Natural justice breach in registration refusal led to quashing and fresh reconsideration after hearing

Refusal of a registration certificate was quashed because the authority relied on secret enquiries and adverse material collected behind the applicant's back without notice or hearing, thereby breaching natural justice. The order also failed to rest on any finding that the statutory conditions for registration under the Punjab General Sales Tax Act, 1948 were not satisfied, and instead proceeded on suspicion about a third-party transaction. The matter was required to be reconsidered after granting a fresh opportunity of hearing.

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Issues: Whether the refusal to grant registration certificate was vitiated by violation of natural justice and by reliance on extraneous considerations.

Analysis: The registration was declined on the basis of secret enquiries and doubts regarding the genuineness of a transaction, but no notice or opportunity of hearing was given to meet the adverse material collected behind the petitioner's back. The refusal was not founded on any finding that the statutory conditions for registration under the relevant provisions of the Punjab General Sales Tax Act, 1948 were not satisfied. The order therefore rested on suspicion about a third party transaction rather than on the statutory criteria governing registration.

Conclusion: The refusal order was liable to be quashed for breach of natural justice and for having been made on an extraneous basis, and the matter was required to be reconsidered after giving the petitioner a fresh hearing.

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