Registration cancellation requires proper enquiry, substantial material, and fair hearing before any adverse finding against the registrant.

A registration certificate cannot be cancelled on mere suspicion, relationship with defaulting persons, or an unsupported inference that the registrant was only a name-lender. The Court noted that the enquiry under Section 22 was not properly conducted, the adverse conclusion lacked substantial material, and no fair opportunity was given to meet the material relied on. The cancellation and revisional orders were therefore unsustainable and were quashed, with the matter remitted for a fresh enquiry after hearing the petitioner.

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Issues: Whether the cancellation of the petitioner's registration certificate and the revisional order could be sustained when the enquiry under Section 22 of the M.P. Commercial Tax Act, 1994 was not properly conducted and the finding that the petitioner was only a name-lender was not supported by adequate material.

Analysis: The registration had been granted after enquiry under Section 22(4)(b). Cancellation was ordered on the basis of a show-cause notice alleging a nexus with defaulting persons and non-filing of returns under Section 26. The record, however, did not show a definite, evidence-based finding that the petitioner was merely lending his name or that the business was ly being carried on by the alleged defaulters. Mere relationship with defaulting persons was held insufficient. The impugned orders were found to rest on conjectures and surmises, with no proper application of mind and no adequate opportunity to meet any adverse material.

Conclusion: The cancellation order and the revisional order were unsustainable and were quashed, and the matter was remitted for a fresh enquiry with opportunity of hearing to the petitioner.

Ratio Decidendi: A registration certificate cannot be cancelled on mere suspicion or relationship with defaulting persons; before depriving a registrant of the right to carry on business, the authority must conduct a proper enquiry, base its conclusion on substantial material, and afford a fair opportunity of hearing.

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