Registration cannot be refused for a residential premises when the proposed retail business is genuine and the application is otherwise in order.

Registration under the Tamil Nadu Value Added Tax Act, 2006 could not be refused merely because the proposed business premises was in a residential area, where the genuineness of the intended granite retail business was not in dispute. The statutory scheme under Section 39 requires registration to be granted if the application is otherwise in order, while any later violation may be dealt with through cancellation, modification or amendment under Section 39(14). The Madras High Court held that the Revenue could not impose additional premises-related conditions, set aside the rejection, and remitted the application for fresh consideration limited to whether it was otherwise in order and whether the applicant proposed to act as a retailer.

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Issues: Whether registration under the Tamil Nadu Value Added Tax Act, 2006 could be refused on the ground that the proposed business premises was in a residential area and the applicant intended to carry on granite retail business there.

Analysis: The application for registration was rejected on the premise that granite business could not be carried on from a residential premises and would require a stockyard. The statutory scheme under Section 39 of the Tamil Nadu Value Added Tax Act, 2006 requires the registering authority to grant registration if the application is in order, while retaining power under Section 39(14) to cancel, modify or amend the registration in case of violation. The earlier decision referred to by the Court had held, with reference to Section 39 and Circular No. 11/2011 dated 25.3.2011, that where the genuineness of the business to be carried on is not in dispute, the Revenue cannot prescribe the extent or nature of the premises as a condition for registration.

Conclusion: The rejection of registration on the ground of the residential location of the premises could not be sustained. The authority was required to reconsider the application on the basis of the governing law and verify only whether the application was otherwise in order and whether the applicant proposed to act as a retailer.

Final Conclusion: The writ petition succeeded, the impugned rejection was set aside, and the matter was sent back for fresh consideration of the registration application in accordance with law.

Ratio Decidendi: When the genuineness of the proposed business is not disputed, registration under the sales tax regime cannot be refused merely because the premises is in a residential area or because the Revenue considers the premises inadequate for the business.

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