D. A. MEHTA, J. ( 1 ) RULE. Mr. Siraj Gori, learned Assistant Government Pleader appears and waives service of Rule on behalf of the respondents. By consent of the learned Advocates for the respective parties the matter is taken up for final hearing. ( 2 ) THIS is a petition preferred under Article 226 of the Constitution of India seeking quashing and setting aside orders dated 26. 8. 2003 (Annexure-A) whereunder the respondents have have ordered attachment of goods of the petitioner amounting to Rs. 4,31,750/- and directed the petitioner to furnish necessary security to the tune of Rs. 15 lacs (Approx.) under Section 30b of the Gujarat Sales Tax Act, 1969 (the Act) on or before 5/1/2004. ( 3 ) THE facts as averred in the petition are that respondent No. 2 visited business premises of the petitioner on 19/8/2003 and impounded various Books of Accounts maintained by the petitioner relevant to the year 2001-2002. On 26/8/2003 respondent No. 2 passed impugned "provisional attachment" order under Section 48a of the Act impounding and attaching stock of Oil, more particularly, described in the order (Annexuere-A ). On 16/12/2003 respondent No. 2 issued a show cause notice calling upon the petitioner to give reasons as to why the petitioner should not be required to give security under Section 30b of the Act for securing probable demand of approximately Rs. 15 lacs. The ground for issuance of show cause notice was that the registration certificates of M/s. Kesar Oil Industries and M/s. Karnavati Trading Co. were retrospectively cancelled and hence considering the value of purchases from the said two dealers the petitioner was called upon to show cause by 22/12/2003. On 29/12/2003 respondent No. 3 passed the impugned order (Annexure-B) holding that the purchases made by the petitioner from the aforesaid two dealers are to be treated as purchases from unregistered dealers and hence the petitioner should furnish necessary security on or before 5/1/2004 as per provisions of Section 30-B of the Act failing which the sales tax registration of the petitioner shall be cancelled. ( 4 ) MR. S. N. SOPARKAR, learned Senior Advocate appearing on behalf of the petitioner submitted that both the orders at Annexures a and b are patently without jurisdiction in light of the judgment of this Court in the case of Giriraj Sales Corporation Vs. ( 4 ) MR. S. N. SOPARKAR, learned Senior Advocate appearing on behalf of the petitioner submitted that both the orders at Annexures a and b are patently without jurisdiction in light of the judgment of this Court in the case of Giriraj Sales Corporation Vs. State of Gujarat in Special Civil Application No. 2648 of 1996 and cognate matters wherein this Court has recorded the statement of Additional Advocate General and thereafter stated that in view of clear stand taken by the State Government the controversy does not survive between the parties. Mr. Soparkar also invited attention to the decision of Supreme Court in State of Maharashtra Vs. Suresh Trading Company (1998)109 Sales Tax Cases 439. He, therefore, urged that in light of the settled legal position the respondents could not disturb the assessment of the petitioner, which had been framed under section 41 (3) of the Act on 31/3/2003 after scrutinising in detail various Books of Accounts as well as other relevant documents, on the basis of cancellation of the registration of the suppliers of goods retrospectively by treating purchases from them as being from unregistered dealers. ( 5 ) MR. SIRAJ Gori, learned Assistant Government Pleader appearing on behalf of the respondents placed reliance on the affidavit-in-reply and annexed order dated 3/7/2003 whereby registration of M/s. Karnavati Trading Company has been cancelled with retrospective effect from 6/11/2001 as well as order dated 26/7/2001 in case of M/s. Kesar Oil Industries whose registration has been cancelled with retrospective effect from 15/1/2000. It was submitted by him that the registration having been cancelled ab-initio, as a natural corollary all purchases made from such dealers were to be treated as purchases from unregistered dealers in hands of the petitioner. The direct consequence would be that petitioner would be liable to pay tax on such purchases and hence the action of the respondents in passing the order of provisional attachment and order calling upon the petitioner to furnish security should be upheld. ( 6 ) IN state of Maharashtra Vs. Suresh Trading Company (supra) the Apex Court has enunciated the law in the following terms :"a purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. ( 6 ) IN state of Maharashtra Vs. Suresh Trading Company (supra) the Apex Court has enunciated the law in the following terms :"a purchasing dealer is entitled by law to rely upon the certificate of registration of the selling dealer and to act upon it. Whatever may be the effect of a retrospective cancellation upon the selling dealer, it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current. The argument on behalf of the department that it was the duty of persons dealing with registered dealers to find out whether a state of facts exists which would justify the cancellation of registration must be rejected. To accept it would be to nullify the provisions of the statute which entitle persons dealing with registered dealers to act upon the strength of registration certificates. "in the case of Giriraj Sales Corporation the following statement was made by Additional Advocate General in writing :"1 It is submitted that under Subsection (1) of Section 30aa, the Commissioner can cancel the certificate of registration of a registered dealer if he is satisfied that the registered dealer has without entering into a transaction of sale, issued to and accepted by another registered dealer a bill or cash memorandum with the intention to defraud the Government revenue or with the intention that the Government may be defrauded. Such a cancellation can be done either prospectively or retrospectively from such date as the Commissioner may, having regard to the circumstances of the case fix. 2 The Scheme of Section 30aa is that only those dealers referred to in subsection (1) who give or accept bills without entering into transactions of sale or purchase shall bear the consequences flowing from cancellation of registration regarding payment of tax and other provisions like interest and penalty, subject to proviso (b) of Section 30aa. 3 Provisions of provisos (a) and (b) of Section 30aa would not affect further re-sales of goods purchased from such purchaser. 4 If the certificate is cancelled prospectively the provisions of Section 15 would operate and provisos (a) and (b) of Section 30aa would not be operative. 5 Irrespective of the fact whether the registration certificate of the vendor or purchaser is cancelled retrospectively, the genuineness of the transactions has to be verified at the time of assessment/reassessment. 4 If the certificate is cancelled prospectively the provisions of Section 15 would operate and provisos (a) and (b) of Section 30aa would not be operative. 5 Irrespective of the fact whether the registration certificate of the vendor or purchaser is cancelled retrospectively, the genuineness of the transactions has to be verified at the time of assessment/reassessment. If transactions are found genuine, they will not be affected by section 30aa and provisos thereto". ( 7 ) IN light of the principle enunciated by Supreme Court and the clear stand taken by the State Government in the aforesaid decision in case of Giriraj Sales Corporation (supra) it is apparent that where the transactions are found to be genuine they will not be affected by provisions of Section 30aa and the provisos thereunder. In the case of the petitioner the assessment had already been framed under Section 41 (3) of the Act. In the circumstances, it is apparent that the impugned orders dated 26/8/2003 (Annexure-A) and 29/12/2003 (Annexure-B) will have to be quashed and set aside. Accordingly order dated 26/8/2003 made under Section 48a of the Act and order dated 29/12/2003 made under Section 30b of the Act are declared to be bad in law and are quashed and set aside. The respondents are directed to release stock of Oil and the petitioners shall not be required to maintain minimum stock of Oil as ordered on 13/1/2004 while granting ad-interim relief. ( 8 ) THE petition is accordingly allowed. Rule made absolute. There shall be no order as to costs. .