Shiv Sankar Lohia vs Sales Tax Officer, Jorabazar Charge, Kolkata and Others

This application under article 226 of the Constitution of India is at the instance of a dealer under the West Bengal Value Added Tax Act, 2003 and is directed against the order dated July 30, 2010. See page 110 supra. passed by the West Bengal Taxation Tribunal thereby rejecting an application u/s 8 of the West Bengal Taxation Tribunal Act, 1987 filed by the writ petitioner challenging the order of the appropriate authority cancelling the registration both under the VAT Act and the Central Sales Tax Act, 1956. It appears from record that initially, the appropriate authority under the Act issued a show-cause notice allegedly u/s 24(1)(a) of the West Bengal Value Added Tax Act, 2003 and u/s 7 of the CST Act, 1956 asking the writ petitioner to show cause why the registration of the petitioner should not be cancelled on the ground that he had not yet submitted the return and he was also not carrying on business at the declared place of business. By the said notice, the writ petitioner was asked to show cause before the said authority on April 23, 2010 as to why the registration should not be cancelled.

It appears that the writ petitioner answered to the said notice to show cause by specifically asserting that he had been carrying on business using the premises at the stated place in ordinary course and had also been submitting the return as per the provisions of the West Bengal Value Added Tax Act and the Rules and the photostat copy of the acknowledgment slip was also annexed for ready reference. The writ petitioner, thus, denied the allegations.

It appears from the order sheet annexed to the affidavit-in-opposition that the appropriate authority on April 23, 2010 first recorded that it had seen the report given by the ACTO/JB and then, recorded the finding that the dealer was not existent at the declared place and that he had no bona fide business activity at the declared place of business and the order was kept reserved.

After recording such order, the concerned officer, further, recorded that he had seen the letter dated April 23, 2010, i.e., the cause shown by the writ petitioner and thereafter, the said officer relied upon the report on the visit to the dealer''s declared place on various earlier dates and ultimately, came to the conclusion that the dealer was not existent and it was further recorded that the postal authority returned back the dealer''s show-cause notice previously with a remark "no such name in the address".

From the aforesaid order, we find that the formalities required for cancellation of the registration have not been complied with.

Once the writ petitioner had disputed the allegations by specifically stating that it was carrying on business at the declared place and that it had also submitted its return regularly, it was the duty of the appropriate authority to draw the attention of the writ petitioner to the various earlier reports relied upon by the authority in the order cancelling the registration. Without drawing the attention of those reports, the authority could not rely upon those by keeping the writ petitioner in dark.

In this case, after receiving the answer to the show-cause notice, it was the duty of the authority to fix another date with the copies of the earlier inspection reports so that the writ petitioner could effectively answer regarding the reports submitted by the authority concerned and then, should have arrived at the final decision.

It appears that the learned Tribunal below did not at all consider the aforesaid aspect of the matter.

We, thus, set aside the order cancelling the registration and give liberty to the respondent-authority to start afresh from the stage of show-cause notice, if it is willing to proceed with the said notice earlier given. We make it clear that we have, otherwise, not gone into the merit. It is needless to mention that in view of setting aside the order of cancellation of the registration, the registration of the writ petitioner has been restored from the date of cancellation.

With the aforesaid observation, the application is, thus, disposed of. Xerox certified copy of this order, if applied for, be given to the learned counsel appearing for the parties within a week from the date of filing of the application.