2016 (11) TMI 1378 - HC - VAT and Sales Tax

Registration of selling dealer - effect of cancellation of registration on purchasing dealer - Held that - reliance placed in the case of State of Maharashtra Versus Suresh Trading Company 1996 (2) TMI 451 - SUPREME COURT OF INDIA where it was held that A purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may be the effect of a retrospective cancellation upon the selling dealer it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current - appeal dismissed - decided in favor of assessee.

Summary

Issues:
Appeal under Clause 15 of the Letters Patent challenging the correctness of the view taken by the learned single Judge in a common order.

Analysis:
The judgment in question involves two appeals brought under Clause 15 of the Letters Patent by the Assistant Commissioner of Commercial Taxes, seeking to challenge the view taken by the learned single Judge in a common order. The primary issue at hand pertains to the reliance on a registration certificate by a purchasing dealer in light of a retrospective cancellation of the selling dealer's registration. The Supreme Court's ruling in State of Maharashtra vs. Suresh Trading Company (1998) is cited, emphasizing that a purchasing dealer is entitled to rely on the registration certificate of the selling dealer and act upon it, regardless of any subsequent cancellation. The court concurs with this view, highlighting that individuals dealing with registered dealers are permitted to act based on the validity of the registration certificate.

The judgment notes that the learned single Judge had already aligned with this legal position and allowed the writ petition accordingly. The High Court, in its assessment, finds no valid reason to entertain the appeals challenging the single Judge's decision. It affirms that the single Judge's interpretation of the law is correct, thereby leading to the dismissal of both appeals at the admission stage. The court concludes by stating that no costs are to be awarded in this matter.

In summary, the judgment upholds the principle that purchasing dealers can rely on the registration certificates of selling dealers, even if the latter's registration is retrospectively canceled. The court affirms the single Judge's decision, emphasizing the legal entitlement of individuals dealing with registered dealers to act based on the validity of the registration certificate, as established by relevant statutes and precedents.