Cancellation of trade tax registration for non-furnishing of additional security upheld where the statute allowed cancellation for sufficient reason.

A registration under section 8A(1B) of the U.P. Trade Tax Act could be cancelled for any other sufficient reason, not only for unpaid tax, penalty or other dues outstanding for three months. The court treated failure to furnish additional security under section 8C as distinct from those dues, and held that non-compliance within the time fixed by the assessing authority could itself amount to sufficient reason for cancellation. The three-month period therefore did not restrict cancellation on that ground, and the cancellation was upheld.

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Issues: Whether registration under section 8A(1B) of the U.P. Trade Tax Act, 1948 could be cancelled immediately for failure to furnish additional security, or whether the authority had to wait for expiry of the three-month period applicable to tax, penalty or other dues.

Analysis: Section 8A(1B) permits cancellation of a registration not only where tax, penalty or other dues remain unpaid for three months, but also where there is any other sufficient reason. Additional security demanded under section 8C does not fall within the expression tax, penalty or other dues. If the dealer failed to furnish the additional security within the time fixed by the assessing authority, that default could constitute sufficient reason for cancellation of registration, and the three-month period was not attracted.

Conclusion: The view that cancellation could be made only after expiry of three months was incorrect. The cancellation was legally sustainable on the ground of non-furnishing of additional security, and the issue was decided in favour of the Revenue.

Ratio Decidendi: Where a registration provision authorises cancellation for any other sufficient reason, default in furnishing additional security within the time fixed by the authority may itself justify cancellation, and a statutory period tied only to unpaid tax, penalty or other dues does not apply.

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