2000 (4) TMI 803 - HC - VAT and Sales Tax

Summary

Issues:
1. Cancellation of registration under U.P. Trade Tax Act.
2. Contradictory orders by the Tribunal.
3. Adherence to principles of natural justice in cancellation of registration.
4. Setting aside the order of cancellation of registration upon remand.

Analysis:

1. The revisionist was granted registration under both the Central Sales Tax Act and the U.P. Trade Tax Act. However, a survey revealed that the business premises were closed, leading to the Trade Tax Officer cancelling the registration under section 8-A(1-B) of the Act. The revisionist appealed against this decision, which was allowed by the Deputy Commissioner, remanding the matter to the assessing authority for reconsideration.

2. The Tribunal then allowed the revisionist's appeal but also observed that the Deputy Commissioner had rightly remanded the matter. The Tribunal's orders were seen as contradictory, with the revisionist being aggrieved by the order justifying the remand. The Standing Counsel argued that the Tribunal's operative order was not appropriately phrased, suggesting that the revisionist's appeal should have been partly allowed based on the observations made.

3. The Court emphasized the importance of following principles of natural justice, stating that even though the Trade Tax Act did not mandate issuing a notice before cancellation of registration, the dealer must be given a reasonable opportunity to be heard. The Trade Tax Officer's cancellation without such an opportunity was deemed improper. The Deputy Commissioner's decision to remand the matter was upheld, but it was noted that the cancellation of registration should have been set aside at that stage.

4. Upon remand, the order of cancellation should have been revoked, and a decision on registration cancellation should have been made after hearing the dealer. The Tribunal's error in the operative portion was highlighted, as it should have partly allowed the dealer's appeal and set aside the assessing authority's order of cancellation. Consequently, the Court modified the Tribunal's order, dismissing both revisions.

In conclusion, the Court emphasized the importance of adhering to principles of natural justice, ensuring that dealers are given a fair opportunity to be heard before any adverse actions like cancellation of registration are taken. The judgment clarified the procedural errors made by the Trade Tax Officer, Deputy Commissioner, and the Tribunal, ultimately modifying the Tribunal's order and dismissing the revisions.