Retrospective VAT registration cancellation quashed, with registration restored and future statutory action kept open.

Retrospective cancellation of a dealer's registration under the Tamil Nadu Value Added Tax Act, 2006 could not be sustained where it was found contrary to the statutory scheme and without authority of law. Following its earlier decision on the same issue, the HC quashed the cancellation order and directed restoration of registration. It also preserved the department's right to initiate proceedings under Section 39(14) in accordance with law, with the dealer free to contest any such action on merits.

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Issues: Whether the retrospective cancellation of the petitioner's registration certificate could be sustained under the Tamil Nadu Value Added Tax Act, 2006.

Analysis: The cancellation order was challenged as being without authority of law and contrary to the statutory scheme. The Court followed its earlier decision on an identical challenge and held that the impugned order cancelling registration with retrospective effect could not stand. At the same time, the Court clarified that the department was at liberty to invoke Section 39(14) of the Tamil Nadu Value Added Tax Act, 2006 and proceed in accordance with law, and the petitioner could contest any such proceedings on merits.

Conclusion: The retrospective cancellation order was quashed and the petitioner's registration was directed to be restored.

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