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Issues: (i) Whether the Assessing Authority had power, by delegation, to cancel the State registration certificate under the Punjab General Sales Tax Act, and whether such cancellation could be founded on grounds outside the statutory grounds; (ii) Whether the cancellation of the Central registration certificate was sustainable, including whether the dealer was given adequate opportunity of being heard.
Issue (i): Whether the Assessing Authority had power, by delegation, to cancel the State registration certificate under the Punjab General Sales Tax Act, and whether such cancellation could be founded on grounds outside the statutory grounds.
Analysis: The delegation order issued under the Act empowered the Assessing Authority to act on behalf of the Commissioner in relation to amendment or cancellation of registration certificates. The more difficult question was the scope of the cancellation power under section 7(4). The expression "in accordance with information furnished under section 16 or otherwise received" was held not to authorise cancellation on wholly extraneous grounds divorced from section 16. The permissible grounds of cancellation were confined to those specifically provided by the Act, and section 7(4) could not be expanded so as to create a new and unstructured power of cancellation. A construction that would permit cancellation for any fanciful or extraneous reason was rejected as amounting to rewriting the provision.
Conclusion: The Assessing Authority could exercise delegated power, but the cancellation of the State registration certificate on grounds not authorised by the Act was illegal.
Issue (ii): Whether the cancellation of the Central registration certificate was sustainable, including whether the dealer was given adequate opportunity of being heard.
Analysis: Under the Central Act, cancellation was permissible for "any other sufficient reason", and the reasons recorded fell within that expression. The challenge therefore failed on merits. However, the authority had not afforded a proper opportunity to the dealer to meet the proposed cancellation. Since notice and a fair opportunity were required before cancellation, the order could not stand as made.
Conclusion: The Central registration certificate could not be validly cancelled without due opportunity, and the cancellation order was unsustainable.
Final Conclusion: The writ petition succeeded. The cancellation orders relating to both registration certificates were quashed, leaving the authorities at liberty to proceed afresh in accordance with law after giving a proper opportunity of hearing.
Ratio Decidendi: A statutory power to cancel a registration certificate cannot be enlarged by interpretation to include grounds not contemplated by the Act, and cancellation affecting civil rights requires compliance with the requirement of a fair opportunity of being heard.
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