Belated renewal of sales tax registration must be considered before cancellation when statute permits renewal with fee and penalty.

Retrospective cancellation of a dealer's registration certificate was invalid where the statute expressly allowed belated renewal on payment of renewal fee and penalty. The Court held that non-renewal by itself did not justify extinguishing the existing registration or cancelling it without first giving the dealer the renewal opportunity under the proviso to section 21(3) of the Tamil Nadu General Sales Tax Act, 1959. Because the authority acted without following that statutory mechanism, the cancellation order was quashed and the respondent was directed to receive the renewal application with fee and proceed according to law.

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Issues: Whether cancellation of the petitioner's registration certificate with retrospective effect was valid without first permitting renewal under the proviso to section 21(3) of the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The proviso to section 21(3) permits a registered dealer who fails to renew within the prescribed period to renew the certificate within a further prescribed period on payment of renewal fee and penalty equal to the renewal fee. This statutory mechanism means that non-renewal does not, by itself, justify extinguishing the earlier right to carry on business or cancelling the registration without first affording the dealer the renewal opportunity contemplated by the proviso. The impugned order was passed without following that course. The Court also drew support from the earlier decision cited before it, where cancellation of registration had been set aside and the Revenue was left at liberty to issue notice and proceed after granting time for renewal.

Conclusion: The cancellation order was not sustainable and was quashed; the respondent was directed to receive the renewal application with fee and pass orders in accordance with law.

Final Conclusion: The writ petition succeeded, and the registration cancellation could not stand because the statutory renewal procedure had to be followed before adverse action was taken.

Ratio Decidendi: Where a tax statute expressly permits belated renewal of registration on payment of fee and penalty, the authority cannot cancel the registration without first giving effect to that renewal mechanism.

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