2017 (3) TMI 754 - HC - VAT and Sales Tax

Natural justice - cancellation of sales tax registration - petitioner was not been served with the impugned order and that he came to know of the cancellation of his registration upon by downloading the information from the internet - Held that - the petitioner had no knowledge of the notice - notice is required to be issued before taking any steps towards cancellation of registration of a dealer - impugned order quashed for breach of principles of natural justice - petition allowed - decided in favor of petitioner.

Summary

Issues:
1. Cancellation of sales tax registration under Section 39(14) of the Tamil Nadu Value Added Tax Act, 2006.
2. Breach of principles of natural justice in the cancellation process.
3. Lack of opportunity for the dealer to be heard before cancellation.
4. Validity of the cancellation order due to improper notice delivery.
5. Quashing of the order and directions for initiating fresh proceedings.

Analysis:
The petitioner's grievance centered around the cancellation of their sales tax registration by the respondent under Section 39(14) of the Tamil Nadu Value Added Tax Act, 2006, allegedly in breach of natural justice principles. The petitioner contended that they were not served with the cancellation order and only became aware of it through internet sources. The petitioner argued that according to Section 39(15) of the Act, no order should be made without giving the dealer an opportunity to be heard. The respondent claimed that a notice was sent for a hearing but returned as the petitioner had reportedly left the address. However, the petitioner denied receiving any such notice, and the court found no evidence to support the respondent's contention.

The court emphasized the importance of providing the petitioner with a chance to present their views, especially regarding a personal hearing before taking any adverse action. Considering the circumstances, the court decided to quash the order dated 31st October, 2016, canceling the petitioner's registration. The court highlighted that the respondent could initiate fresh proceedings if necessary, following the provisions of Section 39(15) of the Act. The court directed the respondent to issue a notice before any further steps towards cancellation of registration, ensuring it is sent to the addresses available in their records and as provided in the writ petition. Additionally, the respondent was instructed to retain proof of the notice dispatch.

In conclusion, the writ petition was disposed of with the mentioned directions, without imposing any costs. The connected pending application was closed, addressing the issues of cancellation of registration, breach of natural justice, lack of opportunity for the dealer to be heard, improper notice delivery, and the need for fresh proceedings with proper notice issuance.