Andhra HC (Pre-Telangana)
Sudhakar Oil Traders vs Assistant Commercial Tax Officer And ... on 21 June, 1995
Equivalent citations: 1995(2)ALT570, [1995]99STC401(AP)
Author: S.S. Mohammed Quadri
Bench: S.S. Mohammed Quadri
JUDGMENT S. Parvatha Rao, J.
1. The petitioner is the proprietary concern of one P. Sudhakar, s/o. P. Rajalingam, aged about 24 years. Thus, P. Sudhakar is the petitioner actually and we will treat him as such for the purpose of the present writ petition. He is aggrieved by the inaction of the first respondent, i.e., Assistant Commercial Tax Officer of Osmangunj Circle, Hyderabad, in not issuing registration certificates under the Andhra Pradesh General Sales Tax Act, 1957 (for short "the Act") and the Central Sales Tax Act, 1956 (for short "the Central Act") in the name of his proprietary concern although it has become a registered dealer by virtue of clause (c) of sub-rule (10) of rule 28 of the Andhra Pradesh General Sales Tax Rules, 1957 ("the Rules", for short). The petitioner seeks a writ in the nature of mandamus directing the respondents, the second respondent being the Commercial Tax Officer of Osmangunj Circle, to issue registration certificates to the petitioner under the Act and the Central Act, etc.
2. The petitioner made the applications dated August 13, 1994, for the registration certificates to the first respondent. He sent them by registered post and they have been received by the first respondent on August 16, 1994. The first respondent issued notice No. 2/94-95 dated August 17, 1994, directing the petitioner to furnish certain information within seven days and that notice was received by the petitioner on September 8, 1994. The petitioner replied by a letter dated September 12, 1994, which was received by the first respondent on September 13, 1994. The first respondent issued another notice No. 2/94-95 dated September 13, 1994, which was served on the petitioner on October 25, 1994. Thereafter, the petitioner addressed a letter dated October 31, 1994 to the first respondent along with certain enclosures and the same was received by the first respondent on November 1, 1994. The petitioner once again addressed a letter dated February 16, 1995 and personally delivered the same. Thereafter, the petitioner was served another notice No. 2/94-95 dated February 16, 1995 and the same was received by the petitioner on February 20, 1995. The records produced by the first respondent support the above facts.
3. The petitioner contends that after receiving his applications for registration under the two Acts on August 16, 1994, the first respondent's notice dated August 17, 1994, was served on him only on September 8, 1994. The record shows that the said notice was dispatched on September 6, 1994 only, which supports the case of the petitioner that the same was served on him on September 8, 1994. That notice states, that the first respondent scrutinised the form D application filed by the petitioner and requires the petitioner to furnish the following information, within seven days from the date of receipt of the notice.
"1. The column No. g(i) was not filled up with the details as required. The photostat copies of registration of the two dealers who have signed at 1 and 2 in form 'D' may be furnished for verification by the undersigned.
2. The form 'A' (i.e., return) of estimated turnover filed by the dealers is not in accordance of the provisions of the APGST Act, 1957. The transactions relating to commission agency under section 11 of the Act was omitted as per Act 18 of 1985 with effect from July 1, 1985 and the turnover of Rs. 1,00,000 shown in the return attracts tax. Hence a revised form 'A' is to be filed in the matter.
3. The documentary evidence in the shape of M.C.H. assessment order and also plan showing the ownership of the landlord against mulgi No. 15-2-675, Kishangunj, may be furnished for verification by the undersigned."
It was also made clear that if the petitioner failed to furnish the information, his form 'D' application would be rejected without further notice to him. Along with the letter dated September 12, 1994, in reply, the petitioner sent photostat copies of the registration certificate of the two dealers who signed in the form "D" application submitted by him. He also stated that he did not fill column 9(h)(i) as his was a proprietary concern and he already signed at column (h) and that he should be permitted to fill column (h)(i) in the office of the first respondent. He then stated :
"(2) We have shown the turnover of Rs. 1,00,000 relating to commission agency transactions as exempted turnover in form 'A' as they are also second sales. A revised form 'A' is filed herewith clarifying this aspect.
(3) The documentary evidence in the shape of municipal tax receipt issued by the M.C.H. is also enclosed herewith showing the ownership of the landlord against mulgi No. 15-2-675, Kishangunj. This is sufficient evidence to prove the ownership of the building."
4. The petitioner submits that after he gave his reply dated September 12, 1994, which he personally submitted in the office of the first respondent on September 13, 1994, he did not receive any notice or communication from the respondents and therefore he must be deemed to have been duly registered by virtue of rule 28(10)(c) of the Rules. He states that he filed his application for registration on August 16, 1994, to which the first respondent issued notice calling for certain information; that he furnished the required information on September 13, 1994 and therefore September 13, 1994, should be taken as the date of filing of the application for the purpose of rule 28(10)(c); and that as he did not receive any further notice or information from the first respondent within 30 days from September 13, 1994, he must be deemed to have been duly registered from October 13, 1994, i.e., after the completion of 30 days from September 13, 1994. The petitioner states that as he considered himself as deemed to have been registered as dealer under the Act, he commenced his business and started filing his monthly returns regularly by sending them to the first respondent by registered post as the first respondent was refusing to receive the same. The petitioner mentioned in his form D application for registration that he would be starting the business of wholesale and retail sales of edible oils and oil cakes and that he took mulgi bearing municipal No. 15-2-675, Kishangunj, on lease. According to him, that was the business he commenced, i.e., in edible oils and oil cakes, from October 13, 1994. The petitioner submits that notice No. 2/94-95, though dated September 13, 1994, was received by him only on October 25, 1994 and therefore that notice cannot alter the position which was already obtained prior to his receiving the said notice, i.e., of his being deemed as duly registered as a dealer. He further contends that the fact that he furnished the information required of him by the said notice personally on November 1, 1994, also would not alter his status as a deemed registered dealer. He submits that even though he is deemed to be a duly registered dealer under rule 28(1)(c), he was not issued registration certificates and that without the certificates he is finding it difficult to carry on his business peacefully as other dealers with whom he is dealing are asking for the registration number and he is not being furnished declaration forms, way bills, etc., required for carrying on his business. He, therefore, addressed another letter dated February 16, 1995 to the first respondent requesting him to issue registration certificates. The first respondent, however, issued another notice dated February 16, 1995, which was received by the petitioner on February 20, 1995, once again calling for further information and demanding that he "should furnish security deposit of Rs. 2,00,000 in the form of National Savings Certificate bonds within seven days" and stating that in default his application would be rejected. Under these circumstances, the petitioner is constrained to approach this Court on February 23, 1995, by way of the present writ petition.
5. The writ petition was admitted on February 24, 1995. In W.P.M.P. No. 4252 of 1995, the petitioner seeks direction to the first respondent to permit him to carry on his business peacefully by issuing a registration certificate. The first respondent filed counter-affidavit dated February 28, 1995 and also produced the relevant record. In his counter-affidavit, the first respondent submits as follows :
"It is submitted that the application for registration is done in two forms, viz., form 'A' and form 'D' under the APGST Rules, 1957. Form 'A' relates to estimated turnover of the dealer. This estimation is taken for the purpose of calculating security that would be required from the dealer. Form 'D' provides for the information about the nature of business, composition of the dealer, i.e., whether it is proprietary concern, firm or limited company and other such information. The said form also provides for identification from two registered dealers. It is the general practice that when application for registration is received, first form 'A' will be checked and after ensuring that it is properly filled in, the check of all other details in form 'D' will be taken up. Upon receipt of the application from the petitioner, form 'A' was checked and it was found that it was improperly filled. This was informed to the petitioner by notice dated August 17, 1994. Subsequently, the proposed business premises where the petitioner had alleged to carry on the business in form 'D' was inspected on September 8, 1994. On inspection it was revealed that this business premises relates to M/s. Paddagari Ramaiah and Company who is the registered dealer on the rolls of the C.T.O., Osmangunj, Hyderabad and he was in arrears of sales tax to a tune of Rs. 3,161,025. Further enquiries also revealed that the petitioner was the son of the proprietor of M/s. Paddagiri Ramaiah and Company."
6. The first respondent admits that the fresh notice dated September 13, 1994, issued by him was served on the petitioner only on October 25, 1994, at his residence and the reason why it could not be served earlier is sought to be explained as follows in his counter-affidavit :
"This notice was sought to be served on the petitioner's proposed business premises and for this purpose, officials of the Commercial Tax Department visited the premises of the dealer on September 14, 1994, September 16, 1994 and September 21, 1994. On all these occasions the notices could not be served as only one office boy was then available at the premises and he pleaded his ignorance of the availability of the petitioner and expressed inability to receive the notice as he was not authorised to do so. It may also be submitted that the petitioner could have filed his reply to the notice dated September 17, 1994 (August 17, 1994 ?), by this time. The revised form 'A' was filed on September 13, 1994."
7. The first respondent submits that as he issued notice dated August 17, 1994, which was received by the petitioner on September 8, 1994, provisions of rule 28(10)(c) will not be attracted and the petitioner cannot be deemed to have been registered as per the said rule. He also submits that the petitioner ought to have furnished security to the extent of Rs. 1,00,000 for registration under the APGST Act and Rs. 1,00,000 under the CST Act and without taking any steps for furnishing the security as required of him, he approached this Court by way of the present writ petition. He, therefore, contends that the writ petition should be dismissed with costs submitting as follows :
"It is submitted that it is not the intention of this respondent to harass the petitioner nor the petitioner is being denied of registration. The petitioner is being asked to comply with the requirements of the APGST Act and he cannot complain of harassment in this regard. It is humbly submitted that the petitioner has not furnished security as required from him till date and it is open to him even today to furnish the required security and comply with the requirement of the APGST Act."
The question then is whether the petitioner is right in proceeding on the basis that he shall be deemed to have been registered under rule 28(10)(c) of the Rules, which provides that "if the certificate of registration is not received by the applicant within 30 days from the date of submission of his application or if no notice is received by him within the period of 30 days from the date of submission of the application, the applicant shall be deemed to have been registered".
8. The first respondent submits that he issued notice dated August 17, 1994, which was admittedly received by the petitioner on September 8, 1994, i.e., well within 30 days from the date of submission of the application by the petitioner, i.e., on August 16, 1994. The first respondent contends that as the notice was received by the petitioner within 30 days, he cannot be deemed to have been duly registered.
9. In the first flush, reading clause (c) literally, the contention appears to be acceptable; but clause (c) cannot be read or understood in isolation and out of context. It has to be read along with the other provisions in rule 28 and keeping in view the object and purpose for which dealers are required to be registered under the Act.
Section 12 of the Act deals with the registration of dealers. Sub-section (1) of section 12 requires that every dealer (other than casual trader) whose total turnover in any year is not less than Rs. 50,000 shall register himself under the Act. Sub-section (2) of section 12 requires that certain dealers shall get themselves registered under the Act irrespective of the quantum of their turnover. Sub-section (5) of section 12 provides that no dealer who is liable to get himself registered shall carry on business as a dealer unless he has been registered and is in possession of a certificate of registration. There is no doubt that the petitioner is a dealer who has to get himself registered under the Act and that by virtue of sub-section (5) of section 12 he cannot carry on business as a dealer unless he gets himself registered and he is in possession of a certificate of registration. Sub-section (6) of section 12 provides that an application of registration shall be made to be prescribed authority, in such manner and within such time as may be prescribed, and shall be accompanied by a fee of one hundred rupees. Sub-section (7) of section 12 empowers the authorities concerned to require the applicant to furnish security and is as follows :
"(7) Where it appears necessary to the authority to whom an application is made under sub-section (6) so to do for the proper realisation of the tax and other dues payable under this Act, or for the proper custody and use of the forms referred to in this Act, the rules made and the notifications issued thereunder, he may by an order in writing and for reasons to be recorded therein, impose as a condition for the issue of a certificate of registration a requirement that the dealer shall furnish in the prescribed manner and within such time as may be specified in the order such security as may be specified, for all or any of the aforesaid purposes."
10. In this context, sub-section (11) of section 12 also has to be noticed. It, inter alia, provides that no dealer shall be required to furnish any security under sub-section (7) unless he has been given an opportunity of being beard and the amount of such security or additional security that may be required to be furnished shall not exceed that amount equal to tax payable under the Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in which such security is required to be furnished. Sub-section (8) of section 12 is crucial and it provides as follows :
"(8) If the authority to whom an application is made under sub-section (6) is satisfied that the application is bona fide and is in order and in conformity with the provisions of this Act and the rules made thereunder and the conditions, if any, imposed under sub-section (7) has been complied with, he shall register the applicant and grant him a certificate of registration in the prescribed form."
A careful reading of this provision shows that the requirements to be satisfied for the registration and for grant of certificate of registration are : firstly - that the application is bona fide; secondly - that it is in order and in conformity with the Act and the Rules; and, thirdly - security, if any, specified by an order duly made under sub-section (7) is furnished in the prescribed manner and within the time allowed.
11. It has to be noticed in this connection that sub-section (10) of section 12 empowers the authority concerned to require the dealer to furnish additional security by an order in writing and for reasons to be recorded therein after satisfying the requirements of sub-section (11) of section 12, i.e., giving opportunity of being heard to the dealer, and that sub-section (17) of section 12 empowers the prescribed authority for good and sufficient reasons to cancel, modify or amend any certificate of registration issued by him after giving the dealer concerned an opportunity of being heard.
Rule 28 of the Rules deals with registration. Sub-rule (6) of rule 28 provides that every application shall be made in form D. Sub-rule (7) of rule 28 requires that the application for registration shall be accompanied by a receipt from the Government Treasury or a demand draft in favour of the registering authority for the requisite fee. Sub-rule (8) of rule 28 provides that the registering authority may require an applicant for registration to furnish security within such time as may be specified by him for the purposes mentioned therein and sub-rule (9) of rule 28 provides for the forms in which the security may be furnished. It has to be noticed that the purposes for which security may be required to be furnished under sub-rule (8) are those mentioned in sub-section (7) of section 12, from which it follows that an applicant can be required to furnish any security under sub-rule (8) only by an order in writing and for reasons to be recorded therein made after giving an opportunity of being heard to the applicant as required by sub-section (11) of section 12. Now sub-rule (10) of rule 28, as a whole, has to be notice. It is as follows :
"(10)(a). The registering authority receiving the application shall, if he is satisfied after making such enquiry as he considers necessary that the application is bona fide and the particulars contained therein are correct and complete, the fees referred to in sub-rune (7) has been paid and the security if any demanded has been furnished, register the dealer and grant him a certificate of registration in form D-1 and also a copy of such certificate for every place of business within the State other than the principal place of business mentioned therein. The certificate shall be issued within thirty days from the date of receipt of application.
(b) If for any reason, the certificate of registration cannot be issued within the period specified above, the registering authority shall give the applicant a notice of further enquiry or a notice to show cause against rejection of the application within a period of thirty days from the date of receipt of application.
(c) If the certificate of registration is not received by the applicant within thirty days from the date of submission of his application or if no notice is received by him within the period of thirty days from the date of submission of application, the applicant shall be deemed to have been duly registered.
(d) Where the said authority is satisfied that the application is not bona fide and the particulars contained therein are not correct and complete, where the fees referred to in sub-rule (7) has not been paid and/or the security if any, demanded has not been furnished, he may reject the application for reasons to be recorded in writing after giving an opportunity of making a representation against the rejection and as the case may be, of correcting and completing the said particulars or complying with the requirements of sub-rules (7) and (8)."
Clause (a) of sub-rule (10) is in terms of sub-section (8) of section 12. Clause (a) also provides that the registering authority shall register the dealer and grant him a certificate of registration in form D-1 if he is satisfied "after making such enquiry as he considers necessary" that (i) the application is bona fide; (ii) the particulars contained in the application are correct and complete; (iii) the fee referred to in sub-rule (7) has been paid; and (iv) the security, if any, demanded, i.e., under sub-rule (8) referred to earlier, has been furnished. What is important to be noticed is that clause (a) makes it very clear that the certificate shall be issued within thirty days from the date of receipt of the application which means that the enquiry contemplated under clause (a) and that contemplated for furnishing of security under sub-rule (8) have not only to be concluded within that time but the time for furnishing of security also should be within that time. It is obvious from this that the enquiry contemplated under clause (a) is a summary enquiry, which has to be concluded expeditiously without any delay and with alacrity. The reason for this is that immediate registration of a dealer on an application made by him without much of an ado should be the invariable normal rule.
12. It cannot be forgotten that article 19(1)(g) of the Constitution of India guarantees the citizen the fundamental right to carry on "any occupation, trade or business" subject, of course, to reasonable restrictions imposed by the State under article 19(6) on the exercise of that right "in the interest of the general public". The main object of the Act is to levy, assess and collect sales tax. It is not to interfere with the fundamental right of citizen to carry on occupation, trade or business of his choice. Indeed, it is only if the dealer does the business contemplated under the Act that sales tax can be collected from him. This cannot be lost sight of by the authorities under the Act. Dealing with the provisions relating to registration in the Madras Sales of Motor Spirit Taxation (Andhra Pradesh Extension and Amendment) Act, 1958 and the Rules made thereunder, a Constitution Bench of the Supreme Court in M. A. Rahman v. State of Andhra Pradesh; has observed that the purpose and object of that Act is to levy and collect tax for purposes of the general revenues of the State and that the liability for payment is placed under section 3 of that Act upon the person effecting the sale. As regards the requirement of registration of dealers under that Act the Bench observed as follows :
"...... In order therefore that the State may have a check on the person from whom the tax is due, section 4(1) provides for registration of dealers who carry on the business in motor spirit. Without such registration it would be impossible for the State to know the persons who are selling motor spirit and from whom the tax is due. The provision therefore under section 4(1) for registration of dealers is an eminently reasonable provision in order to carry out the object of the Act, namely, the levy and collection of this tax for purposes of the State. It is really no restriction on carrying on business in motor spirit; any one who carries on such business is free to do so and all that he has to do is to ask for registration, which he will get subject to the provisions of sub-section (4). That sub-section has not been challenged in these petitions and therefore we proceed on the assumption that it is constitutional. It follows therefore that all that any one who wants to carry on business in motor spirit has to do is to ask for registration which he will get under the rules, and the purpose behind registration is that those on whom the liability to pay tax under section 3 of the Act lies, are known to the State so that it may realise the tax from them."
This makes it imperative that citizens and persons who seek registration under the Act cannot be harassed or humiliated and made to go round the office for paying obeisance to the personnel of the Commercial Tax Department. The officers concerned should bear in mind that they are dealing with citizens like themselves and not with subjects of an Empire : Empires and Rulers, were beyond.
13.We have no doubt that sub-rule (10) of rule 28 makes it abundantly clear that the authorities of the Commercial Tax Department dealing with registration under the Act shall have to immediately initiate the required enquiry on receiving an application for registration and that enquiry should be conducted and completed with expedition and not at a slow or leisurely fashion "moving in a motion like sleep" as in the present case. Even when no time-limit has been fixed under the relevant provisions of the applicable sales tax laws, courts have not countenanced any delay in registration of dealers on applications made by them.
R. M. Sahai, J. (as his Lordship then was) speaking for a Division Bench of the Allahabad High Court in Rakesh Coal Agency v. Sales Tax Officer 1983 Tax LR 3016 observed as follows dealing with registration under the U.P. Sales Tax Act, 1948 :
"We must confess our inability to appreciate the stand taken by the Sales Tax Officer. It also surprises us that even after petitioner approached this Court the Sales Tax Officer instead of applying his mind to the provision of law and pass appropriate orders chose to file counter-affidavit and defend his action on such flimsy grounds mentioned above. Registration under section 8A is right of a dealer. Its grant is normal unless assessing authority after such inquiry as it considers necessary decides otherwise. Sub-section (1A) of section 8 empowers him to impose conditions only. Further time within which proceedings should be completed is of vital importance. Although no time has been provided in the Act and rules yet the application should be disposed of within reasonable time."
In Sewa Singh Sadhu Singh v. State of Haryana [1981] 48 STC 117 a Division Bench of the Punjab and Haryana High Court was inclined to agree with the assessee that the inaction on the part of the Assessing Authority in taking a decision on assessee's application for registration under the Punjab General Sales Tax Act, 1948, would confer the status of a registered dealer on the assessee.
What follows is that the registering authority will have to take up for consideration an application for registration immediately on receiving it and has to make the necessary enquiry with expedition. As pointed out by a Division Bench of this Court in Samayamanthula Srihari v. Commercial Tax Officer [1993] 88 STC 446 "the enquiry that is contemplated under rule 28 is intended to enable the registering authority to find out whether the application submitted for registration is bona fide or not and whether the particulars mentioned therein are correct on not". If he is satisfied that it is bona fide and that the particulars mentioned are correct, he has to issue registration certificate within 30 days from the date of receipt of application. Before that he may also require the applicant to furnish security after giving notice to him in form XIV proposing to demand under section 12(7) or (10) of the Act a specified sum as security for the reasons mentioned therein and informing the applicant that he will be heard by the concerned authority in that regard on a date and place to be mentioned therein and also stating as follows :
"You may also file your objections, if any, in writing at the time of hearing. If you do not appear on the above date or any other day to which the hearing may be adjourned either in person or by an authorised agent it will be deemed that you have no objection for the above proposal and such orders as deemed fit will be passed with reference to records."
This enquiry also has to be held within the 30 days fixed under clause (a) of sub-rule (10). This makes it obvious that it for the purpose of the enquiry contemplated under that clause (a) the presence of the applicant becomes necessary for clarifying anything, he should be given a notice fixing a date for his presence along with the requisite information and other documents, etc., to be presented by him. The time for the appearance of the applicant obviously has to be fixed keeping in view the requirement under clause (a) that the enquiry should be completed expeditiously so as to enable the registering authority to issue the certificate within 30 days from the date of receipt of the application. If the registering authority, after such enquiry, proposes to reject the application, then he will have to issue a notice to show cause against the rejection of the application within a period of 30 days from the date of receipt of the application as required by clause (b) of sub-rule (10). If, however, the registering authority takes the view that further enquiry is necessary, he will have to give the applicant a notice of "further enquiry" within a period of 30 days from the date of receipt of the application.
14. We will have to point out here that the expression used in clause (b) of sub-rule (10) is not "enquiry", but "further enquiry" and the notice that is contemplated under clause (b) is either a notice of further enquiry or a notice to show cause against the rejection of the application - either of which should be given within a period of 30 days from the date of receipt of the application. This has to be read in conjunction with what is provided in clause (c) of sub-rule (10), i.e., that "if no notice is received by him within the period of 30 days from the date of submission of the application, the applicant shall be deemed to have been duly registered". We are clearly of the view that the notice referred to in clause (c) is the one or the other notice mentioned in clause (b) of sub-rule (10), i.e., a notice of further enquiry or a notice to show cause against the rejection of the application. Reading clauses (b) and (c) together, the registering authority should take care to see that either of those two notices are received by the applicant within 30 days from the date of submission of his application if he is not to be deemed to have been duly registered. We are supported in this view by the observations of a Division Bench of this Court, of which one of us - Syed Shah Mohammed Quadri, J. - is a member, in Santhosh Wines v. Asst. Commercial Tax Officer [1995] 99 STC 160 supra. In that case, the Bench considered the scope and ambit of rule 28 of the Rules and observed as follows :
"........ Clause (a) of sub-rule (10) of rule 28 directs that if the registering authority receiving the application for registration is satisfied, after making necessary enquiries that all the requirements are complied with, he shall register and issue the certificate within 30 days from the date of receipt of application. Clause (b) of sub-rule (10) requires that the registering authority shall give the applicant a notice of further enquiry or a notice to show cause against rejection of the application within a period of thirty days from the date of receipt of application within a period of thirty days from the date of receipt of application, if for any reason the certificate of registration could not be issued within the period of 30 days. Clause (c) of sub-rule (10) provides that for the consequence of not taking any of the above two courses mentioned under sub-rules (10)(a) and (10)(b) of rule 28; if the certificate of registration is not received by the applicant within 30 days from the date of submission of his application or if no notice is received by him within the said period of 30 days from the date of submission of the application, the application shall be deemed to have been duly registered. If may also be relevant to note that the certificate of registration issued or deemed to have been issued under sub-rule (10) shall take effect from the date of receipt of application for registration in the case of any person (other than a person succeeding to the business or part thereof) ...... The registering authority is bound to dispose of the application within the 30 days from the date of submission of the application or issue a notice to show cause as to why the application should not be rejected. If the authority fails to comply with any of the above two conditions, the application for registration will be deemed to have been registered on the expiry of the 30 days and in case of any person other than the person succeeding to the business, the certificate of registration or deemed registration will take effect from the date of receipt of the application for registration."
The question in the present case then boils down to this : Whether notice dated August 17, 1994, received by the petitioner on September 8, 1994, can be treated as notice contemplated under clause (b) of sub-rule (10) ?
15. What that notice required of the petitioner has already been pointed out by us earlier. Admittedly, that was the first notice issued by the first respondent after receiving the application of the petitioner on August 16, 1994. Though it was dated August 17, 1994, as pointed by us earlier, it was actually despatched on September 6, 1994 and was in fact received by the petitioner on September 8, 1994. No explanation whatsoever has been given by the first respondent herein in his counter-affidavit as to why 21 days were taken in initiating enquiry under clause (a) of sub-rule (10) when that clause mandates that such enquiry should be concluded within 30 days so as to enable the first respondent to either issue certificate of registration to the petitioner or to issue notices contemplated under clause (b) of sub-rule (10), i.e., of further enquiry or to show cause against the rejection of the application within a period of 30 days from the date of receipt of the application, i.e., by September 15, 1994. A reading of the notice dated August 17, 1994, shows that it nowhere mentions anything about any enquiry. It does not fix any date for the appearance of the petitioner before the authority concerned, i.e., first respondent herein. It only requires the petitioner to furnish certain information, and, that too, "within seven days from the date of receipt of that notice". It is not in dispute that the said notice was received by the petitioner on September 8, 1994 and if 7 days are added to that, the period of 30 days from August 16, 1994, would be over, i.e., by September 15, 1994. This establishes the callous and insouciant attitude of the first respondent in enquiring into the application of the petitioner with utter disregard of the time-limits mandated by clauses (a), (b) and (c) of sub-rule (10). Not even an attempt has been made by him for dealing with that application within 30 days when sub-rule (10) requires that he should endeavour to dispose of the application within 30 days.
However, what is important for the purpose of the present case is that notice dated August 17, 1994, is not a notice of any enquiry as it does not fix any date for the appearance of the petitioner before the registering authority, which is necessary for expeditious disposal of his application. In the circumstances, it cannot be treated as "a notice of further enquiry" under clause (b) of sub-rule (10). The expression "further" in a notice of further enquiry" occurring in clause (b) cannot be rendered otiose. A notice of further enquiry implies that there has been an earlier enquiry. In the present case, as already been pointed out, there was no earlier enquiry prior to notice dated August 7, 1994. Therefore, this notice cannot be considered as notice contemplated under clause (c) of sub-rule (10). This follows also from the stand taken by the first respondent in his counter-affidavit. He takes the stand that the application for registration is done in two forms, i.e., form A and form D, under the Rules and that form A relates to "return of estimated turnover" of the dealer and that form D provides for the information about the nature of business, composition of the dealer and other such information. He then points out as follows :
"It is the general practice that when application for registration in received, first form 'A' will be checked and after ensuring that it is properly filled in, the check of all other details in form 'D' will be taken up. Upon receipt of the application from the petitioner, form 'A' was checked and it was found that it was improperly filled. This was informed to the petitioner by notice dated August 17, 1994."
16. This makes it clear that the first respondent did not take up form D for consideration when he issued notice dated August 17, 1994, as per his own averments in his counter-affidavit. The stand of the first respondent that the application for registration is done in two forms, i.e., form A and form D, does not bear scrutiny. As per sub-rule (6) of rule 28 "every application for registration under sub-rules (1) to (5) shall be made in form D". The heading of form D also is "Application for registration as a dealer under section 12 of the Andhra Pradesh General Sales Tax Act, 1957". This is the only form of application prescribed under the Rules. Form A does not form part of form D application. Form A has to be submitted under rule 9 of the Rules, which is as follows :
"Every dealer liable to get himself registered under section 12 of the Act commencing business after 15th June, 1957 shall within 30 days of the commencement of business submit to the assessing authority of the area in which his principal place of business is situated, a return in form A showing his estimated total and net turnover for the first twelve months of his business."
A reading of rule 9 shows that return in form A has to be submitted "within 30 days of the commencement of business". Sub-section (5) of section 12 provides that :
"No dealer who is liable to get himself registered under sub-section (1) or sub-section (2) or sub-section (4) shall carry on business as a dealer unless he has been registered and is in possession of a certificate of registration."
From this it follows that return in form A under rule 9 is required to be submitted only after the commencement of the business, which can be only after the dealer has been registered and is in possession of a certificate of registration. Therefore, the authorities concerned cannot require a dealer to submit a return in form A before he is registered and a certificate of registration is issued to him. Requiring form A to be filed along with form D is contrary to the Rules. At any rate, any deficiency in form A or checking form A first before dealing with form D application is not contemplated by rule 28 and, in particular, sub-rule (10) of rule 28.
17. We are, therefore, satisfied that the first respondent did not issue any notice contemplated by clause (b) of rule 28(10) and that the petitioner did not receive any such notice within 30 days from the date of making application for registration and therefore the consequence under clause (c) of rule 28(10) follows and the petitioner must be deemed to have been duly registered with effect from the date of his application.
However, the petitioner has taken the stand that as form A filed by him was found by the first respondent to be not in order and he submitted a duly filled form A along with his letter dated September 12, 1994 which was received by the respondents on September 13, 1994, this date should be taken as the date of his application and that as he did not receive any notice within 30 days from this date he should be deemed to have been duly registered with effect from that date. We have already observed that the return in form A is required to be submitted under rule 9 only after commencement of the business and that the Rules do not require that form A should be filed along with form D application for registration. Therefore, we are inclined to take the view that this stand of the petitioner is misconceived. But, what has to be noticed is that even the petitioner did not reckon the so-called notice dated September 8, 1994, issued by the first respondent as a notice of any enquiry and soon after he received it he furnished the information required by the first respondent by September 13, 1994. In the notice dated September 13, 1994, issued by the first respondent no reference was made to his earlier notice dated August 17, 1994, which was received by the petitioner on September 8, 1994; nor was any reference made to the reply dated September 12, 1994, given by the petitioner along with certain enclosures. This notice was actually served on the petitioner only on October 25, 1994. The explanation given by the first respondent in his counter-affidavit for the inordinate delay of six weeks in serving this notice on the petitioner does not stick and there is no satisfactory explanation for this lapse. On the other hand, the delay seems to be deliberate. The first respondent casts a Nelson's eye on the mandatory requirement of rule 28(10) that the enquiry on form D application for registration should be concluded as far as possible within 30 days and if that is not possible notice of further enquiry should be issued within that time.
18. We are of the view that even if a notice of further enquiry is issued, the registering authority should conduct the further enquiry also with utmost despatch. Sub-rule (10) of rule 28 cannot be interpreted to mean that after a notice of further enquiry is issued by the registering authority he can rest on his oars and take his own time for completing the enquiry. Even after issuing a notice of further enquiry it is incumbent on the registering authority to complete the enquiry at the earliest. We are of the view that if the registering authority unduly protracts the enquiry without any good reason taking his own easy time after issuing a notice of further enquiry, then also the applicant should be deemed to have been duly registered. We are in respectful agreement with the view taken by the Division Bench of the Allahabad High Court in Rakesh Coal Agency case 1983 Tax LR 3016, that although no time has been provided in the Rules yet the application should be disposed of within reasonable time. Thus, even though clause (b) of rule 28(10) does not fix any reasonable time within which the application for registration should be disposed of after a notice of further enquiry is issued, it has to be disposed of within a reasonable time. We are also of the view that "reasonable time" in the context cannot be more than 30 days from the date fixed for further enquiry and that if the application is not disposed of within that reasonable time, then also the applicant should be deemed to have been duly registered. This would be in keeping with the intent and object of rule 28(10) and section 12 of the Act. To repeat the observations of the Supreme Court in M. A. Rahman's case , the purpose behind registration is that those on whom the liability to pay tax under the Act lies, are known to the State so that it may realise the tax from them. The registering authority should ever keep this in mind as guiding principle in dealing with registration applications.
19. We have also to observe that because sub-rule (10) of rule 28 provides for a notice of "further enquiry", it does not mean that the registering authority can adopt the method of issuing notice after notice of enquiry ad nauseam in order to gain additional time of 30 days every time a notice is issued. Clause (c) of rule 28(10) provides a valuable safeguard to an applicant, i.e., of being deemed to have been duly registered, if the registering authority does not act as required of him under clauses (a) and (b) of that sub-rule. This safeguard cannot be defeated cheaply by the registering authority adopting the ruse of issuing only a notice and doing nothing else within the prescribed period of 30 days. A flimsy notice within 30 days raising insubstantial objections or frivolous queries cannot deprive the applicant of the deemed registration under clause (c) of rule 28(10).
In the present case we find that the first respondent has not done anything within the prescribed period of 30 days except giving notice dated August 17, 1994, giving 7 days time to the petitioner for submitting some information; that notice wad despatched only on September 6, 1994 and was received by the petitioner on September 8, 1994. We have already found that this notice is not the one contemplated by clause (b) and (c) of the rule 28(10). One objection raised in that notice was that column No. g(i) "was not filled up with the details as required". We have gone through forms "D" and "A" under the Rules and form "A" for registration under the Central Sales Tax Act, 1956 and other forms filed by the petitioner which are in the record produced before us. We did not find any column No. g(i) in any of those forms. The other things required to be produced by the petitioner could have been verified by the first respondent any time by fixing an early date of enquiry and requiring the petitioner to produce all the documents necessary to establish the bona fides of the petitioner. The petitioner furnished the required information on September 13, 1994, along with letter dated September 12, 1994. Thereafter the first respondent took his own time to have the second notice served on the petitioner - it was served on October 25, 1994 only. Even is this notice insubstantial objections were raised. The petitioner clearly stated in form D application under the Rules and form A application for registration under the Central Act that Sudhakar Oil Traders was a proprietary concern and that he was its proprietor. In spite of that the first respondent raises the query as follows in the second notice :
"That in the form 'D' application, the status of the firm is recorded as Sudhakar Oil Traders. But in fact it should be partnership or proprietorship as the case may be. The mistake apparent on the fact of application warrants suitable modification .........."
The petitioner clearly stated in his applications that he was aged 26 years. The first respondent raised the objection that "the age of the proprietor as per ration card is found to be 13 years. It is not known whether the applicant is minor or major. Age certificate is to be adduced by the competent authority". Even though the first respondent observed that the presence of the applicant was an essential factor, he did not require the petitioner to present himself after fixing a date of enquiry even in this notice. In this notice the first respondent also required the petitioner to produce two surety bonds to be executed by tax paying registered dealers and property documents if any held in the name of the proprietor or and HUF members. He also required a clearance certificate to be produced from the competent assessing authority on the ground that "the proprietor as well as one of the witnesses who stood surely feel in huge arrears of taxes to the exchequer". The first respondent in his counter-affidavit in the present writ petition does not state that the petitioner was in arrears of sales tax. He only states that one M/s. Paddagari Ramaiah and Company, who is a registered dealer on the rolls of the C.T.O., Osmangunj, was in arrears of sales tax to the tune of Rs. 3,16,025 and that further enquiry revealed that the petitioner was the son of the proprietor of M/s. Paddagari Ramaiah and Company. But a son cannot be denied registration under the Act and prevented from doing business because the father is in arrears of sales tax. In fact the record discloses that the petitioner's brother P. Rama Krishna has been registered as dealer under the Act under Certificate of Registration No. HYR/04/1/3867/92-93. A xerox copy of certificate of registration issued to P. Rama Krishna is found in the records produced before this Court by the first respondent. In State of Andhra Pradesh v. Indian Medicine Sales House a Division Bench of this Court observed as follows :
"...... No doubt husband and wife are members of a Hindu undivided family under the Hindu law. But Sales Tax Act permits each of them registering separately as dealers. There is also no provision, like the one under section 64 of the Income-tax Act, 1961, to club the turnovers of wife and husband for purposes of assessment."
In that case the husband was owning a manufacturing concern and the wife was owning a trading concern and both were registered separately as dealers under the Act. A member of a Hindu undivided family is not precluded from doing business of his own in his own name or in the name of his own proprietary concern dissociated from the HUF - the Act does not preclude a member of a HUF from doing business independently. The second notice also requires the petitioner to submit National Savings Certificates as a security measure to the satisfaction of the first respondent. The first respondent cannot require the petitioner to furnish any such security or even surety bond from the petitioner without notice in form XIV under section 12 of the Act and without giving opportunity to the petitioner and without making an order in writing stating the reasons as required under section 12(7). No form XIV notice under section 12 was given to the petitioner as already pointed out earlier and the respondent did not make any order as mandated by section 12(7) requiring the petitioner to furnish security specifying the manner in which and the time within which it has to be furnished.
20. We are, therefore satisfied on the facts of the present case that the petitioner has to be deemed to have been registered under rule 28(10)(c) in view of our finding that he did not receive any notice of further enquiry within 30 days from the date of receipt of his application for registration as contemplated by rule 28(10)(b) and that the first respondent in fact did not even commence any enquiry within the said period of 30 days after issuing notice to the petitioner, and because of the inordinate delay in the enquiry raising by and large frivolous and insubstantial objections. When the petitioner is deemed to have been registered, all the incidents of registration under the Act are attracted. The petitioner will be entitled to be issued a certificate of registration under the Act. It will be open to the authorities concerned to require the petitioner to furnish security after passing an order under section 12(10) specifying the requirements of section 12(11). In doing so, the authorities concerned will have to take into consideration the returns already filed by the petitioner. In Jampala Ram Gopal v. Assistant Commercial Tax Officer and Registering Authority [1995] 97 STC 633, a Division Bench of this Court observed that "the power conferred on the registering authority under sub-section (10) of section 12 of the Act shall be exercised for the purpose for which it was intended and any order passed by such authority shall not be either arbitrary or unreasonable". It has also to be pointed out that another Division Bench of this Court in Dwaraka Pershad Badari Pershad v. State of Andhra Pradesh [1992] 87 STC 177 rejected the contention that when dealers registered their names with the department they should be deemed to be genuine dealers. It will be open to the authorities concerned to cancel, modify or amend the certificate of registration issued to the petitioner by an order passed under and in accordance with sub-section (17) of section 12.
21. In the result, the writ petition is allowed with costs and the respondents are directed to issue registration certificates to the petitioner under the Act and also under the Central Act. Advocate's fee is fixed at Rs. 750.
22. Writ petition allowed.