Case Reference:
19 MLR (AD) 196
Commissioner of Customs, Excise and VAT, Dhaka vs. Appollo Steel Mills Limited and others
Background:
Appollo Steel Mills Ltd. applied to cancel its VAT registration after halting production, closing its mills, and having no remaining stock for sale or disposal. They filed this application with the VAT authority, requesting a formal decision on deregistration. However, the VAT authority did not process the application, leaving it unresolved for over six years.
Key Findings:
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Authority’s Duty to Respond
The court highlighted that when an application for VAT deregistration is submitted, it is the duty of the VAT authority to make a timely decision. They cannot indefinitely delay or ignore such applications, especially when production has ceased and no goods remain for sale. -
Proper Adjudication Before Demand Adjustment
The High Court Division emphasized that if the VAT authority has any justified claims against the petitioner, they must address these claims through proper adjudication as outlined in the VAT Act. They cannot adjust or recover any disputed amount without formal adjudication under Section 55 of the VAT Act. -
Court’s Decision
The High Court Division upheld the petitioner’s request to cancel VAT registration, pointing out that the inaction of the VAT authority was unjustifiable. The Appellate Division endorsed this view, underscoring that government authorities must act according to legal requirements and cannot disregard applications or defer decisions without valid reasons. -
Conclusion
With these findings, the petition was dismissed, confirming the High Court’s stance that VAT authorities must address deregistration applications promptly and adjudicate any pending demands appropriately.
With the above observations, the petition is dismissed.
(Para-13, Chief Justice Md. Muzammel Hossain and others, Civil Petition for Leave to Appeal No. 1416 of 2009 from the judgment and order dated the 23rd day of April, 2008 passed by the High Court Division in Writ Petition No. 3951 of 2005).