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of <h1>Court clarifies grounds for cancellation of registration under Central Sales Tax Act</h1> <h3>Venkateswara Commercials and Plastic (P.) Ltd. Versus The State of Tamil Nadu</h3> The court held that cancellation of registration under section 7(1) of the Central Sales Tax Act can be based on 'any other sufficient reason,' not ... - Issues:1. Validity of cancellation of registration under section 7(1) of the Central Sales Tax Act.2. Interpretation of grounds for cancellation under section 7(4)(b) of the Act.Analysis:The judgment pertains to a petition filed under article 226 of the Constitution seeking to quash the order of the Board of Revenue confirming the cancellation of registration granted to the petitioner under section 7(1) of the Central Sales Tax Act. The petitioner, a private limited company, applied for registration in 1970, which was subsequently cancelled by the Assistant Commercial Tax Officer. The Board of Revenue upheld the cancellation on the grounds that the petitioner had not commenced business, was not liable to pay tax under the Act, and had submitted a nil turnover return. The petitioner argued that cancellation could only occur if they ceased business or tax liability, not on the grounds stated by the Board.The court disagreed with the petitioner's interpretation, stating that section 7(4)(b) allows cancellation for 'any other sufficient reason,' not limited to ceasing business or tax liability. The court emphasized that the word 'sufficient' indicates a broad interpretation, and any valid reason would justify cancellation. The court rejected the argument that commencement of business under the Companies Act differed from the Central Sales Tax Act, clarifying that a company is deemed to have commenced business upon incorporation. The court also disagreed with the Board's requirement for actual tax liability before registration, highlighting that registration is necessary before engaging in inter-State sales.Ultimately, the court set aside the Board's order, concluding that the cancellation based on the grounds provided was unjustified. The court held that the petitioner was entitled to registration even before engaging in sales transactions, and the Board's decision was erroneous. The petition was allowed, and costs were awarded to the petitioner.
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