TMI Blog2016 (9) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the order of cancellation of the Registration Certificate takes effect. The buying dealer is also liable to pay, any addition to the amount due, interest at the rate of two percent per month on the amount of tax payable, for the period commencing from the date of claim of input tax from the dealer. Section 39(15) of the VAT Act, 2006, is silent, as to whether the competent authority is empowered to cancel, modify or amend any certificate of registration granted by him, retrospectively. The decision in the case of the Hon'ble Supreme Court in State of Maharashtra vs. Suresh Trading Co. [1996 (2) TMI 451 - SUPREME COURT OF INDIA] is relied upon where it was held that whatever be the effect of 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 such certificate was alive. The retrospective cancellation of the Registration Certificate is set aside - appellant was not provided with an opportunity to file any counter affidavit, on the grounds of challenge made in the supporting affidavit to the writ petition filed to quash the Registration Certificate, with retrospective ef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 10(2) of the Tamil Nadu Value Added Tax Rules (hereinafter referred to as VAT Rules), read with Section 19 of the Tamil Nadu Value Added Tax, 2006 (hereinafter referrred to as VAT Act), the claim of the purchasing dealers to avail input credit, should not be denied, and merely because, the Registration Certificates of the seller dealers, have been cancelled with retrospective effect, reversal of input tax credit of the buying dealers, is contrary to the law declared by the Hon'ble Apex Court in State of Maharatshtra vs. Suresh Trading Co. reported in (1998) 109 STC 439 (SC) . Thus, for the abovesaid reasons, and other grounds inter alia, made in the supporting affidavits, respondents/buying dealers, have sought for a writ of certiorari, to quash the proceedings, impugned in the writ petitions. 4. Taking note of the law declared by the Hon'ble Apex Court in State of Maharatshtra vs. Suresh Trading Co. reported in (1998) 109 STC 439 (SC) and a decision of this court in Jinsasan Distributors vs. Commercial Tax Officer, reported in 2013 59 VST 256 (Mad), the writ court, in W.P.Nos.11404 to 11407 of 2015 dated 20.04.2015, ordered as hereunder: 2. Learned counsel appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect upon any person who has acted upon the strength of registration certification when the registration was current. ... In the present case, it is not in dispute that the registration certificates of the selling dealers have been cancelled with retrospective effect and, therefore, to reverse the input-tax credit on the plea that registration certificates have been cancelled with retrospective effect cannot be countenanced. 5. In view of the above decision, the respondent cannot deny the benefit of input-tax credit to the petitioner as it is contrary to the law laid down by the Apex Court in the above said judgment. Therefore, the writ petitions stand allowed in the light of the ratio laid down by this court as well as the Honourable Supreme Court in the decision cited above. No costs. The connected miscellaneous petitions are closed. 5. W.A.Nos.946/2016 to 949/2016 are filed against the orders made in W.P.Nos.11404 to 11407 of 2015. Similar orders have been passed in other writ petitions, against which, appeals filed, are listed today. 6. Assailing the correctness of the orders impugned before us, Mr.Kanmani Annamalai, learned Additional Government Pleader (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e burden of proving that any transaction or any turnover of a dealer is not liable to tax, shall lie on such dealer. Sec. 17(2) For the purpose of claim of input tax credit, the burden of proving such claim shall lie on such dealer. Sec.17(3) Notwithstanding anything contained in this Act or in any other law for the time being in force, a dealer in any of the goods specified in the Second Schedule liable to pay the tax in respect of the first sale in the State shall be the first seller of such goods and shall be liable to pay tax at the rate specified in the Second Schedule on his turnover of sale relating to such goods, uless he proves that the sale or purchase, as the case may be, of such goods had already been subjected to tax under this Act. 9. In the backdrop of the above provisions, Mr.Kanmani Annamalai, learned Additional Government Pleader (Taxes) submitted that the authority granting certificate of registration, has powers to cancel, modify or amend any certificate of registration by him, and while doing so, he is mandated to give the dealer concerned, an opportunity of being heard. He also submitted that when input tax credit availed by the registered buying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registered dealer, who had purchased any taxable goods from the selling dealer and availed input tax credit in respect of the said goods, has to pay the amount availed on the date from which the order of cancellation of the Registration Certificate takes effect. Added further, the buying dealer is also liable to pay, any addition to the amount due, interest at the rate of two percent per month on the amount of tax payable, for the period commencing from the date of claim of input tax from the dealer. Section 39(15) of the VAT Act, 2006, is silent, as to whether the competent authority is empowered to cancel, modify or amend any certificate of registration granted by him, retrospectively. 13. As the issue considered by this court, in the instant writ appeals, is restricted only to the correctness of reversal of input credits availed, by the buying dealers, consequent to the cancellation of the Registration Certificates of the selling dealers with retrospective effect, we are not inclined to go into the aspect, as to whether the competent authority has power to cancel, modify or amend the Registration Certificate retrospectively. 14. In the light of the above, we now consider t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se not taxable. High Court further held that the condition precedent for becoming entitled to make a tax free re-sale was the purchaser of the goods, which was re-sold from a registered dealer and obtaining from that registered dealer of a certificate in this behalf. Thus the condition having been fulfilled, the right of purchasing dealer to make a tax free sale accrued to him. Thereafter, the whole, by reason of something that had happened subsequent to the date of the purchaser, namely, the consummation of the selling dealers registration with retrospective effect, that a tax free re-sales had become liable to tax. 17. Not satisfied with the aforesaid decision of the High Court, State of Maharashtra went on appeal. After hearing the learned counsel appearing for the parties, the Hon'ble Apex Court in Suresh Trading Company's case, at paragraphs 5 and 6, held as follows: 5. In our view, the High Court was right. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re dismissed. However, there shall be no order as to cost. Consequently, the connected civil miscellaneous petitions are closed. 21. Writ appeal No.753 of 2016 is filed against the order made by the writ court in W.P.No.5173 of 2015 dated 03.03.2015, by which the writ court, issued a writ of certiorari, to quash the order of the Assistant Commissioner (CT), Braodway Assessment Circle, Chennai, respondent herein in Rc.No/221/2014/Ac dated 12.01.2015. 22. Order impugned before the writ court was cancellation of the Registration Certificate of M/s.Vijayshree Metals, Chennai/respondent, with retrospective effect. Placing reliance on the decision of this court in Jinsasan Distributors vs. Commercial Tax Officer (CT), Chintadripet Assessment Circle, Chennai, reported in 2013 59 VST 256 (Mad) and by observing that the said decision is squarely applicable to the facts to W.A.No.753/2016, the writ court, has set aside the order dated 12.01.2015 of the Assessing Officer, cancelling the Registration Certificate of the seller, with retrospective effect, with a further direction to the Assessing Officer, to activate the Registration Certificate, within one week from the date of receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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