9911796707
TMI Blog1981 (12) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... rat Sales Tax Act, 1969 (hereinafter referred to as "the Gujarat Act"). 2.. In order to appreciate the challenge to the impugned order of cancellation of the recognition certificate of the petitioner-firm, a few facts need be set out. The petitioner-firm is a dealer registered under the Gujarat Act as well as under the Central Sales Tax Act, 1956. It also holds recognition certificate under the Gujarat Act. It is claimed by the petitioner-firm that its annual turnover of the sales was more than Rs. 15 lacs and substantial portion thereof was in the course of inter-State trade and commerce. The petitioner-firm further claims that it used to submit the returns regularly and has paid the tax due thereon as per the provisions of the Gujarat A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vey held on 1st February, 1979, it was only because the person in-charge of the account was not present on that day. To the surprise of the petitioner-firm, the respondent herein by the impugned order decided to withdraw the recognition granted to the petitioner-firm under section 32 of the Gujarat Act in exercise of his power conferred by section 35(2)(b) of the Gujarat Act. It is this order which is under challenge in this petition before us. 4.. Pursuant to the rule nisi issued by this Court (by the learned single Judge during the summer vacation) by his order of 5th June, 1979, the respondent herein has filed his affidavit-in-reply supporting the impugned order on the ground, inter alia, that the cancellation of the recognition certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent herein calling upon the petitioner-firm to explain why its recognition certificate should not be cancelled did not by way of allegation state a word as to the impropriety or the irregularity found by the respondent herein in the books of the petitioner-firm. Besides calling for the explanation in the show cause notice as to why recognition should not be cancelled, there is no reference to any precise ground which impelled the authorities concerned to take the proposed action. The only other fact which has been mentioned in the said notice was that the Sales Tax Officer-1, Enforcement Branch, Jamnagar, has, by his letter of 17th March, 1979, informed the respondent that the account books of the petitioner-firm have been seized. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t," 7.. Section 35(2), therefore, entails an obligation on the competent authority, before exercising the power of suspension or cancellation of recognition, licence or permit, of giving a reasonable opportunity to the licensed dealer, recognised dealer or a commission agent, as the case may be, of being heard and making his submissions against the proposed action. It is, therefore, clear that before a dealer could be deprived of the benefit of the licence or the recognition or the permit, as the case may be, he must be apprised of the grounds, which, in the opinion of the competent authority, called for the proposed action of suspension or cancellation. So far as the present case is concerned, it is common ground that the power which has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submit satisfactory explanation to avoid the proposed action of cancellation or suspension. 8.. The second grievance of the petitioner-firm is also well-founded. The grievance is that the impugned order has been made without any adjudication properly and legally made by holding regular proceedings pursuant to the seizure of the books under section 59(4) of the Gujarat Act. It will be worthwhile to reproduce section 59(4) under which the books of a dealer can be seized. Sub-section (4) of section 59 reads as under: "59(4) If the Commissioner has reason to believe that any dealer has evaded or is attempting to evade the payment of any tax due from him he may, for reasons to be recorded in writing, seize such accounts, registers or documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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