2003 (12) TMI 590 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of certificate of registration under Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956 with retrospective effect.
2. Petition to quash the cancellation and renew the certificate for the Assessment Year 2003-2004.
3. Interpretation of Proviso to Sub-section (3) of Section 21 of the Tamil Nadu General Sales Tax Act, 1959.
4. Compliance with renewal provisions and penalty for failure to renew.
5. Comparison with a Division Bench decision regarding cancellation of registration certificate.

Analysis:
The petitioner challenged the cancellation of their registration certificate under the Tamil Nadu General Sales Tax Act, 1959 and Central Sales Tax Act, 1956 with retrospective effect. The petitioner sought to quash the cancellation and requested the respondent to accept renewal fees for the certificate for the Assessment Year 2003-2004 from 01.04.2003. The petitioner's counsel argued that the cancellation could not be sustained based on the Proviso to Sub-section (3) of Section 21 of the Tamil Nadu General Sales Tax Act, 1959. They also cited a Division Bench decision that supported their contention.

The Proviso to Sub-section (3) of Section 21 of the Tamil Nadu General Sales Tax Act, 1959 allows a registered dealer who fails to renew the certificate within the prescribed period to renew it later by paying the renewal fee and a penalty equal to the renewal fee. The provision emphasizes that the right to carry on business cannot be canceled if the renewal process is not followed. The respondent did not adhere to this provision before canceling the certificate, which was a procedural error.

Referring to a Division Bench decision, the Court highlighted that in similar cases, the cancellation of a registration certificate was set aside, and the revenue authorities were directed to issue a show cause notice to the dealer, allowing them time to seek renewal before taking any further action. The Court, based on the statutory provision and the Division Bench decision, quashed the respondent's order and directed them to accept the renewal application with fees and pass orders as per the law. The petitioner was given two weeks to submit the renewal application, and the writ petition was allowed without costs.