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2020 (1) TMI 710 - HC - VAT and Sales TaxPrinciples of Natural Justice - cancellation of registration - Petitioner was purchasing natural gas by paying Central Sales Tax - SCN was issued to the Petitioner for cancellation of registration under the Central Sales Tax Act, 1956 - HELD THAT:- The authority cancelling the certificate has to be satisfied that cause exists for cancellation of registration and the cancellation is to be done after due notice to the dealer. Therefore, if the dealer submits explanation to the show cause notice, the authority, before proceeding to cancel the registration, will have to be satisfied that the explanation is not proper. This procedure envisages that reasons need to be given to cancel the registration. The registered dealer is entitled to know why his explanation was not found satisfactory. The SCN issued to the Petitioner on the basis that the Petitioner had not effected sale of any of the goods specified therein in the year 2016-17. Thus Section 7(4) was invoked against the Petitioner. However, the impugned order refers to Section 7(5) of the Act. Section 7(5) of the Act deals with the contingency where registered dealer himself seeks cancellation of the registration - Petitioner has not made such application. Thus the order is unreasoned and without application of mind. The contention of the Petitioner of breach of principles of natural justice will have to be accepted - Petition allowed - decided in favor of petitioner.
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