Natural Lab Private Limited vs State of U.P. and Others

Heard learned counsel for the parties. The petitioner is a private limited company incorporated under the provision of the Companies Act, 1956. At the time of its incorporation the company had two directors, namely, Shri Devendra Kumar (the petitioner) and Shri Pankaj Yadav. It is alleged that it was decided amongst the directors that Shri Devendra Kumar will look after the work of taxation and the rest of the matters will be looked after by Shri Pankaj Yadav. As per mutual understanding Shri Devendra Kumar applied for registration under the provision of the U. P. Value Added Tax Act. The company was allotted Tax Identification No. 09482404077 on June 16, 2008 after which the petitioner Shri Devendra Kumar became the authorised signatory of the company.

It appears that there some disputes have arisen between them on which they have started accusing each other for acting against the interest of the company.

By this writ petition the petitioner has prayed for setting aside the order of the registering authority by which he has amended the registration certificate adding the name of Shri Pankaj Yadav as director of the company. The petitioner has also made a prayer to quash the notice dated June 1, 2011 u/s 17(14) of the Act, requiring him to show cause on an information given by Shri Pankaj Yadav to other directors of the firm on May 19, 2011 that the firm has been closed (on Form XI) on April 1, 2011 and that the registration be cancelled.

Notices were issued to the private respondent on which Shri Bhola Nath Yadav has entered appearance on behalf of Shri Pankaj Yadav. He states that the dispute has arisen between the directors on the licence taken by Shri Devendra Kumar under the Drugs and Cosmetics Act representing himself as proprietor of the company. An objection has been taken by learned standing counsel that there is right to appeal against the order amending the registration certificate provided by section 55 of the Act.

The learned counsel for the petitioner submits that right to appeal has been provided against the order of assessing authority, whereas in the present case the order has been passed by the registering authority. He refers to the definition of the "assessing authority" u/s 2(b) and the definition of "registering authority" u/s 2(aa) of the Act. It is submitted that the registering authority includes assessing authority but that where registering authority has passed an order, not as assessing authority but as registering authority u/s 17(14) of the Act, the order is not appellable. The learned counsel for the petitioner submits that the application for amendment could not have been decided unless notice was given to the person in whose favour the registration was given and after hearing him serving the principle of natural justice.

We have examined the provisions of the Act and the Rules. u/s 55 of the Act, if any dealer or other person is aggrieved by an order made by the assessing authority other than the order mentioned in sub-section (7) of section 48 he can file an appeal within 30 days. The "assessing authority'''' is defined in section 2(2) of the Act as well as rule 2(c) of the U. P. Value Added Tax Rules, 2008. Rule 2(c); sub-rule (4) of rule 5 and rule 32(13) relevant for the purposes to find out whether the word "assessing authority" in section 55 will include the registering authority are quoted as below:

(c) ''Assessing authority'' shall include--

(i) A Joint Commissioner (Assessment) appointed and posted by the State Government in a corporate circle to perform the functions and exercise the powers of assessing authority;

(ii) A Deputy Commissioner or an Assistant Commissioner appointed by the State Government and posted either by the State Government or by the Commissioner or a Commercial Taxes Officer appointed and posted by the Commissioner;

(a) in a circle to perform the functions and exercise the powers of an assessing authority in such circle;

(b) in any offices of the Department and empowers under rule 5 to exercise powers under sections 45, 48 and 49.

(4) Registering authority posted or nominated by Commissioner in a circle shall have concurrent jurisdiction with all other assessing authorities of such circle.

(13) Where there is no registering authority in any circle, assessing authority having jurisdiction over the principal place of business of the dealer shall be the registering authority.

A conjoint reading of definitions of "assessing authority" and "registering authority" u/s 2(b) and section 2(aa) as well as "assessing authority" as defined under rule 2(c) read with rules 5 and 32(13) of the Rules would show that the assessing authority will include registering authority. Shri S.P. Kesarwani submits that in the office of the Department the assessing authorities are empowered to act as registering authorities. In our opinion for the purposes of section 55 the assessing authority will include registering authority.

In view of the above, the appeal lies against the order of amending the registration certificate u/s 55 of the Act. The petitioner may prefer an appeal before the appellate authority, who will decide it after giving notice to both the parties as to whether the order amending the registration certificate is valid or suffers from any illegality. It will be open to the petitioner to give reply to the show-cause notice on the application moved by Shri Pankaj Yadav alleging that the business of the firm has been closed and thus the registration be cancelled. The writ petition is accordingly dismissed on the ground of alternative remedy.