2001 (1) TMI 931 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to cancellation of registration certificate by sales tax authorities without following principles of natural justice.

Analysis:
The petitioner, a dealer in wooden articles, challenged the cancellation of their registration certificate by sales tax authorities. The authorities conducted a raid on the petitioner's factory and issued show cause notices regarding unaccounted documents/materials. The petitioner replied to the show cause notices but was informed the next day that their registration certificate had been cancelled. The court noted that the authorities did not follow the principle of natural justice as the petitioner's reply was not considered before cancellation. The court emphasized that the authorities failed to pass an order with reasons for cancellation, as required by section 15 of the M.P. General Sales Tax Act, 1958. The court found the actions of the authorities to be without jurisdiction and ordered a proper inquiry to be conducted, giving the petitioner an opportunity to represent their case. The court directed the authorities to pass a reasoned order on the cancellation of the registration certificate within four months.

In conclusion, the court allowed the petition, quashed the impugned communication, and instructed the authorities to conduct a proper inquiry following the principles of natural justice and statutory provisions. The court emphasized the importance of due process and adherence to legal procedures in matters of cancellation of registration certificates by sales tax authorities.