2019 (12) TMI 467 - HC - VAT and Sales Tax

Amendment in registration certificate - proprietorship firm, without dissolution entered into partnership firm - whether partnership firm is required to apply for a fresh registration certificate or amendment is permissible as per section 75 of the VAT Act? - HELD THAT - Section 75 of the VAT Act casts a duty upon the dealer to inform his Assessing Authority about the change in the ownership of his business where the provisions of sections 17 18 apply - Rule 33 authorizes a dealer to inform about the change in the business in requisite Form - XII within a period of 30 days; whereas, sections 17 14(a) of the VAT Act clearly provide that where there is a change in the constitution of a firm without dissolution thereof, then it is not necessary for the dealer to apply for a fresh certificate of registration. In the case in hand, on constitution of a partnership firm, the dealer immediately moved a duly signed application for amendment on 02.11.2011 in the registration certificate in Form - XII prescribed under Rule 33 of the U.P. Value Added Tax Rules and submitted on 25.11.2011 within the prescribed limit of 30 days - Further, the record reveals that there is no finding against the dealer that the change in the constitution was not informed to the Department in proper format within the prescribed period. Therefore, the dealer has duly given information to his Assessing Authority as per the requirement of section 75 of the VAT Act with regard to change of his business which includes the change in the ownership of the business. The authorities below were not justified in rejecting the amendment application of the revisionist - question of law is answered in favour of the revisionist and against the Department - revision allowed.

Summary

Issues:
Whether a proprietorship firm, upon entering into a partnership firm without dissolution, is required to apply for a fresh registration certificate or if an amendment is permissible as per section 75 of the VAT Act.

Analysis:
The judgment pertains to a revision filed against the rejection of an amendment application for a registration certificate by the Commercial Tax Tribunal. The revisionist, a proprietorship firm, transitioned into a partnership firm without dissolution. The key issue was whether a fresh registration certificate was necessary or if an amendment sufficed under section 75 of the VAT Act.

The VAT Act mandates that a dealer inform the Assessing Authority of any change in ownership as per sections 17 and 18. Rule 33 allows for such information to be provided in Form XII within 30 days. Notably, sections 17 and 14(a) specify that in cases of a change in firm constitution without dissolution, a fresh registration certificate is not required.

In this case, upon the formation of the partnership firm, the dealer promptly submitted an application for amendment in Form XII within the stipulated time frame. There was no indication that the change in constitution was not duly communicated to the Department. The precedent set by the Division Bench in Fifco Traders Vs. State of U.P. & Another supports the permissibility of amending the registration certificate in cases where a proprietorship firm transitions into a partnership firm with the proprietor also being a partner.

Given the circumstances and legal precedents, the rejection of the revisionist's amendment application was deemed unjustified. Consequently, the order of the Commercial Tax Tribunal was set aside, and the revision was allowed in favor of the revisionist against the Department.

In conclusion, the judgment clarifies the procedural requirements under the VAT Act regarding amendments to registration certificates in cases of firm constitution changes without dissolution, emphasizing the importance of timely and proper communication to the Assessing Authority.