Eligibility certificate cancellation requires a misuse allegation; a notice alleging only wrongful grant is insufficient.

Section 4A(3) of the U.P. Trade Tax Act permits cancellation of an eligibility certificate only where the Commissioner forms an opinion that the exemption facility obtained on its basis has been misused. A show cause notice that merely asserts the certificate was wrongly granted, without alleging misuse, does not satisfy that statutory basis. Where the relevant fact was already known at the time of grant and no misrepresentation was shown, the cancellation power could not be exercised. The cancellation of the eligibility certificate was therefore not sustainable, and the challenge to the High Court's view failed.

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Issues: Whether the eligibility certificate granted for tax exemption could be cancelled under Section 4A(3) of the U.P. Trade Tax Act when the show cause notice did not allege misuse of the certificate but proceeded on the footing that the certificate had been wrongly granted.

Analysis: Section 4A(3) permits cancellation of an eligibility certificate only when the Commissioner forms an opinion that the exemption facility obtained on the basis of that certificate has been misused in any manner whatsoever. The notice issued to the respondent did not allege misuse of the certificate. Instead, it asserted that the certificate itself had been wrongly granted because the unit had installed a second-hand machine. The fact relied upon by the appellant was already known when the certificate was granted, and there was no misrepresentation. In the absence of an allegation of misuse in the show cause notice, the power under Section 4A(3) could not be invoked.

Conclusion: The cancellation of the eligibility certificate was not sustainable and the challenge to the High Court's decision failed.

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