Eligibility certificate cancellation was invalid absent misrepresentation, with delayed reopening of exemption benefits held improper.

Cancellation of an eligibility certificate under section 4A(3) of the U.P. Trade Tax Act was held unjustified where the assessee had disclosed the purchase and transfer of the pouch sealing machine in the original exemption proceedings and the authority was aware of that fact. The power to withdraw the benefit was described as discretionary and confined to cases of misuse, breach of conditions, or another legally sustainable ground; it could not be used to reopen a conscious earlier decision merely because a different view was later taken. The long delay in initiating the proceedings after expiry of the exemption period also made the exercise of power improper on the facts. The revision succeeded for the assessee.

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Issues: Whether cancellation of the eligibility certificate under section 4A(3) of the U.P. Trade Tax Act, 1948 was valid in the absence of misrepresentation or concealment of material facts, and whether the proceeding was vitiated by inordinate delay.

Analysis: The unit had disclosed the purchase and transfer of the pouch sealing machine at the time of the original exemption proceedings, and the record showed that the authority granting the certificate was aware of that fact. The cancellation was therefore not founded on any misrepresentation, concealment, or misuse of the certificate. The power under section 4A(3) is discretionary and is to be exercised only where there is misuse, breach of conditions, or a legally sustainable ground for withdrawal of the benefit; it is not meant to reopen a conscious decision merely because a different view is later taken. The proceedings were also initiated after a long lapse of time after expiry of the exemption period, which made the exercise of power improper on the facts of the case.

Conclusion: The cancellation under section 4A(3) was unjustified, and the revision succeeded in favour of the assessee.

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