1991 (7) TMI 377 - HC - VAT and Sales Tax

Summary

Issues:
1. Quashing of order imposing penalty under U. P. Sales Tax Act and Central Sales Tax Act.
2. Dispute regarding constitution of partnership firm.
3. Justification of penalty for not renewing registration under Central Sales Tax Act.
4. Delay in registration application and deposit of late fee.
5. Rejection of retrospective registration under Central Sales Tax Act.
6. Competency of Deputy Commissioner, Sales Tax for granting retrospective registration.

Analysis:
The petitioner sought to quash an order imposing penalty under the U. P. Sales Tax Act and the Central Sales Tax Act. The case involved a partnership firm, initially M/s. Mico Lock Service, which later transformed into M/s. Mico Enterprises with an additional partner. The firm applied for registration under both Acts retrospectively from 1st April, 1981, due to the main partner's illness. The U. P. Sales Tax Act registration was granted retrospectively, but the Central Sales Tax Act registration was denied initially due to the late fee not being deposited with the application.

The main issue was the justification of penalty for not renewing registration under the Central Sales Tax Act. The petitioner argued that since the delay reasons were the same for both Acts and late fee was eventually deposited, rejection of Central Sales Tax Act registration was unjustified. The Court noted that the late fee could be deposited until the application date as per Section 8-A(1-A)(c) of the Act and directed the respondent to reconsider granting retrospective registration under the Central Sales Tax Act.

The Court found the rejection of retrospective registration under the Central Sales Tax Act on the sole basis of late fee deposit timing as unsustainable. Even though the Sales Tax Officer initially granted U. P. Sales Tax Act registration from 1st April, 1981, and Central Sales Tax Act registration from 24th August, 1981, the Court directed the respondent to grant Central Sales Tax Act registration retrospectively from 1st April, 1981, to 23rd August, 1981, in line with the U. P. Sales Tax Act decision.

In conclusion, the Court allowed the petition, quashed the penalty order and directed the respondent to issue a fresh order based on the Court's observations regarding granting retrospective registration under the Central Sales Tax Act.