Mandatory notice and hearing are required before cancelling CST registration; State cancellation does not automatically cancel central registration.

Cancellation of a Central Sales Tax registration certificate is invalid where the dealer is not given prior notice and an opportunity of hearing, because section 7(4)(b) of the Central Sales Tax Act, 1956 and rule 9(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 make those safeguards mandatory. The Central scheme also does not permit automatic cancellation of CST registration merely because the State sales tax registration has been cancelled. The cancellation orders were therefore contrary to the statutory procedure and could not stand.

---

---

Issues: Whether the cancellation of the registration certificate under the Central Sales Tax Act was valid in the absence of prior notice and hearing, and whether cancellation under the State sales tax law could automatically justify cancellation under the Central Sales Tax Act.

Analysis: Section 7(4)(b) of the Central Sales Tax Act, 1956 expressly requires due notice before cancellation of a registration certificate, and rule 9(1) of the Central Sales Tax (Registration and Turnover) Rules, 1957 also requires that the dealer be given an opportunity of being heard. The scheme of the Central enactment does not contemplate automatic cancellation merely because the State registration has been cancelled. The impugned orders were therefore passed in breach of the mandatory procedural safeguard embodied in the statute and the Rules.

Conclusion: The cancellation of the Central sales tax registration was invalid and the challenge succeeded in favour of the assessee.

---