Cancellation of eligibility certificate under trade tax law requires proven contravention of statutory conditions, not mere allegations.

Cancellation of an eligibility certificate under section 4A(3) of the U.P. Trade Tax Act was examined against the statutory requirement of misuse or contravention of section 4A conditions. The certificate had been granted after scrutiny, but was later cancelled on allegations relating to an old furnace and job-work based production. The record disclosed no finding that the assessee had actively breached the statutory conditions or misused the certificate, and the settled view noted was that cancellation under section 4A(3) is not justified without such contravention. The cancellation was therefore set aside.

---

---

Issues: Whether the cancellation of the eligibility certificate under section 4A(3) of the U.P. Trade Tax Act, 1948 was justified in the absence of any finding of misuse or contravention of the conditions of section 4A.

Analysis: The eligibility certificate had been granted after scrutiny and was later cancelled on the grounds of use of an old furnace and alleged job-work based production of rolled products. The record disclosed no finding that the assessee had actively contravened the conditions of section 4A or misused the certificate. The decision also followed the settled view that cancellation under section 4A(3) is not warranted unless there is a contravention of the statutory conditions by the assessee. The absence of any departmental appeal under section 10(2) was also noted.

Conclusion: The cancellation of the eligibility certificate was unjustified and was set aside.

---