The law and procedure relating to registration of a person as a dealer under the TNVAT Act is specified in sections 38 and 39 of the TNVAT Act. Any dealer or any person who wants to do business in the State of Tamil Nadu can get himself registered under the act. However, if a dealer purchases goods within the State of Tamil Nadu and sells the same inside the State and if his total turnover for the year is more than Rs. 10 lakhs, then such dealer shall get himself registered under the act. If the total turnover of such dealer is less than Rs. 10 lakhs, he need not get himself registered under the act. Similarly, in the case of a dealer who purchases goods from outside the state and sells the same in the State or interstate, then such dealer has to get registered under the act if his total turnover for the year exceeds Rs five lakhs. He need not get registered if his total turnover for the year is less than Rs. 5 lakhs.
A minor is not entitled to enter into a contract. However, if the person who intends to commence business is a minor or if the minor inherits an existing business or succeeds at dealer, the certificate of registration shall be issued not in the name of the minor but in the name of the Guardian or trustee or agent of the minor.
The following classes of dealers have to register themselves whatever be the quantum of turnover:
1. Every casual trader,
2. Every dealer in bullion, gold, silver and platinum jewellery including articles thereof and worn out or beaten jewellery and precious stones,
3. Every dealer registered under the CST act,
4. Every dealer residing outside the state but carrying on business in the state,
5. Every agent of a non-resident dealer,
6. Every factor, broker, a commission agent, arhati or delcredere agent or auctioneer or any other mercantile agent,
7. Every dealer who obtains or brings goods from outside the state or exports goods outside the territory of India, shall get registered under this act irrespective of the quantum of his turnover.
Generally, the application for registration has to be submitted within a period of 30 days from the date of commencement of business. However, in respect of certain classes of dealers, a shorter period has been prescribed. In case of a casual trader, who has occasional transaction of purchase or sale, the application for registration has to be submitted within 24 hours of the transaction. In the case of a dealer who recites outside the state and has no fix it place of business in the State of Tamil Nadu, but sells, distributes all supplies goods through an employee or any other person other than an agent, the dealer shall file an application for registration is within 24 hours of arrival in the State of Tamil Nadu.
The dealer shall register a place as the principal place of business in the state. If he has any other place of business in the state, such other places of business shall also be included in the certificate of registration. The dealer shall not keep his goods in places which are not mentioned in certificate of registration. It is open to the authority who has issued the certificate of registration to demand security or additional security from the dealer, for the purpose of proper realisation of the tax payable under this act. The demand for security or additional security can be made on the dealer only after following the principles of natural justice. The registering authority is also empowered to forfeit the whole or any part of the security furnished by the dealer for realizing any part of the tax or penalty or interest payable by the dealer under this act.
The officer is also empowered to refund any amount deposited by the dealer as security or by the security has been furnished by the dealer in the form of a pledge, release the pledge, if the dealer proves himself to be prompt in the payment of tax and above reproach in the conduct of his business. The deposit to be furnished by the dealer can be in the form of immovable property along with security bond or post office or in the form of savings bank deposits for National savings certificates duly pledged in favour of the registering authority or in the form of term deposits in favour of the registering authority or in the form of bank guarantee.
The registration certificate will be valid until it is cancelled by the authority or on closure of business of the dealer. It is not necessary for the dealer to renew the registration certificate annually under this act. The authority has been empowered to grant a duplicate registration certificate if the original registration certificate has been lost or destroyed. A dealer can himself apply to the officer to cancel his registration certificate. The authority granting the registration certificate can also cancel, modify or amend any registration certificate granted to the dealer, for good and sufficient reasons, after following the principles of natural justice. What is “for good and sufficient reasons” depends on the facts of each case and there is no universal principle to determine “for good and sufficient reasons”.
The application for registration has to be submitted in form A within a period of 30 days from the date of commencement of business. The application can be submitted even after the expiry of the period of 30 days if the applicant satisfies the officer for not submitting the application within the prescribed period of 30 days. Once an application is submitted, the registering authority has to process the application and grant registration certificate within a period of 30 days from the date of submission of the application.
If the registration certificate is not submitted within a period of 30 days from the date of filing of application, the dealer is deemed to have been registered under the act and the registering authority has to assign a Taxpayer Identification Number within seven days from the expiry of the said period. The registration certificate is not transferable from one dealer to another. If the registering authority finds any defect in the application for registration, the registration certificate will not be issued and the registering authority shall issue a notice proposing to reject the application in the light of the defect found in the application for registration.
If there is any change in the constitution of the business, the dealer shall, within 30 days from the date of change in the constitution, furnish details of the change to the registering authority and have the certificate of registration amended accordingly. If the partnership firm is dissolved, a copy of the deed of dissolution shall be furnished by all the partners to the registering authority within 30 days from the date of dissolution. If a registered dealer dies, his executor or administrator or other legal representatives shall, within 30 days of taking charge as executor or administrator or has legal representative, furnish details to the registering authority in form E. If a dealer changes the name and style of the business or shifts the place of business, such change shall be intimated to the registering authority within 30 days of such change and have the registration certificate amended accordingly.
The registration certificate shall be exhibited at the principal place of business and also at the additional place of business or branch or godown or factory, of the dealer.