Reasoned exercise of discretion in security substitution and valuation disputes: unreasoned refusal to accept bank guarantee was quashed.

The authority's discretion to alter security under section 13-A(6) of the U.P. Sales Tax Act had to be exercised with reasons where the dealer specifically sought correction of valuation and substitution of bank guarantee for cash security. A bare statement that the request was considered and rejected was insufficient because it did not show the basis for sustaining the higher valuation or refusing the bank guarantee. The orders were therefore unsustainable and were quashed, with the matter to be decided afresh after hearing the dealer and recording reasons if the requests were again refused.

---

---

Issues: Whether the orders refusing release of the goods on the basis of the valuation fixed by the authority and declining permission to furnish bank guarantee in place of cash security could be sustained despite the absence of reasons.

Analysis: The power under section 13-A(6) of the U.P. Sales Tax Act, 1948 to alter the nature of security is discretionary, but where a dealer places special circumstances before the authority and specifically seeks correction of valuation and substitution of bank guarantee for cash security, the authority must apply its mind and record reasons for rejecting the request. A bare statement that the application was considered and dismissed does not disclose the basis of the decision. The impugned orders contained no reasons either for sustaining the higher valuation or for refusing the request for bank guarantee.

Conclusion: The orders could not be sustained and were liable to be quashed. The matter was required to be decided afresh after hearing the petitioner, with reasons to be recorded if the requests were again rejected.

---