Unpublished cancellation of purchaser registration cannot defeat exemption when seller acted in good faith without notice.

A selling dealer could not be denied sales tax exemption merely because the purchasers' registration certificates had been cancelled, where the cancellation had not yet been published in the official gazette when the sales were made. Rule 12 required such publication to make the cancellation known to the world at large, and a dealer acting in good faith without notice could not be imputed knowledge of an unpublished cancellation. Declarations obtained before the sales were therefore valid against the seller, and departmental delay in publication could not defeat the exemption.

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Issues: Whether the selling dealer could be denied exemption on the basis of declarations obtained from purchasers whose registration certificates had been cancelled, where the cancellation was not published in the official gazette until after the sales and assessment year.

Analysis: Rule 12 of the Delhi Sales Tax Rules, 1951 required cancellation of a registration certificate to be published in the official gazette as soon as possible. Until such publication, the cancellation was not known to the world at large, and a selling dealer acting in good faith could not be attributed knowledge of the cancellation merely because the purchasing dealers may have been aware of it. The dealer had obtained declarations before making the sales and had no notice that the purchasers were no longer registered dealers. The failure or delay of the department in publishing the cancellation could not prejudice the dealer.

Conclusion: The declarations were valid against the selling dealer, and the benefit of exemption could not be denied. The issue is answered in the affirmative and in favour of the assessee.

Ratio Decidendi: Where cancellation of a purchaser's registration certificate is required to be published in the official gazette, the cancellation is not enforceable against a selling dealer lacking notice until such publication, and declarations obtained in good faith before sales cannot be rejected for departmental non-publication or delayed publication.

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