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182 Goods & Services Tax Cases - Reports [Vol. 1
[2010] 1 GST 182 (KER.)
HIGH COURT OF KERALA
Shanthi Poultry Farm (P.) Ltd.*
v.
Commercial Tax Inspector
C.K. ABDUL REHIM, J.
WP(C) NOS. 29206, 29600 AND 29900 OF 2009
OCTOBER 27, 2009
REGISTRATION - Period 3-8-2000 to 3-9-2000 - Petitioner was a registered
dealer dealing in live chicken, hatching chicks, equipments,
poultry feeds and poultry medicines, etc. - Dy. Commissioner found that
bank instruments furnished by dealer towards advance tax between
period from 3-8-2000 to 3-9-2000 worth Rs. 50,000, had been
dishonoured for insufficiency of funds in bank account - On basis of said
report Commissioner of Commercial Taxes, held that tendering of
invalid bank instruments and dishonouring of same when presented for
encashment was a ‘good and sufficient reason’ provided under section
16(10), for cancelling registration - It further held that instruments
tendered by dealer were accepted by officials of check post, on presumption
that, those were ‘Pay orders’ issued by bank, and description of
signature in instruments was printed in order to mislead check post
authorities that those were ‘Pay orders’, but, in fact those instruments
were cheques issued by ‘Farmers Development Society’ in favour of
Commercial Tax Inspector; therefore, nature of offence committed by
dealer was grave and was liable to be dealt with under provisions of
section 16(10), read with rule 17(18)(vii) and, accordingly, he cancelled
registration of petitioner - It was found from records that (i) no action as
enumerated in rule 28 which provided for specific procedure with
respect to dishonour of cheques, was resorted to in instant case, (ii)
before taking any action on basis of abovesaid allegations, principles of
natural justice demanded that dealers should be put on with specific
notices raising such allegations and they should be given adequate
opportunity to defend such allegations, however, proposed notices
issued in instant case did not reveal any such instances or did not contain
any of narrations of fraud committed by petition - Whether in view of
above said facts, Commissioner of Commercial Taxes was not justified in
*In favour of assessee.
GOODS & SERVICES TAX CASES ❑ JANUARY 20 - FEBRUARY 4, 2010 ◆ 58
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