The petitioner is stated as aggrieved of the rejection of application for granting registration under the relevant provisions of the KVAT Act and Rules. The prayers are in the following terms:
“(i) To call for the records relating to Exts.P12 to P14 and to issue a writ of Certiorari or any other appropriate writ, direction or order, quashing Exhibit P12 notice and P14 order being arbitrary, illegal, unjust, discriminatory, clearly violative of the provisions of KVAT Act, Central Sales Tax Act and the Rules made thereunder, violative of the principles of natural justice and also in violation of rights as laid down under Article 21 of the Constitution of India.
(ii) To issue a writ of Mandamus or any other appropriate writ, direction or order directing the 1st respondent that the refusal to grant sales tax registration is clearly illegal and violative of the provisions of KVAT Act, Central Sales Tax Act and the Rules made thereunder.
(iii) To issue a writ of Mandamus or any other appropriate writ, direction or order directing the 1st respondent to reconsider Exhibit P12 & P14 and grant sales tax registration to the petitioner if the application is in accordance with the provisions of the KVAT Act and the Rules made thereunder, forthwith untramelled by flimsy and bald allegations in Exhibit P12 & P14.
(iv) To issue an order of interim stay for the operation of Exhibit P12 notice & P14 order pending disposal of the Writ Petition Civil.
(v) To issue any other appropriate writ, direction or order to meet out justice in the facts and circumstances of this case.”
2. After considering the application for registration preferred by the petitioner, the 1st respondent issued Ext.P12 notice stating that the petitioner is a 'benami' of somebody else and also directing the petitioner to file objections, if any in this regard. The petitioner submitted Ext.P13 objection, stating that the proposal to reject the application for registration is clearly illegal. Thereafter, the 1st respondent issued Ext.P14 notice, rejecting the petitioner's application. Pursuant to the directions given by this Court to produce a copy of the report dated 31.07.2014 referred to in Ext.P12, as the reason for turning down the request for granting registration, has been produced along with a statement dated 12.11.2014 of the Assistant Commissioner of Law. A copy of the report of the Inspecting Assistant Commissioner has been produced as Annexure R1(a), which reads as follows:
“Please refer to the above. An enquiry was conducted with respect to the business activities of Sri. V.S. Abdul Khader. Sri. Abdul Khader is engaged in petty sales of iron scraps and he has no source of income. It is also known that the applicant is resident of ward 18 of Vandazhy Grama Panchayath for the last three years. He has not availed any loans from any financial institutions. He has no property of his own. The source of income of the applicant is not known. Even though the applicant have a PAN with No.AHUPA 6590L, he has not filed any income tax return during the past years. Hence, the genuineness of the application can be suspected. There is every reason to suspect that he is a benami, of someone else and the possibility of creating huge tax arrears cannot be overruled.
I am of the opinion that the registration application is liable to be rejected.”
The learned counsel for the petitioner points out that, the credentials of the petitioner have been doubted absolutely without any basis and the petitioner's intention to start a business, complying with the relevant provisions of law, is sought to be thwarted without any regard to the Rule of law. The attempt on the part of the concerned respondent, to brand the petitioner as a 'benmai' of somebody else, is not based on any material collected by the concerned respondent, but on the basis of presumptions and assumptions. The learned counsel also points out that, adequate power and authority is vested upon the concerned respondent to demand security to the satisfaction, in terms of Section 17 of the KVACT Act, so as to grant registration.
4. After hearing both the sides, this Court finds that the reason for rejection of the application as put forth by the 1st respondent vide Ext.P14 is not correct or sustainable and the matter requires to be reconsidered, also with reference to the adequate security to be furnished by the petitioner so as to have registration and to do business, in conformity with the relevant provisions of law. Accordingly, Ext.P14 is set aside and the 1st respondent is directed to reconsider the matter, also with reference to the extent of security to be furnished for granting registration. It is always open for the concerned respondent/ authorities of the Department, to have a close vigil on the business, sought to be pursued by the petitioner and intercept the same, if any adverse activities are being pursued or if there is any attempt to evade payment of tax. The proceedings as above shall be finalised at the earliest, at any rate, within 'six weeks', from the date of receipt of a copy of this judgment.
The petitioner shall produce a copy of this judgment, along with a copy of the writ petition, before the 1st respondent, for further steps.
The writ petition is disposed of.
P.R. RAMACHANDRA MENON, JUDGE sp