20Cancellation of certificate of registration

(1) Where--

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

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

(c) 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:

Provided that in a case referred to in clause (a) or clause (b), the certificate of registration shall be deemed to be inoperative with effect from the date of discontinuance or transfer of the business, as the case may be, and in a case referred to in clause (c), 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 that the particulars of the dealer regarding cancellation are published, as required by section 65, in the Official Gazette, after the aforesaid date:

Provided further that where a dealer has failed to furnish information regarding discontinuance of his business as required by section 40, the Commissioner shall before cancelling the certificate from any specified date, publish in the Official Gazette, a notice of his intention so to do for the information of the dealer and shall hear objections, if any, of the dealer before passing the order.

(2) A dealer registered under section 15 may, subject to the provisions of sub-section (4) of that section, apply in the prescribed manner not later than six months before the end of a year to the Commissioner for cancellation of his certificate of registration and the Commissioner shall, unless the dealer is liable to pay tax under section 3, cancel the certificate of registration accordingly, and such cancellation shall take effect from the end of the year.

(3) Notwithstanding anything contained in sub-sections (1) and (2), the Commissioner may at any time for reasons to be recorded in writing and after giving the dealer an opportunity of being heard, cancel the certificate of registration held by such dealer from such date as the Commissioner may specify in this behalf--

(a) if the dealer has failed to pay any tax (including any penalty) due from him under any provisions of this Act; or

(b) if the dealer holds or accepts or furnishes or causes to be furnished a declaration for the purposes of sub-clause (v) of clause (a) of sub-section (2) of section 4 or section 5 which he knows or has reason to believe to be false; or

(c) if the dealer who has been required to furnish the security under the provisions of section 18 has failed to furnish such security; or

(d) if the dealer contravenes or has contravened any of the provisions of this Act; or

(e) if the dealer has been convicted of an offence under this Act or under the Bengal Finance (Sales Tax) Act, 1941 (Bengal Act VI of 1941), as then in force in Delhi; or

(f) if there is any other reason which in the opinion of the Commissioner warrants such cancellation.

(4) (a) If an order of cancellation passed under sub-section (3) is set aside as a result of an appeal or other proceeding under this Act, the certificate of registration of the dealer shall be restored and he shall be liable to pay tax as if his certificate had not been cancelled.

(b) If any dealer whose certificate of registration has been restored under clause (a) satisfies the Commissioner that tax has been paid by such dealer on sale of goods made to him during the period his certificate of registration was inoperative which, but for the cancellation of such certificate he would not have paid, then the amount of such tax shall be adjusted or refunded in such manner as may be prescribed.

(5) Every dealer who applies for cancellation of his 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 of the date of communication to him of the order of cancellation.

(6) If a dealer fails to surrender his certificate of registration as provided in sub-section (5), 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 not exceeding twenty-five rupees for every day of default.

(7) The cancellation of a certificate of registration shall not affect the liability of any person to pay tax due for any period prior to the date of such cancellation, whether such tax is assessed before the date of cancellation but remains unpaid or is assessed thereafter notwithstanding that he is not liable to pay tax under this Act.

(8) Where by any order passed under this Act it is found that any person registered as a dealer ought not to have been so registered, then, notwithstanding anything contained in this Act, such person shall be liable to pay tax for the period commencing with the date of his registration and ending with the date of such order, as if he were a dealer.