(1) Remission of output tax payable by a dealer in accordance with the rules contained in this Part and in part III 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 the Act and the rules laid down 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 section 118 or the rules referred to in sub-rule (1), such Senior Joint Commissioner or Joint Commissioner or Deputy Commissioner, shall, after giving such dealer a reasonable opportunity of being heard, pass an order for discontinuance of the benefit of remission of the tax payable by such dealer for reasons to be recorded in writing: Provided that the benefit of remission of tax shall not be refused for any period prior to the date of such contravention by the dealer unless the order renewing the certificate of eligibility is revised otherwise under section 85 or section 86, or reviewed otherwise under section 88, by a competent authority.