2012 (2) TMI 456 - HC - VAT and Sales Tax

Summary

Issues involved: Registration cancellation u/s 39 of Tamil Nadu Value Added Tax Act, 2006 without reasons and retrospective effect.

Registration Cancellation without Reasons:
The petitioner, a registered dealer u/s 39 of Tamil Nadu Value Added Tax Act, 2006, had their registration certificate cancelled by the respondent without providing any reasons for such cancellation. The respondent's action of cancelling the registration without affording an opportunity of personal hearing to the petitioner was challenged. The impugned order lacked the necessary reasons as required by clause (14) of section 39 of the Act. The court noted that cancellation of registration can only be done based on sufficient reasons and after giving a personal hearing to the dealer as per clause (15) of the Act. The respondent's order was found to be in violation of these provisions and contrary to established legal principles, as highlighted in Indo Germa Products Limited v. Assistant Commissioner (CT) [2011] 45 VST 236 (Mad). Consequently, the High Court set aside the impugned order of registration cancellation.

Retrospective Effect of Registration Cancellation:
The impugned order of the respondent cancelling the petitioner's registration was also found to be improper due to its retrospective effect. The respondent did not have the authority to cancel the registration with retrospective effect, as observed by the court. The cancellation of registration should be done in accordance with the law, after issuing an appropriate notice and providing an opportunity of personal hearing to the dealer. The High Court allowed the writ petition, setting aside the impugned order, and directed the respondent to follow the legal procedures for cancellation of registration in the future. The court emphasized that the respondent must adhere to the principles of natural justice and statutory provisions when taking such actions.