Registration refusal requires proper inquiry into ownership and a hearing before any adverse decision on prima facie material.

A registration refusal cannot stand where the authority declines the application without conducting an adequate inquiry into the claimant's ownership of the business. On the materials produced, including government certificates, factory registration records, tax notices and transfer documents, the authority was required to examine the prima facie acceptance of ownership before rejecting registration. Where such inquiry is incomplete, the adverse refusal and revisional orders are liable to be set aside and the matter remitted for fresh consideration. The claimant must also be given a hearing before any final adverse decision is taken on the basis of the materials collected.

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Issues: (i) Whether the refusal to grant registration was sustainable without adequate inquiry into the petitioner's ownership of the business; (ii) Whether the revisional order and the refusal order were liable to be quashed and the matter sent back for fresh inquiry.

Issue (i): Whether the refusal to grant registration was sustainable without adequate inquiry into the petitioner's ownership of the business.

Analysis: The materials produced by the petitioner included certificates issued by Government departments, a factory registration certificate, income-tax demand notice, and transfer agreements relating to the land on which the business stood. In view of those materials, the authority was required to make a proper inquiry and consider the prima facie acceptance of the petitioner as owner by the Government departments before declining registration.

Conclusion: The refusal based on inadequate inquiry was not sustainable.

Issue (ii): Whether the revisional order and the refusal order were liable to be quashed and the matter sent back for fresh inquiry.

Analysis: Since adequate inquiry had not been made and the petitioner's claim to ownership had not been properly examined, the orders rejecting registration could not stand. The matter required fresh inquiry, and if the authority remained prima facie adverse after collecting materials, the petitioner had to be heard before final disposal.

Conclusion: The orders were quashed and the matter was remanded for fresh inquiry with an opportunity of hearing.

Final Conclusion: The writ petition succeeded, the adverse orders were set aside, and the sales tax authority was directed to reconsider the registration application expeditiously after proper inquiry.

Ratio Decidendi: A registration refusal cannot be sustained where the authority fails to make adequate inquiry into the claimant's ownership and must afford a hearing before taking an adverse decision on prima facie material.

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