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TMI Blog1961 (3) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Nand Lal Raj Kishan, carry on a business of commission agents at Delhi and are liable to pay sales tax in respect of their business under the provisions of the Bengal Finance (Sales Tax) Act, 1941, as in force in Delhi. They filed returns for four quarters of 1954-55 and claimed exemption in respect of sales of certain goods to the registered dealers under the provisions of section 5(2)(a)(ii) of the said Act. By his order dated April 11, 1956, the Sales Tax Officer disallowed the exemption claimed by the petitioners mainly on the ground that the alleged sales were made to "those registered dealers whose activities had gone underground." The Sales Tax Officer issued a demand notice for a sum of Rs. 1,11,890-11-0 on account of sales tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereupon the Sales Tax Officer made certain enquiries and found that the petitioners had been frequently shifting their places of business and the sales alleged to have been made by them to some registered dealers were not genuine, because those persons could not be traced at the addresses given. On a report being submitted to the Commissioner of Sales Tax, Delhi, the Commissioner asked the Sales Tax Officer to issue a notice to the petitioners. On July 13, 1957, such a notice was issued to the petitioners to show cause why they should not be asked to furnish a security of Rs. 10,000 in accordance with the provisions of section 8A. The petitioners then appeared before the Sales Tax Officer and made a statement that they were not prepared to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent writ petition the petitioners have impugned the order of the Commissioner dated November 27, 1957, on the ground that section 8A of the Act under which the order was passed is constitutionally invalid. They have challenged the validity of section 8A on three grounds: firstly, it is contended that section 8A gives an undefined, unlimited and unrestricted power to the Commissioner of Sales Tax; secondly, it is contended that no limit is fixed with regard to the amount of security which may be demanded under the section; and thirdly, it is contended that the section imposes an unreasonable restriction on the right of the petitioners to carry on their business inasmuch as it does not provide for any enquiry before the demand for security ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any licence under the Order. It was pointed out by this Court that there was nothing to regulate or guide the discretion of the licensing officer and the provision impugned therein committed to the unrestrained will of a single individual the power to grant, withhold or cancel licences in any way he chose. That is not the position here. Section 8A itself gives the necessary guidance when it says that the Commissioner may exercise his power only when it is necessary to do so for the proper realisation of the tax levied under the Act. In a later decision of this Court in Virendra v. The State of Punjab and Another [1958] S.C.R. 308 at 321., it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The amount must depend on the nature of the business, its turnover and the amount of tax payable thereon by the person concerned. Furthermore, the order of the Commissioner under section 8-A is subject to revision by the Chief Commissioner and if an arbitrary or unreasonable amount is demanded, the order of the Commissioner will be subject to scrutiny by the Chief Commissioner. We do not think that even in the matter of the amount of security, the power of the Commissioner is unlimited or unrestricted. As to the last contention that the section does not provide for any enquiry or any. opportunity being given to the person against whom the order is proposed to be passed of being heard, this point was taken before the Chief Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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