ANISH P. MATHEW Vs. STATE OF KERALA

JUDGEMENT

(1.) THE petitioner herein is aggrieved with Ext.P8 order by which the application for registration made by him, on a transfer of a business from a registered dealer, was refused. The brief facts are that, the 4th respondent herein was carrying on business in the name and style of "M/s Preena Rock Products" in Door No.IV/292A, in the premises which was also owned by him. Allegedly, there are huge tax arrears with respect to the said business. The 4th respondent entered into an agreement with the petitioner to sell the property as also the business to the petitioner herein. The 4th respondent also undertook the earlier liability of sales tax which, in any event, would be a charge on the property which is sought to be transferred; under Section 37 of the Kerala Value Added Tax Act, 2003 (for short 'KVAT Act').

(2.) PETITIONER purchased the property by Ext.P1 sale deed and thereafter, by Ext.P2, transferred the Unit, registered with the Local Self Government Institution, to the petitioner's name. A licence was also obtained in the name of the petitioner as is evidenced by Ext.P3. Exts.P4 to P6 necessary sanctions were obtained from the competent authorities and thereafter, Ext.P7(a) application under the KVAT and CST Acts were made which were declined by Ext.P8, which is assailed herein.

(3.) IT is to be noticed that the business which was run by the 4th respondent obviously could not be continued by the 4th respondent himself and hence, the sale as per Ext.P1. Though sales tax arrears are stated to have been determined against the 4th respondent for the earlier years, they are under challenge, according to the 4th respondent. In any event, the charge created under Section 37 of the KVAT Act cannot be effaced insofar as the recovery proceedings initiated or intended by the State. Any recovery for a period prior to the transfer also could be taken against the assets of the Firm, which stands transferred to the petitioner herein. The transfer to that extent would be void as per the specific words employed in Section 37 of the KVAT Act. However, that need not detain the Registering Authority in granting fresh registration as sought for by the petitioner. Any transfer of business would entail a fresh registration, since such transfer is deemed for the purposes of the Act and Rules to be a fresh registration under Rule 17(24) of the Kerala Value Added Tax Rules.