2007 (6) TMI 490 - HC - VAT and Sales Tax

Summary

Issues:
Challenge to cancellation of registration certificate under Tamil Nadu Value Added Tax Act, 2006.

Detailed Analysis:

1. Opportunity of being heard and additional security:
The petitioner challenged the cancellation of the registration certificate issued under the Tamil Nadu Value Added Tax Act, 2006, on the grounds of not being given an opportunity of being heard before being directed to pay additional security. The petitioner argued that the additional security demanded was not in accordance with the provisions of section 39(5) of the Act, which states that the amount of security or additional security should not exceed one half of the tax payable. The court noted that the principles of natural justice were violated as the petitioner was not given a chance to present objections before the cancellation of the registration certificate.

2. Cancellation of registration certificate without proper opportunity:
The respondent cancelled the registration certificate of the petitioner without considering the petitioner's request for 15 days to file objections and without providing a reasonable opportunity for the petitioner to be heard. The court emphasized that before cancelling the registration, the assessee should be given an opportunity of being heard as mandated by section 39(5) of the Tamil Nadu VAT Act, 2006. The court found that the respondent did not follow the statutory provisions and principles embedded in the Act before cancelling the registration certificate.

3. Remand for fresh consideration:
The court set aside the impugned order and remanded the matter back to the respondent for fresh consideration on merits. The petitioner was granted 15 days to submit objections to prove his case, and a personal hearing as per section 39(5), (14), and (15) of the Act was mandated before passing appropriate orders. The court directed the respondent to pass orders within 15 days of receiving the objections, ensuring compliance with the law.

4. Disposal of the writ petition:
With the directions provided for fresh consideration and compliance with procedural requirements, the writ petition was disposed of. The court closed the related Miscellaneous Petition with no costs imposed on either party.

This detailed analysis highlights the key issues raised in the legal judgment challenging the cancellation of the registration certificate under the Tamil Nadu Value Added Tax Act, 2006, and the court's decision to set aside the impugned order, remand the matter for fresh consideration, and ensure compliance with statutory provisions and principles of natural justice.