2012 (2) TMI 451 - HC - VAT and Sales Tax

Permission to run the business - Cancellation of the registration of the petitioner - Held that - The respondent had passed the impugned order cancelling the registration of the petitioner, retrospectively, without giving an opportunity of hearing to the petitioner. As such, the impugned order of the respondent, dated January 13, 2012, is liable to be set aside. Hence, it is set aside. The petitioner is directed to appear before the respondent, on February 23, 2012, along with all the relevant documents to substantiate his claims, pursuant to the notice issued by the respondent, on November 11, 2011. Thereafter, the respondent shall consider the objections filed by the petitioner, if any, and pass appropriate orders thereon, on the merits and in accordance with law, with regard to the cancellation of the registration of the petitioner

Summary

Issues:
1. Cancellation of registration of the petitioner without a personal hearing.
2. Validity of the impugned order dated January 13, 2012.
3. Dispute over the possession of the property in question.
4. Pending civil suits related to the property.

Analysis:

Cancellation of registration without a personal hearing:
The petitioner filed a writ petition seeking to quash the impugned order dated January 13, 2012, which cancelled the registration of the petitioner retrospectively without providing an opportunity of personal hearing. The petitioner's counsel argued that as per relevant laws and precedents, such cancellation cannot be done without affording the dealer a chance to be heard. The counsel cited specific clauses from the Tamil Nadu Value Added Tax Act, 2006, emphasizing the necessity of a personal hearing before any cancellation of registration. The Government Advocate for the respondent failed to demonstrate that the petitioner was given a fair opportunity to present his case before the registration was cancelled. The court found the cancellation without a personal hearing to be unjust and ordered the petitioner to appear before the respondent with relevant documents to substantiate his claims.

Validity of the impugned order:
The learned Government Advocate representing the respondent argued that the registration was cancelled due to false information provided by the petitioner regarding the rental agreement and letters of introduction. However, the advocate could not establish the authority to cancel the registration retrospectively or prove that the petitioner was given a proper chance to defend himself. The court noted the lack of evidence supporting the cancellation and set aside the impugned order, directing the respondent to review the objections filed by the petitioner after a personal hearing and pass appropriate orders within two weeks.

Dispute over possession of the property:
It came to light during the proceedings that another individual had filed a petition seeking to be involved in the case, claiming to have been conducting business at the same premises as a tenant for several years. Additionally, civil suits were mentioned, indicating ongoing legal disputes related to the possession of the property in question. The court acknowledged these disputes but clarified that its decision regarding the cancellation of registration should not influence the outcomes of the civil suits pending in separate courts.

In conclusion, the High Court of Madras found the cancellation of the petitioner's registration without a personal hearing to be unjust and ordered a reevaluation by the respondent after providing the petitioner with an opportunity to present his case. The court also noted the existing disputes over the property but emphasized that its decision on the registration cancellation should not impact the separate civil suits underway.