Deemed registration cancellation fails where authority relies on the wrong jurisdictional power and gives defective notice.

A deemed registration continued from the earlier sales tax regime could be cancelled under the Gujarat Value Added Tax Act if the statutory grounds under the cancellation provision were satisfied, because the cancellation power was not limited to registrations originally granted under the VAT regime. The order was not saved by treating the wrong statutory reference as a mere clerical error, since the authority had proceeded throughout on revisional power under a different provision that conferred a distinct jurisdiction. The defective jurisdictional basis also vitiated the notice and breached natural justice. The cancellation order and the Tribunal's affirmation were set aside, with liberty to proceed afresh in accordance with law.

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Issues: (i) Whether the Deputy Commissioner had power under Section 27(5) of the Gujarat Value Added Tax Act, 2003 to cancel a registration originally granted under the earlier sales tax regime; (ii) whether the impugned order could be sustained as a mere wrong reference to the statutory provision; and (iii) whether the action suffered from breach of natural justice.

Issue (i): Whether the Deputy Commissioner had power under Section 27(5) of the Gujarat Value Added Tax Act, 2003 to cancel a registration originally granted under the earlier sales tax regime.

Analysis: Registration granted under the earlier regime was deemed to continue under the VAT regime by reason of the registration and savings provisions. Section 27(5) empowered cancellation of registration on specified grounds after notice and recorded reasons, and that power was not confined to registrations originally granted under the VAT Act. The deemed registration could therefore be cancelled under the VAT Act if the statutory grounds were established.

Conclusion: The power to cancel the deemed registration existed under Section 27(5) of the Gujarat Value Added Tax Act, 2003.

Issue (ii): Whether the impugned order could be sustained as a mere wrong reference to the statutory provision.

Analysis: The authority throughout proceeded on the basis of revisional power under Section 75, from the notice stage to the final order, even though the action actually required original cancellation power under Section 27(5). The two provisions operate in distinct fields and confer different jurisdictions. This was not a case of a harmless misdescription, but of exercise of power under a wholly inappropriate source, which could not be cured by subsequent justification.

Conclusion: The impugned order could not be saved as a mere wrong reference to the statute.

Issue (iii): Whether the action suffered from breach of natural justice.

Analysis: The notice itself proceeded on an incorrect jurisdictional footing, thereby putting the petitioner to answer a proposed action under a revisional provision instead of the cancellation provision actually required. Since the defect went to the root of the proceedings, the resulting procedure was inconsistent with fair hearing requirements.

Conclusion: The action was vitiated by breach of natural justice.

Final Conclusion: The cancellation order and its affirmation by the Tribunal were set aside for want of proper jurisdictional basis and for violation of fair procedure, leaving the authority at liberty to take fresh action in accordance with law if permissible.

Ratio Decidendi: Where an authority proceeds throughout on an incorrect source of power and the statutory provisions invoked confer materially different jurisdictions, the action is not curable as a mere wrong citation and must fail for want of lawful authority and fair notice.

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