2019 (2) TMI 394 - HC - VAT and Sales Tax

Cancellation of registration of the petitioner - TNVAT Act, 2006 - principles of natural justice - Held that - Perusal of the cancellation clarification notice dated 12.06.2017 would clearly indicate that the petitioner was given 15 days time to make his reply with regard to the business activity being carried on in the premises. Therefore, it is evident that the time granted therein, expires only on 27.01.2017, however, an order of cancellation was issued on 23.06.2017, which means that the respondent has chosen to pass the order without even waiting for the petitioner to make his reply. This Court finds that the impugned cancellation of registration was passed in violation of principles of natural justice - this Court is inclined to set aside the impugned cancellation order - petition allowed.

Summary

Issues:
1. Cancellation of registration under the Tamil Nadu Value Added Tax Act, 2006 without notice to the petitioner.
2. Alleged violation of principles of natural justice in the cancellation proceedings.
3. Dispute regarding the petitioner's request for cancellation versus a request for a name change.
4. Timeliness of the cancellation order in relation to the petitioner's response time.

Analysis:
The petitioner challenged the respondent's decision to cancel their registration under the Tamil Nadu Value Added Tax Act, 2006, contending that the cancellation was done without issuing a notice, thus violating principles of natural justice. The petitioner claimed that they had requested a name change for their business, not a cancellation of registration, and highlighted that the respondent proceeded with the cancellation without waiting for the petitioner's response within the specified time frame. The respondent, however, argued that the cancellation was based on the petitioner's request for cancellation, supported by documentary evidence. The court noted discrepancies between the petitioner's alleged request and the respondent's actions, emphasizing that the cancellation was premature and lacked proper adherence to natural justice principles.

The court observed that the cancellation clarification notice provided the petitioner with a specific timeframe to respond regarding the ongoing business activities, yet the cancellation order was issued before the deadline for the petitioner's reply had passed. This premature action further demonstrated the violation of natural justice principles in the cancellation process. The court ultimately ruled in favor of the petitioner, setting aside the cancellation order and granting liberty to the respondent to initiate fresh proceedings if necessary, in compliance with the law. The judgment concluded by allowing the writ petition, with no costs imposed, and closing the connected M.P., thereby rectifying the procedural irregularities in the cancellation of registration.