2015 (10) TMI 2604 - HC - VAT and Sales Tax

Registration of dealer - Section 28(1) of the Act - the dealer is a registered dealer and the retail store situated at Kishanganj is its additional place of business and the dealer has already got a centralized registration under Rule 3(9)(a) of the Rules 2005 w.e.f. 01.04.2011 and the original certificate of registration is submitted in the office of the Commissioner of Commercial Taxes for the purpose of amendment and sought further time in writing to produce the ledger book as was directed but the respondent no. 2 passed the order dated 23.01.2015 referred above in terms of Section 28(1) of the Act treating the petitioner as an unregistered Dealer. Whether Kishanganj Branch of M/S. V.MART RETAIL LTD. may be treated as a dealer for the purpose of assessment of tax due and imposing penalty in terms of Section 28(1) of the Act? - Held that - It is evident from the facts noticed above that M/S V. MART RETAIL LTD. is a registered dealer having TIN VAT NO. 10050916069 under Patliputra Circle of Commercial Taxes in terms of Sub-rule 9 (a) of Rule 3 of the Rules 2005 which talks about registration of dealer . Rule 3(3) of the Rule 2005 stipulates that an application for registration shall be filed before the Circle In-charge within whose jurisdiction the place of business of the dealer is situated but on the other hand Rule 3(9)(a) provides that such dealers who have got more places of business than one situated in different circles of Bihar shall apply before the Commissioner or before the officer specially authorized in this behalf - the dealer(petitioner) was not required to make application for registration before the Circle In-charge of Commercial Tax Kishanganj rather he was required to make application before the Commissioner of Commercial Taxes for the purpose of amendment of the certificate of registration. Once the petitioner made application for amendment of certificate under Section 20 of the Act furnishing the information required under Section 23 of the Act it could not be treated as a dealer evading registration. The order impugned dated 23.01.2015 passed by the Assistant Commissioner of Commercial Taxes Kishanganj Circle Kishanganj (respondent no. 2) is without jurisdiction as well as based on wrong notion of law - application allowed - decided in favor of assessee.

Summary

Issues Involved:
1. Applicability of Section 28(1) of the Bihar Value Added Tax Act, 2005.
2. Jurisdiction of the Assistant Commissioner, Commercial Taxes, Kishanganj Circle.
3. Compliance with registration and amendment procedures under the Act and Rules.
4. Validity of the penalty imposed under Section 28(1) of the Act.
5. Alternative remedy and maintainability of the writ application under Article 226 of the Constitution of India.

Detailed Analysis:

1. Applicability of Section 28(1) of the Bihar Value Added Tax Act, 2005:
The core issue was whether Section 28(1) of the Act was applicable against the petitioner, a registered dealer under Patliputra Circle, Commercial Taxes, Bihar. Section 28(1) pertains to the assessment of tax for dealers evading registration. The court noted that the petitioner was already registered under Patliputra Circle with effect from 01.04.2011 and had applied for an amendment of its certificate of registration to include the Kishanganj branch. The court concluded that since the petitioner had complied with the registration requirements, Section 28(1) was not applicable.

2. Jurisdiction of the Assistant Commissioner, Commercial Taxes, Kishanganj Circle:
The court examined whether the Assistant Commissioner had the jurisdiction to pass the impugned order. It was determined that the dealer was required to apply for registration with the Commissioner of Commercial Taxes, not the Circle In-charge of Kishanganj. The court found that the Assistant Commissioner of Kishanganj Circle exceeded his jurisdiction by initiating proceedings and passing the order dated 23.01.2015, treating the petitioner as an unregistered dealer.

3. Compliance with Registration and Amendment Procedures:
The petitioner had informed the Circle In-charge of Patliputra Circle about the additional place of business and had applied for an amendment of the registration certificate. The court observed that the petitioner had submitted the necessary information as required under Section 23 of the Act and was issued an amended certificate on 05.02.2015. The court emphasized that the petitioner had complied with the registration and amendment procedures, thus invalidating the penalty imposed under Section 28(1).

4. Validity of the Penalty Imposed:
The court noted that the penalty under Section 28(1) could only be imposed if the dealer willfully failed to apply for registration or furnish required information. Since the petitioner had applied for an amendment and informed the authorities, the court held that the penalty was unjustified. The court also referenced the third proviso of Section 19, which deems a dealer to possess a valid certificate from the date of application, further supporting the petitioner's compliance.

5. Alternative Remedy and Maintainability of the Writ Application:
The respondents argued that the petitioner had an alternative remedy of appeal, and thus the writ application should not be entertained. The court referred to the Supreme Court's decision in A.V. Venkateshwaran vs. R.S. Wadhwani, which allows for the invocation of Article 226 in cases of complete lack of jurisdiction or violation of natural justice. The court found that the present case fell within the first category, justifying the bypassing of the alternative remedy.

Conclusion:
The court set aside the order dated 23.01.2015 passed by the Assistant Commissioner of Commercial Taxes, Kishanganj Circle, declaring it without jurisdiction and based on a wrong notion of law. The writ application was allowed, and the penalty imposed on the petitioner was invalidated.