Retrospective cancellation of registration cannot rest on alleged suspicious transactions alone where genuine transactions also exist.

Retrospective cancellation of a dealer's registration certificate is impermissible merely because some transactions are alleged to be suspicious or non-genuine, especially where valid transactions also exist on record. The proper course for any proven invalid transactions is assessment proceedings or other action against the concerned parties according to law. Because the impugned cancellation rested on the same basis already rejected in the earlier binding judgment, it was contrary to that ruling and beyond jurisdiction. The retrospective cancellation order was quashed, and restoration of the registration certificate was directed.

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Issues: Whether the respondent-authority could validly retrospectively cancel the registration certificate again on the basis of alleged suspicious or non-genuine transactions after an earlier judgment had held such retrospective cancellation to be impermissible.

Analysis: The earlier judgment had conclusively held that retrospective cancellation of a dealer's registration is not justified merely because some transactions are alleged to be doubtful, particularly where valid and genuine transactions are also on record. Such invalid transactions, if established, may be dealt with in assessment proceedings, and the Department may proceed against the concerned parties in accordance with law. The impugned order proceeded on the same foundation as before and therefore stood contrary to the binding earlier decision. The authority's view that the earlier judgment rested only on the ground of going beyond the show-cause notice was rejected as a misunderstanding of the earlier ruling.

Conclusion: The retrospective cancellation order was without jurisdiction and unsustainable. It was quashed, and restoration of the registration certificate was directed.

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