied that the particulars and details given in the application were correct and complete, it may, for reasons to be recorded in writing after giving the dealer a reasonable opportunity of being heard reject such an application. 8. I do not find any justification in petitioners counsels submission that registration to the petitioner under VAT had been refused on the ground that it was not a permanent resident of the State and on that ground the order was liable to be quashed. 8. I do not find any justification in petitioners counsels submission that registration to the petitioner under VAT had been refused on the ground that it was not a permanent resident of the State and on that ground the order was liable to be quashed. This is so because the information sought for by the Commercial Taxes Officer from the petitioner as to the proof of its Directors residence/domicile appears to be intended to satisfy him as to the bonafides and genuineness of petitioners concern. 9. Petitioners application for registration under Value Added Tax appears to have been rejected on two grounds viz. (1) that proof of residence of its Directors submitted by it to the Commercial Taxes Officer was not the permanent residence proof and (2) its CST registration had been cancelled by the Commercial Taxes Officer. 10. Commercial Taxes Officer Circle `G Jammus order of cancellation of CST registration has been quashed in OWP no. 796/2007. One of the reasons which had thus weighed with the Registering Authority to refuse registration to the petitioner being no more there. The Registering Authority is required to re-consider petitioners request for its registration under Value Added Tax. While doing so, it is required to proceed in terms of Rule 12 of Value Added Tax Rules, 2005 and pass appropriate order on petitioners request in accordance with law. In case the Commercial Taxes Officer finds any material on records indicating that the petitioner was not a genuine concern and did not qualify for its registration under Rule 12 of Value Added Tax Rules, 2005, it may pass such orders as may be warranted under law after complying with the provisions of Rule 12 of Value Added Tax Rules, 2005. 11. Communication no. 1034/CTO/G dated July 25, 2007 issued by Commercial Taxes Officer Circle `G Jammu refusing registration to the petitioner cannot thus be sustained because neither enquiry and investigation as mandated by Rule 12 of the Value Added Tax Rules, 2005 appears to have been held by the Commercial Taxes Officer nor any reasonable opportunity of hearing had been afforded to the petitioner before rejecting his request for his VAT registration and additionally because one of the grounds relied upon for refusal of VAT registration i.e. cancellation of petitioners CST registration no more survives in view of setting aside of Commercial Taxes Officers order issued in this behalf. 12. 12. Allowing this writ petition, Commercial Taxes Officer Circle `G Jammus communication no. 1034/CTO/G dated July 25, 2007 is, accordingly, quashed and the matter is remitted to him for his fresh consideration in terms of the provisions of Rule 12 of Value Added Tax Rules, 2005. 13. Petitioner, through its counsel is directed to appear before Commercial Taxes Officer Circle `G for further instructions on May 20,2008.