2017 (10) TMI 544 - HC - VAT and Sales Tax

Cancellation of registration - TNVAT Act - opportunity of being heard - Held that - the revisional authority accepts the fact that the registering authority did not afford an opportunity for personal hearing to the petitioner when Sections 39(14) and 39(15) of TNVAT Act, 2006, mandates that an opportunity of personal hearing should be granted to the dealer before cancellation. Therefore, the revisional authority fell in error in holding that since the petitioner themselves filed an application for cancellation, the failure to afford an opportunity for personal hearing by the registering authority is not fatal. With regard to the cancellation of the petitioner s registration, the same is vitiated on two grounds, namely, the same has been passed without affording an opportunity of personal hearing, which is mandatorily required to be provided and secondly, the cancellation has been done with retrospective effect which is also illegal. Therefore, on these two grounds, the registration cancellation order dated 13.04.2017 calls for interference. Petition allowed - decided in favor of petitioner.

Summary

Issues:
Challenge to cancellation of registration under TNVAT Act, 2006 without affording personal hearing and with retrospective effect.

Analysis:
The petitioner challenged the cancellation of their registration under the TNVAT Act, 2006, due to an error in the TIN number provided during the application process. The petitioner realized the mistake and submitted a representation to cancel their request for cancellation. Despite this, the registration was cancelled with retrospective effect, leading to the petitioner filing a revision petition. The revisional authority erred in not granting a personal hearing to the petitioner as mandated by Sections 39(14) and 39(15) of the TNVAT Act, 2006. The authority wrongly believed that since the petitioner initiated the cancellation process, a personal hearing was unnecessary. However, the petitioner's representation clearly indicated the inadvertent error in the application. The revisional authority also erred in dismissing the revision petition based on the failure to conduct a verification inspection, as the registering authority was obligated to verify the place of business as per the notice issued. These errors justified interference with the revisional authority's decision.

The cancellation of the petitioner's registration was found to be flawed on two grounds. Firstly, the cancellation was done without providing the mandatory opportunity for a personal hearing, which is a legal requirement. Secondly, the cancellation was made with retrospective effect, which was deemed illegal. Therefore, the court held that the cancellation order was invalid and ordered the restoration of the petitioner's registration within ten days from the date of the order. The judgment allowed the writ petition, setting aside the impugned orders and directing the first respondent to reinstate the petitioner's registration promptly. No costs were awarded, and the connected miscellaneous petitions were closed as a result of the judgment.