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Valid registration is necessary for a dealer to claim concessional rate of tax U/S 8 of Central Sales Tax Act, 1956: High Court of Tripura

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. this was held in Tripura Electricals v. The State of Tripura and Ors [WP(C) No.1745/2017] in the High Court of Tripura by the division bench consisting of HON’BLE THE CHIEF JUSTICE MR. AKIL KURESHI and HON’BLE JUSTICE MR. S G CHATTOPADHYAY.

Facts are 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.

The counsel for the petitioner contended that necessary permits for the inter-State purchase of goods were granted and assessments were made. It was, therefore 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.

The counsel appearing for the respondent submitted that it was the duty of the petitioner to have the registration of the firm duly amended upon the sole proprietor dying. 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.

The Court made reference 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 that “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.”

Considering the precedents and the facts of the case the court 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. Thus disposing of the petition with directions.

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