Prospective cancellation of dealer registration cannot defeat deduction for sales made before the registration was cancelled.

Cancellation of a purchasing dealer's registration under the sales tax law operates prospectively and does not retrospectively defeat a selling dealer's deduction for sales made while the purchaser's registration was still in force. The statutory scheme, read with the provisions on cancellation and publication, requires that dealers be informed promptly of cancellation, and any effective date specified for cancellation cannot be earlier than the order itself. As a result, pre-cancellation sales remain eligible for deduction from taxable turnover.

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Issues: Whether cancellation of a purchasing dealer's registration certificate could operate retrospectively so as to deny the selling dealer deduction from taxable turnover for sales made before the cancellation order.

Analysis: Deduction under section 5(2) depended on the purchaser being a registered dealer at the time of sale. The cancellation order was made in November 1956, while the sales in question were made earlier. Reading section 7(7), section 9, and rule 12(1)(d) together, the scheme emphasised prompt publication of cancellation so that other dealers may be informed. The words allowing cancellation to take effect from a specified date were construed as permitting only the date of the order or a later date, not a date earlier than the order. The statutory scheme did not support retrospective cancellation to defeat deductions for sales made while the registration certificate was still subsisting.

Conclusion: The cancellation could not be given retrospective effect against the assessee, and the assessee remained entitled to the deduction for the pre-cancellation sales.

Ratio Decidendi: A cancellation of registration under the sales tax law operates only prospectively and cannot retrospectively deprive a seller of deduction for sales made when the purchaser's registration was still in force.

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