2014 (4) TMI 693 - HC - VAT and Sales Tax

Requirement of Notice of change in the constitution of the firm - Certificate of registration Held that - Section 17 deals with registration of dealers and sub-section (14)(a) read with Explanation (II) would clearly show that where there is a change in the constitution of the firm without dissolution thereof, then it shall not be necessary for the dealer or the firm (the constitution whereof is changed) to apply for a fresh certificate of registration and then on information being furnished in the manner required by section 75, the certificate of registration shall be amended It is not the case of the respondents that the change in the constitution of the firm was not informed to the Department in the proper format or within the prescribed period - As such, this Court is proceeding on the basis that the information was supplied by the petitioner on the requisite format and within the specified period - On information as required u/s 75 with regard to change of business, (which includes the change in the ownership or constitution of business or entering into partnership or other association in regard to his business sub-sections (c) and (f) having been given within the prescribed period of 30 days, Rule 33 of the Rules of 2008 would become applicable - Then as per Rule 33(3), when information Rule 33(1) is received by the competent authority, the correctness of the information has merely to be verified and since the respondents do not dispute the correctness of the information furnished by the petitioner, necessary amendment in the relevant records, including registration certificate, ought to have been made, as far as possible, within a period of 30 days. The present is not a case of transfer and is only a case relating to change in constitution of the firm hence in the absence of a registered dealer having been succeeded by another dealer by transfer, the provisions of Rule 35 of the Rules of 2008 would not be attracted - As such the order passed by respondent no.2 rejecting the application of the petitioner for amending the registration certificate u/s 75 read with Rule 33 of the Rules is liable to be quashed - Accordingly, this writ petition stands allowed - The impugned order dated 9.1.2014 passed by respondent no.2 is quashed - The respondents are directed to pass fresh order in the light of the observations made hereinabove Decided in Favour of assessee.

Summary

Issues:
Change in constitution of firm from proprietorship to partnership under the Uttar Pradesh Value Added Tax Act, 2008.

Analysis:
The petitioner, initially registered as a proprietorship firm under the Act of 2008, changed its constitution to a partnership firm, maintaining the same business nature. The petitioner informed the authorities about this change as required by law. Despite this, the respondent issued a notice stating the application did not comply with the Act. The respondent then passed an order under section 17(8) of the Act, citing a contravention of section 17(14) and Rule 35 of the Rules of 2008. The petitioner challenged this order through a writ petition.

The petitioner argued that the notice was vague, hindering their ability to respond adequately. They contended that the change in constitution should have led to an amendment in the registration certificate, as per the Act and Rules. The relevant sections of the Act and Rules were examined to determine the obligations regarding changes in business structure. Section 17(14)(a) and Explanation (II) clarified that a fresh registration certificate was not required for certain changes in constitution, and Rule 33 outlined the process for informing authorities about such changes.

The court found that the petitioner had provided the necessary information about the change in constitution within the prescribed period. As per section 75 of the Act, Rule 33 applied to the situation, requiring verification of information and subsequent amendments within 30 days. Since the correctness of the information was not disputed, the court held that the registration certificate should have been amended promptly. Rule 35, which deals with transfer of registration, was deemed inapplicable as the case involved a change in constitution, not a transfer.

Consequently, the court quashed the order rejecting the petitioner's application for amending the registration certificate. The respondent was directed to pass a fresh order within 30 days in line with the court's observations and the law. The writ petition was allowed, with no costs imposed on either party.