Purchasing dealer deduction cannot be denied solely because suppliers' registrations were later cancelled; assessment remanded.

A purchasing dealer's deduction cannot be denied solely because the suppliers' registrations were later cancelled; that circumstance, by itself, does not defeat the purchasing dealer's entitlement. The assessment, which rested mainly on the cancelled-registration basis, could not be sustained on that ground and was set aside to that extent. The matter was remanded for fresh assessment without treating the cancellation of the selling dealers' registrations as determinative.

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Issues: Whether the petitioner's assessment could be sustained on the footing that purchases were made from dealers whose registration had been cancelled, and whether the assessment required reconsideration in light of the legal position governing the purchasing dealer's entitlement.

Analysis: The assessment for the relevant year had rejected the petitioner's claim mainly because transactions were alleged to have been effected with registration-cancelled dealers. The governing legal position recognized that subsequent cancellation of a dealer's registration does not, by itself, affect the purchasing dealer's right to deduction. In view of that settled position, the assessment could not be maintained on that sole basis and required fresh consideration.

Conclusion: The assessment was set aside to the extent it proceeded on the cancelled-registration aspect, and the matter was remanded for fresh assessment without taking that factor into account.

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