1963 (4) TMI 46 - HC - VAT and Sales Tax

Summary

Issues Involved:
1. Authority to cancel the registration certificate.
2. Grounds for cancellation of the registration certificate.
3. Adequate opportunity to show cause against cancellation.

Detailed Analysis:

1. Authority to Cancel the Registration Certificate:
The petitioner contended that only the Excise and Taxation Commissioner could cancel the registration certificate, and the Assessing Authority had no such power. However, the court found that Section 15 of the Act allows the Commissioner to delegate his powers to any person appointed under Section 3 to assist him. Notifications dated 30th March 1949, and an order by the Commissioner under Section 15, confirmed that the Assessing Authority had been delegated the power to cancel registration certificates. Thus, the court concluded that the Assessing Authority was authorized to cancel the registration certificate.

2. Grounds for Cancellation of the Registration Certificate:
The petitioner argued that the grounds for cancellation must be those enumerated in Section 16 of the Act, and the cancellation in this case did not meet those criteria. The court noted that the cancellation was based on allegations of bogus transactions and tax evasion, which were not grounds specified in Sections 7(6) or 16. The court rejected the State's argument that Section 7(4) could be interpreted to include these grounds, stating that the grounds for cancellation must be explicitly provided for in the Act. Therefore, the court held that the cancellation was not in accordance with any provision in the Act and was thus illegal.

3. Adequate Opportunity to Show Cause Against Cancellation:
The petitioner claimed that no adequate opportunity was given to show cause against the cancellation. The court observed that the petitioner's letter requesting details of the material justifying the proposed cancellation was received by the Assessing Authority on 1st October 1962, but the cancellation was ordered on the same day without responding to the letter. The court agreed that no adequate opportunity was provided, and the cancellation order could not be justified on this ground.

Conclusion:
The court allowed the petition, quashing the orders of the Assessing Authority canceling both the registration certificates under the State and the Central Acts. The court directed that the registration certificates could only be canceled after the petitioner was given a proper opportunity to show cause. The petition was allowed without any order as to costs.