Surety bond acceptance for sales tax registration can be implied by licence issuance without separate written endorsement.

Where the Haryana sales tax scheme required security for registration, a personal bond with solvent surety was a permissible form of security and did not need a separate written endorsement of acceptance by the competent authority. The issuance of the sales tax licence after the surety bond was furnished was treated as valid acceptance of the security, because the statutory provisions did not require formal attestation and the surrounding evidence showed the bond had been acted upon. On that basis, the challenge to recovery failed, the Revenue's finding on acceptance was set aside, and the injunction decree was reversed.

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Issues: Whether a surety bond furnished for obtaining sales tax registration required a formal written endorsement of acceptance by the competent authority, and whether issuance of the sales tax licence on the strength of the bond amounted to valid acceptance making the surety liable.

Analysis: Section 23 of the Haryana General Sales Tax Act, 1973 authorises the competent authority to insist on security as a condition for registration, while Rule 61 of the Haryana General Sales Tax Rules, 1975 prescribes the permissible forms of security, including a personal bond with solvent surety. The statutory scheme does not require a separate written endorsement or formal attestation of acceptance of the surety bond. Once the licence was issued after the surety bond had been furnished, the requirement of security stood satisfied. The surrounding circumstances and the evidence on record supported the inference that the bond had been acted upon and accepted for the purposes of registration.

Conclusion: Formal written acceptance of the surety bond was not necessary, and issuance of the sales tax licence amounted to valid acceptance of the security. The challenge to recovery failed, and the finding against the Revenue on this aspect was set aside.

Final Conclusion: The decree of injunction was reversed, the recovery proceedings were upheld, and the suit was dismissed.

Ratio Decidendi: Where the governing sales tax provisions require furnishing of security but do not mandate an express endorsement of acceptance, issuance of the licence on the basis of the furnished surety bond can constitute valid acceptance by the competent authority.

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