Sales tax security demand must stay within the statutory ceiling and be linked to estimated tax liability.

The power to require security under sales tax registration provisions is a legitimate safeguard for levy and collection, but it must be exercised for good and sufficient reasons after estimating the dealer's turnover and keeping the demand linked to the tax payable under the statute. A cash security demand is not invalid merely because it is cash, especially where no alternative security is offered. However, the authority cannot exceed the statutory ceiling, and any demand above one half of the estimated annual tax liability is contrary to the governing provision and liable to be quashed to that extent.

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Issues: Whether the security demand made under the sales tax registration provisions was valid, particularly in light of the statutory requirement that the security amount not exceed one half of the tax payable on the dealer's estimated annual turnover.

Analysis: The power to demand security was held to be a legitimate safeguard ancillary to the levy and collection of sales tax, and not an arbitrary or ultra vires exercise of power. The prescribed authority was required to act for good and sufficient reasons and after estimating the dealer's turnover so as to relate the security demand to the tax payable under the statute. A demand for security in cash was not, by itself, invalid, especially where no alternative security was offered. However, the authority was bound by the statutory limit, and a demand exceeding one half of the estimated annual tax liability was contrary to the governing provision.

Conclusion: The security demand was invalid to the extent that it exceeded the statutory ceiling and was therefore liable to be quashed.

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