2017 (7) TMI 1219 - HC - VAT and Sales Tax

Restoration of registration certificate of the petitioner - TNVAT Act, 2006 - no notice of cancellation was served - Held that - There is no record to show that the notice was issued to the petitioner prior to cancellation of his registration, there was no written order to the said effect and it is a mere entry in the official website. It is a settled legal position that unless and until an order is communicated, the same cannot take effect - the cancellation of the petitioner s registration was illegal. Furthermore, retrospective cancellation with effect from April 2012 is also bad in law. The respondents are directed to restore the petitioner s registration certificate with effect from 01.04.2012 - petition allowed.

Summary

Issues:
1. Failure to comply with court directions regarding restoration of registration certificate under TNVAT Act.
2. Alleged illegal cancellation of registration without proper notice and communication.
3. Retrospective cancellation of registration with effect from April 2012.
4. Non-production of relevant files by respondents during court proceedings.
5. Legal position on the necessity of communicating orders to affected parties.

Issue 1: Failure to comply with court directions regarding restoration of registration certificate under TNVAT Act.

The petitioner approached the court seeking restoration of their registration certificate under the Tamil Nadu Value Added Tax Act, 2006 (TNVAT Act) after the respondent failed to provide appropriate orders despite earlier court directions in a previous writ petition. The court had directed the respondent to consider the petitioner's representations and provide an authenticated copy of any cancellation order if passed. However, the respondent did not comply with these directions, leading the petitioner to seek redress through the current writ petition.

Issue 2: Alleged illegal cancellation of registration without proper notice and communication.

The petitioner contended that the cancellation of their registration was done without notice, and they were wrongly treated as a dealer engaged in stock business. The court noted that without proper communication of the cancellation order, it could not take effect, citing legal precedents to support this principle. The court found that the cancellation of the petitioner's registration was illegal due to the lack of proper communication and notice, rendering the retrospective cancellation with effect from April 2012 invalid in law.

Issue 3: Retrospective cancellation of registration with effect from April 2012.

The court held that the retrospective cancellation of the petitioner's registration certificate with effect from April 2012 was illegal. Citing previous decisions, the court emphasized that such retrospective cancellations were not permissible under the law. The court referred to a specific case, Visku Enterprises v. The Assistant Commissioner, where a similar retrospective cancellation was deemed unlawful, reinforcing the invalidity of the retrospective action taken against the petitioner.

Issue 4: Non-production of relevant files by respondents during court proceedings.

During the court proceedings, the respondents failed to produce the relevant files related to the petitioner, despite a previous direction to do so. The court expressed dissatisfaction with this non-compliance, highlighting the importance of providing necessary documentation for a fair and informed decision-making process. The absence of these files raised questions about the transparency and procedural correctness of the actions taken by the respondents against the petitioner.

Issue 5: Legal position on the necessity of communicating orders to affected parties.

The court reiterated the legal principle that an order passed by an authority must be communicated to the affected party to take effect. Failure to communicate such orders renders them ineffective and incapable of creating or altering rights. The court cited various judgments to support this position, emphasizing the fundamental requirement of communication for the validity of administrative actions. In light of this legal position, the court found the cancellation of the petitioner's registration certificate without proper communication to be unlawful and ordered its restoration with effect from April 2012.

In conclusion, the High Court of Madras, in a judgment delivered by Mr. T.S. Sivagnanam, J., allowed the writ petition filed by the petitioner, setting aside the impugned order and directing the restoration of the petitioner's registration certificate under the TNVAT Act from April 2012. The court emphasized the importance of proper communication of orders, declared the retrospective cancellation as illegal, and criticized the non-compliance of the respondents in producing relevant files during the proceedings. The judgment underscored the necessity of following legal procedures and respecting the rights of affected parties in administrative actions.