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Section 27. Cancellation of registration

Where-

(a) any business, in respect of which a certificate of registration has been issued to a dealer under this Act is discontinued;

(b) in the case of transfer of whole business by a dealer, the transferee already holds a certificate of registration under this Act;

(c) an incorporated body has been wound up or it otherwise ceases to exist;

(d) the owner of a proprietorship business dies leaving no successor to carry on the business;

(e) in case of a firm or association of persons, it is dissolved; or

(ee) a dealer changes his place of business situated within the jurisdiction of one authority to a different place falling under the jurisdiction of another authority.

Explanation.-- For the purpose of this clause, the ‘authority’ means the authority prescribed under sub-section (3) of section 21.

(f) a dealer has ceased to be liable to pay tax under this Act,-

 the Commissioner may cancel the certificate of registration of such dealer or the transferor, as the case may be, from such date, as may be specified by him.

(2) A registered dealer, whose certificate of registration is liable to be cancelled under sub-section (1), may apply for cancellation of his registration to the prescribed authority, in the manner and within the time prescribed.

(3) On receipt of such application from the dealer, if the registering authority is satisfied that the dealer fulfils the conditions specified in subsection (1), he shall cancel the registration of such dealer.

(4) The certificate of registration shall be deemed to be inoperative-

(a) in case of clause (a) or (b) of sub-section (1), with effect from the date of discontinuance or, as the case may be, transfer of the business;

(b) in case of clause (c), (d), (e), or (f) of sub-section (1), from the date on which the dealer's liability to pay tax has ceased,

 notwithstanding the fact that the order of cancellation is passed or not or that the particulars of the dealer regarding cancellation are published as required under sub-section (11), or not.

 (5) If a dealer –

 (a) has failed to file three consecutive returns  under this Act;

 (b) knowingly furnishes incomplete or incorrect particulars in his returns with a view to evade tax;

 (c) has failed to pay tax due for three consecutive tax periods  from him under the provisions of this Act;

 (d) having issued tax invoice or retail invoices, has failed to account for the said invoices in his books of account;

 (e) holds or accepts or furnishes or causes to be furnished a declaration, which he knows or has reason to believe to be false;

 (f) omitted *******

 (g) has been convicted of an offence under this Act, or under the earlier law;

 (h) discontinues his business and has failed to furnish information regarding such discontinuation, 

 (i) without entering into a transaction of sale issues to another dealer tax invoice, retail invoice, bill or cash memorandum with the intention to defraud the Government revenue or,

(j) who has been found evading tax on account of variation in physical stock compared with his regular books of accounts,

 the Commissioner may at any time, for reasons to be recorded in writing and after giving the dealer an opportunity of being heard, cancel his certificate of registration from such date as may be specified by him.

"(5A) (1) If a dealer,—

(a) has failed to inform changes as required under sub-section (1) of section 26;

(b) has failed to furnish return under section 29;

(c) has failed to pay tax under section 30;

(d) has failed to file declaration or intimate the changes as required under section 65 or 66; or

(e) has failed to produce the books of accounts required under section 67,

the Commissioner may, at any time, for reasons to be recorded in writing and after giving the dealer an opportunity of being heard, suspend his certificate of registration from such date not earlier than the date of order of suspension, as may be specified by him in the order. 

(2) where a dealer, whose certificate of registration is suspended for the failure of any of the requirements specified in sub-section (1), fulfils the requirements, the Commissioner shall, by an order in writing, withdraw the suspension order from such date as may be specified therein.

(3) the dealer whose certificate of registration is suspended under sub-section (1) shall not be entitled to claim input tax credit during the period of suspension of registration. 

(6) Every person whose registration is cancelled under sub-section (5) shall pay in respect of every taxable goods held as stock on the date of cancellation an amount equal to the tax that would be payable in respect of the goods if the goods were sold at fair market price on that date or the total tax credit previously claimed in respect of such goods, whichever is higher.

(7) If an order of suspension or  cancellation passed under this section is set aside as a result of an appeal or other proceedings under this Act, the certificate of registration of the dealer shall be restored and he shall deemed to be treated as if his registration was not  suspended or cancelled.

(8) Every dealer who applies for cancellation of registration shall surrender with his application the certificate of registration granted to him and every dealer whose registration is cancelled otherwise than on the basis of his application shall surrender the certificate of registration within seven days from the date of communication to him of the order of cancellation:

Provided that if a dealer is unable to surrender the certificate of registration on account of loss, destruction or defacement of such certificate, such dealer shall intimate the registering authority accordingly within seven days from the date of communication of order of cancellation of registration.

(9) If a dealer –

 (a) fails without sufficient cause to comply with the provisions of subsection (2); or

 (b) fails to surrender his certificate of registration as provided in sub-section (8),

 the Commissioner may, by an order in writing and after giving the dealer an opportunity of being heard, direct that the dealer shall pay, by way of penalty, a sum equal to rupees one hundred for every day of default.

(10)  Suspension or cancellation of a certificate of registration shall not affect the liability of any dealer to pay tax, penalty or interest due for any period till the date of such  suspension or cancellation and which has remained unpaid or is assessed thereafter.

(11) The Commissioner shall publish in the manner as may be prescribed the particulars of dealers whose certificate of registration has been suspended or  cancelled under the provisions of this Act.