TMI Blog1994 (1) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales tax due for the year 1992-93, is questioned. Therefore, they are disposed of by a common order. All the petitioners are dealers in turmeric. They got themselves registered under section 12 of the Act in different years. At the time of registration, it is stated that each petitioner was asked to furnish security in a sum of Rs. 2,000 under sub-section (7) of section 12 of the Act and the same had been furnished in the prescribed manner. While so, the Assistant Commercial Tax Officer and the registering authority served the impugned notice dated December 18, 1993 on each one of them stating that the security furnished by them/him at the time of registration was found to be inadequate when compared to the volume of business done by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -section (7) such additional security, as may be specified in the order for all or any of the aforesaid purposes." (11) "No dealer shall be required to furnish any security under subsection (7) or any security or additional security under sub-section (10) unless he has been given an opportunity of being heard and the amount of such security or additional security that may be required to be furnished shall not exceed the amount equal to tax payable under this Act, in accordance with the estimate of such authority, on the turnover of such dealer for the year in which such security or as the case may be, additional security is required to be furnished." It is submitted by the learned counsel for the petitioners that the power under sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year in which the additional security is required to be furnished. In all the impugned notices, it is mentioned that there is increase in the volume of business carried on by the respective dealers and the security furnished by them/him at the time of registration is found to be inadequate to ensure proper realisation of the tax and other dues payable under the Act and proper custody and use of the forms issued to them/him from time to time. The mention of increase in the volume of business in the show cause notice cannot be said to be either irrelevant or extraneous to the purpose of ensuring proper realisation of the tax and other dues payable under the Act or the proper custody and use of the forms issued to the dealer from time to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings were initiated for re-opening the assessments. Therefore, it was held that the notice ought not to have been issued on the facts of that case. In support of the contention that the discretionary power vested in the registering authority under sub-section (10) of section 12 has to be exercised in each case judiciously on sound principles and not arbitrarily, the learned counsel for the petitioners has cited a decision of the Division Bench of the Rajasthan High Court in Delhi Cloth General Mills Co. Ltd. v. State of Rajasthan [1980] 45 STC 128. As we have already mentioned, the question of applying those principles arises only after the registering authority passes an order and not at the stage of issuing the show cause notice. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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