2004 (2) TMI 654 - HC - VAT and Sales Tax

Court quashes registration cancellation orders under Sales Tax Act due to lack of jurisdiction and limitations.

Siddhartha Fertichem Pvt. Ltd. Versus Assistant Commissioner, Gandhidham and another

Siddhartha Fertichem Pvt. Ltd. Versus Assistant Commissioner, Gandhidham and another - [2004] 137 STC 58 (Guj) Issues Involved:1. Jurisdiction and authority of the Assistant Sales Tax Commissioner.2. Period of limitation for invoking revisional powers under Section 67 of the Gujarat Sales Tax Act, 1969.3. Grounds for cancellation of registration under Section 30-AA of the Gujarat Sales Tax Act, 1969.4. Adequacy of alternative remedies under Article 226 of the Constitution.Detailed Analysis:1. Jurisdiction and Authority of the Assistant Sales Tax Commissioner:The petitioner challenged the order dated February 15, 2002, by the Assistant Sales Tax Commissioner, which canceled the petitioner's registration under the Gujarat Sales Tax Act, 1969, and the Central Sales Tax Act, 1956. The petitioner argued that the order was passed without jurisdiction and authority, making it null and void ab initio. The court found that the Assistant Sales Tax Commissioner lacked the authority to cancel the registration based on the grounds provided, as these grounds did not fall under the contingencies specified in Section 30-AA of the Gujarat Sales Tax Act.2. Period of Limitation for Invoking Revisional Powers under Section 67 of the Gujarat Sales Tax Act, 1969:The petitioner contended that the revisional powers under Section 67 could only be invoked within three years from the date of the order granting registration, which was July 21, 1998. Thus, the period expired on July 20, 2001. The court agreed, stating that the Assistant Sales Tax Commissioner had not called for the record relating to the grant of the registration certificate before July 21, 2001. Therefore, the impugned order dated February 15, 2002, was passed beyond the three-year limitation period, making it invalid.3. Grounds for Cancellation of Registration under Section 30-AA of the Gujarat Sales Tax Act, 1969:The Assistant Sales Tax Commissioner had invoked Section 30-AA, alleging that the petitioner provided incorrect addresses and failed to inform the authorities about changes in the place of business. The court found that Section 30-AA could not be invoked for these reasons. The section is applicable in specific circumstances such as issuing invoices without actual sales transactions or failing to furnish returns for three or more consecutive periods. Since the petitioner had entered into actual sales transactions and there was no evidence of failing to furnish returns for three or more consecutive periods, the court held that the cancellation of registration under Section 30-AA was not justified.4. Adequacy of Alternative Remedies under Article 226 of the Constitution:The respondent argued that the petition under Article 226 was not maintainable as the petitioner had an alternative remedy of filing an application for reference. The court acknowledged that while the rule of alternative remedy is a rule of practice, it is not absolute. The court can exercise its powers under Article 226 if the order under challenge is on the face of it illegal or without jurisdiction. Given that the impugned order suffered from the bar of limitation and lack of authority, the court found it appropriate to exercise its jurisdiction under Article 226.Conclusion:The court quashed the impugned order dated February 15, 2002, and the subsequent order dated January 7, 2003, by the Gujarat Sales Tax Tribunal, as they were found to be without jurisdiction and authority. The petition was allowed, and the rule was made absolute to the extent specified, with no order as to costs. The court, however, clarified that the authorities could still exercise their legitimate powers under Section 30-AA if they have valid grounds, without expressing any opinion on the merits of such potential actions.