2006 (7) TMI 596 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Whether the registration certificates of the petitioners were deemed to be cancelled due to non-renewal within the prescribed period.
2. Whether the third respondent was required to provide an opportunity of hearing before returning the renewal applications of the petitioners.
3. Applicability of section 21(6) of the Tamil Nadu General Sales Tax Act, 1959 regarding the opportunity of being heard before refusal of renewal.

Detailed Analysis:

1. Deemed Cancellation of Registration Certificates:
The petitioners, registered dealers under the Tamil Nadu General Sales Tax Act, 1959, failed to renew their registration certificates within the validity period of one year. As per section 21(3) of the Act, the registration certificates are deemed to have been cancelled with effect from April 1, 2006. The petitioners applied for renewal only on June 13, 2006, which was beyond the prescribed period. The third respondent returned the applications, citing section 21(3) and a precedent case, N.V.S. Agro Derivatives v. Commercial Tax Officer, [2006] 144 STC 106 (Mad). The court found that the facts of these cases were identical to the N.V.S. Agro Derivatives case, where late applications for renewal were not accepted, and thus, the deemed cancellation was upheld.

2. Opportunity of Hearing Before Returning Renewal Applications:
The petitioners contended that they should have been provided an opportunity of hearing under sections 21(3), 21(5), and 21(6) of the Act before the renewal applications were returned. However, the court noted that section 21(3) provides for deemed cancellation if renewal is not done within the prescribed period, and thus, no notice or opportunity of hearing is necessary. The court distinguished the present cases from other cited cases (Sun Gas Pvt. Ltd. v. Registrar, Fisher Pumps (P) Ltd. v. Commercial Tax Officer, and C. Baskaran v. Deputy Commercial Tax Officer) based on differing facts and the specific provisions of section 21(3).

3. Applicability of Section 21(6) Regarding Opportunity of Being Heard:
The petitioners argued that section 21(6) mandates an opportunity of being heard before refusing renewal. Section 21(6) states, "no renewal under this section shall be refused and no order under sub-section (5) shall be made, unless the dealer concerned has been given an opportunity of being heard." The court clarified that section 21(6) applies only when a renewal application is submitted within the prescribed period. Since the petitioners submitted their applications after the prescribed time limit (April 30, 2006), section 21(6) was not applicable. The court emphasized that the provisions of the Act and Rules must be read together and construed harmoniously.

Conclusion:
The court concluded that the petitioners' registration certificates were rightly deemed cancelled due to non-renewal within the prescribed period. The third respondent was not required to provide an opportunity of hearing before returning the late renewal applications. The writ petitions were dismissed, and the court held that the submission of the learned counsel for the petitioners was not acceptable. Consequently, the connected miscellaneous petitions were also closed.