F.H. NAZEER AHAMMED Vs. STATE OF KERALA

JUDGEMENT

(1.) The petitioner herein was a registered dealer in the rolls of the Sales Tax Officer, Vadakara and engaged in the local purchase and sale, and inter-State sale of coconut oil, copra, dry coconut, cake, etc. The petitioner's registration was cancelled by annexure All order under section 16(10) of the Kerala Value Added Tax Act, 2003 (hereinafter referred to as, 'The KVAT Act") for reasons, inter alia, that the dealer/assessee had filed an insolvency petition and on his own showing was disabled from carrying on the business and if permitted to conduct business under cover of registration, the same would go against the interest of revenue of the State. The petitioner having unsuccessfully resorted to appellate remedies, is before this court raising questions of law regarding the legality of cancellation of the registration on the mere filing of an insolvency petition as also against the reasoning that the revenue interest of the State would not be served by the continued registration of the petitioner. Before embarking on an examination of the legal issues purportedly arising from the order of the Tribunal, we have to first look at the conduct of the petitioner. The dealer, having committed default of the tax payable for the years 2003-04 to 2005-06, was proceeded against under the provisions of the Revenue Recovery Act. The petitioner then approached the sub-court, Vadakara with an application for adjudging him as an insolvent and the dues to the Sales Tax Department was also included in the schedule of debts. It was under such circumstance that the Sales Tax Officer, Vadakara initiated proceedings for cancellation of registration and effected cancellation by annexure All. The petitioner then approached this court with W. P. (C). No. 10438 of 2009, which was dismissed. On appeal being filed, the Division Bench concurred with the view of the learned single judge in relegating the petitioner to the statutory remedy. On the prayer of the petitioner to permit him to continue registration, the Division Bench in its judgment allowed the same, however, on strict conditions in the following words:

(2.) It is very evident that the retention of registration was allowed only on condition of the petitioner remitting rupees five lakhs and the renewal was specifically directed to take effect only after payment. This court also did not restrain the assessing officer from proceeding with the recovery against the movable and immovable assets of the petitioner. It was also specifically directed that in the event of the petitioner not complying with any formalities for continuation of registration, the renewal granted under the said judgment would be withdrawn.

(3.) Admittedly the petitioner did not make any payment as per the judgment. The petitioner contends that the assessments were considerably modified in appeal and the liability of the petitioner was also consequently reduced. The property of the petitioner was proceeded against and sold. The petitioner himself withdrew the petition for adjudging him as insolvent, filed before the sub-court, Vadakara. However, the statutory remedies against the cancellation of the registration having been unsuccessful, the petitioner is in revision before this court.