Natural justice and statutory procedure must precede cancellation of registration when a dealer seeks restoration under the tax law.

Cancellation of registration under the Orissa Value Added Tax Act could not be sustained where the dealer had produced the required records, sought restoration under the statutory scheme, and was not given a meaningful notice or hearing before adverse action was taken. The court noted that sections 30 and 31 require notice, inquiry, consideration of the restoration request, and an opportunity to meet the grounds for cancellation before registration is cancelled under section 31(5). As the authority relied on material not shown to the dealer and departed from the prescribed procedure, the cancellation was held illegal and set aside, with a direction to decide the restoration application expeditiously.

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Issues: Whether the order cancelling the registration certificate was sustainable when the dealer had sought restoration under the statutory scheme and no effective opportunity of hearing was given before cancellation.

Analysis: The statutory framework under sections 30 and 31 of the Orissa Value Added Tax Act, 2004 requires suspension of registration to be followed by notice, production of records, and consideration of any restoration request made by the dealer. Cancellation under section 31(5) can follow only after the dealer fails to furnish the requisite evidence and after such inquiry as the authority considers necessary, along with an opportunity of hearing. Since the dealer produced the required records within time, filed an application for restoration, and no notice or meaningful hearing preceded the cancellation, the authority acted in disregard of the statutory procedure and the principles of natural justice. The cancellation was also based on material not shown to the dealer.

Conclusion: The cancellation order was illegal and liable to be quashed.

Final Conclusion: The writ petition succeeded to the extent that the cancellation of registration was set aside and the authority was directed to decide the restoration application expeditiously.

Ratio Decidendi: A cancellation of registration under section 31(5) of the Orissa Value Added Tax Act, 2004 cannot be sustained unless the dealer is afforded the statutorily required opportunity to meet the grounds for cancellation and the restoration request, if filed, is duly considered.

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