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TMI Blog2018 (11) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... artment, he had to execute a bond with two sureties, under Section 17 of the Act read with Rule 19. Indeed, on 08.04.2011 Ali executed a bond with P.A. Azeez, the petitioner, and Kathiru Pilla, as the two sureties. Later, Kathiru Pilla wanted to withdraw from being the surety. Therefore, he invoked Rule 19(4) of the Kerala Value Added Tax Rules, 2005. As seen from the record, even Azeez submitted the Ext.P4, dated 07.10.2014, declaring his intention that he too must be discharged from the liability of being a surety. Then Ali, the dealer, had to execute a new bond with two other persons as sureties. He did execute, but the Department claims that it was for a different purpose. So it asserts that there are two bonds. The Department, yet, mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him from the liability. Though the Department informed Ali, she stresses, he has so far not come forward to execute a new bond. In this context, she contends that both the bonds could be pressed into service. In other words, Azeez cannot get absolved of his responsibility or liability because to replace him, Ali has produced no new bond with other sureties. 6. Heard Sri Aji V. Dev, the petitioner's counsel, and Dr. Thushara James, the learned Government Pleader. 7. Indeed, the facts are not in dispute. Azeez stood surety for Ali in 2011 and executed a bond under Section 17 of the Act, read with Rule 19 of the Rules. Evidently, he is one of the two sureties. Later, as the record reveals, both the sureties, that is Kathiru Pilla and Az ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh for the amount assured and acceptable to the said authority; or (e) . . . (f) . . . (g) . . . (h) . . . (3) The security or additional security furnished shall be maintained in full so long as the registration certificate continues to be in force and may, in the event of default of payment of any tax or any other amount due under the Act be liable to adjustment towards such tax or other amount due, after due intimation to the dealer. (4) Where a person who stood as surety by signing the bond in Form 6 furnished under sub-rule (2) desires to withdraw from the bond, he shall duly serve on the dealer who had executed the bond and to the registering authority, of his desire to do so. Thereupon the dealer shall within sixty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an option. Within sixty days, the dealer must furnish new security in the manner specified under sub-rule (2). And the withdrawal will operate from the date the new security is furnished. 11. Even otherwise, Section 133 of the Contract Act may also come in the way of the Department's defence. Without the surety's consent, if the principal debtor and the creditor vary the contractual terms, then, that variation discharges the surety from the transaction and the liability. 12. Therefore, viewed from either perspective, the Department's contention cannot be accepted. It must fail. So it does. 13. In these circumstances, I hold that the demand against the petitioner cannot be sustained, and the Department can have its course only vis-&a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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