2017 (8) TMI 1601 - AT - VAT and Sales Tax

Cancellation of registration of appellant - failure to pay tax U/s. 27(5) of Gujarat VAT Act - HELD THAT - The appellant did not produce sufficient evidence before the learned cancelling authority therefore, view taken by the learned cancelling authority was correct. Secondly, the appellant has paid tax and interest accepting indirectly that the purchases were not genuine. The cancelling authority has power to cancel registration on grounds mentioned under section 27(5) of GVAT Act. The cancellation of registration passed by the learned Commercial Officer (6) Unit-76, Bhavnagar dated 12.01.2016 is confirmed - appeal dismissed.

Summary

Issues:
1. Cancellation of registration under the Gujarat Value Added Tax Act, 2003.
2. Grounds for cancellation based on non-payment of tax under Section 27(5)(i).
3. Appellant's submission regarding physical exchange of goods and billing activities.
4. Examination of evidence presented by the appellant.
5. Comparison with the judgment in the case of State of Gujarat Vs. Nageshi Enterprise.
6. Justification of canceling authority's decision.
7. Appellant's payment of tax and interest as acceptance of liability.
8. Observations of the first appellate authority.
9. Consideration of vendor transactions and billing activities.
10. Legal basis for canceling registration under Section 27(5) of the GVAT Act.

Analysis:

1. The appellant challenged the cancellation of registration under the Gujarat Value Added Tax Act, 2003, following the dismissal of the first appeal. The cancellation was based on the appellant's failure to pay tax under Section 27(5)(i) as determined by the Commercial Tax Officer.

2. The appellant contended that the canceling authority did not consider the physical exchange of goods and erroneously associated the appellant with billing activities, arguing that vendor registration certificates were valid and details of purchases were provided to the first appellate authority.

3. The appellant's representative highlighted that all necessary documents were presented to prove the genuineness of transactions, while the Government Representative argued that the appellant knowingly provided incorrect information to evade tax, citing a relevant High Court judgment.

4. The Tribunal examined the evidence and found that the appellant's submission lacked sufficient proof of physical transportation of goods, supporting the canceling authority's decision due to inadequate documentation.

5. Reference was made to the State of Gujarat Vs. Nageshi Enterprise case, emphasizing the importance of accurate reporting to avoid tax evasion, which influenced the decision to cancel the appellant's registration based on similar grounds.

6. The Tribunal upheld the canceling authority's decision, noting the appellant's payment of tax and interest as an implicit acknowledgment of non-genuine transactions, aligning with the provisions of Section 27(5) of the GVAT Act.

7. The first appellate authority's observations revealed discrepancies in the appellant's records, indicating a lack of proper documentation for transactions, further supporting the cancelation of registration.

8. Specific vendor transactions were scrutinized, with findings suggesting involvement in billing activities or tax evasion, reinforcing the decision to cancel registration based on non-compliance with tax regulations.

9. The Tribunal concluded that the canceling authority acted within its jurisdiction, considering the appellant's failure to produce adequate evidence and the payment of tax as indicative of non-genuine transactions, justifying the registration cancelation.

10. Consequently, the Tribunal dismissed the second appeal, affirming the order of cancelation of registration issued by the Commercial Tax Officer and Deputy Commissioner, with no costs imposed on the appellant.