2014 (7) TMI 535 - HC - VAT and Sales Tax

Cancellation of registration - Non filing or belated filing of return - Whether looking to the facts and circumstances of the case, the order for cancellation of registration dated May 23, 2008 passed by the respondent No. 3 is justified merely on the basis of non-filing of the returns while as per provision of section 17(1)(d) of the VAT Act, the registration can be cancelled only in case of arrears of tax liability of the petitioner - Held that - appellant has filed, annexure P/5, disclosing the details of the return submitted by him to show that the appellant had subsequently submitted the return in annexure P/5. The appellant has also disclosed that in terms of the return no tax was payable, whereas the Board has taken the view that though the appellant had submitted the return belatedly but no proof of payment of tax has been filed. It is also found that the order of cancellation of the registration certificate is an ex parte order and the fact relating to the submission of return and the liability/non-liability of the appellant in terms of the return needs consideration and proper opportunity is required to be given to the appellant before taking any action. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Cancellation of registration certificate under the M.P. VAT Act based on non-filing of returns and subsequent appeals challenging the cancellation.

Analysis:
The appeals filed under section 53 of the M.P. VAT Act, 2002 contested the cancellation of the registration certificate of the appellant by the M.P. Commercial Tax Appellate Board. The appellant, a registered dealer, had their registration certificate canceled for non-filing of returns. The first appeal and subsequent second appeal were both dismissed. The substantial questions of law admitted for consideration were whether the cancellation based solely on non-filing of returns was justified and if the authority erred in not remanding the case despite additional evidence of late-filed returns. The appellant argued for a fresh adjudication based on the late submission of returns, citing relevant case laws. The respondents defended the cancellation citing non-compliance with return submission timelines.

The High Court considered the appellant's submission of the return details and lack of proof of tax payment, noting the ex parte nature of the cancellation order. The court found that the matter required further consideration, especially regarding the liability/non-liability of the appellant as per the return. The court concluded in favor of the appellant, emphasizing the need for proper opportunity and consideration of all relevant factors before taking any action. Consequently, the court remanded the matter back to the assessing officer for a fresh decision in accordance with the law and the observations made in the judgment.

In the final disposition, the court ordered the appeals to be accordingly disposed of, with a signed order to be kept in the respective appeal files. The judgment highlighted the importance of providing a fair opportunity for the appellant and ensuring a comprehensive review of the circumstances before making any decisions regarding the cancellation of the registration certificate under the M.P. VAT Act.