Retrospective cancellation of buyer registration does not automatically deny sales-tax deduction to the selling dealer.

Retrospective cancellation of a purchasing dealer's registration does not automatically defeat a selling dealer's claim to sales-tax deduction where the sale was made to a registered dealer at the relevant time. The text applies that principle to deduction claimed on sales supported by declaration forms under the M.P. General Sales Tax Act, 1958, and notes that the revisional authority had not proceeded on the correct legal footing. The impugned revisional order was quashed, and the matter was remanded for fresh decision in accordance with law.

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Issues: Whether the petitioner was entitled to deduction in respect of sales claimed to have been made to a registered dealer when that dealer's registration was later cancelled retrospectively, and whether the revisional order sustaining the demand could stand.

Analysis: The petition concerned assessment to sales tax under the M.P. General Sales Tax Act, 1958 and the claim for deduction under section 2(r)(iv) on sales supported by declaration forms. The decisive question was whether subsequent retrospective cancellation of the purchasing dealer's registration could defeat the selling dealer's claim to the benefit attached to sales made to a registered dealer. The Court noted the line of authority holding that where the selling dealer had effected the sale to a dealer who was registered at the relevant time, later cancellation of that registration with retrospective effect does not, by itself, deprive the selling dealer of the statutory benefit. In view of those later decisions, the revisional authority's order required reconsideration on the correct legal footing.

Conclusion: The impugned revisional order was quashed and the matter was remanded to the revisional authority for fresh decision in accordance with law.

Final Conclusion: The petitioner succeeded, but only to the extent that the adverse revisional order was set aside and the revision was sent back for reconsideration on merits.

Ratio Decidendi: Retrospective cancellation of a purchasing dealer's registration does not automatically defeat the selling dealer's entitlement to statutory sales-tax deduction where the sale was made to a registered dealer at the relevant time.

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