Dipak Chakraborti (Technical Member) - (1.) IN this petition filed under section 8 of the West Bengal Taxation Tribunal Act, 1987, the petitioner, Tadanya Timber Trading Private Limited, a private limited company incorporated under the Companies Act, 1956 carrying on business from 2/7, Sarat Bose Road, Kolkata 700 020, has challenged the notices issued by the Joint Commissioner of Sales Tax, Sreerampur Charge (respondent No. 1) under memo No. 259 dated October 22, 2009, memo No. 340 dated December 13, 2009 and also the order dated February 4, 2010, cancelling the registration certificate (in short, "RC") of the petitioner. According to the petitioner, at the time of granting registration and for sometime thereafter, its principal place of business was at Dankuni Station Pally, P. O. & P. S. : Dankuni, Dist. Hooghly. In February 2008, the principal place of business stood shifted to 2/7, Sarat Bose Road, Kolkata 700 020, the present address. This shifting of the principal place of business was duly communicated to the Assistant Commissioner of Sales Tax, Sreerampur Charge on February 27, 2008. It was requested therein that the records be transferred to the Assistant Commissioner of Commercial Taxes, Bhawanipur Charge, as the new place of business fell within the territorial jurisdiction of that charge.
(2.) THE petitioner, as submitted in this petition, filed returns up to quarter ending December 31, 2007, in the office of the Sreerampur Charge and those were duly accepted but despite specific prayers for transferring the file to Bhawanipur Charge, the authorities concerned did not transfer the file. Hence the petitioner had gone to file the return for the period quarters ending on March 31, 2008 to Sreerampur Charge. This was in the month of May 2008. The said return was not accepted on the ground that its RC had been cancelled by the Assistant Commissioner of Sales Tax, Sreerampur Charge. Unfortunately, no notice was served before cancellation and the cancellation order was not also communicated to the petitioner. However, copies of the letter intimating the cancellation of RC sent under memo No. 160, dated December 28, 2007 and order dated December 28, 2007, cancelling the RC were made available to the petitioner on July 1, 2008. This order of cancellation was challenged by the petitioner before the revisional authority, Senior Joint Commissioner of Sales Tax, Bally Circle. Upon appreciation of the facts and circumstances of the case, revisional authority set aside the order dated December 28, 2007, but at the same time, gave liberty to the respondents to initiate the proceedings after observing statutory procedural formalities. Since the order dated December 28, 2007 stood set aside, the respondents were supposed to give effect of the order passed by the revisional authority. As the direction was not complied with, the petitioner by a letter dated October 21, 2009 drew the attention of respondent No. 1 about such inaction on the part of the respondents. Respondent No. 1 issued a notice for showing cause on November 17, 2009 as to why the RC would not be cancelled. This was issued under memo No. 259 dated October 22, 2009. This was duly replied to by the petitioner and the hearing was taken up on November 18, 2009. Another notice under memo No. 340 dated December 3, 2009, alleging therein that there had been no existence of the business at the original place of business, was issued to the petitioner requiring its presence on December 11, 2009. Ultimately on February 4, 2010, respondent No. 1 cancelled the RC of the petitioner with retrospective effect from October 12, 2007 on the ground that the petitioner failed to establish that it had existed at the declared place of business, i.e., Dankuni Station Pally, P. O. & P. S. Dankuni, Dist. Hooghly on October 12, 2007. Sri J A Khan, learned advocate appearing on behalf of the petitioner, submits that the orders passed by the respondent -authorities were whimsical and without any legal support. The authorities acted most vindictively. It is contended that originally the RC was cancelled with effect from December 28, 2007, but for valid and cogent reasons, the revisional authority set aside the said order. There is no denial of the facts that liberty was given to the respondents to initiate fresh proceedings for cancellation of the RC of the petitioner, on due observance of the statutory provisions, if they so desired. Unfortunately without giving any regard to the statutory provision, the authorities concerned rejected the RC with effect from October 12, 2007, that means two months earlier than the date of rejection of the RC as was done originally with effect from December 28, 2007. The RC of a dealer can be cancelled suo motu in terms of the provision of section 29(1)(a) of the VAT Act read with rule 15 of the West Bengal Value Added Tax Rules, 2005 (in short, "the VAT Rules"). Rule 15 of the VAT Rules specifically provides that "when the appropriate assessing authority, upon receiving information, is satisfied that the dealer has ceased to carry on business or ceased to exist at his place of business or ceased to be liable to pay tax under sub -section (8) of section 10, section 11 or sub -section (8) of section 14, he shall, after giving the dealer an opportunity of being heard, cancel the certificate of registration of such dealer under sub -section (1) of section 29 and such cancellation will take effect from the date of such order". In this particular case, it is pointed out by the learned advocate that the order for cancellation of RC was passed on February 4, 2010, giving retrospective effect from October 12, 2007. The action of respondent No. 1 was totally against the provision of the VAT Act and Rules framed thereunder. Learned advocate further questions as to whether any enquiry was conducted at all on October 12, 2007. He draws our attention to the orders passed on October 12, 2007, in the respective file of the petitioner where there is no mention of placing such report. On that date, an order was passed showing re -allocation of this file to group A. Even in the order dated December 28, 2007 when the RC was cancelled initially, there is no specific reference of such report and this report was not also made known to the petitioner. The allegation that there is ho functional existence of the petitioner at the said place of business is uncorroborated, wishful and untenable. The petitioner by a letter dated February 27, 2008 intimated the authorities concerned regarding shifting of the place of business from Dankuni, Hooghly to Kolkata. Learned advocate also challenges the veracity of the report dated January 22, 2010 as the same was not brought on record at any point of time. In addition to the allegation that there was no functional existence of the petitioner at its original place of business, the respondent -authorities have also questioned the tenancy of the petitioner. Non -disclosure of the items being dealt by dealer cannot be a ground of cancellation of RC. Section 27A of the VAT Act read with rule 12 of the VAT Rules requires disclosure of information including change in the class or classes of goods which a dealer deals in. Rule 14 of the VAT Rules has taken care of such defaults. But nowhere it has been prescribed that for violation of such provision the RC of a dealer can be cancelled. It is strongly contended that the petitioner disclosed nature of items being dealt in while submitting the returns and the returns were duly received by the authorities concerned. But no step had been taken by them against alleged violation of the provision of section 27A of the VAT Act or rule 12 of the VAT Rules. The petitioner had been carrying on business from its Kolkata address and it was made known to the concerned authorities of Sreerampur Charge. But no enquiry was made by them to ascertain the facts as to whether the petitioner was actually carrying on business from that place, i.e., from Kolkata. It is, therefore, contended that the cancellation order was totally unlawful and hence it should be set aside with the direction to send back the records to the assessing authorities of Bhawanipur Charge under whose jurisdiction the petitioner is presently carrying on business.
(3.) THE respondents are represented by Sri B. Majumdar, learned State Representative. It is strongly argued by the learned State Representative that there was no functional existence of the petitioner at Dankuni, Hooghly, and this fact was ascertained upon due enquiry. Even another spot enquiry was made on January 22, 2010 for coming to a conclusion. The respondent -authorities have rightly questioned the legality of the tenancy agreement to ascertain the existence of the ostensible place of business but that also shows various discrepancies. In the facts and circumstances of the case, there was nothing improper on the part of the assessing authority to cancel the RC. The effect of such cancellation was given with effect from October 12, 2007, that, is the date on which the non -existence of the dealer at his principal place of business at Dankuni, Hooghly, was detected.;