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2016 (8) TMI 296 - GUJARAT HIGH COURT

2016 (8) TMI 296 - GUJARAT HIGH COURT - TMI - Validity of cancellation of TIN registration number - merit of the case not examined principle of natural justice - GVAT - Sub-rule (3) of rule 10 postulate a specific mandate to the authority that when the Commissioner intends to cancel or suspend the registration under sub-rule (5) or (5A) of section 27, he shall give a notice to the dealer with form No.104 Held that: - the authority before canceling the registration of the appellant, has not o .....

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L APPLICATION (OJ) NO. 551 of 2015 In TAX APPEAL NO. 499 of 2015 - Dated:- 29-7-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : MR ANKIT SHAH, ADVOCATE FOR THE OPPONENT : MR.PRANAV TRIVEDI, AGP ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE A.J. SHASTRI) 1. By way of present Tax Appeal, the appellant is challenging the validity of an order passed by the Gujarat Value Added Tax Tribunal dated 24.12.2014 passed in Second Appeals Nos.940 and 941 of 2014. While admitting the Tax Ap .....

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3 ? For considering the same, we may refer to the facts of the case. 2. The appellant herein is a private limited company dealing in the business of dyes and chemicals and for the same purpose, the appellant had obtained TIN number from the VAT Authority. It is the case of the appellant that the TIN number granted by the authority came to be canceled by the Deputy Commissioner of Commercial Tax, RangeIII, Ahmedabad vide order dated 14.03.2014 in exercise of powers under section 100 and section 2 .....

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ant, who, according to the appellant, without entering into merits of the case, had disposed of the appeal vide order dated 21.08.2014 only on the ground that the registration certificate of the appellant was canceled ab initio, hence nothing more is required to be dealt with and the first Appellate Authority has dismissed the appeal vide order dated 21.08.2014. 3. The appellant feeling aggrieved by and dissatisfied with the said order passed by the first Appellate Authority, preferred Second Ap .....

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has dismissed the appeal exclusively on the ground that Deputy Commissioner canceled the TIN number ab initio. Learned counsel appearing on behalf of the appellant submitted that the learned Tribunal as well as the Appellate Authority has committed grave error in not examining the merit of the case and simply disposed of the appeal on the premise that the dealers with whom the appellants had dealt with in past, their TIN numbers were canceled ab initio void. It was also contended by the counsel .....

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he appellant that under the provisions of the VAT Act, under section 100 read with section 27(5) (I), the specific procedure is prescribed to deal with such a situation and by submitting that the counsel for the appellant has drawn the attention of the Court about the rule No.10 which deals with cancellation or suspension of certificate of registration and based upon this, the counsel submitted that the authorities have not considered whether before taking any action, there is compliance of this .....

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s rule is giving mandate to the authority to comply with this procedure of issuance of form No.104. By drawing attention to this rule, it is submitted by the counsel that the Deputy Commissioner while passing the original order, has not followed this procedure which has been provided under the statutory rules and therefore, this aspect having lost sight of the Tribunal, the order deserves to be corrected. Learned counsel further submitted and drawn the attention of the Court about effect of rule .....

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Deputy Commissioner has not considered this material and since the learned Tribunal has not considered these aspects, the order passed by the Tribunal deserves to be corrected. It was also brought to the notice of the Court by the learned counsel that the present appellant has purchased the goods from two registered dealers; one M/s.Laxmi Corporation and another M/s.Khodiyar Traders and it has been contended that when the appellant has dealt with these two registered dealers, their registration .....

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t orders passed by the authorities are required to be corrected. Learned counsel has further contended that at no point of time, any opportunity was given or even an indication is give that the registration is sought to be canceled by the authority and therefore, counsel contended that qua this issue or cancellation of registration, no opportunity of effective representation and hearing is given and that being the situation, the order of cancellation of registration deserves to be set aside sinc .....

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these two traders was center of controversy. Learned AGP had contended that the Appellate Authority while dealing with an appeal, has brought to the notice of the appellant about this fact and granted effective opportunity. The appellant could have anticipated the ultimate outcome upon it. Learned counsel submitted that even if no opportunity at the relevant point of time is granted on the issue of cancellation of registration, then also, there is a substantial knowledge passed on to appellant, .....

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s as named above, whose TIN numbers have been canceled ab initio and therefore also, granting of opportunity would not make any difference so far as ultimate decision arrived at by the authority is concerned and therefore, learned AGP submitted that there is a substantial compliance of natural justice and effective opportunity is granted, hence order in question does not call for any interference. However, one fact is candidly accepted that at no point of time, the appellant has ever been grante .....

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t was placed to the notice about his possible cancellation of registration, nor even at the stage of the appeal forum, such opportunity was afforded on that issue. What has been dealt with by the authorities below is pertaining to a different issue and not an issue pertaining to cancellation of registration. For this purpose, we may refer to the relevant provisions governing the issue; Rule 10 of the rules which deals with cancellation or suspension of certification of registration. We may repro .....

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in writing, cancel the registration with effect from the date, which may be fixed in accordance with the provision of subsection (4) of section 27. (3) When the Commissioner intends to cancel or suspend the registration under subsection (5) or (5A) of section 27, he shall give a notice to the dealer in Form 104. 6. Subrule (3) of rule 10 postulate a specific mandate to the authority that when the Commissioner intends to cancel or suspend the registration under subrule (5) or (5A) of section 27, .....

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re canceling the registration of the appellant, has not observed this specific procedure as contained under the relevant rules referred above. It is settled position of law that if the statute commands the authority to do a particular act in a particular manner only, the authority is expected legitimately to undertake such act in that particular manner only. Here while passing the impugned orders, learned counsel for the appellant has rightly pointed out and which is emerging from record that be .....

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some reasonable explanation. Before exercising statutory powers, the statutory authority is expected to scrupulously observe this principle of natural justice. The same not having been done in the present case, we are of the opinion that the authorities below have passed orders in violation of this basic principles of natural justice. The bare reading of the order of the Tribunal in question, more particularly, paragraphs No.10 and 11, also reflects that the appellant was not served with the not .....

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statute stated above, we are of the opinion that the learned Tribunal has misdirected itself and passed the impugned order. No doubt, the record emerges that the appellant was put to notice in form No.401 and 309, but so far as material issue pertaining to form No.104, it is undisputed position that no such procedure as required under the law is undertaken. We are not on the form, but substance of the opportunity being given. Even if not in precise in form No.104 where in any other manner, noti .....

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