Cancellation of VAT registration requires recorded reasons and prior hearing; retrospective effect cannot be imposed without authority of law.

Cancellation of dealer registration under the Tamil Nadu Value Added Tax Act, 2006 was unsustainable where the order contained no recorded reasons, no personal hearing was afforded, and retrospective cancellation was imposed without shown authority. Section 39(14) requires sufficient reasons for cancellation, and section 39(15) contemplates a prior opportunity of personal hearing. An order made without reasons and without hearing breaches both the statute and natural justice, and retrospective effect cannot be applied absent legal backing. The impugned cancellation was therefore set aside, with liberty to proceed afresh in accordance with law after notice and hearing.

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Issues: Whether the cancellation of the dealer's registration under the Tamil Nadu Value Added Tax Act, 2006 was sustainable when the order recorded no reasons, no personal hearing was afforded, and the cancellation was made with retrospective effect.

Analysis: Section 39(14) of the Tamil Nadu Value Added Tax Act, 2006 requires cancellation of registration to be supported by sufficient reasons, and section 39(15) contemplates an opportunity of personal hearing before such cancellation. The impugned order did not state reasons, and the record showed that no personal hearing had been granted. The order was also passed with retrospective effect, though no authority for such retrospective cancellation was shown. The cancellation was therefore inconsistent with the statutory requirements and the principles of natural justice.

Conclusion: The cancellation of registration was not valid and was set aside. The result was in favour of the assessee.

Final Conclusion: The writ petition succeeded and the impugned cancellation order was annulled, leaving the authority free to proceed afresh in accordance with law after notice and hearing.

Ratio Decidendi: Where the statute requires recorded reasons and a prior personal hearing for cancellation of registration, an order passed without reasons and without hearing cannot be sustained, and retrospective cancellation cannot be imposed absent authority of law.

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