Allahabad High Court allows Chartered Accountants-CS-CWAs to appear before UP VAT Authorities | 23-08-2014 |

On 20th August, 2014, Lucknow Bench of Allahabad High Court has allowed Chartered Accountants, Companies Secretaries and  Cost and Works Accountants to appear before UP Vat Authorities in connection with assessment proceedings under U P VAT Act.

It is pertinent to note that on 6th August, the Allahabad High Court has on the petition filed by Tax Lawyers Association, Lucknow granted an interim stay to the effect that no person except a registered advocates can appear beore the authorities under  UP VAT Act. Download the judgement dated 06-08-2014 Click Here >>  

Tax Lawyers Association, Lucknow (the petitioner) relied on the section 33 of the Advocates' Act, 1961 as under:

“33. Advocates alone entitled to practise . -

Except as otherwise provided in this Act or in any other law for the time being in force, no person shall, on or after the appointed day, be entitled to practise in any court or before any authority or person unless he is enrolled as an advocate under this Act.”

Subsequently, the Institute of Chartered Accountants of India (ICAI) and by the Institute of Company Secretaries of India (ICSI) have filed Applications for impleadment and for vacating the interim stay order.

The question before the bench was with respect to the validity of Rule 73 of U.P. Value Added Tax Rules, 2008 on the ground that they are ultra vires the provisions of the U.P. Value Added Tax Act, 2008 and the Advocates Act, 1961 insofar as it permits persons who are not Advocates 'to appear and represent' before the authorities.

The said Rule 37 is reproduced as under,

“Rule 73. Representation before the authorities under the Act. -

Unless otherwise provided in the Act or these Rules, anything which is by the Act or the rules required or permitted to be done by a dealer, except when he is required to attend personally for examination or affirmation on oath, may be done by a lawyer, an accountant or an authorized agent appointed by the dealer in writing in this behalf.”

Rule 2 (e) of the Rules of 2008 defines the expression 'accountant' which after a recent amendment on 27 June 2014 is read as under;

“Accountant” means a Chartered Accountant as defined in Chartered Accountants Act, 1949, or a member of an Association of Accountants recognized in this behalf by the Central Board of Revenue and includes a Company Secretary as defined in the Company Secretaries Act,1980 and a Cost Accountant as defined in the Cost and Works Accountant Act, 1959.”

While delivering the judgement, the Court observed that prior to the U.P. Value Added Tax Act of 2008 which came into force from 1 January 2008, the Act in force was U.P. Trade Tax Act, 1948 and Rule 77A of the erstwhile Act of 1948 also authorised “accountant”  to appear before UP trade Tax authorities.

The court further observed that the restriction cast under section 33 of the Advocates' Act of 1961 upon persons other than advocates is subject to contrary provision contained in the section 33 itself.

In the words of the Court;

“The embargo which is enacted in Section 33 of the Act of 1961 upon persons, who are not advocates practicing in any court or before any authority or person is, therefore, clearly subject to a provision to the contrary in the Act or except as otherwise provided in any other law for the time being in force. Hence, where a provision is contained in any other law for the time being in force, entitling persons who are not advocates to practise in any court or before any authority or person, its effect would be to lift the embargo which is imposed by Section 33 of the Act of 1961.”

While delivering the judgement, the Court examined the validity of Rule 73 of U.P. Value Added Tax Rules, 2008 on the ground that they are ultra vires the provisions of the U.P. Value Added Tax Act, 2008 and the Advocates Act, 1961 insofar as it permits persons who are not Advocates 'to appear and represent' before the authorities, and expressed as under:

"Prima facie, therefore, and particularly, having due regard the law laid down by the Supreme Court, there would be no occasion to hold that Rule 73 of the Rules of 2008, insofar as it governs the category of Accountants is ultra vires the provisions of the Act of 1961, or for that matter, the provisions of the Act of 2008."

The Court vacated the interim stay as under:

"In the circumstances and at the present stage, we clarify that the interim order dated 6 August 2014 shall stand vacated insofar as the categories of (i) Chartered Accountants; (ii) Cost and Works Accountants; and (iii) Company Secretaries are concerned."

Download the full order Click Here >>