The High Court of Tripura recently comprising of a bench of Chief Justice Mr. Akil Kureshi and Justice Mr. S G Chattopadhyay remarked that liability to pay tax under Section 6 of the CST Act is not connected to the requirement of registration under Section 7. Registration under Section 8 of course, is necessary for claiming a concessional rate of tax on the inter-State sales. (Tripura Electricals v. The State of Tripura and Ors)
Facts of the case
The petitioner is a proprietary concern engaged in buying and selling goods within the State of Tripura. The proprietor expired and f the elder daughter of the deceased is continuing the same business and has been granted permissions by the department in the name of the proprietary concern. An application was made to the State Value Added Tax authorities for issuance of C-Forms for the years 2015-16 in connection with the inter-State purchases made by the petitioner firm, which had not been issued on the ground that the petitioner firm is not a registered concern.
Contention of the Parties
Appearing for the petitioner learned Advocate Mr. Rajib Saha submitted that the respondent authorities were well aware about the death of the original proprietor of the concern and that his wife and daughter had inherited the business. It was on this basis that necessary permits for interState purchase of goods were granted and assessments made which were also challenged before appellate authorities and appeals were entertained. It would, therefore, be too late in the day for the authorities now to contend that since the registration of the firm was not amended after the death of the proprietor, C-Forms cannot be issued.
On the other hand, learned counsel Mr. A Nandi appeared for the respondents as a special counsel and opposed the petition. Referring to an affidavit-in-reply dated 29th September 2018 filed by the respondents, he submitted that it was the duty of the petitioner to have the registration of the firm duly amended upon the sole proprietor dyeing. The petitioner failed to do so. Merely because at one stage certain C-Forms may have been issued would not give a vested right to the petitioner to claim such certificates for subsequent transactions. Even an unregistered dealer is liable to pay taxes.
Courts Observation & Judgment
The having heard the learned counsel for the parties and having perused documents on record, observed, “Section 6 of the CST Act creates a liability on every dealer to pay tax as per the prescribed rates. Sub-section (1) of Section 6 provides that subject to the other provisions of the Act, every dealer shall, with effect from such date as the Central Government may notify, be liable to pay tax under the Act on all sales of goods other than electrical energy effected by him in course of inter-State trade or commerce. Section 7 of the Act pertains to registration of dealers. Under sub-section (1) of Section 7, every dealer liable to pay tax under the Act has to get himself registered within such time, as may be prescribed, by making an application for such purpose. Sub-section (1) of Section 8 of the Act provides that every dealer who in course of inter-State trade or commerce, sells to a registered dealer goods of the description referred to in sub-section (3), shall be liable to pay tax which shall be three per cent of his turnover or at the rate applicable under laws of the State where the sale takes place, whichever is lower. It is in this context, the requirement for the petitioner to obtain C-Form arises. However, one thing may be noted that the liability to pay tax under Section 6 of the CST Act is not connected to the requirement of registration under Section 7. Registration, of course, is necessary for claiming concessional rate of tax on inter-State sale.”
The Court referred to Section 19 of the T-VAT Act pertains to compulsory registration of dealers and Under Rule 16 of the Tripura Value Added Tax Rules, 2005 a dealer can apply for amendment of certificate of registration. Sub-rule (1) of Rule 16 provides that when any registered dealer furnishes any information in accordance with sub-section (5) of Section 19 to the Superintendent of Taxes within 14 days of occurrence of the event along with the certificate of registration for amendment or cancellation thereof, the concerned Superintendent of Taxes shall amend the certificate accordingly after making such inquiry as he deems fit.
The court observed, “the petitioner never applied for amendment of the registration after the death of the sole proprietor of the concern, the information in this respect was available with the department and in any case, even after the death of the proprietor the business was continued by the wife of the deceased with the help of the elder daughter who was to inherit the business in succession.”
The Court considering the precedents and the facts of the case held that, the demand of the petitioner, for the authorities to issue C-Form without amending the registration, cannot be accepted. However, since the department had also virtually accepted the succession of the business upon the death of the sole proprietor they should let the petitioner apply for amendment of the registration certificate. With these observations and directions the petition is disposed of. Pending application(s), if any, also stands disposed of.
READ JUDGMENT
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