1972 (4) TMI 89 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of registration certificates under the Punjab General Sales Tax Act and the Central Sales Tax Act.
2. Violation of principles of natural justice in the cancellation order.
3. Mention of cancellation of both registration certificates in the communication.
4. Consideration of alternative remedy under the Sales Tax Act.

Analysis:
The case involved an appeal against the cancellation of registration certificates under the Punjab General Sales Tax Act and the Central Sales Tax Act. The petitioner, a dealer, had obtained these certificates for the sale, purchase, and manufacture of goods. The Assessing Authority issued notices alleging business closure and misuse of the registration certificates. The petitioner denied the allegations, but the Authority canceled the Punjab Act certificate without mentioning the Central Act certificate. The petitioner challenged this decision on grounds of natural justice and communication discrepancy.

The first contention raised was the lack of opportunity for the petitioner to rebut the collected material, violating principles of natural justice. The court acknowledged that canceling a registration certificate requires due process and opportunity for the certificate-holder to defend. The petitioner's argument that they had sufficient opportunity was dismissed, as there was no evidence of the material being shared with them. The court upheld the single judge's decision on this issue.

The second contention was regarding the mention of canceling both registration certificates in the communication, despite the order specifying only the Punjab Act certificate. The court emphasized that the communication error did not align with the order, leading to confusion and unfairness. The single judge's decision to quash the cancellation order was upheld on this ground as well.

Lastly, the argument about exhausting remedies under the Sales Tax Act before seeking judicial relief was addressed. The court clarified that the availability of alternative remedies does not bar the High Court from granting extraordinary relief under the Constitution. The single judge rightly considered the lack of natural justice in the Assessing Authority's decision as a basis for intervention, irrespective of the petitioner not utilizing statutory remedies. Consequently, the appeal was dismissed, affirming the quashing of the cancellation order without costs.