Security under sales tax law must rest on relevant grounds and proportionality, not isolated delay or unrelated considerations.

Section 18 of the Delhi Sales Tax Act, 1975 permits security only to protect proper realisation of tax or the custody and use of statutory forms. The security orders were unsustainable because they were based mainly on a single delay in filing one quarter's return, despite the dealer's long registration history, regular returns and tax payments. The authorities also relied on irrelevant considerations, including alleged non-separate charging of tax, increased turnover and office changes, which had no nexus with section 18. The amount of security was found grossly disproportionate to the alleged default, showing non-application of mind; the orders were therefore liable to be quashed.

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Issues: Whether the orders directing the dealer to furnish security under section 18 of the Delhi Sales Tax Act, 1975 were sustainable in law.

Analysis: Section 18 permits security only for the proper realisation of tax or for the proper custody and use of statutory forms. The material on record showed that the action was founded essentially on a solitary delay in filing returns for one quarter, while the dealer had a long history of registration, regular returns, and tax payment. The authorities relied on considerations that had no nexus with section 18, including alleged non-separate charging of tax and general references to increased turnover and office changes. The quantum of security imposed was also found to be grossly disproportionate to the alleged default, which reinforced the conclusion that the power had not been exercised on sound principles.

Conclusion: The security orders were unsustainable, having been passed with non-application of mind and on irrelevant considerations; they were liable to be quashed in favour of the petitioner.

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