Allahabad High Court
M/S Rifco Traders vs State Of U.P. And Another on 15 April, 2014
Bench: Vineet Saran, Naheed Ara Moonis
HIGH COURT OF JUDICATURE AT ALLAHABAD
Court No.32
Civil Misc. Writ Petition (Tax) No. 122 of 2014
M/s Rifco Traders ... Petitioner
Vs.
State of U.P. and another ... Respondents
Hon'ble Vineet Saran, J
Hon'ble Naheed Ara Moonis, J
The petitioner M/s Rifco Traders was initially registered with the respondent no. 2 under the provisions of the Uttar Pradesh Value Added Tax Act, 2008 (hereinafter referred to as the "Act of 2008") as a proprietorship firm, for dealing in the business of trading of specified goods. Such certificate of registration was issued on 23.5.2012 and was operative with effect from 12.12.2010. On 15.11.2013 the constitution of the proprietorship firm was changed to a partnership firm by inducting two persons as partners, besides the proprietor in whose name the firm was initially registered, but the nature of business was to remain the same. Such partnership deed was registered on 15.11.2013 and was made effective from 25.11.2013.
The information with regard to change in the constitution of the firm was required to be given under the provisions of the Act of 2008, which was furnished by the petitioner on 27.11.2013 in Form XII of the Act of 2008 through one of its partners, the receipt of which was issued by the respondent on 24.12.2013. Then on 26.12.2013 a notice was issued by the respondent no.2-Assistant Commissioner, Commercial Tax, Bulandshahr to the petitioner to appear on 6.1.2014 by merely stating in the notice that the application of the petitioner did not appear to be as per the provisions of the Act of 2008. The date fixed for appearance was postponed (because of administrative reasons) for 8.1.2014. On the said date the petitioner-firm was represented and an objection was also filed on behalf of the firm. Then an order dated 9.1.2014 was passed by the respondent no.2 under section 17(8) of the Act of 2008 holding that the change in the constitution of the firm from proprietorship to partnership was in contravention of the provisions of section 17(14) Explanation (II) of Act of 2008 and Rule 35 of the U.P. Value Added Tax Rules, 2008 (hereinafter referred to as the "Rules of 2008"). Aggrieved by the said order, this writ petition has been filed.
We have heard Sri Ashok Kumar, learned counsel assisted by Sri Praveen Kumar, learned counsel for the petitioner as well as Sri A.C.Tripathi, learned Standing Counsel appearing for the respondents. With consent of the learned counsel for the parties, this writ petition is being disposed of at the admission stage itself.
The submission of the learned counsel for the petitioner is that no proper notice was issued to the petitioner as the notice dated 26.12.2013 is wholly vague for it merely states that the application of the petitioner does not appear to be as per the provisions of the Act of 2008. It is submitted that in the absence of any specific objection or reason having been given in the notice, the petitioner was handicapped in submitting its objections. It is further submitted by the learned counsel for the petitioner that a combined reading of section 17(14)(a) and Explanation (II) as well as section 75 (c) and (f) of the Act of 2008 read with Rules 33 and 35 of the Rules of 2008 would clarify the entire position, that on information being provided in the requisite format with regard to re-constitution of the firm, necessary amendment in the registration certificate was to be incorporated by the respondent-authority within 30 days. It is also submitted that Rule 35, which provides for fresh certificate of registration to be obtained where a registered dealer has succeeded in the business by another dealer by transfer, reconstitution or otherwise would not be applicable in the facts of the present case and even if applicable, the same would be contrary to the provisions of section 75(f) of the Act and Rule 33 of the Rules of 2008.
Sri A.C.Tripathi, learned Standing Counsel appearing for the respondents has, however, supported the order passed by the respondent no.2.
For proper appraisal of the aforesaid provisions of the Act and the Rules, relevant section 17(14) along with proviso and Explanations and section 75 of the Act of 2008 and Rules 33 and 35 of the Rules of 2008 are reproduced below:-
"17. Registration of dealers.-(1) Every dealer liable to pay tax under this Act shall obtain registration certificate issued by the prescribed registering authority in the prescribed form.
(2).....
.................
(14) The registering authority, after considering any information furnished or otherwise received and after making such inquiry as it may deem fit, amend from time to time any certificate of registration which shall take effect:
(a) in the case of change in the name, ownership or place of business, or opening of a new place of business, from the date of the event necessitating the amendment whether or not information in that behalf is furnished within the time prescribed under section 75.
(b) in case of any addition or modification in the description of any goods or class of goods in the certificate of registration, from the date of event necessitating the amendment if information in that behalf is furnished within the time prescribed under section 75 and in any other case, from the date of receipt of request for such addition or modification by the registering authority or the assessing authority, as the case may be;
(c) in case of deletion of any goods or class of goods, from the date of order of deletion.
Provided that where in consequence of a change in the ownership of a business, liability for payment of tax of any dealer ceases, the amendment of the certificate of registration shall take effect from the date on which information in respect of such change is furnished under section 75.
Explanation (I) - Any amendment of a certificate of registration under this sub-section shall be without prejudice to any liability for tax or penalty (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,
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, as the case may be, the partners of such partnership business, to apply for a fresh certificate of registration, and on information being furnished in the manner required by section 75, the certificate of registration shall be amended.
75. Information to be furnished regarding change of business.- If any dealer to whom the provisions of sections 17 and 18 apply:-
(a) transfers his business or any part thereof by sale, lease, leave, license, hire or in any other manner whatsoever, or otherwise disposes of his business or any part thereof; or
(b) acquires any business, whether by purchase or otherwise; or
(c) effects or comes to know of any other change in the ownership or constitution of his business; or
(d) discontinues his business or changes in his place of business or warehouse or opens a new place of business or warehouse; or
(e) changes the name, style or nature of his business or effects any change in the class or description of goods in which he carries on his business, as specified in his certificate of registration; or
(f) enters into partnership or other association in regard to his business; or
(g) starts a new business or joins another business either singly or jointly with other persons; or
(h) in the case of a company incorporated under 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.
Rule 33. Information Regarding Change of Business.-
(1) The information regarding 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 receiving the information referred to in sub-rule (1) the registering authority or the assessing authority, as the case may be, shall verify the correctness of information and after making such enquiry as he may deem fit, including enquiry at business premises, pass appropriate order and make necessary amendment in relevant records including registration certificate as for as possible within a period of 30 days.
35. Registration certificate not transferable.- A registration certificate granted under these rules shall not be transferable. Where a registered dealer is succeeded in the business by another dealer by transfer, reconstitution or otherwise, the successor dealer shall obtain a fresh certificate of registration in accordance with these rules."
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, we are proceeding on the basis that the information was supplied by the petitioner on the requisite format and within the specified period. That having been done, on information as required under section 75 of the Act of 2008 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. Though the heading of Rule 33 deals with information regarding change of business but the same is relatable to section 75 which, as already clarified hereinabove, would include the effect of change in the ownership or constitution of business. Then as per sub-rule (3) of Rule 33, when information under sub-rule (1) of Rule 33 is received by the competent authority, the correctness of the information has merely to be verified, and since in the present case 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. As we have already mentioned above, the present is not a case of transfer and is only a case relating to change in constitution of the firm (which earlier was a proprietorship firm and reconstituted as a partnership 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, for the foregoing reasons, the order passed by respondent no.2 rejecting the application of the petitioner for amending the registration certificate under section 75 of the Act 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 and in accordance with law, within a period of 30 days from the date of filing of a certified copy of this order before the respondent no.2. No order as to cost.
Dt: 15.4.2014
dps
(Naheed Ara Moonis, J) (Vineet Saran, J)
