(1) Deferment of payment of tax by a dealer in accordance with the rules prescribed in this Part may be discontinued even before the expiry of the available eligible period as applicable to him if such dealer contravenes any of the provisions of clause (a) of section (1) of section 116 and the rules contained in this Part or Part III.

(2) Where the Senior Joint Commissioner or the Joint Commissioner or the Deputy Commissioner, as the case may be, has in his possession information that the dealer has contravened any provision of the section or the rule, referred to in sub-rule (1), such Senior Joint Commissioner or such Joint Commissioner or such Deputy Commissioner shall, after giving such dealer a reasonable opportunity of being heard, pass an order for discontinuance of the benefit of deferment of payment of tax for reasons to be recorded in writing:

Provided that the benefit of deferment of payment of tax shall not be refused for any period prior to the date of such contravention by the dealer unless the order, granting the renewal of such certificate of eligibility is revised under section 85 or section 86, or reviewed under section 88, by a competent authority.