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M/s. Highness Coconut And Trading Co. Versus State of Gujarat

2015 (8) TMI 950 - GUJARAT HIGH COURT

Cancellation of Registration certificates – Billing activities – After giving opportunity to petitioner, concerned authority cancelled registrations, both under VAT Act and CST Act – By impugned judgement tribunal confirmed orders cancelling registration certificates – Held that:- registration certificates of petitioner under VAT Act as well as CST Act was cancelled ab-initio, as it was found that they had indulged into billing activities only – Petitioner had disclosed / declared only one Bank .....

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ers passed of tribunal – Decided against Assesse. - Special Civil Application No. 15359 of 2014 , Special Civil Application No. 15360 of 2014 - Dated:- 5-5-2015 - M. R. Shah And S. H. Vora, JJ. For the Appellant : Mr Manish K Kaji, Adv. For the Respondent : Mr Chintan Dave, AGP ORDER (Per : Honourable Mr. Justice M. R. Shah) 1.00. As common question of law and facts arise in both these petitions and with respect to the same dealer but with respect to registration certificates under VAT Act as we .....

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r, etc. at Botad in Bhavnagar District. The petitioner dealer was holding the said registration certificates from 1/7/2002 under the GST Act / VAT Act and from 1/7/ 2002 under the CST Act. 2.01. That after a period of one year, on 22/7/2003, the petitioner applied to add branch office at Surat and accordingly Surat was added as the place of business. That after a period of three months from the date of obtaining registration certificates, on 22/11/2003, the petitioner - dealer applied to add goo .....

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n by him on rent from one Mr.Anvarbhai before 15 days. 2.03. That considering the returns for the A.YS. 2006- 2007 and 2007-2008, it is found that the petitioner dealer had done alleged purchases mainly from M/s. Vishal Traders and M/s. Shiv Enterprise, whose registrations were cancelled abinitio, as they were found to be indulged into billing activities only and since they were not doing any business and were issuing bills only. Thus, the officers were of the view that after getting registratio .....

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parate notices in the Form No.401 for the A.Ys. 2006-2007 and 2007-2008 were also issued on 12/6/2008 by the same officer asking him to produce bills for purchase, sales, TIN Number and evidence showing payment etc. 2.06. That the petitioner dealer replied to the same and thereafter the VAT Authority passed order under section 28(2) of the VAT Act on 14/8/2008 insisting that the petitioner should give security of ₹ 10 Lacs to secure the interest of the revenue. 2.07. That the against the s .....

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hority, passed under section 28(2) of the VAT Act, directing the petitioner to furnish security of ₹ 10 Lacs, the petitioner preferred an appeal before the learned tribunal. 2.10. That the learned tribunal dismissed the said appeals, against which the petitioner preferred appeals before this Court being Tax Appeal Nos.14 and 46 of 2014. That in the meantime, after following due procedure as required and after giving opportunity to the petitioner - dealer, the concerned authority under the .....

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. Both the appeals came to be allowed to the aforesaid extent. However, the Division Bench did not expressed any opinion on the action of the authority in cancelling the registrations ab-initio. 2.12. At this stage, it is required to be noted that it was brought to the notice of the Division Bench that their registration certificates under the VAT Act as well as CST Act have been cancelled ab-initio for which separate proceedings are initiated. Therefore, the Division Bench specifically clarifie .....

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es under the VAT Act as well as CST Act, ab-initio. Hence, the common petitioner - dealer has preferred both these Special Civil Applications challenging the order passed by the learned tribunal in dismissing the Revision Applications and confirming the orders cancelling the registration certificates under the VAT Act as well as CST Act. 3.00. Mr.Manish Kaji, learned advocate appearing on behalf of the common petitioner - dealer has vehemently submitted that the order cancelling the registration .....

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lged into billing activities only and their registration certificates have been cancelled ab-initio. It is submitted that on the aforesaid ground, registration certificates of the petitioner cannot be cancelled. 3.03. Mr.Kaji, learned advocate appearing on behalf of the petitioner - dealer has further submitted that at the time when the petitioner purchased the goods from the aforesaid two parties, both of them were having registration certificates and both of them were registered dealers and th .....

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earing on behalf of the petitioner - dealer has heavily relied upon the decision of the Hon'ble Supreme Court in the case of State of Maharashtra Vs. Suresh Trading Company, reported in 1998 (Vol.109) Sales Tax Cases 439 as well as decision of the Division Bench of this Court in the case of Giriraj Sales Corporation Vs. State of Gujarat and others, reported in (2002) (Vol.125) Sales Tax Cases 369. 3.06. Mr.Kaji, learned advocate appearing on behalf of the petitioner - dealer has further subm .....

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idered by the appropriate authority while cancelling the registration certificates of the petitioner and copy of which have not been supplied to the petitioner, the order cancelling the registration certificates ab-initio, is in breach of principles of natural justice. 3.07. Mr.Kaji, learned advocate appearing on behalf of the petitioner - dealer has further submitted that the learned tribunal has not properly appreciated the fact that in fact, the petitioner had shifted his place of business fr .....

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l Civil Applications. 4.00. Both these petitions are opposed by Mr.Chintan Dave, learned Assistant Government Pleader appearing on behalf of the respondent - State of Gujarat. He has vehemently submitted that in the facts and circumstances of the case, more particularly when it is found that the petitioner had indulged into billing activities only and has shown purchase from dealers, whose registrations were cancelled ab-initio, as they were found to be indulged into billing activities only, no .....

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ade purchases of ₹ 104.19 Lacs in the year 2007-2008 from M/s. Vishal Traders after its registration were cancelled on 1/4/2007 and said transactions were through the Bank at Surat and the petitioner did not disclose his Bank Account at Surat and only Bank Account at Botad was declared / disclosed in which there was no transaction shown. It is submitted that, therefore, in the facts and circumstances of the case, as such the orders cancelling the registration certificates ab-initio cannot .....

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d to dismiss the present Special Civil Applications. 5.00. Heard the learned advocates appearing on behalf of the respective parties at length. 5.01. At the outset, it is required to be noted that the registration certificates of the petitioner under the VAT Act as well as CST Act have been cancelled ab-initio. The orders cancelling the registration certificates ab-initio have been confirmed upto the learned tribunal. From the findings recorded by the learned tribunal, which is not denied and/or .....

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ces once its registrations were cancelled. As rightly observed by the learned tribunal, the petitioner dealer was not entitled to obtain tax invoices after knowing that registration of M/s. Vishal Traders have been cancelled. 5.02. It is required to be noted that the petitioner dealer had disclosed / declared only one Bank Account at Botad, however, on inquiry it has been found that all the transactions by the petitioner were from Surat Bank Account, which was not declared / disclosed by the pet .....

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enuine and/or same were billing activities only and the transactions were not genuine and even the petitioner dealer tried to defend the action of M/s. Vishal Traders and M/s. Shiv Enterprise etc. therefore, it cannot be said that the learned tribunal has committed any error in confirming the order passed by the authority cancelling the registration certificates of the petitioner dealer under the VAT Act as well as CST Act ab-initio. 5.03. In the facts and circumstances of the case, the registra .....

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have been cancelled ab-initio, the petitioner has shown purchases from the aforesaid M/s. Vishal Traders and M/s. Shiv Enterprise and had obtained / issued invoices and those transactions and purchases are found to be bogus and not genuine. 5.04. Now, so far as the contention on behalf of the petitioner that as the copies of the statements of the proprietor of M/s. Vishal Traders, upon which reliance has been placed by the department, has not been supplied / issued to the petitioner, the order .....

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