2008 (12) TMI 698 - HC - VAT and Sales Tax

If the dealer has failed to comply with the provisions in sub-section (2) of section 23, he would not get any benefit to register as dealer under the West Bengal Value Added Tax Act, 2003 in question from the date of the application which he has filed? Held that - It appears from the said rule that the dealer has to make an application within the time-limit mentioned in section 23(2). In the instant case, it appears that the dealer has failed to apply within the time mentioned in section 23(2) and the certificate of registration shall be made valid from the date of incurring liability which has already been defaulted by the dealer as it appears from the facts in question, and, further it has been specifically stated, in case such application made after the said time-limit, certificate for registration shall be valid from the date of order of granting registration. In the facts and circumstances of the case, such rule has been prescribed by the authority which has been given authority under section 114 of the VAT Act and furthermore, under section 23(2) of the said Act. Therefore, no infirmity in the said rule which has been framed by the authority without taking into consideration the moot and reasons as has been stated for enacting the Act in question.Accordingly, in our considered opinion, there is no violation by the said authority in framing of such rule and, thereby, it cannot be said that there is any violation of the Act in question or any article of the Constitution of India. Therefore, we cannot declare that the said rule 6(2) is ultra vires in the facts and circumstances of the case.

Summary

Issues:
Application against judgment of West Bengal Taxation Tribunal regarding compliance with provisions of West Bengal Value Added Tax Act, 2003 and validity of rule 6(2) under section 114 of the Act.

Compliance with Section 23(2) for Registration:
The main issue in this case revolves around the requirement for a dealer to comply with the provisions of sub-section (2) of section 23 of the West Bengal Value Added Tax Act, 2003 to register as a dealer. The petitioner had failed to apply within the specified time limit under section 23(2), leading to a question of whether the dealer could still benefit from registration under the Act. The Act mandates that a dealer liable to pay tax must apply for registration within a specific timeframe, accompanied by a declaration. The prescribed authority then grants a certificate of registration subject to conditions. The authority to make rules under section 114 of the Act is crucial, and the court found that the rule 6(2) regarding the validity of registration certificates was valid and not ultra vires. The court emphasized that the rule was framed within the authority granted and did not violate the Act or the Constitution.

Validity of Rule 6(2) under Section 114:
The court examined the specific provisions of rule 6(2) which dictate the validity of registration certificates based on the timing of the dealer's application. The rule stipulates that if the application is made within the specified time limit, the certificate is valid from the date of incurring liability; otherwise, it is valid from the date of granting registration. The court upheld the validity of this rule, stating that it was prescribed by the authority in accordance with the Act and did not contravene the legislative intent behind enacting the Value Added Tax Act.

Conflict between Section 23(4) and Rule 6(2):
Another issue raised was the alleged conflict between section 23(4) of the VAT Act and rule 6(2) of the VAT Rules. Section 23(4) provides for penalties if a dealer files a registration application beyond the prescribed period without reasonable cause. The court analyzed the contentions raised by the petitioner regarding this conflict and found no reason to accept the arguments presented. The court concluded that there was no irregularity in the order passed by the Tribunal, leading to the dismissal of the application.

Conclusion:
In conclusion, the High Court of Calcutta dismissed the application challenging the judgment of the West Bengal Taxation Tribunal. The court upheld the validity of rule 6(2) under section 114 of the West Bengal Value Added Tax Act, 2003, emphasizing the importance of compliance with registration requirements and the authority of the rule-making body. The court found no reason to accept the contentions regarding the alleged conflict between different provisions of the Act and Rules, ultimately leading to the rejection of the application.