R.N. Misra, J.
1. These are applications individually made by four hoteliers at Puri. They have been registered dealers under the Orissa Sales Tax Act. The Supreme Court, the Punjab High Court as also this court came to decide that where hoteliers raised consolidated and composite charges for all amenities along with food and the charge for food was not divisible and separate, it was not open to the sales tax authorities to separate the same and treat that part of it as sale. Each of the petitioners thereafter applied to the Sales Tax Officer, Puri-I Circle, for cancellation of the registration as dealer. The Assistant Sales Tax Officer in-charge of registration of dealers has rejected each of the applications and has directed the registration certificate of each of the dealers to be returned to the dealer by the impugned order in each of these applications. As common questions of fact and law arise and common counsel for the parties advanced one argument, we propose to dispose of all these applications by a common order.
2. Section 9 of the Orissa Sales Tax Act, 1947 (hereafter referred to as the 'Act'), deals with registration of dealers. Sub-section (6) thereof provides for cancellation of certificate of registration in the following way :
(a) any business in respect of which a certificate has been granted under this section has been discontinued or has been entirely transferred by the owners of the business to other persons; or
(b) the gross turnover of any such business has during each of the three consecutive years failed to exceed Rs. 25,000; or
(c) there is any other sufficient reason so to do, the Commissioner shall cancel the registration with effect from the prescribed date and on such cancellation the Commissioner may, on application in the prescribed form received within six months of the date of cancellation, refund in such manner and subject to such conditions as may be prescribed, the security, if any, paid under Sub-section (3-a) of Section 9.
Rules 15, 16 and 16-A of the Orissa Sales Tax Rules (hereafter referred to as the 'Rules') are the corresponding rules of Clauses (a), (b) and (c) of Sub-section (6) of Section 9 of the Act. It is conceded by the counsel for the parties that the applications of the petitioners are covered by Section 9(6)(c) of the Act. We shall, therefore, refer to Rule 16-A of the Rules, which is the appropriate one. That rule provides:
'(1) If the Assistant Sales Tax Officer or the Sales Tax Officer, as the case may be, for any sufficient reason finds that the registration of any dealer is required to be cancelled under Clause (c) of Sub-section (6) of Section 9, he shall refer the matter to the Commissioner for orders. The Commissioner after giving the dealer a reasonable opportunity of being heard, wherever practicable, may order cancellation of the registration with effect from a date to be specified in the order. (2) * * *(3) * * *
3. After the applications were made to the Sales Tax Officer, there does not seem to have been any enquiry. In some of these cases, a statement has been recorded from the assessee after the disposal of the application. In the last case, there does not seem to have been any enquiry at all.
Rule 16-A of the Rules does not envisage the making of any application. But it cannot be forgotten that it does not exclude the making of an application so as to bring a particular fact to the notice of the appropriate authority for initiating action as contemplated under the Rules. When the petitioners applied to the appropriate authority, it was his duty to enquire into the matter before he rejected the applications. The learned standing counsel argues that since there was no procedure for moving the Sales Tax Officer for action under Rule 16-A of the Rules, there is no obligation cast upon him to make any enquiry. As we find the Assistant Sales Tax Officer has not rejected the applications on the ground that no application lay to him in the matter. On the other hand, he has found fault with the petitioners for having not affixed the appropriate fee upon their applications and he has proceeded to dispose them of on merit. Though Rule 16-A of the Rules does not provide for receiving of applications, we are not inclined to hold that it precludes the Sales Tax Officer to receive an application containing the request for cancellation of registration. The scheme under Rule 16-A is that the Assistant Sales Tax Officer or the Sales Tax Officer, as the case may be, has to refer the matter to the Commissioner for orders and at the stage of the Commissioner a hearing is contemplated. If the Assistant Sales Tax Officer was to reject the application, even in the absence of a provision for hearing at that stage, natural justice required that he should have afforded an opportunity to the applicant to support the application. One need not take a very technical view of this matter. Section 9(6) of the Act contemplated of different situations where registrations can be cancelled. The purpose of Section 9 is to require registration in every case where there is liability for registration. Similarly it contemplates of cancellation of registration wherever there is no liability under the Act. If the petitioners had got themselves registered as dealers under a mistaken position of law and after the law has been settled, if it really transpires that the petitioners have no liability for registration as dealers it is all but appropriate that their registration as dealers should be cancelled. If an application in that regard had been made by the dealer it is all but appropriate that he should be given an opportunity of substantiating his application. A hearing at that stage could assist the Sales Tax Officer or the Assistant Sales Tax Officer, as the case may be, to form his own view of the matter and to make the recommendation to the Commissioner. In view of the materials placed before us, we hold that the disposal of the applications by the Assistant Sales Tax Officer has not been appropriate. He should have given an opportunity to each of the petitioners to be heard in the matter before he rejected them. We would accordingly quash his orders in each of the cases and call upon him to redispose of the applications of the petitioners. Since there is no provision debarring any enquiry at that stage and incorporation of a provision of hearing by the Commissioner does not exclude a hearing at the earlier stage for reaching the satisfaction for making a reference to the Commissioner, we require the Assistant Sales Tax Officer to afford an opportunity of being heard by him in support of the applications before he decides to refer or not to refer the matter to the Commissioner as required under Rule 16-A of the Rules. This would be in accord with the requirements of natural justice. The learned standing counsel had requested us to indicate in clear terms that the Assistant Sales Tax Officer would be free to reject the applications as not maintainable under Rule 16-A of the Rules. We do not find it necessary to say so, as on the earlier occasion the applications had not been rejected as not maintainable. We are also of the view that in the absence of any clear exclusion, it is open to an assessee to bring the fact to the notice of the Sales Tax Officer or the Assistant Sales Tax Officer, as the case may be, within the ambit of Rule 16-A of the Rules for appropriate action being taken.
4. Each of these applications is accordingly allowed. The impugned order is quashed and a direction be issued to the Assistant Sales Tax Officer for redisposal of each petitioner's application in the manner indicated above. No costs.
B.K. Ray, J.