Omitted statutory power and ineffective notice make search sealing and retrospective GST-style cancellation unsustainable.

When a statute omits a previously express power, the authority cannot continue to exercise that power by implication; here, the substituted Gujarat VAT provision no longer authorised sealing of business premises during search, so the sealing order was without authority of law. Administrative cancellation of registration must also comply with effective notice and hearing; where the show-cause notice was not served before the cancellation order and the hearing notice reached after the hearing date, the assessee was denied a meaningful opportunity to respond. Retrospective cancellation from an earlier date, unsupported by material or justification, was therefore unsustainable, with liberty reserved to proceed afresh in accordance with law.

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Issues: (i) whether the authorities had power under the Gujarat Value Added Tax Act, 2003 to seal the business premises during search; and (ii) whether cancellation of registration without effective notice and with retrospective effect was sustainable.

Issue (i): whether the authorities had power under the Gujarat Value Added Tax Act, 2003 to seal the business premises during search.

Analysis: Section 67 of the Gujarat Value Added Tax Act, 2003 earlier contained an express power to seal premises, but that power was omitted when the provision was substituted by the Amending Act 6 of 2006. The absence of such authority in the substituted provision showed that the legislature had consciously removed the power to seal premises. The order also did not disclose that the seal was only temporary as part of a continuing search.

Conclusion: The sealing order was without authority of law and was liable to be set aside.

Issue (ii): whether cancellation of registration without effective notice and with retrospective effect was sustainable.

Analysis: The material did not establish service of the show-cause notice before the cancellation order was passed, and the notice of hearing was delivered after the scheduled hearing date had already passed. The assessee therefore had no effective opportunity of hearing. Further, the proposed basis was discontinuance of business in the assessment year 2016-17, yet the registration was cancelled retrospectively from 22.06.2010 without any supporting material or justification.

Conclusion: The cancellation of registration was unsustainable and was liable to be set aside, with liberty to the authorities to initiate fresh proceedings in accordance with law.

Final Conclusion: Both impugned orders were quashed for want of statutory authority and denial of effective opportunity, while leaving the department free to proceed afresh after following due process.

Ratio Decidendi: Where a statute expressly omits a power that previously existed, the authority cannot exercise that omitted power, and administrative action affecting rights must comply with effective notice and hearing before adverse consequences are imposed.

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