Pratham Automobiles vs The Deputy Commercial Tax Officer

S. Manikumar, J.—The petitioner, has challenged the order dated 19.09.2007of the respondent thereby cancelling the sales tax registration

of the petitioner firm.

The brief facts leading to the writ petition is as follows:

The petitioner has submitted that he is a dealer to Honda Motor Cycles and Scooters etc. in the name and style of M/s. Pratham Automobiles. The

firm has a show room for display of its motor bikes, scooters and other accessories at Plot Nos. 252 and 253, comprised in R.S. Nos. 121/1,

138/4, 139, 140, 141/1, 142, 145/3 to 6, 72/2, in all measuring a total extent of 22.39 acres. The above said survey numbers are comprised in a

lay out approved by the Town and country Planning Authority under C.S.A.R. D.T.P. No. 220-87/L.P.164. The property in plot Nos. 252 and

253, totally measuring 7,800 square feet of vacant site was purchased in the name of S.G. Ashok Kumar, who is none other than the brother of

Deepak Kumar, a partner in the said firm. He has revenue records and other title deeds in his name. The petitioner firm is in possession of the

property under a deed of declaration date 01.12.2005 executed by S.G. Ashok Kumar in favour of the partner R. Deepak Kumar. The petitioner

firm has put up a superstructure after obtaining the necessary licence and permission, in a portion of the leased site at a costs of Rs. 40 lakhs and is

running a show room there. After obtaining the dealership number from the Commercial Tax for the principal place of business and for the

additional place of business, the petitioner had been diligently doing business in the said premises. In these circumstances, with an ulterior motive,

the residents of Kancheepuram Kanaga Durgai amman Nagar and Annai Indira Nagar Residents Association at Konerikuppam, Ponnerikarai,

seemed to have made representations in writing on 22.2.2007 alleging that the two dealers show room have been put up by the petitioner on the

play ground owned by the Government. On the basis of the said representation, the Commissioner of Right to Information Act, had instructed

orally to cancel the registration of the petitioner''s show room. Pursuant to the said oral instructions, the Deputy Commercial Tax Officer,

Kancheepuram, the respondent herein, issued a show cause notice on 22.08.2007, calling upon the petitioner to submit his explanation as to how

he had located the show room in the disputed place said to be a play ground allotted by the Government.

The petitioner has submitted his detailed explanation on 10.09.2007 stating that the construction of show room was duly authorised by the

competent authorities and that the Commissioner of Right to Information, has no jurisdiction to issue any oral instruction to the respondent for

cancellation of the registration of the show room given under the Taxation Act. Without considering his explanation in a proper perspective the

respondent has cancelled the registration in a cryptic manner and, therefore, the petitioner has filed the present writ petition for the relief stated

above.

Hard both sides.

Mr. R. Mahadevan, learned Additional Government Pleader, on instructions, submitted that the Commissioner appointed under Rights to

Information Act, has passed detailed orders regarding the objections dated 22.02.2007 submitted by the Kancheepuram Kanaga Durgai Amman

Nagar and Annai Indira Nagar Residents Association and submitted that there is no illegality in the order of cancellation.

A perusal of the impugned order of cancellation makes it clear that the respondent has failed to consider the explanation submitted by the

petitioner to the show cause notice on the proper perspective. It is also evident that the respondent has merely acted on the oral instructions of the

Commissioner, appointed under the Right to Information Act, without following the procedure set out in the VAT Tax 2006.

Sub-section 14 of Section 39 of the Tamilnadu Value Added Tax Act, 2006 provides the procedure for registration as well as cancellation.

Section 39(14) of the said Act is extracted here under:

The authority granting the certificate of registration may, by order, for good and sufficient reasons to cancel, modify or amend any certificate of

registration granted by it.

8(a) Sub-clause 15 of Section reads as follows:

No application for registration or for a copy or duplicate of the certificate under this Section shall be refused and no order under Sub-section (14)

shall be made, unless the dealer concerned has been given an opportunity of being heard.

When there is a mandatory provision in the Act providing ''opportunity of being heard'' the respondent ought to have followed the procedure,

before cancelling the registration.

Right to practice any profession, or to carry on any occupation, trade or commerce is a fundamental right guaranteed under the constitution

and keeping that in mind, legislature has provided a right of personal hearing before cancellation of the registration. The impugned order, which is

passed in violation of the principles of natural justice, as well as non-consideration of the explanation offered by the petitioner in the proper

perspective, is liable to be set aside. Accordingly, the impugned order of the respondent dated 19.09.2007 is set aside and the respondent is

directed to scrupulously follow the provisions contemplated under the Act, providing adequate opportunity to the petitioner and pass a speaking

order.

With the above directions, the writ petition is disposed of. Consequently, connected M.P. is closed.