Harishankar Goverdhanlal vs M.P. Commercial Tax Appellate Board and Others

Prakash Shrivastava , J.—This order will also govern the disposal of VAT Appeal No. 3 of 2012 since both these appeals involve the same question of law on the same fact-situation. These appeals to have been filed u/s 53 of the M.P. VAT Act, 2002 (for short, "the Act") against the order of the M.P. Commercial Tax Appellate Board, Bhopal, dated December 20, 2011 in respect of the cancellation of the registration certificate of the appellant.

Facts have been noted from VAT Appeal No. 2 of 2012. In brief, the appellant is a registered dealer under the M.P. Commercial Tax Act and was issued the registration certificate under the Act. By the ex parte order dated May 23, 2008 the registration certificate of the appellant was cancelled on the ground of non-filing of the return. The first appeal preferred by the appellant was dismissed by the Deputy Commissioner (Appeals), Commercial Taxes, vide order dated June 11, 2009 and the second appeal has been dismissed by the Board by order dated December 20, 2011.

These appeals were admitted on May 18, 2012 on the following substantial questions of law:

(a) 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?

(b) Whether the learned authority respondent No. 1 has committed legal error in not remanding the case in spite of taking the additional evidence of the returns filed by the appellant on June 10, 2009?

The aforesaid questions of law are interconnected, therefore, they are decided together.

The learned counsel appearing for the appellant has placed reliance upon the judgment of this court in the matter of Suraj Automobiles Service, Biaora (Rajgarh) v. Commissioner of Commercial Tax, Madhya Pradesh [2014] 67 VST 121 (MP) (dated February 7, 2013 passed in VATA No. 17 of 2012) and has submitted that the matter is required to be sent to the assessing officer for fresh adjudication after taking into account the fact of filing of the return, though belatedly. He has further placed reliance upon the judgment of this court in the matter of Garg Trading Co., Indore v. Sales Tax Officer reported in [2005] 5 STJ 422 (MP) and has submitted that the registration has been cancelled on irrelevant and non-existent ground, therefore, the same is required to be set aside. He has also placed reliance upon different decisions of the Board and has submitted that the registration could not have been cancelled by the ex parte order without giving proper opportunity to the appellant.

The learned counsel appearing for the respondents has submitted that since the appellant had not submitted the return within time, therefore, in terms of the Rules the registration certificate has rightly been cancelled.

Having heard the learned counsel for the parties and on the perusal of the record, it is found that the 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.

In view of this, we answer the questions in favour of the appellant and remand the matter back to the assessing officer for fresh decision, in accordance with law, keeping in view the observations made above.

The appeals are accordingly disposed of. Signed order be kept in the file of VATA No. 2 of 2012 and a copy thereof be kept in the file of VATA No. 3 of 2012.