2016 (7) TMI 479 - HC - VAT and Sales Tax

Rejection of application for VAT registration - application has been rejected by the respondent stating that the proposed place of business is a residential area and that the petitioner having applied for registration as a dealer of granite commodity, such business cannot be carried on in a residential premises. - TNVAT - Held that - when there is no dispute with regard to the genuineness of the business that is going to be carried on at the place of business, it is not for the Revenue to suggest the extent of the land that is necessary to carry on the business and it is for the businessman to decide the same. The writ petition is allowed, the impugned order is set aside and the respondent is directed to re-consider the application for registration, after taking into consideration the law laid down by this Court in the decision 2012 (7) TMI 865 - MADRAS HIGH COURT , call for appropriate documents to establish that the petitioner proposes to be only a retailer and upon satisfaction, the respondent shall grant a registration certificate to the petitioner subject to the condition that the petitioner complies with other formalities. - Decided in favor of petitioner.

Summary

Issues:
1. Rejection of registration application for a granite retailer in a residential area under the Tamil Nadu Value Added Tax Act, 2006.

Analysis:
The petitioner, a granite retailer, applied for registration under the Tamil Nadu Value Added Tax Act, 2006, but the application was rejected by the respondent citing that the proposed business location was a residential area, unsuitable for a granite business. The petitioner challenged this decision through a writ petition.

The petitioner's counsel argued that the location's extent should not affect registration issuance, citing a previous case. Reference was made to Section 39(1) and (2) of the Act, emphasizing that if the registration authority finds the application in order, they must grant the certificate. Additionally, the counsel highlighted that under Sub-Section (14) of Section 39, the authority can modify or cancel the registration in case of violations.

On the other hand, the Additional Government Pleader contended that a granite business necessitates a stockyard and cannot operate in a residential area. However, it was noted that the petitioner applied as a retailer without intending to stock granite at the business location.

Referring to a previous decision, the court emphasized that the genuineness of the business should be the focus, not the extent of the business premises. The court rejected the reasoning in the impugned order and directed the respondent to re-examine the application, considering the law laid down in the previous case. The respondent was instructed to verify the application's compliance with Section 39 and grant registration if satisfied with the petitioner's retail business intent, within four weeks.

In conclusion, the writ petition was allowed, the impugned order was set aside, and the respondent was directed to reconsider the registration application based on the court's guidance. The petitioner was to be granted a registration certificate if all requirements were met within the specified timeframe, without incurring any costs.