Additional security demand fails when completed assessments stand and no valid reassessment proceedings have begun.

A notice demanding additional security under section 12(2) of the A.P. General Sales Tax Act could not be sustained where the relevant assessments had already been completed and no reassessment proceedings had been validly initiated by the competent authority. The record showed that the demand was based on alleged tax evasion for completed assessment years, but the officer issuing the notice lacked competence to commence reassessment. In the absence of any lawful foundation for further action, requiring additional security served no legal purpose. The notice was held unsustainable, relief was granted to the assessee, and further proceedings pursuant to the notice were restrained.

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Issues: Whether a notice demanding additional security under section 12(2) of the A.P. General Sales Tax Act could be sustained when the relevant assessments had already been completed and no reassessment proceedings had been initiated by the competent authority.

Analysis: The demand notice proceeded on the footing of alleged tax evasion for the assessment years already completed. The record showed that no reassessment proceedings had been commenced by the competent Commercial Tax Officer, and the officer who issued the notice was not the authority competent to initiate such proceedings. In these circumstances, calling upon the assessee to furnish additional security served no legal purpose, because the assessments had attained completion and the foundation for further action was absent.

Conclusion: The demand notice was not sustainable and the challenge to it succeeded.

Final Conclusion: The assessee was entitled to relief, and all further proceedings pursuant to the impugned demand notice were restrained.

Ratio Decidendi: A demand for additional security cannot be sustained where the assessments have already been completed and no reassessment proceedings have been validly initiated by the authority competent to do so.

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