2021 (5) TMI 40 - HC - VAT and Sales Tax

Direction to the respondents for issuing C-Forms - inter-state sale - CST Act - amendment of the registration after the death of the sole proprietor of the concern not applied - HELD THAT - In the present case, it is found that though the petitioner never applied for amendment of the registration after the death of the sole proprietor of the concern, the information in this respect was available with the department and in any case, even after the death of the proprietor the business was continued by the wife of the deceased with the help of the elder daughter who were to inherit the business in succession. A valid registration is necessary for a dealer to claim concessional rate of tax on inter-Sate sale of goods under Section 8 of CST Act. The demand of the petitioner, therefore, for the authorities to issue C-Form without amending the registration, therefore cannot be accepted. However, as noted, since the department has also virtually accepted the succession of the business upon death of the sole proprietor, let the petitioner even now apply for amendment of the registration certificate. If such applications are filed within a period of two weeks from today with supporting documents, the superintendent shall after following the procedure laid down in Section 19(5) T-VAT Act and Rule 16 of the TVAT Rules shall dispose of such application as expeditiously as possible. If he does accept the application, the same would have effect from the date of death of the sole proprietor. If such amendment in the registration is granted it would be open for the petitioner to re-activate the request for grant of C-Form on inter-State transactions which shall be decided on merits. Petition disposed off.

Issues:
1. Petitioner's prayer for direction to issue C-Forms under CST Act.
2. Failure to amend registration after the death of the sole proprietor.
3. Requirement of valid registration for claiming concessional rate of tax on inter-State sale.
4. Interpretation of relevant provisions of CST Act and T-VAT Act.
5. Application of Rule 16 of TVAT Rules for amending registration.

Analysis:
1. The petitioner sought a direction for the issuance of C-Forms under the CST Act for inter-State purchases. The petitioner, a proprietary concern, continued business after the demise of the original proprietor, with the deceased's wife and daughter managing the operations. Despite previous permits and assessments being granted, the authorities had not issued the C-Forms, citing the firm's unamended registration post the proprietor's death.

2. The respondent contended that the petitioner should have amended the firm's registration upon the sole proprietor's demise. The failure to do so, according to the respondent, meant that the petitioner could not claim C-Forms for subsequent transactions. The respondent emphasized that even an unregistered dealer is liable to pay taxes, irrespective of past issuances of C-Forms.

3. The Court analyzed the provisions of the CST Act, emphasizing that while registration is necessary for claiming concessional tax rates on inter-State sales, the liability to pay tax under the Act is not contingent on registration. The Court highlighted the importance of obtaining C-Forms for claiming concessional rates and the significance of registration for such purposes under Section 8 of the CST Act.

4. Referring to the T-VAT Act, the Court delved into the compulsory registration requirements for dealers. It outlined the process for registration, amendment, and cancellation under Section 19 of the T-VAT Act, along with the relevant provisions of Rule 16 of the TVAT Rules. The Court noted that the registration could be amended with retrospective effect under specific circumstances.

5. Despite the petitioner's failure to apply for registration amendment post the proprietor's death, the Court acknowledged that the department was aware of the situation. The Court directed the petitioner to apply for registration amendment within two weeks, with supporting documents. If the application is accepted, the petitioner can re-activate the request for C-Forms for inter-State transactions, subject to the amended registration's approval and subsequent evaluation on merits.

In conclusion, the Court disposed of the petition, providing directions for the petitioner to apply for registration amendment to potentially claim C-Forms for inter-State transactions, emphasizing the importance of valid registration for availing concessional tax rates under the CST Act.

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