2015 (9) TMI 416 - HC - VAT and Sales Tax

Cancellation of Registration Genuineness of Transaction Tribunal vide impugned order dismissed revision application of appellant confirming order passed by authorities cancelling registration certificates of petitioner Held that - Admitted that registration of petitioner was cancelled ab-initio under VAT Act as well as CST Act on ground that petitioner indulged into billing activities only with respect to the alleged purchases Tribunal observed that after examining issue afresh and considering genuineness of transactions / purchases alleged to have been made by petitioner, further consequential actions with respect to cancellation of registration may be taken Under said circumstances, matter was required to be remanded to A.O. and fresh decision was required to be taken with respect to cancellation of registration certificates in light of genuineness of transactions / purchases made by petitioner Thus matter remanded back to tribunal Decided against Assesse.

Summary

Issues:
1. Cancellation of registration certificates under the VAT Act and CST Act.
2. Denial of input tax credit on purchases made from specific traders.
3. Appeal against the impugned order passed by the Gujarat Value Added Tax Tribunal.

Cancellation of Registration Certificates:
The case involved the cancellation of registration certificates of the petitioner-dealer under the VAT Act and CST Act due to alleged involvement in billing activities with specific traders. The Gujarat Value Added Tax Tribunal had confirmed the cancellation of registration certificates. However, the High Court noted that the tribunal had remanded the matter to the Assessing Officer (A.O.) to re-examine the issue of input tax credit and other consequential matters. The High Court decided to quash and set aside the impugned orders of cancellation and remanded the case to the first authority for fresh consideration. The court emphasized that if the transactions were found to be non-genuine or involved only billing activities, the registration certificates could be canceled.

Denial of Input Tax Credit:
The Assessing Officer had denied input tax credit claimed by the dealer on purchases from specific traders, alleging that those traders were involved in billing activities only. The tribunal had partially allowed the appeals related to input tax credit and directed the A.O. to reevaluate the claim. The High Court observed that the genuineness of the transactions, including purchases from the specific traders, needed to be determined before deciding on the cancellation of registration certificates. The court stressed that the issues of input tax credit denial and registration cancellation were interconnected and required a comprehensive examination.

Appeal Against Tribunal's Order:
The petitioner-dealer appealed against the impugned order passed by the Gujarat Value Added Tax Tribunal, which confirmed the cancellation of registration certificates. The High Court, after considering the arguments from both parties, decided to remand the matter to the first authority for fresh consideration. The court directed the appropriate authority to decide on the cancellation of registration certificates and the genuineness of transactions within three months from the date of the order. The High Court clarified that if the transactions were found to be non-genuine, appropriate consequences, including cancellation of registration certificates, would follow. No costs were awarded in the case.

This detailed analysis of the judgment highlights the key issues of cancellation of registration certificates, denial of input tax credit, and the appeal process, providing a comprehensive overview of the legal proceedings and the High Court's decision in the matter.