VAT registration cancellation requires strict statutory procedure; an online return acknowledgment defeats a non-filing allegation.

Cancellation of VAT registration under the Tamil Nadu Value Added Tax Act, 2006 was treated as unsustainable where the department relied on an inspection report but the record showed an electronic acknowledgment of the annual return for 2015-16. The departmental file did not support the allegation of non-filing, and the cancellation appeared to rest only on another officer's report. The mandatory pre-cancellation procedure under Section 39(14) and Section 39(15) had not been followed, so the cancellation could not stand in law and restoration of registration was directed.

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Issues: Whether cancellation of the petitioner's registration under the Tamil Nadu Value Added Tax Act, 2006 was valid when the return had been filed online and the statutory procedure under Section 39(14) and Section 39(15) had not been followed.

Analysis: The cancellation was stated to rest on an inspection report suggesting that the petitioner was not carrying on business at the registered premises and had failed to file annual returns. However, the record contained an electronic acknowledgment showing filing of the annual return for 2015-16, and the departmental file did not support the stated ground of non-filing. The Court found that the cancellation appeared to be based only on the report of another departmental officer. In any event, the mandatory procedure required before cancellation of registration under Section 39(14) and Section 39(15) had not been complied with.

Conclusion: The cancellation of registration was held to be unsustainable in law and the respondent was directed to restore the petitioner's registration. The issue was decided in favour of the assessee.

Ratio Decidendi: Cancellation of VAT registration is invalid unless the statutory procedure prescribed for pre-cancellation compliance is strictly followed, and an online return acknowledgment negates a claim of non-filing.

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