Reasonable hearing in security demands fails when the final basis is not disclosed in the show cause notice.

The power to demand security under section 7(4a)(i) of the Bengal Finance (Sales Tax) Act, 1941 had to be exercised for good and sufficient reasons after giving the dealer a reasonable opportunity of being heard. A demand based on a ground not disclosed in the show cause notice, where the final order relied on the directors' relationship with another allegedly defaulting concern and the dealer's reply was not shown to have been considered, failed that requirement. On that basis, the demand was treated as invalid for breach of natural justice.

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Issues: Whether the demand of security under section 7(4a)(i) of the Bengal Finance (Sales Tax) Act, 1941 was invalid for want of a reasonable opportunity of being heard, because the ground on which it was ultimately based was not disclosed in the show cause notice.

Analysis: The statutory power to demand security under section 7(4a)(i) could be exercised only for good and sufficient reasons and after giving the dealer an opportunity of being heard. The notice called upon the dealer to meet specific grounds, but the final order proceeded on a different basis, namely the relationship of directors with another concern said to be a defaulter. That ground did not appear in the notice, and the reply filed by the dealer was not shown to have been considered. In these circumstances, the dealer had no fair opportunity to answer the real basis of the proposed demand.

Conclusion: The demand of security was invalid and liable to be struck down for breach of the requirement of reasonable hearing.

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