Eligibility certificate cancellation upheld where dealer failed to rebut inquiry findings and ignored repeated hearing opportunities.

A dealer who was repeatedly given opportunity after remand but still failed to appear or produce supporting records could not complain of denial of hearing; the refusal to adjourn and ex parte disposal were therefore justified. On the merits, cancellation of the eligibility certificate was sustained because departmental inquiry findings showed alleged purchases were bogus, the supposed sellers did not exist, and the claimed sales were unverifiable. As the dealer produced no account books or rebuttal evidence, the burden to prove entitlement to the benefit remained undischarged, and the cancellation was upheld.

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Issues: (i) Whether the refusal to adjourn the proceedings and the ex parte decision cancelling the eligibility certificate were illegal for want of proper opportunity; (ii) Whether the cancellation of the eligibility certificate on the basis of departmental inquiry and uncontroverted facts was justified.

Issue (i): Whether the refusal to adjourn the proceedings and the ex parte decision cancelling the eligibility certificate were illegal for want of proper opportunity.

Analysis: The matter had earlier been remanded specifically to afford the dealer another opportunity of hearing. Even after that, the dealer repeatedly failed to appear, sought adjournments, and did not place the claimed supporting material before the Commissioner or the Tribunal. The conduct showed lack of bona fides and no real intention to contest on merits. The refusal to adjourn was therefore not arbitrary or perverse.

Conclusion: The refusal to adjourn and the ex parte disposal were held to be justified and lawful.

Issue (ii): Whether the cancellation of the eligibility certificate on the basis of departmental inquiry and uncontroverted facts was justified.

Analysis: The Commissioner's order recorded specific factual findings that the alleged purchases from Delhi parties were bogus, the alleged sellers did not exist, and the sales claimed by the dealer were not verifiable. The dealer failed to rebut these findings by producing account books or other evidence. In such circumstances, the burden to establish genuine entitlement to the benefit remained on the dealer, and the material collected by the Department supported the inference of misuse of the eligibility certificate.

Conclusion: The cancellation of the eligibility certificate was upheld as justified.

Final Conclusion: The revision failed and the Tribunal's order sustaining cancellation of the eligibility certificate was maintained.

Ratio Decidendi: Where a dealer, after being afforded opportunity, fails to participate or rebut adverse inquiry findings, the authority may proceed ex parte and sustain cancellation of a tax exemption or eligibility benefit if the material on record establishes misuse and the dealer does not discharge the burden of proof.

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