Personal hearing is mandatory before VAT registration cancellation, and retrospective cancellation needs clear statutory authority.

Cancellation of sales tax registrations under the Tamil Nadu Value Added Tax Act, 2006 was held invalid where no personal hearing was afforded before adverse action was taken, because clause (15) of section 39 required such hearing and the omission breached natural justice. Retrospective cancellation was also unsustainable because no statutory authority was shown to justify cancellation with retrospective effect. The cancellation orders were set aside, with the matter left open to be proceeded with afresh in accordance with law after notice, objections and personal hearing.

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Issues: (i) Whether cancellation of the sales tax registrations without affording a personal hearing was valid under clause (15) of section 39 of the Tamil Nadu Value Added Tax Act, 2006. (ii) Whether the authority had power to cancel the registrations retrospectively.

Issue (i): Whether cancellation of the sales tax registrations without affording a personal hearing was valid under clause (15) of section 39 of the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The registrations were cancelled without giving the petitioners an opportunity of personal hearing. Clause (15) of section 39 required such hearing before adverse action affecting registration was taken.

Conclusion: The cancellation was invalid for breach of the statutory requirement of personal hearing and natural justice.

Issue (ii): Whether the authority had power to cancel the registrations retrospectively.

Analysis: No material was shown to establish authority to cancel registration with retrospective effect. In the absence of demonstrated statutory power, retrospective cancellation could not be sustained.

Conclusion: The retrospective cancellation was without authority and could not stand.

Final Conclusion: The cancellation orders were set aside and the matters were left open to be proceeded with afresh in accordance with law after notice, objections, and personal hearing.

Ratio Decidendi: A registration cancellation under the Tamil Nadu Value Added Tax Act, 2006 cannot be sustained unless the statutory requirement of personal hearing is followed, and retrospective cancellation must rest on clear authority of law.

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