2013 (7) TMI 865 - HC - VAT and Sales Tax

Suspension of registration certificate - registration was suspended because an FIR was lodged - in course of inquiry pertaining to a seizure, it transpired that the respondent is not available at the place of its business, as mentioned in the challan that was found in course of seizure - Held that - Tribunal has correctly held that, if the registered dealer is not carrying on business from its registered address, but is carrying on business from some other address, then, VAT Act itself provides what penalty may be imposed upon such dealer. That being the situation, we feel that the Tribunal has rightly held that the FIR, insofar as that allegation is concerned, was in excess of the jurisdiction or power of the officers, who lodged that FIR. The fact remains that, merely because an FIR has been lodged, neither the State, nor any of its officers, could, because of such FIR, interfere with right to livelihood of the respondent by staying its registration and, accordingly, stopping his business affecting its right to life. - FIR can only be lodged and accepted in respect of a cognizable offence and not in respect of a non-cognizable offence, as those mentioned in the VAT Act. - Decided against Revenue.

Summary

Issues:
1. Suspension of registration of a dealer due to an FIR.
2. Jurisdiction of tax officers in lodging FIRs.
3. Impact of FIR on the right to livelihood of the dealer.

Analysis:
1. The respondent, a registered dealer, had their registration suspended due to an FIR lodged against them. The FIR alleged that the respondent was not conducting business from the registered address mentioned in the challan found during a seizure. The Tribunal correctly determined that if a registered dealer operates from a different address than the registered one, the VAT Act specifies the penalty. The Tribunal held that the FIR, concerning this allegation, exceeded the jurisdiction of the officers who lodged it. The court emphasized that the State or its officers cannot impede the respondent's right to livelihood solely based on an FIR, which affects their right to conduct business and life.

2. The Chief Standing Counsel argued that the Tribunal's order should not be interpreted as a blanket prohibition on tax officers from lodging FIRs. The Tribunal did not prohibit officers from lodging FIRs but allowed investigation of aspects not covered by the VAT Act. It acknowledged that officers could lodge FIRs for cognizable offenses as per the Code of Criminal Procedure. The court affirmed this stance, cautioning that FIRs should only be filed for cognizable offenses and not for non-cognizable offenses under the VAT Act.

3. In conclusion, the court disposed of the revision with the above observations. It clarified the limits of lodging FIRs by tax officers, emphasizing the distinction between cognizable and non-cognizable offenses. The judgment reaffirmed the importance of upholding the dealer's right to livelihood and conducting business without undue interference based solely on an FIR.