Tax exemption eligibility certificate cannot be cancelled through a later amendment when the original grant was lawful and relied upon.

A tax exemption eligibility certificate granted to a new unit could not be cancelled merely because a later retrospective amendment introduced a seven-year ownership or lease requirement. The cancellation power under section 4-A(3) was directed to misuse, breach of conditions, or other substantial disentitlement, not to reopening the correctness of a lawful original grant by the prescribed authority. The power was also discretionary and had to be exercised fairly, particularly where the dealer had relied on the earlier assurance and later acquired ownership. The cancellation was therefore unjustified and the exemption benefit already granted was preserved.

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Issues: Whether the Commissioner could cancel an eligibility certificate granted to a new unit on the ground that, after retrospective amendment, the unit did not satisfy the requirement of ownership or a lease for not less than seven years, and whether such cancellation was justified in the circumstances.

Analysis: The eligibility certificate had been lawfully granted when no such requirement formed part of the governing notification. The subsequent amendment introduced a definition of "new unit" requiring ownership or a lease of at least seven years, but the cancellation power under section 4-A(3) was framed to deal with misuse, breach of conditions, or cases where the unit was not entitled to the facility on grounds arising from the unit holder's conduct. It did not confer a revisional power on the Commissioner to reopen the correctness of the original grant made by the prescribed authority. The Court also held that the amended provision was discretionary and had to be exercised fairly, taking into account the fact that the dealer had acted on the earlier assurance, had already become owner of the property, and that cancellation at a later stage would impose an unexpected hardship.

Conclusion: The Commissioner was not justified in cancelling the eligibility certificate, and the Tribunal's affirmance of that cancellation was erroneous.

Final Conclusion: The revision succeeded and the cancellation of the eligibility certificate was quashed, with the dealer retaining the exemption benefit already granted.

Ratio Decidendi: A cancellation power under a tax exemption provision cannot be used as a revisional power to nullify a lawful eligibility certificate merely because of a subsequent change in law, and where the power is discretionary it must be exercised fairly, reasonably, and only for substantial defaults arising from misuse, breach, or comparable disentitlement.

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