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of <h1>Sales Tax Tribunal decision overturned due to unclear grounds; petitioner wins challenge on delayed returns penalty.</h1> The Sales Tax Tribunal upheld the cancellation of a registration certificate citing non-timely returns and sales with bogus dealers. The petitioner ... - Issues:Cancellation of registration certificate under section 7(4) of the Punjab General Sales Tax Act, 1948.Analysis:The Sales Tax Tribunal, Punjab, referred the question of law regarding the sustainability of an order cancelling a registration certificate under section 7(4) of the Act. The petitioner's certificate was cancelled for not filing returns on time and engaging in sales with bogus dealers. The Tribunal upheld the cancellation based on these grounds. The petitioner challenged this decision, arguing that sales were made to registered dealers and that one ground for cancellation was untenable. The petitioner cited legal precedents to support this argument, which the department did not contest.The petitioner further contended that since one ground for cancellation was found untenable, it affected the authority's decision-making process. Reference was made to a Supreme Court decision highlighting the impact of partly relevant and partly irrelevant material on a decision. The department's counsel referred to another Supreme Court case to argue that if any substantial wrongdoing is established, the punishment can be upheld, regardless of other charges.The court differentiated the case at hand from the referenced Supreme Court cases, emphasizing that the cancellation was based on two grounds. However, as one ground was deemed untenable due to sales being made to registered dealers, the only valid ground was the delay in filing returns. The court noted that a penalty provision existed for delayed returns under section 10(6) of the Act, which could have been applied instead of cancelling the registration certificate. Therefore, it was crucial to determine which ground primarily influenced the cancellation decision. Consequently, the court concluded that the cancellation order was not sustainable in law due to the lack of clarity on the principal reason for cancellation.In conclusion, the court answered the referred question in the negative, favoring the petitioner and ruling against the department. No costs were awarded in this matter.
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