JUDGMENT B. C. VARMA, J. - The Board of Revenue acting under section 44 of the Madhya Pradesh General Sales Tax Act, 1958 has referred the following question for decision of this Court : "Whether, in the facts and circumstances of the case, the Tribunal was justified in allowing the claim of deduction of sale of bardana under section 2(r)(ii) of the M.P. General Sales Tax Act, 1958 when the registration certificate of the selling dealer was cancelled with retrospective effect, i.e., from the date of its issue ?" 2. M/s. Roshanlal Gulshanlal of Bhatapara was being assessed to sales tax for sale of new bardanas for a period between 30th October, 1970 and 19th December, 1971. In the course of assessment proceedings, it revealed that the dealer has shown a purchase of old bardana worth Rs. 60,000 from one Jagdish Prasad Mool Shanker. This Jagdish Prasad Mool Shanker was shown as a registered dealer under the Madhya Pradesh General Sales Tax Act and, therefore, the dealer claimed exemption form the sale of these bardanas under section 2(r)(ii) of the Act. The assessing authority, however, found that the registration certificate of the selling dealer, viz., M/s. Jagdish Prasad Mool Shanker was revoked from its inception. It was held that the said purchase of old bardana from Jagdish Prasad Mool Shanker was from unregistered dealer. Therefore, the dealer was held not entitled to claim deduction of the amount realised by sale of those bardanas from him taxable turnover. Consequently, sales tax was imposed on the amount realised by sale of this item by the dealer. The appeal before the Appellate Assistant Commissioner of Sales Tax, Raipur proved abortive. The dealer preferred a second appeal before the Tribunal (Board of Revenue). By order dated 21st June, 1975, the Board of Revenue allowed that appeal. It was found that the claim of the tax-paid purchases from the local registered dealer was verified and found to be correct. Consequently, it was held : "the fact that the registration certificate was subsequently cancelled, though with retrospective effect is not a good and sufficient basis for rejecting the claim for exemption under section 2(r)(ii)". The Revenue was not satisfied with the order of the Board of Revenue and, therefore, applied to it for referring the question aforesaid to the High Court. The Revenue was not satisfied with the order of the Board of Revenue and, therefore, applied to it for referring the question aforesaid to the High Court. Influenced by the decision of this Court in Narayan Das Mangal Sen v. State of M.P. (decided on 21st March, 1979) (1980) 13 VKN 18 the Tribunal felt that the question did arise out of Tribunal's order for decision by this court and has therefore made this reference. 3. It was not disputed before us nor was it in dispute before the lower Tribunals at any time that the commodity, i.e., bardana was subject only to single point tax payable by the first seller who at the time of the sale was a dealer duly registered under the Act. The dealer, viz., M/s. Roshanlal Gulshanlal was, therefore, entitled to deduct, from his taxable turnover, the sale price of the bardana as it was purchased otherwise than in the course of inter-State trade or commerce from a registered dealer in view of section 2(r)(ii) of the Act which at the relevant time read thus : "2.(r) 'Taxable turnover' in relation to any period means that part of a dealer's turnover for such period which remains after deducting therefrom - (ii) the sale price of goods other than those mentioned in sub-clauses (i) and (iv) of this clause, which have been purchased otherwise than in the course of inter-State trade or commerce from a registered dealer provided that the sales of such goods by such registered dealer were taxable under the Act." A reading of the above provision shows that benefit thereunder can be granted to a dealer if he satisfies the assessing authority that : (i) goods do not fall in the categories mentioned in sub-clauses (i) and (iv) of that clause, (ii) that the goods have been purchased otherwise than in the course of inter-State trade and commerce, (iii) that the purchase was from a registered dealer and (iv) that the sale of the goods by the registered dealer was taxable under the Act. In the present case there is no doubt that the bardana by the selling dealer, viz., Jagdish Prasad Mool Shanker, was taxable under the Act, that it was not purchased by the dealer in the course of inter-State trade and commerce and that it did not fall in any of the categories mentioned in sub-clauses (i) and (iv) of the clause. The only dispute is whether it was purchased from a registered dealer. Even in this regard the facts show that at the time of purchase of goods by the dealer, the selling dealer was a registered dealer. Due enquiries were made in that behalf and there was every reason for the dealer to be satisfied that he was making purchases from a registered dealer. In our opinion the law lays stress on the fact the at the time of purchase the selling dealer must be a registered dealer and nothing more. There is nothing on record to show that the selling dealer had obtained him registration by practising fraud or buy unfair means of that the registration can be said to be bogus. There is even no suggestion that the dealer had any hand in securing registration for the selling dealer. The order of the Board of Revenue dated 21st June, 1975 by which it allowed the appeal of the dealer indicates that during the course of assessment all the relevant entries in the dealer's books of account were duly checked and were found to be correct. These entries clearly disclose that the dealer purchased the burdana from a registered dealer. The record is significantly silent as to the reason for the cancellation of the registration of the selling dealer and that too from its inception. Clearly, therefore, and in the circumstances of the case the dealer cannot be held responsible for the cancellation of the registration of the selling dealer nor can he be deprived of the benefit of section 2(r)(ii) of the Act because of the cancellation of the registration of the selling dealer from its inception. 4. As we have earlier mentioned in order to claim that benefit of the exemption under section 2(r)(ii) of the Act all that the dealer is required to show is that he made the purchases from a registered dealer, i.e., at the time the purchases were made the selling dealer was a registered dealer. 4. As we have earlier mentioned in order to claim that benefit of the exemption under section 2(r)(ii) of the Act all that the dealer is required to show is that he made the purchases from a registered dealer, i.e., at the time the purchases were made the selling dealer was a registered dealer. In point of fact the dealer has been able to establish that. The subsequent cancellation of the registration, even from its inception will not have the effect of depriving him of that benefit under section 2(r)(ii) of the Act for the requirement of law stood satisfied as soon as he could show that the purchase was from a registered dealer. To us, what appears to be significant and relevant is the fact of the selling dealer to be a registered dealer at the time when the purchase was made from him by the concerned dealer. The subsequent cancellation of the registration to us, does not seem to be creating any impediment in claiming benefit under the provisions of section 2(e)(ii) of the Act. 5. The decision in Narayan Das Mangal Sen v. State of M.P. (1980) 13 VKN 18 (MP) mentioned by the Board of Revenue in its order of reference has turned upon its own facts and is clearly distinguishable form the present case. There the selling dealer was held to have obtained registration somehow and was held to be a bogus firm. The amount of turnover representing sales from that bogus firm were found to be real and genuine and it was found that the dealer had somehow obtained false declaration in form 12-A under rule 20(3) of the Act. Genuineness of the declaration was doubted. Ultimately, it was found that no sales were made and, therefore, deductions claimed from the turnover under section 2(r)(ii) of the Act were disallowed. That decision really does not turn upon the factum of cancellation of registration of the selling dealer. Our conclusion, therefore, is that the dealer purchased bardana in question from the registered dealer and the subsequent cancellation of the selling dealer will not deprive him of the benefit of the provisions of section 2(r)(ii) of the Act. That decision really does not turn upon the factum of cancellation of registration of the selling dealer. Our conclusion, therefore, is that the dealer purchased bardana in question from the registered dealer and the subsequent cancellation of the selling dealer will not deprive him of the benefit of the provisions of section 2(r)(ii) of the Act. The Tribunal was, therefore, justified in allowing the claim for deduction of sale price of bardana from the taxable turnover under section 2(r)(ii) of the Madhya Pradesh General Sales Tax Act, 1958 even though the registration certificate of the selling dealer was cancelled with retrospective effect, i.e., from, the date of its issue. 6. The question referred is, therefore, answered in the affirmative and in favour of the dealer and against the Revenue. The dealer, i.e., M/s. Roshanlal Gulshanlal shall get the costs of this reference. Counsel fee Rs. 100. Reference answered in the affirmative.