2004 (5) TMI 544 - HC - VAT and Sales Tax

Issues Involved:
1. Validity of the Commissioner's refusal to grant combined registration.
2. Compliance with the Commercial Taxes Tribunal's order.
3. Legitimacy of separate registrations for manufacturing units.
4. Impact of the Bihar Re-organisation Act, 2000 on registrations.
5. Non-compliance with interim orders regarding issuance of forms.

Issue-wise Detailed Analysis:

1. Validity of the Commissioner's Refusal to Grant Combined Registration:
The petitioner-company, a manufacturer and seller of cement, sought a combined registration for its sales outlets in Jharkhand after the re-organization of Bihar. The Commissioner refused this request, maintaining separate registrations for the manufacturing units at Sindri and Chaibasa. The court found that the Commissioner erred in thinking that the Cement Manufacturing Division was a separate entity and not merely a division of the petitioner-company. The court directed the Commissioner to delete "cement" from the separate registrations of Sindri and Chaibasa units, thereby allowing a combined registration for sales through outlets.

2. Compliance with the Commercial Taxes Tribunal's Order:
The Tribunal had previously directed the Commissioner to reconsider the company's application for combined registration. The Commissioner, however, granted a consolidated registration excluding Sindri and Chaibasa. The court emphasized that the Commissioner was bound by the Tribunal's order and had no authority to bypass it. The court found that the Commissioner had tried to "pick holes" in the Tribunal's reasoning, which was unacceptable.

3. Legitimacy of Separate Registrations for Manufacturing Units:
The court acknowledged the necessity of separate registrations for the manufacturing units at Sindri and Chaibasa due to the need for purchasing raw materials. However, it was argued that these registrations also included the sale of cement, which could lead to tax avoidance. The petitioner-company agreed to delete "cement" from these registrations, thereby eliminating any complications and allowing for a combined registration for sales through outlets.

4. Impact of the Bihar Re-organisation Act, 2000 on Registrations:
The court noted that under sections 84 and 85 of the Bihar Re-organisation Act, 2000, all rules, orders, and forms were adopted by the State of Jharkhand. Thus, the authorities in Jharkhand were bound to respect the combined registration previously granted in Bihar. The court found merit in the argument that the change involved only a shift from Patna to Ranchi, and the combined registration should have been continued.

5. Non-compliance with Interim Orders Regarding Issuance of Forms:
The court addressed the complaint that the Commissioner did not comply with the interim order to supply forms to the petitioner-company. The court criticized the Commissioner for defending the non-grant of forms and emphasized that the Commissioner was not entitled to judge the High Court's interim direction. Although the court considered taking action against the Commissioner, it ultimately decided against it, attributing the non-compliance to ignorance. The court directed the Commissioner and other authorities to issue the necessary forms to the petitioner.

Conclusion:
The writ petition was allowed, and the court quashed the Commissioner's order dated December 22, 2003. The court directed the Commissioner to grant a combined registration to the petitioner-company, including Sindri and Chaibasa, and to delete "cement" from the registrations of these units. Additionally, the court ordered the issuance of necessary forms to the petitioner and imposed costs of Rs. 5,000 on the respondents due to the conduct of the Commissioner and the department officers.

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