Opportunity to object before cancellation notice and reasoned order required before coercive action under composition tax law.

The HC held that, before any cancellation of the petitioner's composition arrangement, the petitioner must be allowed to file objections to the notice within the stipulated time. The competent authority was directed to consider those objections in light of the relevant statutory provisions and the nature of the petitioner's business, and then pass a speaking order. Until such reasoned decision was made, no precipitative or coercive action could be taken against the petitioner.

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Issues: Whether the petitioner should be permitted to file objections to the notice proposing cancellation of the composition certificate and whether the authority should decide the matter by a speaking order before taking precipitative action.

Analysis: The dispute arose from a notice proposing cancellation of the petitioner's composition arrangement under the tax law. The petitioner sought an opportunity to place its objections before any adverse action was taken. The Court directed that objections, if filed within the stipulated time, must be considered by the competent authority in light of the relevant statutory provisions and the nature of the petitioner's business, and that a reasoned order must thereafter be passed. Pending such consideration, coercive action was restrained.

Conclusion: The petitioner was given an opportunity to file objections, the authority was required to decide the matter by a speaking order, and no precipitative action could be taken until then.

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