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TMI Blog2016 (5) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... application was filed belatedly is patently erroneous. The registering authority has not considered the provisions of Section 17 (14) (a) of the Vat Act, which makes it obligatory upon the registering authority to carry out the amendment irrespective of the fact that the application was not furnished within the prescribed period as provided under Section 75 of the Act. We further find that there is no finding that the petitioner is still or simultaneously carrying on his business at Noida as well as at Ghaziabad. In the absence of this finding, the application for change of place of business could not be rejected. It is found that the petitioner's application on the ground of nonfurnishing ₹ 20/- as filing fees was not an incurable defect and that the same could have been cured. The registering authority could not reject the petitioner's application on this ground and should have allowed the petitioner to cure the defect. Therefore, the order rejecting the petitioner's application for change of place of business was wholly illegal and, cannot be sustained. Ex parte provisional assessment order passed - no notices were served - Respondent contended that proper service w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns at the Ghaziabad address. Also the affixation made under clause (e) of Rule 72 of the Rules was done at Noida address. This affixation at Noida was patently illegal and could not be held to be a proper notice by affixation, inasmuch as the respondents knew that the petitioner had shifted his place of business and there was no one at the Noida address. The respondents have not come with a stand that the petitioner is simultaneously carrying on his business at Noida as well as at Ghaziabad. In fact, the respondents admit that the petitioner has shifted his place of business from Noida to Ghaziabad. There is another aspect, that clause (h) of Rule 72 of the Rules has not been followed which requires the summons to be sent by registered post acknowledgment due in addition to personal service unless dispensed with by the Assessing Authority. In the instant case, there is nothing to indicate that the assessing authority had dispensed with the service of summons by registered post. Therefore, it is apparently clear that there was no valid service of summons and consequently, ex-parte proceedings were taken based on which ex-parte assessment orders were passed which can not be su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registering authority to amend the registration certificate accordingly. The petitioner contends that while applying for change of place of business, the petitioner had indicated that they had shifted to the new place of business on 20.01.2013. According to the petitioner, no action was taken on the petitioner's application inspite of a reminder being issued again on 11.02.2015. 2. The petitioner contends that in the year 2004 ex-parte assessment orders were passed by the assessing authority for the assessment year 2011-12, 2013-14 and 2014-15. According to the petitioner, no notice was served upon them, and that, on this ground, the appeals filed by the petitioner were allowed by orders dated 31.01.2015, 20.02.2015 and 30.05.2015. The assessment orders were set aside and the matter was remitted to the assessing authority to pass a fresh assessment order. The assessment proceedings for the aforesaid years is still pending consideration. The assessment orders were set aside on the ground that the petitioner had no notice of the assessment proceedings, inasmuch as their principal place of business had changed and that the summons were sent to the petitioner's old place of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shifted his place of business on 20.01.2013 without previous intimation and that the application for change of place of business was filed after 11 months on 05.12.2013. The impugned order further indicates that the petitioner did not give details of closure of its business at Noida nor filed the filing fee of ₹ 20/-. 8. The ground urged by the petitioner is that no opportunity of hearing was provided. The impugned order is violative of Section 75 of the Vat Act read with Rule 33(1) and (3) of the U.P.Value Added Tax Rules (hereinafter referred to as the Rules ). Further, the provision of Section 75 is not mandatory and that only an intimation is required to be given by the petitioner and that the said application cannot be rejected on the ground of delay. It was further contended that the petitioner was never served with the impugned order dated 02.09.2014 and that they only came to know for the first time when a counter affidavit in Civil Misc. Writ Petition No. 80 of 2016 was filed. 9. On the other hand, the stand of the respondent is, that the said order was served by affixation at the Noida address. Further, Section 75 read with Rule 33 of the Rules has no appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty imposable under this Act. Explanation (II)-For the removal of doubts, it is hereby declared that where a registered dealer- (a) affects a change in the name of his business; or (b) is a firm and there is change in the constitution of the firm without dissolution thereof; or (c) is a trustee of a trust and there is a change in the trustees thereof; or (d) is a guardian of the ward and there is a change in the guardian; or (e) is a Hindu Undivided Family and the business of such family is converted into a partnership business with all or any of the coparceners as partners thereof, (f) is proprietor of a business and such business is succeeded by successor or successors of its proprietor on account of disability or death of such proprietor. then merely by reason of any of the circumstances aforesaid, it shall not be necessary for the dealer or the firm the constitution whereof is changed, or the new trustees, or the new guardian or, the partners of such partnership business or successor or successors, as the case may be, to apply for a fresh certificate of registration, and on information being furnished in the manner required by section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a statute effects any change in the constitution of Board of Directors; or (i) effects any change in the particulars furnished in application for grant of registration certificate under section 17, he shall within thirty days of the occurring of any of the events aforesaid, inform the registering authority in the form and manner, as may be prescribed. 13. A perusal of Section 75 (d) of the Vat Act indicates that where a dealer changes his place of business he shall inform the registering authority in the form and manner as prescribed within 30 days. Rule 33 of the Rules provides the manner for providing the information regarding change of place of business. For facility, Rule 33 of the Rules is extracted hereunder: 33. Information Regarding Change of Business.- (1) The information regrding change of business under section 75, shall be furnished to the registering authority in Form XII along with form VII or VII-G, as the case may be, and shall be signed by the person referred to in sub-rule (6) of rule 32. (2) The application under sub-rule (1) shall accompany the registration certificate and evidence regarding change of business. (3) On r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Undertaking from sureties for treating Security furnished earlier valid for the purpose of amended constitution of firm in Form-XIII. Rule 6 of the Rules is with regard to the jurisdiction of the assessing authority. For facility, Rule 6 is extracted hereunder: 6. Jurisdiction of Assessing Authority.- (1) If a dealer carries on business within the limits of jurisdiction of only one Assistant Commissioner that officer shall be the assessing authority in respect of such dealer and the place where he carries on business shall be deemed to be his principal place of business. (2) If a dealer other than a casual dealer carries on business within the limits of jurisdiction of more than one Assistant Commissioner he shall, within thirty days of the commencement of business, declare one of the places of his business as his principal place of business in Uttar Pradesh and shall intimate all the Assistant Commissioners within whose limits of jurisdiction his places of business are situated. The Assistant Commissioner within whose limits of jurisdiction the principal place of business so declared by the dealer is situated shall be the assessing authority in respect of suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of such dealer and his decision shall be final. (6) If a dealer has no fixed place of business, the Assistant Commissioner within whose limits of jurisdiction he ordinarily resides shall be the assessing authority in respect of such dealer. (7) In a case in which the driver or person-in charge of a vehicle carrying goods referred to in sub-section (1) of section 50, with the documents referred to in rule 58 to carry such goods out side the State and is found not to carry such goods outside the State, the Commissioner shall nominate the assessing authority for assessment and penal proceedings. (8) No dealer, who has once made a declaration under above sub rules or who has failed to make such declaration within the time specified therein, shall be allowed to change the same or, as the case may be, to make a declaration except with the previous written permission of the Commissioner or any officer authorized by him in this behalf, and on such conditions as he may deem fit to impose. (9) Whenever there is any doubt or if any of the sub-rules of this rule do not apply, the commissioner shall determine the Assistant Commissioner who will be the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner made a declaration of his principal place of business under Rule 6(1) of the Rules and any change in the principal place of business requires a written permission from the Commissioner, which in the instant case was not done by the petitioner and, therefore, the petitioner's application for change of place of business filed under Section 75 of the Act read with Rule 33 of the Rules could not be allowed and was rightly rejected in view of noncompliance of Rule 6(8) of the Rules. 17. The contention of the learned counsel for the respondents is patently misconceived. Rule 6 of the Rules has no application in the instant case. The application for change of place of business was rightly filed by the petitioner under Section 75 of the Vat Act read with Rule 33 of the Rules in Form No. XII. The petitioner filed the application for amendment of his registration certificate, which it applied under Form No. VII and registration was granted. Column no.6 of Form No. VII required the petitioner to disclose his principal place of business in Uttar Pradesh with complete address. The application in Form XII only requires the petitioner to apply for amendment of its registration cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner's application on the ground of nonfurnishing ₹ 20/- as filing fees was not an incurable defect and that the same could have been cured. The registering authority could not reject the petitioner's application on this ground and should have allowed the petitioner to cure the defect. In view of the aforesaid, the order dated 02.09.2014 rejecting the petitioner's application for change of place of business was wholly illegal and therefore, cannot be sustained. 20. The petitioners have challenged the exparte provisional assessment orders for the months of April to October,2015 under the U.P.Vat Act as well as under Central Sales Tax Act on the ground that no notices were served. It was urged that inspite of having knowledge that the petitioner had changed its place of business from Noida to Ghaziabad, the respondents for reasons best known to them had sent the notices and affixed the same as well as the demand notices at the Noida address and made no attempt to serve the petitioner at the Ghaziabad address. The petitioner has also questioned the assessment orders on the ground that the assessing authority had no jurisdiction to make any assessment, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents in adhering to the process of service of summons under Rule 72 of the Rules. Rule 72 of the Rules has been ignored and a procedure which is not known to law has been adopted. For facility, the Rule 72 of the Rules is extracted hereunder:- 72. Mode of service.- The service of any notice, summons or order under the Act or the Rules may be affected by any of the following methods, namely: (a) Service to be on dealer or person concerned in person when practicable, or on his agent- Wherever it is practicable service shall be made on the dealer or person concerned in person, unless he has an agent empowered to accept service, in which case service on such agent shall be sufficient. (b) Service on agent by whom dealer or person concerned carries on business- In a case relating to any business or work against a person who does not reside within the local limits of the jurisdiction of the authority from which the notice, summons or order is issued, service on any manager or agent, who, at the time of service, personally carries on such business or work for such person within such limits, shall be deemed good service. (c) Service on an adult me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endorse or annex, or cause to be endorsed or annexed, on or to the original notice, order or summons, a return stating the time when and the manner in which the notice, order or summons was served, and the name and address of the person (if any) identifying the person served and witnessing the delivery or tender of the notice, order or summons. (g) Examination of the process server- Where a notice, order or summons is returned under clause(e), the authority shall, if the return under that rule has not been verified by the affidavit of the process server, and may, if it has been so verified, examine the process server on oath, or cause him to be so examined by another authority, touching his proceedings, and may make such further enquiry in the manner as it thinks fit: and shall either declare that the notice, order or summons has been duly served or order such service as it thinks fit. (h) Simultaneous issue of notice or order or summon for service by post in addition to personal service- (i) The authority shall, in addition to, and simultaneously with, the issue of notice, order or summons for service in the manner provided under this rule, also direct the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er circulating in the locality in which the dealer or person concerned is last known to have actually and voluntarily resided, carried on business or personally worked for gain. (iii) Effect of substituted service;- Service substituted by the order of authority shall be as effectual as if it had been made on the dealer or concerned person. (iv) Time for appearance to be fixed;- Where service is substituted by the order of authority, the authority shall fix such time for the appearance of the dealer or the concerned person as the case may require. (j) Service of notice, order or summon where the dealer or person concerned resides within the jurisdiction of another authority- A notice, order or summons may be sent by the authority by which it is issued, whether within or without the State, either by one of its process server or by post to any authority having jurisdiction in the place where the dealer or person concerned resides. (k) Duty of authority to which notice, order or summon is sent- The authority to which a notice, order or summons is sent under clause (j) shall, upon receipt thereof, proceed as if it has been issued by such authority and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other manner which the authority thinks fit; and, where the dealer or the concerned person has an agent empowered to accept service, the letter may be delivered or sent to such agent. 24. Rule 72(a) of the Rules provides that the service of summons is required to be made on a dealer or a person concerned in person or his agent. In the instant case, the report of process server indicates that there was no Firm at the Noida address. At the Ghaziabad address, the process server met one person, who refused to divulge his name but clearly indicated as to which person would receive the notice. The process server, however, indicates service by refusal. In our opinion, the report of the process server is wholly illegal. There is no finding that the person who refused to accept the notice was a dealer or a person concerned in person or an agent empowered to accept the notice. In the absence of any report to this effect we are of the opinion that there is no valid service by refusal. 25. Admittedly, the Assessing Authority has no jurisdiction to effect service of summons outside his territorial jurisdiction. Territorial jurisdiction of the Assessing Authority was Noida. Ghaziabad wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order by affixation was made on 17.12.2015 at Noida. The Assessing Authority had also rejected the recall application on the ground that the admitted tax of ₹ 3.3 crore was not deposited which is a mandatory requirement as per Section 32 of the Act. On this issue, we are of the opinion that Assessing Authority committed a manifest error in rejecting the recall application. For facility, section 32 is extracted hereunder:- 32.Power to set aside ex-parte order of assessment or penalty.- (1) In any case in which an order of assessment or re-assessment or rejection of application for registration or order of penalty is passed exparte, the dealer may apply to the assessing authority within thirty days of the service of the order to set aside such order and re-open the case; and if such authority is satisfied that the applicant did not receive notice or was prevented by sufficient cause from appearing on the date fixed, it may set aside the order and reopen the case for hearing: Provided that no such application for setting aside an exparte assessment order shall be entertained unless it is accompanied by satisfactory proof of the payment of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the admitted tax by the dealer. In the instant case, we find that the assessment orders were served by affixation at the Noida address. The respondents knew very well that the petitioner had shifted its place of business. Therefore, affixation of the assessment order at the Noida address was of no avail. The limitation could not start from that date, i.e. the date of affixation as there was no valid service of the assessment orders upon the petitioner. The limitation of 30 days will start from the date when there is proper service of the order upon the petitioner on which date the petitioner gets knowledge about the assessment orders which in the instant case was lacking. 31. We also find that pursuant to the ex-parte assessment orders, a sum of ₹ 49.82 crores was realized after attaching the bank account which included the admitted amount of ₹ 3.3 crores. Therefore, the petitioner's application could not be rejected on the ground that the admitted tax of ₹ 3.3 crores was not deposited by the petitioner. Once the amount has been realized, it was not open to the petitioner to deposit any further amount. Consequently, the order dated 11.02.2016 rejecting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate order. 35. Before parting, we must observe the manner in which the respondents have proceeded with the assessment and recovered the amount from the petitioner's Bank account in haste is deplorable and in gross violation of the provisions of the Act. We find that for the assessment years 2011-12, 2013-14 and 2014-15 ex-parte assessment orders were made without adequate service of notices upon the petitioner. These assessment proceedings were set aside in appeal on the short ground that the service of the summons were sent at the address where the petitioner was no longer carrying on its business. Inspite of this knowledge, the respondents chose deliberately to serve the notice for provisional assessment for the period April to October, 2015 upon the petitioner at the Noida address knowing fully well that the petitioner was not carrying any business from the Noida address. The respondents knew very well that the petitioner had shifted its place of business from Noida to Ghaziabad as they made a futile attempt to serve the notice at Ghaziabad but later for the reasons best known to them, chose deliberately to serve the notice by affixation at the Noida address. Suc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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