2009 (3) TMI 942 - HC - VAT and Sales Tax

Deemed registered dealer - Held that - The provisions of the Act and the Rules should be construed harmoniously to arrive at the correct interpretation to be given to cases of this nature. But unfortunately, the respondent proceeded in a hyper-technical manner and rejected the application of the petitioner, leaving a period of about 10 months from December 1, 2007 to September 23, 2008 as a period in vacuum. Therefore the action of the respondent is not in accordance with the object of the Act, but goes against the tenor of statutory provisions. Writ petition is allowed, directing the respondent to treat the petitioner as a deemed registered dealer in terms of section 26 of the Tamil Nadu Value Added Tax Act, 2006, from the date of death of her husband, viz., December 1, 2007, up to the date of issue of a fresh certificate of registration, viz., September 23, 2008 and act accordingly while accepting and passing orders of assessment.

Summary

Issues:
1. Registration under Tamil Nadu Value Added Tax Act, 2006 after the death of the husband.
2. Interpretation of Section 26 and Section 38(4) of the Tamil Nadu Value Added Tax Act, 2006.
3. Rejection of the request for registration with retrospective effect.
4. Compliance with the provisions of the Act and Rules regarding registration after the death of a dealer.

Analysis:
1. The petitioner's husband, a registered dealer, passed away, and the petitioner sought to continue the business. She applied for a new registration under the Tamil Nadu Value Added Tax Act, 2006, after her husband's death. The respondent advised her to obtain a fresh certificate, resulting in a break in registration from the date of death until the issuance of the new certificate.

2. The court analyzed Section 26 of the Act, which deems the legal representative as the dealer upon the death of the registered dealer. The petitioner should have been deemed the dealer under Section 26, but due to confusion regarding Section 38(4), she obtained a new registration. The court clarified that Section 26 is the substantive provision for succession, while Section 38(4) outlines the procedure to be followed, emphasizing that both provisions should be read harmoniously.

3. The court highlighted that the respondent's rejection of the petitioner's request for retrospective registration was not in line with the Act's objective. It pointed out that the Act allows for the amendment of registration certificates to ensure continuity, and the respondent's decision left a significant period without registration, contrary to statutory provisions.

4. The judgment emphasized the need for a harmonious interpretation of the Act and Rules to address situations like the petitioner's. It criticized the hyper-technical approach taken by the respondent and directed them to treat the petitioner as a deemed registered dealer from the date of her husband's death until the issuance of the new registration certificate.

In conclusion, the court allowed the writ petition, instructing the respondent to recognize the petitioner as a registered dealer from the date of her husband's death to the date of the new registration certificate. The judgment highlighted the importance of adhering to statutory provisions and ensuring continuity in registration processes, especially in cases of succession due to death.