Cancellation of Registration certificate in the case of Bogus purchases

By | August 19, 2015
(Last Updated On: August 19, 2015)

 

Q: Can the Registration certificate be cancelled in the case of Bogus purchases ?

Gujarat VAT – Where Assessing Authority cancelled registration certificates of assessee on ground that alleged purchases made by it from two dealers were bogus and not genuine and even assessee had indulged into billing activities only, registration certificates had been rightly cancelled

 

HIGH COURT OF GUJARAT

Highness Coconut And Trading Co.

v.

State of Gujarat

M.R. SHAH AND S.H. VORA, JJ.

SPECIAL CIVIL APPLICATION NOS. 15359 AND 15360 OF 2014

MAY  5, 2015

FACTS

■           In the returns filed for the assessment years 2006-07 and 2007-08, the assessee had shown to have made purchases from two dealers, namely, ‘V’ and ‘S’.

■           The Assessing Authority having found that the registration certificates of ‘V’ and ‘S’ had been cancelled ab initio, as they were found to be indulged into billing activities only and they were not doing any business, opined that the alleged purchases by the assessee from ‘V’ and ‘S’ were bogus and not genuine and even the assessee had indulged into billing activities only and in fact not entered into transactions of sales and purchases. He, therefore, cancelled the registration certificates of the assessee.

■           Both the First Appellate Authority and the Tribunal upheld the order of the Assessing Authority.

■           On Special Civil Applications :

HELD

■           From the findings recorded by the Tribunal, which is not denied and/or disputed, the assessee had shown to have made purchases from ‘V’ and ‘S’ after their registration certificates were cancelled. It is required to be noted that registration certificates of ‘V’ and ‘S’ have been cancelled ab initio, as it was found that they had indulged into billing activities only. Therefore, ‘V’ and ‘S’ were not competent to issue tax invoices once their registration certificates were cancelled. The assessee was not entitled to obtain tax invoices after knowing that registration certificates of ‘V’ and ‘S’ have been cancelled. [Para 5.01]

■           In the facts and circumstances of the case, the registration certificates of the assessee were rightly cancelled ab initio, more particularly when it has indulged into billing activities only. [Para 5.02]

■           In the result, the Special Civil Application of the assessee was liable to be dismissed. [Para 6]

 

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