2020 (2) TMI 962 - HC - VAT and Sales Tax

Non-payment of security deposit - amendment of registration certificate - Tripura VAT Act - HELD THAT - The insistence on the part of the department to collect security deposit of ₹ 12,00,000/- from the petitioner for amending the registration certificate is wholly impermissible. Under Memorandum dated 20th July, 2015 the Commissioner of Taxes in exercise of powers under Rule 12(4) of the Rules of 2005 has prescribed the security deposit amounts required for different classes of re-sellers, importers, manufacturers and transporters - As per this Memorandum thus, the Government could insist on collecting security deposit in two cases namely where transporters of all categories by whatever name called seek registration or when branch office of transporters of all categories are to be registered. However, when it comes to amendment of registration other than inclusion of branch office of transporters as mentioned in Clause (v), the amount of security required is nil. In the present case, the petitioner only required amendment of the registration certificate by including a go-down. It s case would therefore fall under Clause (vi) of the said Memorandum. Only if the request of the petitioner was for including the branch office in the registration certificate the security amount of ₹ 12,00,000/- prescribed in Clause (v) of the said Memorandum would have applicability. What are the rules and regulations for amendment of a registration certificate of a transporter under the new regime is not brought to our notice. Under the circumstances, we permit the petitioner to make a fresh application for amendment of the registration certificate. If such an application is made, the same shall be examined by the GST authorities on the basis of the presently prevailing rules and regulations - petition disposed off.

Summary

Issues:
Challenge to communication demanding security deposit for amendment of registration certificate.

Analysis:
The petitioner, engaged in the business of transportation, challenged a communication demanding a security deposit of &8377; 12,00,000 for amending the Certificate of Registration to include a new go-down. The petitioner argued that the demand was unjust as the additional go-down did not constitute a branch office. The Government contended that the new go-down would be treated as a branch office, justifying the security deposit based on a memo dated 17.11.2011. However, the High Court found the demand impermissible under the Tripura Value Added Tax Act (TVAT Act) and the Rules of 2005.

The TVAT Act, particularly Section 22, regulates the registration of transporters, carriers, and transporting agents. Rule 17 of the Rules of 2005 outlines the registration process, requiring transporters to provide details of branch offices and go-downs in their application. The Government's Memorandum dated 20.07.2015 prescribed security deposit amounts for different categories, distinguishing between transporters, branch offices, and amendments to registration certificates. The Court clarified that the petitioner's request for amending the certificate fell under a category with nil security deposit requirement.

The Court highlighted the distinction between a branch office and a go-down, emphasizing that the petitioner did not intend to use the new go-down as a branch office. The reliance on the 2011 Memorandum was deemed misplaced as it was superseded by the 2015 Memorandum. An inquiry report further supported the petitioner's position, confirming the nature of the new go-down as a delivery point rather than a branch office. Consequently, the Court set aside the communication demanding the security deposit.

Considering the evolving legal landscape due to the introduction of the GST regime, the Court permitted the petitioner to submit a fresh application for amending the registration certificate under the new rules. The Court directed the GST authorities to process the application within three months, emphasizing that the new go-down should not be considered a branch office. The judgment concluded by disposing of the petition accordingly, providing relief to the petitioner and ensuring compliance with the prevailing regulations under the GST regime.