Cancellation of VAT registration requires statutory grounds or sufficient cause; unsupported allegations and mere apprehension are not enough.

Cancellation of registration under section 17(11) of the U.P. Value Added Tax Act is sustainable only on grounds expressly covered by the provision or for other sufficient cause. The recorded reasons here did not meet that standard: temporary non-transacting of business was not shown to cause revenue loss or otherwise amount to sufficient cause, the alleged bogus purchases were not established on the record, and no finding linked the dealer to supplier-driven tax evasion. A bare apprehension that the TIN might be misused, without material or a specific instance of misuse, was insufficient. The cancellation orders were therefore based on extraneous grounds and were not sustainable.

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Issues: Whether cancellation of registration under section 17(11) of the U. P. Value Added Tax Act was justified on the grounds that the dealer was not carrying on business, that the purchases were bogus, and that the TIN was likely to be misused for tax evasion.

Analysis: Section 17(11) permits cancellation only on the grounds expressly specified in the provision or for any other sufficient cause. The reasons recorded for cancellation did not fit within the enumerated grounds. The finding that the dealer was not transacting business for a period was not shown to cause revenue loss and did not amount to sufficient cause. The alleged bogus purchases were not established from the record, and the Tribunal had not recorded a finding that the dealer was linked with any tax evasion by the supplier. The apprehension that the TIN might be misused was unsupported by any material or specific instance of misuse.

Conclusion: The cancellation orders were based on extraneous grounds and were not sustainable under section 17(11) of the U. P. Value Added Tax Act.

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