Retrospective cancellation of registration cannot defeat completed resale deductions absent an express deeming provision.

Retrospective cancellation of a seller's registration certificate does not, by itself, defeat a purchasing dealer's statutory deduction where the purchase and resale were completed while the seller's registration remained in force. The deduction under the Bombay Sales Tax Act depended on purchase from a registered dealer and compliance with the certificate requirement; those conditions were satisfied at the relevant time. Although the Act allowed cancellation from an earlier date, it contained no deeming provision invalidating transactions already concluded with third parties or treating them as purchases from an unregistered dealer. The retrospective cancellation could operate against the cancelled dealer, but not impose fresh tax liability or penalty on innocent third parties.

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Issues: Whether the retrospective cancellation of a seller's registration certificate could deprive a purchasing dealer of the statutory deduction available on resale when the purchase and resale were made while the seller's certificate was in force.

Analysis: The deduction under section 10(1)(ii) of the Bombay Sales Tax Act, 1959 depended on the goods having been purchased from a registered dealer and on the certificate required by section 12A being furnished. The purchases were made and the certificates issued when the seller's registration was admittedly subsisting. Section 22(6) empowered cancellation of registration from an anterior date, but the Act contained no deeming provision treating the dealer as unregistered for the intervening period or invalidating transactions already completed with third parties. The power of retrospective cancellation could operate against the dealer whose registration was cancelled, but it could not be extended by implication to impose fresh tax liability or penal consequences on innocent third parties whose transactions were lawful when entered into.

Conclusion: The purchasers remained entitled to the deduction, and the retrospective cancellation did not convert their purchases from an unregistered dealer into taxable transactions.

Final Conclusion: Retrospective cancellation of registration did not affect the accrued rights of third parties or authorise retrospective taxation of transactions completed before the cancellation order.

Ratio Decidendi: A retrospective cancellation of a dealer's registration cannot, in the absence of an express deeming provision, invalidate completed transactions with third parties or impose tax or penalty on them for conduct that was lawful when done.

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