Proforma credit continuation turned on substance, not technical form, where correspondence sought correction of records and ongoing facility.

Letters seeking correction of the factory name in the licence, personal ledger account and proforma credit records were treated as a sufficient application for continuation of existing proforma credit under Rule 56A. Because the partnership firm had already been granted the facility and the successor company had taken over the business as a going concern, the correspondence was not a mere forwarding letter but a request to keep the credit arrangement alive. Departmental acquiescence over several years reinforced that substance prevailed over technical objection, so the demand for reversal of credit on the ground of no valid application was unsustainable.

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Issues: Whether the appellant's letters seeking correction of records and continuation of the existing proforma credit facility amounted to a valid application for availing proforma credit under Rule 56A, and whether the demand for reversal of credit was sustainable.

Analysis: The request made in the 1978 correspondence was not a mere forwarding letter unconnected with proforma credit; it specifically sought correction of the factory name in the licence, personal ledger account, proforma credit order and related papers so that business could continue without interruption. Since the partnership firm had already been granted the facility and the new company had taken over the business as a going concern, the request could be treated as an application for continuation of the existing permission. The departmental conduct over several years also showed acquiescence, and the denial of credit rested on a technical objection that ignored the substance of the correspondence and the long-standing operation of the account.

Conclusion: The letters constituted a sufficient application for continuation of proforma credit, and the demand based on absence of application was unsustainable.

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