2013 (5) TMI 621 - HC - VAT and Sales Tax

U.P. Value Added Act 2008 - applications dated 12th February 2008 in Form VII and VIII purporting to be under section 17(5) of the U.P. VAT Act 2008 for validation of registration certificate issued under the erstwhile Act filed by widow of deceased who was a registered dealer under the U.P. Trade Tax Act 1948 - claim under scheme of Group Insurance for all registered dealers by the name of Traders Accident Insurance Scheme denied - Maintainability of writ - Held that - Once the registration certificate is granted by the Registering Authority it relates back to the date of enforcement of U.P. VAT Act 2008 in view of specific provision contained in section 17(9). Consequently Anil Kumar Kesarwani the deceased was a registered dealer on the date of enforcement of the U.P. VAT Act 2008 till his death on 4-6-2009. Question of grant of registration certificate and satisfaction regarding fulfilment of requirements under the Act is a matter between the dealer and the Registering Authority and the insurer has no right to question the wisdom of the Registering Authority. There is also no prohibition under the Act for grant of formal registration certificate to a dealer posthumously. Rather it was the necessity in law as Anil Kumar Kesarwani who was a registered dealer under the erstwhile Act and was liable to pay tax under the new Act was under statutory obligation to apply for being registered under the Act and reciprocal duty being cast upon the Registering Authority to grant such certificate to him. Thus even otherwise there was no illegality in the action of the Registering Authority in registering Anil Kumar Kesarwani by granting registration certificate dated 18th September 2010. As such the first objection by the Insurance Co. that the registration certificate having been granted 15 month after the death of Anil Kumar Kesarwani is invalid cannot be sustained. A bare perusal of provision of erstwhile Act and the new Act will show that the requirement of obtaining biometric data is not the prerequisite for registering a person under the Act. Rather section 17(3) read with section 17(5) states that every dealer holding registration certificate under the erstwhile Act as a dealer is deemed to be registered under the new Act only upon making an application in Form VIII accompanied by certain documents and requisite fee without getting biometric verification done. Thus non-obtaining of biometrics data as in the instant case will not invalidate the registration certificate. Contention of the respondent s counsel that the petitioner is not entitled to any relief because he has not challenged the order of the Insurance Co. declining his claim is not sustainable in law as it contains the same grounds which were communicated to the petitioner by the Dy. Commissioner Trade Tax Division-13 Allahabad vide letter dated 23rd June 2011 & admittedly petitioner has already challenged the letter of respondent no. 3 which itself contains the reason given by the Insurance Co. for declining the claim of the petitioner. Thus refusing relief to the petitioner on the said ground will amount to taking a hyper technical view which is not called for. As decided in K.N. Guruswamy v. State of Mysore 1954 (5) TMI 19 - SUPREME COURT if the State or its instrumentalities acts in a arbitrary manner even in the matter of contract an aggrieved party can approach the Court by of writ under Article 226 of the Constitution. The claim for insurance can be enforced through a writ petition. Thus writ petition succeeds and is allowed & insurance Co. respondent no. 2 is directed to forthwith settle the claim of the petitioner.

Summary

Issues Involved:
1. Validity of the registration certificate granted posthumously.
2. Requirement of biometric data for registration.
3. Justification for refusal of insurance claim.
4. Maintainability of the writ petition for enforcement of insurance claim.

Issue-wise Analysis:

1. Validity of the registration certificate granted posthumously:
The court examined whether the registration certificate granted to the deceased dealer, Anil Kumar Kesarwani, posthumously was valid. It was established that Anil Kumar Kesarwani was a registered dealer under the erstwhile U.P. Trade Tax Act, 1948. Upon the enforcement of the U.P. VAT Act, 2008, he filed the required application in Form VIII, making him a deemed registered dealer from January 1, 2008. The court held that the registration certificate issued on September 18, 2010, though granted posthumously, was valid as it related back to the date of enforcement of the U.P. VAT Act, 2008, and there was no legal prohibition against issuing a registration certificate posthumously.

2. Requirement of biometric data for registration:
The court addressed the objection raised by the Insurance Company regarding the absence of biometric data for Anil Kumar Kesarwani. It was clarified that neither the erstwhile Act nor the new Act mandated biometric data as a prerequisite for registration. The requirement for biometric data was only applicable to new dealers and was not essential for those transitioning from the old Act to the new Act. Consequently, the absence of biometric data did not invalidate the registration certificate, and the Insurance Company's objection on this ground was dismissed.

3. Justification for refusal of insurance claim:
The Insurance Company refused the insurance claim on the grounds that the registration certificate was issued 15 months after the dealer's death and lacked biometric data. The court found these reasons to be untenable. The registration certificate, once granted, was deemed valid from the date of the new Act's enforcement. Additionally, the lack of biometric data did not invalidate the registration. The court emphasized that the Insurance Company had no right to challenge the registration certificate granted by the Registering Authority. Therefore, the refusal to honor the insurance claim was deemed unjustified.

4. Maintainability of the writ petition for enforcement of insurance claim:
The court considered whether the writ petition was maintainable for enforcing the insurance claim. It was argued that the petitioner should approach the civil court. However, the court noted that the dispute involved interpreting legal provisions rather than factual disputes. Citing the Supreme Court's decision in ABL International Ltd. & Anr vs. Export Credit Guarantee Corporation Of India Limited & others, the court held that a writ petition is maintainable for enforcing contractual obligations, especially when the State or its instrumentalities act arbitrarily. The court concluded that relegating the petitioner to a civil suit would cause undue hardship, and thus, the writ petition was maintainable.

Conclusion:
The court allowed the writ petition, quashing the decision of the Insurance Company as communicated by the Dy. Commissioner, Trade Tax. The Insurance Company was directed to settle the petitioner's claim with interest at 14% per annum from one month after the claim was lodged until actual payment. Additionally, the petitioner was awarded Rs. 10,000 as the cost of the writ petition.