Natural justice in tax registration cancellation: order set aside because the dealer was denied a mandatory hearing.

Cancellation of sales tax registration under Section 39 of the Tamil Nadu Value Added Tax Act, 2006 was unsustainable where the dealer was not given an opportunity of hearing. Section 39(15) makes hearing mandatory before cancellation, modification or amendment of a registration certificate, and failure to comply with that statutory safeguard in a quasi-judicial action violates natural justice. The cancellation was therefore illegal and was quashed, with the matter remanded for fresh consideration after hearing the petitioner.

---

---

Issues: Whether cancellation of sales tax registration under Section 39 of the Tamil Nadu Value Added Tax Act, 2006 was sustainable when the dealer was not given an opportunity of hearing.

Analysis: Section 39(14) empowers the registering authority to cancel, modify or amend a registration certificate for good and sufficient reasons. Section 39(15) expressly bars such action unless the dealer concerned has been given an opportunity of being heard. The cancellation order was passed without affording such hearing, despite the statutory mandate. Non-compliance with the prescribed procedure in a quasi-judicial action amounts to violation of the principles of natural justice and renders the order unsustainable.

Conclusion: The cancellation of registration was illegal and liable to be quashed. The matter was remanded for fresh consideration after giving the petitioner an opportunity of hearing.

---