2014 (4) TMI 729 - HC - VAT and Sales Tax

Whether registration came to be cancelled from inception u/s 27 of the Act - Gujarat Value Added Tax Act, 2003 - Held that - it does appear to be a case where provisional registration in terms of rule 5(16) of the said Rules was converted into a permanent registration - only on the grounds mentioned u/s 27 of the Act, such registration could be cancelled Section 27(5)(g) permits the authority to cancel such registration if the dealer is convicted of an office under the said Act or the earlier law - Even in such a case, the Commissioner has to grant a hearing and pass an order recording his reasons for the same - The proposed grounds on which the Commissioner desired to rely for cancellation of registration are never conveyed to the petitioner - we cannot uphold the said order - The impugned order dated 21.1.2013 of the ACC is quashed - This is without prejudice to the respondents to pass a fresh order in accordance with law after following the legal requirements - it would be open for the petitioner to raise all contentions, including the grounds that unless and until the dealer is convicted and that too in an offence under the Act or the earlier law, the registration cannot be cancelled Decided in favour of asseessee.

Summary

Issues:
Challenge to cancellation of registration under the Gujarat Value Added Tax Act, 2003 without a hearing and disclosure of grounds.

Analysis:
The petitioner challenged the order cancelling their registration under the Gujarat Value Added Tax Act, 2003, without being granted a hearing or given reasons for the cancellation. The petitioner applied for registration and TIN in December 2012, claiming provisional registration under the Act. The authority relied on the petitioner's involvement in a criminal case and inaccurate details provided by the petitioner to cancel the registration. The petitioner's appeal to the Gujarat Value Added Tax Tribunal was dismissed, leading to the present petition.

The petitioner argued that the final registration could only be cancelled under Section 27 of the Act, specifically citing sub-section (5)(g) which requires the dealer to be convicted of an offense under the Act or earlier law, with the Commissioner providing reasons after a hearing. The petitioner contended that the details issue was raised for the first time in the petition, emphasizing that the cancellation was unjust as no grounds were disclosed or hearing granted.

On the other hand, the respondents supported the cancellation under Rule 5(15) of the Rules, allowing cancellation if the authority was unsatisfied with the details provided by the dealer. The Court observed that the provisional registration seemed to have been converted into permanent registration, making cancellation permissible only on grounds specified in Section 27 of the Act. The Court noted that no hearing was granted to the petitioner, and the grounds for cancellation were not communicated, leading to the quashing of the impugned order.

The Court held that the cancellation order was quashed, allowing the respondents to issue a fresh order following legal requirements. The petitioner was given the opportunity to raise all contentions, including the requirement of a conviction for an offense under the Act or earlier law for registration cancellation. The Court refrained from expressing an opinion on this contention, disposing of the petition with the mentioned observations and directions.