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2021 (6) TMI 720 - HC - VAT and Sales TaxCancellation of registration certificate of dealer with retrospective effect - disallowance of input tax credit - Provisional assessment of goods - denial on the ground that some purchases were not genuine - HELD THAT:- The impugned order passed by the respondent no.2 authority is liable to be quashed and set aside as being wholly without jurisdiction and contrary to the judgement in ARSHIL ENTERPRISE VERSUS STATE OF GUJARAT [2020 (4) TMI 306 - GUJARAT HIGH COURT] passed by this Court inthe first round of litigation - This Court clearly ruled that the retrospective cancellation of registration certificate was not justified in a case wherein the allegations of non-genuineness was only in respect of some transactions and that the retrospective cancellation would also adversely impact the valid and genuine transactions. It was clearly observed that if some past transactions are proved to be invalid, then they can be dealt with in the assessment and action can also be taken against those parties who have entered such invalid transactions. However, all transactions cannot be invalidated by retrospectively cancelling the registration certificate of the dealer. In the present case, even in the second round of litigation, the respondent no.2 authority has alleged non-genuineness only in respect of some transactions as is apparent from the table at page 3 of the impugned order. Thus, the retrospective cancellation is absolutely contrary to the binding decision of this Court in the first round of litigation. The stance of the respondents in the affidavit-in-reply that the judgement of this Court was only on the basis that the respondent - authority had travelled beyond the scope of the show-cause notice is completely misconceived - the respondent - authorities are not remediless in respect of the alleged non-genuine transactions. They can be dealt with in accordance with law in the assessment proceedings. The impugned order retrospectively cancelling the registration certificate of the writ-applicants thereby invalidating even the transactions which are not disputed by the respondents and, therefore, the impugned order deserves to be quashed and set aside - Application allowed.
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