2007 (2) TMI 608 - AT - VAT and Sales Tax

Summary

Issues: Challenge to rejection of application for registration under the West Bengal Value Added Tax Act, 2003.

Analysis:
The petitioner challenged the order rejecting their application for registration under the West Bengal Value Added Tax Act, 2003. The petitioner started their business of buying and selling biscuits and oil in 2005 and applied for registration on May 5, 2005. Despite appearing before the Assistant Commissioner with books of account, the application process faced delays and adjournments. The Assistant Commissioner suddenly rejected the application on May 29, 2006, citing the petitioner's absence without prior notice. The rejection was communicated to the petitioner on June 8, 2006. Instead of challenging this rejection, the petitioner submitted a fresh application on July 3, 2006, which was granted on July 31, 2006, with effect from that date.

The Tribunal noted that the VAT Act, 2003 came into operation from May 1, 2005, and the petitioner's business commenced in the same year. The rejection of the first application left the petitioner liable to pay taxes as an unregistered dealer from May 29, 2005. The Tribunal observed that the petitioner was deprived of benefits available to registered dealers despite applying for registration in a timely manner. The Assistant Commissioner's decision to reject the first application was criticized for lacking reasons and not following principles of natural justice.

The Tribunal acknowledged the petitioner's mistake in not challenging the initial rejection and instead submitting a second application. However, it was noted that the petitioner deserved registration from the date of the first application, as there were no significant changes in circumstances between the first and second application. The Tribunal directed the authorities to treat the second application as a continuation of the first, granting registration from May 29, 2005. The petitioner was given time to submit any arrear returns by a specified date, with a warning of potential cancellation of registration if the returns were not filed.

In agreement with the Chairman, the Technical Member supported the decision to set aside the rejection of the first application and grant registration from the date of the initial application. The Tribunal emphasized the importance of following due process and ensuring that applicants are not unfairly deprived of benefits under the law.